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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: 002-73024
GARTMORE VARIABLE INSURANCE TRUST
(Exact name of registrant as specified in charter)
1200 RIVER ROAD, SUITE 1000, CONSHOHOCKEN, PENNSYLVANIA 19428
(Address of principal executive offices) (Zip code)
Eric Miller
1200 River Road
Suite 1000
Conshohocken, PA 19428
(Name and address of agent for service)
Registrant’s telephone number, including area code: (484) 530-1300
Date of fiscal year end: December 31, 2006
Date of reporting period: June 30, 2006
Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget (“OMB”) control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.
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Item 1. Reports to Stockholders.
Include a copy of the report transmitted to stockholders pursuant to Rule 30e-1 under the Act (17 CFR 270.30e-1).
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Gartmore GVIT Nationwide Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
7 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statements of Changes in Net Assets | |
10 | Financial Highlights | |
11 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GNAT (8/06)
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Shareholder
Expense Example | Gartmore GVIT Nationwide Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Nationwide Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,022.90 | $ | 4.11 | 0.82% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.12 | 0.82% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,022.30 | $ | 5.32 | 1.06% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.54 | $ | 5.32 | 1.06% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,023.60 | $ | 4.16 | 0.83% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.68 | $ | 4.17 | 0.83% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,022.90 | $ | 4.11 | 0.82% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.73 | $ | 4.12 | 0.82% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Nationwide Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 97.1% | |
Commercial Paper | 2.4% | |
Other Investments* | 5.3% | |
Liabilities in excess of other assets** | -4.8% | |
100.0% | ||
Top Holdings | ||
Microsoft Corp. | 2.3% | |
Procter & Gamble Co. (The) | 2.3% | |
Altria Group, Inc. | 2.2% | |
Johnson & Johnson, Inc. | 2.0% | |
UnitedHealth Group, Inc. | 1.8% | |
Exxon Mobil Corp. | 1.6% | |
Pfizer, Inc. | 1.5% | |
Bank of America Corp. | 1.5% | |
Phelps Dodge Corp. | 1.5% | |
Home Depot, Inc. (The) | 1.3% | |
Other Assets | 82.0% | |
100.0% | ||
Top Industries | ||
Oil & Gas | 8.6% | |
Financial Services | 8.3% | |
Insurance | 7.3% | |
Retail | 6.2% | |
Banks | 6.2% | |
Computer Software & Services | 5.9% | |
Semiconductors | 5.8% | |
Healthcare | 5.3% | |
Telecommunications | 5.0% | |
Transportation | 4.8% | |
Other Assets | 36.6% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
2
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.1%) | |||||
Aerospace & Defense (2.6%) | |||||
Boeing Co. (The) | 175,090 | $ | 14,341,622 | ||
General Dynamics Corp. | 51,242 | 3,354,301 | |||
Northrop Grumman Corp. | 129,612 | 8,302,945 | |||
Raytheon Co. | 157,220 | 7,007,295 | |||
United Technologies Corp. | 180,500 | 11,447,310 | |||
44,453,473 | |||||
Agricultural Services (0.4%) | |||||
Archer-Daniels-Midland Co. | 155,522 | 6,419,948 | |||
Auto Parts & Equipment (0.7%) | |||||
Autoliv, Inc. ADR — SE | 87,000 | 4,921,590 | |||
Cummins, Inc. (c) | 56,700 | 6,931,575 | |||
11,853,165 | |||||
Banks (4.9%) | |||||
Bank of America Corp. | 520,982 | 25,059,235 | |||
BB&T Corp. | 40,000 | 1,663,600 | |||
Credit Suisse Group ADR — CH (c) | 50,000 | 2,799,500 | |||
Mellon Financial Corp. | 84,200 | 2,899,006 | |||
New York Community Bancorp, Inc. (c) | 242,370 | 4,001,529 | |||
Northern Trust Corp. | 75,350 | 4,166,855 | |||
PNC Bank Corp. | 114,090 | 8,005,695 | |||
State Street Corp. | 55,800 | 3,241,422 | |||
SunTrust Banks, Inc. | 90,590 | 6,908,393 | |||
U.S. Bancorp | 167,400 | 5,169,312 | |||
UBS AG ADR — CH | 46,400 | 5,090,080 | |||
Wachovia Corp. | 158,005 | 8,544,910 | |||
Zions Bancorp. | 66,706 | 5,199,066 | |||
82,748,603 | |||||
Building & Construction (0.9%) | |||||
Martin Marietta Materials | 93,900 | 8,558,985 | |||
Weyerhaeuser Co. | 92,050 | 5,730,113 | |||
14,289,098 | |||||
Business Services (0.0%) | |||||
Pitney Bowes, Inc. | 12,180 | 503,034 | |||
Capital Goods (1.6%) | |||||
General Electric Co. | 536,515 | 17,683,535 | |||
Sherwin-Williams Co. (c) | 79,480 | 3,773,710 | |||
Timken Co. (c) | 151,300 | 5,070,063 | |||
26,527,308 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Chemicals (1.1%) | |||||
Dow Chemical Co. | 108,400 | $ | 4,230,852 | ||
Du Pont (E.I.) De Nemours | 189,090 | 7,866,144 | |||
Rohm & Haas Co. | 114,850 | 5,756,282 | |||
17,853,278 | |||||
Coal (0.0%) | |||||
KFX, Inc. (b) (c) | 17,660 | 269,845 | |||
Computer Equipment (1.7%) | |||||
Apple Computer, Inc. (b) | 67,650 | 3,864,168 | |||
Hewlett Packard Co. | 503,600 | 15,954,048 | |||
International Business Machines Corp. | 114,994 | 8,833,839 | |||
28,652,055 | |||||
Computer Software & Services (5.9%) | |||||
Affiliated Computer Services, Class A (b) | 100,365 | 5,179,838 | |||
Cisco Systems, Inc. (b) | 1,116,507 | 21,805,382 | |||
Computer Sciences Corp. (b) | 78,850 | 3,819,494 | |||
eBay, Inc. (b) | 132,035 | 3,867,305 | |||
EMC Corp. (b) | 323,992 | 3,554,192 | |||
Google, Inc., Class A (b) | 24,910 | 10,445,510 | |||
Ingram Micro, Inc. (b) (c) | 243,900 | 4,421,907 | |||
Microsoft Corp. | 1,677,886 | 39,094,744 | |||
Symantec Corp. (b) | 244,800 | 3,804,192 | |||
Yahoo!, Inc. (b) | 109,510 | 3,613,830 | |||
99,606,394 | |||||
Consumer Products (2.3%) | |||||
Procter & Gamble Co. (The) | 688,430 | 38,276,708 | |||
Diversified (1.5%) | |||||
3M Co. | 205,851 | 16,626,585 | |||
Berkshire Hathaway Inc., Class B (b) (c) | 2,595 | 7,896,585 | |||
24,523,170 | |||||
Electronics (0.9%) | |||||
Arrow Electronics, Inc. (b) | 170,200 | 5,480,440 | |||
KLA-Tencor Corp. | 107,154 | 4,454,392 | |||
L-3 Communications Holdings, Inc. | 57,650 | 4,347,963 | |||
14,282,795 | |||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Financial Services (8.3%) | |||||
Affiliated Managers Group, Inc. (b) (c) | 24,000 | $ | 2,085,360 | ||
Bear Stearns Cos., Inc. | 51,228 | 7,176,018 | |||
Cit Group, Inc. | 106,350 | 5,561,042 | |||
Citigroup, Inc. | 197,813 | 9,542,499 | |||
Countrywide Financial Corp. | 81,450 | 3,101,616 | |||
Federated Investors, Inc., Class B | 92,749 | 2,921,594 | |||
Franklin Resources, Inc. | 9,300 | 807,333 | |||
Goldman Sachs Group, Inc. | 142,756 | 21,474,784 | |||
Hudson City Bancorp, Inc. | 583,592 | 7,779,281 | |||
J.P. Morgan Chase & Co. | 414,850 | 17,423,699 | |||
KKR Financial Corp. | 251,100 | 5,225,391 | |||
Legg Mason, Inc. | 56,328 | 5,605,763 | |||
Lehman Brothers Holding, Inc. | 168,950 | 11,007,093 | |||
Marshall & Ilsley Corp. | 34,400 | 1,573,456 | |||
Merrill Lynch & Co., Inc. | 191,100 | 13,292,916 | |||
Moody’s Corp. | 75,850 | 4,130,791 | |||
Morgan Stanley | 177,461 | 11,217,310 | |||
Robert Half International, Inc. | 18,200 | 764,400 | |||
T. Rowe Price Group, Inc. | 24,600 | 930,126 | |||
TD Ameritrade Holding Corp. | 251,054 | 3,718,110 | |||
Wells Fargo & Co. | 63,100 | 4,232,748 | |||
139,571,330 | |||||
Food & Beverage (0.8%) | |||||
Coca-Cola Enterprises, Inc. | 516,900 | 10,529,253 | |||
Pepsi Bottling Group, Inc. (The) | 96,100 | 3,089,615 | |||
13,618,868 | |||||
Healthcare (5.3%) | |||||
Aetna, Inc. | 238,642 | 9,528,975 | |||
Biogen Idec, Inc. (b) | 77,600 | 3,595,208 | |||
Johnson & Johnson, Inc. | 563,026 | 33,736,517 | |||
Triad Hospitals, Inc. (b) (c) | 99,750 | 3,948,105 | |||
UnitedHealth Group, Inc. | 667,673 | 29,898,397 | |||
Wellpoint, Inc. (b) | 123,450 | 8,983,457 | |||
89,690,659 | |||||
Hotels & Motels (0.1%) | |||||
MGM Grand, Inc. (b) (c) | 55,600 | 2,268,480 | |||
Insurance (7.3%) | |||||
American International Group, Inc. | 303,454 | 17,918,959 | |||
Aspen Insurance Holdings Ltd. (c) | 82,200 | 1,914,438 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Insurance (continued) | |||||
Assurant, Inc. | 125,567 | $ | 6,077,443 | ||
Chubb Corp. | 228,500 | 11,402,150 | |||
Genworth Financial, Inc. | 157,050 | 5,471,622 | |||
Hartford Financial Services Group, Inc. | 160,000 | 13,536,000 | |||
Lincoln National Corp. | 113,300 | 6,394,652 | |||
Manulife Financial Corp. ADR — CA | 200,658 | 6,374,905 | |||
MetLife, Inc. | 384,507 | 19,690,602 | |||
MGIC Investment Corp. (c) | 50,600 | 3,289,000 | |||
PartnerRe Ltd. | 34,400 | 2,203,320 | |||
Principal Financial Group, Inc. | 139,050 | 7,738,133 | |||
Prudential Financial, Inc. | 185,415 | 14,406,746 | |||
SAFECO Corp. | 107,200 | 6,040,720 | |||
122,458,690 | |||||
Machinery & Equipment (1.3%) | |||||
Black & Decker Corp. | 54,240 | 4,581,110 | |||
Caterpillar, Inc. | 170,810 | 12,721,929 | |||
Deere & Co. | 54,190 | 4,524,323 | |||
21,827,362 | |||||
Manufacturing (3.9%) | |||||
Danaher Corp. | 82,478 | 5,304,985 | |||
Illinois Tool Works, Inc. | 105,940 | 5,032,150 | |||
Joy Global, Inc. | 99,500 | 5,182,955 | |||
Nucor Corp. | 103,360 | 5,607,280 | |||
Parker Hannifin Corp. | 69,450 | 5,389,320 | |||
Phelps Dodge Corp. | 298,360 | 24,513,257 | |||
Rockwell Automation, Inc. | 38,690 | 2,786,067 | |||
Siemens AG ADR — DE (c) | 52,000 | 4,514,640 | |||
Textron, Inc. | 74,700 | 6,885,846 | |||
65,216,500 | |||||
Medical (1.3%) | |||||
Abbott Laboratories | 248,942 | 10,856,361 | |||
Baxter International, Inc. | 172,700 | 6,348,452 | |||
Fisher Scientific International, Inc. (b) | 60,400 | 4,412,220 | |||
21,617,033 | |||||
Metals (2.3%) | |||||
Alcan, Inc. ADR — CA | 237,240 | 11,136,046 | |||
Alcoa, Inc. | 379,340 | 12,275,442 | |||
Cleveland-Cliffs, Inc. (c) | 106,421 | 8,438,121 | |||
Reliance Steel & Aluminum Co. | 51,307 | 4,255,916 |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Metals (continued) | |||||
Teck Cominco Ltd., Class B (c) | 39,000 | $ | 2,330,640 | ||
38,436,165 | |||||
Mining (0.9%) | |||||
Compania De Minas Buenaventur ADR — PE (c) | 90,660 | 2,473,205 | |||
Rio Tinto PLC ADR — GB (c) | 20,790 | 4,359,871 | |||
Southern Copper Corp. (c) | 95,242 | 8,488,919 | |||
15,321,995 | |||||
Multimedia (2.0%) | |||||
CBS Corp., Class B | 52,350 | 1,416,068 | |||
News Corp. | 354,100 | 6,791,638 | |||
Time Warner, Inc. | 750,466 | 12,983,061 | |||
Walt Disney Co. (The) | 418,116 | 12,543,480 | |||
33,734,247 | |||||
Office Equipment & Services (0.3%) | |||||
Xerox Corp. (b) | 348,000 | 4,840,680 | |||
Oil & Gas (8.6%) | |||||
ChevronTexaco Corp. | 172,315 | 10,693,869 | |||
Conocophillips | 234,414 | 15,361,149 | |||
Devon Energy Corp. | 58,150 | 3,512,842 | |||
Duke Energy Corp. | 264,600 | 7,771,302 | |||
ENSCO International, Inc. | 40,000 | 1,840,800 | |||
Exxon Mobil Corp. | 426,062 | 26,138,905 | |||
Halliburton Co. | 195,200 | 14,485,792 | |||
Hanover Compressor Co. (b) (c) | 93,400 | 1,754,052 | |||
Marathon Oil Corp. | 63,018 | 5,249,399 | |||
Nabors Industries Ltd. (b) | 240,980 | 8,142,714 | |||
National-OilWell, Inc. (b) | 156,890 | 9,934,275 | |||
Occidental Petroleum Corp. | 200,938 | 20,606,192 | |||
Pride International, Inc. (b) | 55,000 | 1,717,650 | |||
Schlumberger Ltd. ADR — NL | 57,866 | 3,767,655 | |||
Sempra Energy | 94,624 | 4,303,500 | |||
Valero Energy | 74,100 | 4,929,132 | |||
XTO Energy, Inc. | 89,000 | 3,940,030 | |||
144,149,258 | |||||
Paper & Forest Products (0.2%) | |||||
Louisiana-Pacific Corp. | 176,650 | 3,868,635 | |||
Pharmaceuticals (2.9%) | |||||
Amgen, Inc. (b) | 143,927 | 9,388,358 | |||
Gilead Sciences, Inc. (b) | 107,315 | 6,348,755 | |||
McKesson Corp. | 120,920 | 5,717,098 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Pharmaceuticals (continued) | |||||
Pfizer, Inc. | 1,098,790 | $ | 25,788,601 | ||
Wyeth | 42,924 | 1,906,255 | |||
49,149,067 | |||||
Restaurants (1.1%) | |||||
McDonald’s Corp. | 531,880 | 17,871,168 | |||
Retail (6.2%) | |||||
Best Buy Co., Inc. | 78,900 | 4,326,876 | |||
Circuit City Stores, Inc. | 212,000 | 5,770,640 | |||
Coach, Inc. (b) | 126,367 | 3,778,373 | |||
Costco Wholesale Corp. | 111,000 | 6,341,430 | |||
CVS Corp. | 221,350 | 6,795,445 | |||
Federated Department Stores, Inc. | 336,880 | 12,329,808 | |||
Home Depot, Inc. (The) | 628,515 | 22,494,551 | |||
J.C. Penney Co., Inc. | 92,257 | 6,228,270 | |||
Kroger Co. | 254,699 | 5,567,720 | |||
Lowe’s Cos., Inc. | 84,000 | 5,096,280 | |||
Nordstrom, Inc. | 121,800 | 4,445,700 | |||
Target Corp. | 202,609 | 9,901,502 | |||
TJX Cos., Inc. | 319,130 | 7,295,312 | |||
Wal-Mart Stores, Inc. | 84,950 | 4,092,042 | |||
104,463,949 | |||||
Semiconductors (5.8%) | |||||
Analog Devices, Inc. | 230,530 | 7,409,234 | |||
ASML Holdings NV ADR — NL (b) | 225,400 | 4,557,588 | |||
Avnet, Inc. (b) | 90,040 | 1,802,601 | |||
Freescale Semiconductor, Inc. (b) | 233,250 | 6,857,550 | |||
Intel Corp. | 716,135 | 13,570,758 | |||
Linear Technology Corp. | 95,630 | 3,202,649 | |||
Marvel Technology Group Ltd. (b) | 314,087 | 13,923,477 | |||
Maxim Integrated Products, Inc. | 255,280 | 8,197,041 | |||
National Semiconductor Corp. | 410,250 | 9,784,463 | |||
STMicroelectronics N.V., ADR — NL (c) | 95,848 | 1,540,277 | |||
Taiwan Semiconductor Manufacturing Co. ADR — TW (c) | 723,259 | 6,639,517 | |||
Texas Instruments, Inc. | 641,409 | 19,428,278 | |||
96,913,433 | |||||
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Telecommunications (5.0%) | ||||||
AT&T, Inc. | 498,939 | $ | 13,915,409 | |||
Corning, Inc. (b) | 498,801 | 12,065,996 | ||||
Embarq Corp. (b) | 103,567 | 4,245,211 | ||||
Motorola, Inc. | 357,160 | 7,196,774 | ||||
Nokia Corp. ADR — FI | 316,000 | 6,402,160 | ||||
QUALCOMM, Inc. | 293,667 | 11,767,237 | ||||
Qwest Communications International, Inc. (b) (c) | 386,000 | 3,122,740 | ||||
Sprint Corp. | 632,352 | 12,640,716 | ||||
Verizon Communications | 223,246 | 7,476,509 | ||||
Vodafone Group PLC ADR — GB | 234,700 | 4,999,110 | ||||
83,831,862 | ||||||
Tobacco (3.5%) | ||||||
Altria Group, Inc. | 496,511 | 36,458,802 | ||||
Loews Corp. — Carolina Group | 102,300 | 5,255,151 | ||||
Reynolds American, Inc. (c) | 144,122 | 16,617,267 | ||||
58,331,220 | ||||||
Transportation (4.8%) | ||||||
Burlington Northern Santa Fe Corp. | 251,660 | 19,944,056 | ||||
CSX Corp. | 210,960 | 14,860,022 | ||||
Fedex Corp. | 37,500 | 4,382,250 | ||||
Norfolk Southern Corp. | 325,500 | 17,323,110 | ||||
Omega Navigation Enterprises, Inc., Class A (b) ADR — GR | 296,360 | 4,273,511 | ||||
Union Pacific Corp. | 29,200 | 2,714,432 | ||||
United Parcel Service, Inc., Class B | 200,761 | 16,528,653 | ||||
80,026,034 | ||||||
Utilities (0.7%) | ||||||
Edison International | 149,600 | 5,834,400 | ||||
Exelon Corp. | 61,070 | 3,470,608 | ||||
Progress Energy, Inc. (c) | 52,700 | 2,259,249 | ||||
11,564,257 | ||||||
Total Common Stocks | 1,629,029,766 | |||||
COMMERCIAL PAPER (2.4%) | ||||||
Banks (1.3%) | ||||||
KBC Financial Products International Ltd., 5.33%, 07/03/06 | $ | 21,251,000 | 21,244,708 | |||
Shares or Principal Amount | Value | ||||||
COMMERCIAL PAPER (continued) | |||||||
Finance Lessors (0.6%) | |||||||
PB Finance (Delaware), 5.17%, 07/13/06 | $ | 10,000,000 | $ | 9,982,833 | |||
Newspapers (0.5%) | |||||||
E.W. Scripps Co. PP, 5.40%, 07/03/06 (d) | 8,340,000 | 8,336,247 | |||||
Total Commercial Paper | 39,563,788 | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (5.3%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust Funds — Note 2 (Securities Lending) | 89,002,539 | 89,002,539 | |||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 89,002,539 | ||||||
Total Investments (Cost $1,729,232,976) (a) — 104.8% | 1,757,596,093 | ||||||
Liabilities in excess of other assets — (4.8%) | (79,727,084 | ) | |||||
NET ASSETS — 100.0% | $ | 1,677,869,009 | |||||
(a) | See Notes to Financial Statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | All or part of the security was on loan as of June 30, 2006. |
(d) | Represents a restricted security acquired and eligible for resale under Rule 144A, which limits the resale to certain qualified buyers. |
ADR | American Depositary Receipt |
CA | Canada |
CH | Switzerland |
DE | Germany |
FI | Finland |
GB | United Kingdom |
GR | Greece |
NL | Netherlands |
PE | Peru |
SE | Sweden |
TW | Taiwan |
See notes to financial statements.
6
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,729,232,976) | $ | 1,757,596,093 | ||
Cash | 594 | |||
Interest and dividends receivable | 1,779,759 | |||
Receivable for capital shares issued | 543,446 | |||
Receivable for investments sold | 37,096,254 | |||
Prepaid expenses and other assets | 20,584 | |||
Total Assets | 1,797,036,730 | |||
Liabilities: | ||||
Payable for investments purchased | 28,492,467 | |||
Payable for capital shares redeemed | 486,505 | |||
Payable for return of collateral received for securities on loan | 89,002,539 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 771,411 | |||
Fund administration and transfer agent fees | 112,325 | |||
Distribution fees | 15,199 | |||
Administrative servicing fees | 127,099 | |||
Other | 160,176 | |||
Total Liabilities | 119,167,721 | |||
Net Assets | $ | 1,677,869,009 | ||
Represented by: | ||||
Capital | $ | 1,656,411,225 | ||
Accumulated net investment income (loss) | 53,996 | |||
Accumulated net realized gains (losses) from investment, futures, and foreign currency transactions | (6,959,329 | ) | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 28,363,117 | |||
Net Assets | $ | 1,677,869,009 | ||
Net Assets: | ||||
Class I Shares | $ | 1,435,048,430 | ||
Class II Shares | 82,700,203 | |||
Class III Shares | 906,348 | |||
Class IV Shares | 159,214,028 | |||
Total | $ | 1,677,869,009 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 118,995,059 | |||
Class II Shares | 6,875,855 | |||
Class III Shares | 75,055 | |||
Class IV Shares | 13,204,419 | |||
Total | 139,150,388 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 12.06 | ||
Class II Shares | $ | 12.03 | ||
Class III Shares | $ | 12.08 | ||
Class IV Shares | $ | 12.06 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 1,038,631 | ||
Dividend income (net of foreign withholding tax of $4,198) | 14,405,495 | |||
Income from securities lending | 179,409 | |||
Total Income | 15,623,535 | |||
Expenses: | ||||
Investment advisory fees | 4,819,727 | |||
Fund administration and transfer agent fees | 588,992 | |||
Distribution fees Class II Shares | 60,043 | |||
Administrative servicing fees | 1,167,921 | |||
Administrative servicing fees | 34,805 | |||
Administrative servicing fees | 1,215 | |||
Administrative servicing fees | 127,873 | |||
Custodian fees | 534,217 | |||
Trustee fees | 30,360 | |||
Other | 192,390 | |||
Total expenses before earnings credit | 7,557,543 | |||
Earnings credit (Note 6) | (527,523 | ) | ||
Total Expenses | 7,030,020 | |||
Net Investment Income (Loss) | 8,593,515 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 107,088,578 | |||
Net realized gains (losses) on futures transactions | (111,781 | ) | ||
Net realized gains (losses) on foreign currency transactions | (1,175 | ) | ||
Net realized gains (losses) on investment, futures, and foreign currency transactions | 106,975,622 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (75,991,951 | ) | ||
Net realized/unrealized gains (losses) on investments, futures and foreign currencies | 30,983,671 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 39,577,186 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 8,593,515 | $ | 13,519,630 | ||||
Net realized gains (losses) on investment, futures, and foreign currency transactions | 106,975,622 | 174,294,336 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (75,991,951 | ) | (74,179,353 | ) | ||||
Change in net assets resulting from operations | 39,577,186 | 113,634,613 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (7,433,454 | ) | (12,583,552 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (278,694 | ) | (121,563 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (6,448 | ) | (9,853 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (820,923 | ) | (1,466,824 | ) | ||||
Change in net assets from shareholder distributions | (8,539,519 | ) | (14,181,792 | ) | ||||
Change in net assets from capital transactions | (48,218,364 | ) | 13,735,109 | |||||
Change in net assets | (17,180,697 | ) | 113,187,930 | |||||
Net Assets: | ||||||||
Beginning of period | 1,695,049,706 | 1,581,861,776 | ||||||
End of period | $ | 1,677,869,009 | $ | 1,695,049,706 | ||||
Accumulated net investment income (loss) | $ | 53,996 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 4,286,195 | $ | 210,751,828 | ||||
Dividends reinvested | 7,433,454 | 12,583,552 | ||||||
Cost of shares redeemed | (111,195,290 | ) | (208,318,493 | ) | ||||
(99,475,641 | ) | 15,016,887 | ||||||
Class II Shares | ||||||||
Proceeds from shares issued | 58,243,591 | 13,823,413 | ||||||
Dividends reinvested | 278,694 | 121,563 | ||||||
Cost of shares redeemed | (191,373 | ) | (1,487,343 | ) | ||||
58,330,912 | 12,457,633 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 250,652 | 1,089,919 | ||||||
Dividends reinvested | 6,448 | 9,853 | ||||||
Cost of shares redeemed | (1,001,303 | ) | (388,545 | ) | ||||
(744,203 | ) | 711,227 | ||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 1,867,218 | 4,785,250 | ||||||
Dividends reinvested | 820,923 | 1,466,824 | ||||||
Cost of shares redeemed | (9,017,573 | ) | (20,702,712 | ) | ||||
(6,329,432 | ) | (14,450,638 | ) | |||||
Change in net assets from capital transactions | $ | (48,218,364 | ) | $ | 13,735,109 | |||
8
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 351,918 | 18,473,713 | ||||
Reinvested | 616,376 | 1,099,304 | ||||
Redeemed | (9,117,420 | ) | (18,424,897 | ) | ||
(8,149,126 | ) | 1,148,120 | ||||
Class II Shares | ||||||
Issued | 4,791,743 | 1,189,729 | ||||
Reinvested | 23,292 | 10,522 | ||||
Redeemed | (15,552 | ) | (132,433 | ) | ||
4,799,483 | 1,067,818 | |||||
Class III Shares | ||||||
Issued | 20,579 | 92,064 | ||||
Reinvested | 530 | 852 | ||||
Redeemed | (80,447 | ) | (34,497 | ) | ||
(59,338 | ) | 58,419 | ||||
Class IV Shares | ||||||
Issued | 153,746 | 423,291 | ||||
Reinvested | 68,066 | 128,403 | ||||
Redeemed | (739,490 | ) | (1,836,077 | ) | ||
(517,678 | ) | (1,284,383 | ) | |||
See notes to financial statements.
9
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Nationwide Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 11.64 | 0.08 | (1.46 | ) | (1.38 | ) | (0.08 | ) | (0.29 | ) | (0.37 | ) | $ | 9.89 | (11.82% | ) | $ | 1,677,316 | 0.78% | 0.77% | 0.82% | 0.73% | 58.36% | |||||||||||||||||||
Year Ended December 31, 2002 | $ | 9.89 | 0.08 | (1.79 | ) | (1.71 | ) | (0.08 | ) | — | (0.08 | ) | $ | 8.10 | (17.35% | ) | $ | 1,252,686 | 0.83% | 0.84% | 0.84% | 0.83% | 33.25% | ||||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.10 | 0.08 | 2.14 | 2.22 | (0.05 | ) | — | (0.05 | ) | $ | 10.27 | 27.51% | $ | 1,459,917 | 0.83% | 0.83% | (i | ) | (i | ) | 129.01% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.27 | 0.12 | 0.88 | 1.00 | (0.14 | ) | — | (0.14 | ) | $ | 11.13 | 9.75% | $ | 1,402,753 | 0.83% | 1.07% | (i | ) | (i | ) | 131.43% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.13 | 0.10 | 0.72 | 0.82 | (0.10 | ) | — | (0.10 | ) | $ | 11.85 | 7.44% | $ | 1,506,358 | 0.83% | 0.88% | (i | ) | (i | ) | 179.84% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.85 | 0.06 | 0.21 | 0.27 | (0.06 | ) | — | (0.06 | ) | $ | 12.06 | 2.29% | (g) | $ | 1,435,048 | 0.82% | (h) | 1.02% | (h) | (i | ) | (i | ) | 115.43% | ||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 8.68 | 0.04 | (0.57 | ) | (0.53 | ) | (0.05 | ) | — | (0.05 | ) | $ | 8.10 | (6.14% | )(g) | $ | 765 | 1.07% | (h) | 1.03% | (h) | (i | ) | (i | ) | 33.25% | ||||||||||||||||
Year Ended December 31, 2003 | $ | 8.10 | 0.05 | 2.15 | 2.20 | (0.04 | ) | — | (0.04 | ) | $ | 10.26 | 27.23% | $ | 5,570 | 1.08% | 0.60% | (i | ) | (i | ) | 129.01% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.26 | 0.08 | 0.89 | 0.97 | (0.11 | ) | — | (0.11 | ) | $ | 11.12 | 9.53% | $ | 11,210 | 1.08% | 0.95% | (i | ) | (i | ) | 131.43% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.12 | 0.07 | 0.71 | 0.78 | (0.08 | ) | — | (0.08 | ) | $ | 11.82 | 7.04% | $ | 24,550 | 1.08% | 0.66% | (i | ) | (i | ) | 179.84% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.82 | 0.04 | 0.22 | 0.26 | (0.05 | ) | — | (0.05 | ) | $ | 12.03 | 2.23% | (g) | $ | 82,700 | 1.06% | (h) | 0.82% | (h) | (i | ) | (i | ) | 115.43% | ||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 9.78 | 0.05 | (1.65 | ) | (1.60 | ) | (0.07 | ) | — | (0.07 | ) | $ | 8.11 | (16.38% | )(g) | $ | 399 | 0.72% | (h) | 1.07% | (h) | (i | ) | (i | ) | 33.25% | ||||||||||||||||
Year Ended December 31, 2003 | $ | 8.11 | 0.09 | 2.13 | 2.22 | (0.05 | ) | — | (0.05 | ) | $ | 10.28 | 27.48% | $ | 870 | 0.83% | 0.83% | (i | ) | (i | ) | 129.01% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.28 | 0.11 | 0.89 | 1.00 | (0.13 | ) | — | (0.13 | ) | $ | 11.15 | 9.84% | $ | 847 | 0.83% | 1.05% | (i | ) | (i | ) | 131.43% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.15 | 0.09 | 0.73 | 0.82 | (0.11 | ) | — | (0.11 | ) | $ | 11.86 | 7.35% | $ | 1,595 | 0.83% | 0.86% | (i | ) | (i | ) | 179.84% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.86 | 0.07 | 0.21 | 0.28 | (0.06 | ) | — | (0.06 | ) | $ | 12.08 | 2.36% | (g) | $ | 906 | 0.83% | (h) | 0.96% | (h) | (i | ) | (i | ) | 115.43% | ||||||||||||||||||
Class IV Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(f) | $ | 8.30 | 0.05 | 1.95 | 2.00 | (0.03 | ) | — | (0.03 | ) | $ | 10.27 | 24.17% | (g) | $ | 169,690 | 0.83% | (h) | 0.85% | (h) | (i | ) | (i | ) | 129.01% | ||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.27 | 0.12 | 0.88 | 1.00 | (0.14 | ) | — | (0.14 | ) | $ | 11.13 | 9.75% | $ | 167,051 | 0.83% | 1.06% | (i | ) | (i | ) | 131.43% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.13 | 0.10 | 0.72 | 0.82 | (0.10 | ) | — | (0.10 | ) | $ | 11.85 | 7.44% | $ | 162,547 | 0.83% | 0.86% | (i | ) | (i | ) | 179.84% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.85 | 0.06 | 0.21 | 0.27 | (0.06 | ) | — | (0.06 | ) | $ | 12.06 | 2.29% | (g) | $ | 159,214 | 0.82% | (h) | 1.02% | (h) | (i | ) | (i | ) | 115.43% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from July 11, 2002 (commencement of operations) through December 31, 2002. |
(e) | For the period from May 6, 2002 (commencement of operations) through December 31, 2002. |
(f) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(g) | Not annualized. |
(h) | Annualized. |
(i) | There were no fee reductions during the period. |
See notes to financial statements.
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Nationwide Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is
11
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
12
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(e) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(f) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(g) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 10,900,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 8,959,158 | 5.29% | 07/21/06 | |||||
Funding Agreement — GIC | GE Life and Annuity | 2,000,000 | 5.28% | 07/14/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 25,000,000 | 5.41% | 07/03/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 25,000,000 | 5.38% | 07/03/06 | |||||
Medium Term Note — Floating | Alliance and Leister PLC | 2,500,000 | 5.13% | 07/10/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 1,000,057 | 5.27% | 09/08/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 1,999,414 | 5.39% | 07/03/06 | |||||
Medium Term Note — Floating | West Corp Federal Credit Union | 1,000,000 | 5.19% | 07/14/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 10,643,910 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$87,184,228 | $ | 89,002,539 |
(h) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(i) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||||
$ | 1,748,758,674 | $ | 89,136,625 | $ | (80,299,206 | ) | $ | 8,837,419 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(j) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
Up to $250 million | 0.60% | |
On the next $750 million | 0.575% | |
On the next $1 billion | 0.55% | |
On the next $3 billion | 0.525% | |
On $5 billion or more | 0.50% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I, Class II, and Class III shares of the Fund and 0.20% on Class IV shares of the Fund.
As of June 30, 2006, Nationwide Financial Services received $1,272,046 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $626.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $1,924,889,318 and sales of $1,989,749,903.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that the Fund has outperformed its benchmark, the S&P 500 Index for the one-, three-, and five-year periods ended September 30, 2005, and ranked in the top quartile of the Lipper Large-Cap Core Funds category for these periods. Moreover, the Board noted that the Fund outperformed the median of its Lipper category by 376 basis points over the twelve month period ended September 30, 2005.
Next, the Board reviewed and considered the Fund’s contractual advisory fee and breakpoints, and noted that the contractual advisory fee placed the Fund in the third quintile of its Lipper-constructed Expense Group. The Board also considered the Fund’s total expenses and noted that the Fund placed in the second quintile of the Fund’s Expense Group. The Board also noted that the adviser manages institutional accounts in a similar manner to the Fund and determined that while the Fund’s management fee was higher, this was understandable given the more-extensive regulations and regulatory restrictions to which mutual funds are subject. Finally, the Board reviewed the adviser’s profitability and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
6 | Statement of Operations | |
7 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGR (8/06)
Table of Contents
Shareholder Expense Example | Gartmore GVIT Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Growth Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 969.40 | $ | 4.20 | 0.86% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.54 | $ | 4.32 | 0.86% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 969.40 | $ | 4.20 | 0.86% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.54 | $ | 4.32 | 0.86% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Growth Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 99.3% | |
Commercial Paper | 1.9% | |
Other Investments* | 10.3% | |
Liabilities in excess of other assets** | -11.5% | |
100.0% | ||
Top Holdings | ||
Johnson & Johnson | 2.9% | |
Cisco Systems, Inc. | 2.8% | |
PepsiCo, Inc. | 2.1% | |
Google, Inc. | 2.1% | |
Genentech, Inc. | 2.0% | |
Emerson Electric Co. | 2.0% | |
Target Corp. | 2.0% | |
Boeing Co. | 2.0% | |
KBC Financial Products International, 5.33%, 07/03/06 | 1.9% | |
Gilead Sciences, Inc. | 1.9% | |
Other Assets | 78.3% | |
100.0% | ||
Top Industries | ||
Computer Software & Services | 16.0% | |
Retail | 10.1% | |
Drugs | 9.4% | |
Healthcare | 9.0% | |
Financial Services | 6.9% | |
Manufacturing | 5.5% | |
Semiconductors | 5.1% | |
Telecommunications | 5.1% | |
Hotels & Casinos | 5.1% | |
Electronics | 5.0% | |
Other Assets | 22.8% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | ||||
COMMON STOCKS (99.3%) | |||||
Aerospace & Defense (2.0%) | |||||
Boeing Co. | 49,600 | $ | 4,062,736 | ||
Agriculture (1.3%) | |||||
Archer-Daniels-Midland Co. | 39,880 | 1,646,247 | |||
Monsanto Co. | 12,980 | 1,092,786 | |||
2,739,033 | |||||
Chemicals (1.5%) | |||||
Praxair, Inc. | 58,940 | 3,182,760 | |||
Computer Software & Services (16.0%) | |||||
Apple Computer, Inc. (b) | 36,910 | 2,108,299 | |||
Bea Systems, Inc. (b) | 138,650 | 1,814,929 | |||
Cisco Systems, Inc. (b) | 298,410 | 5,827,946 | |||
Citrix Systems, Inc. (b) | 50,350 | 2,021,049 | |||
Cognizant Technology Solutions Corp. (b) | 24,450 | 1,647,197 | |||
EMC Corp. (b) | 89,860 | 985,764 | |||
F5 Networks, Inc. (b) (c) | 37,430 | 2,001,756 | |||
First Data Corp. | 39,140 | 1,762,866 | |||
Google, Inc. (b) | 10,520 | 4,411,351 | |||
Hyperion Solutions Corp. (b) | 55,970 | 1,544,772 | |||
Informatica Corp. (b) | 38,700 | 509,292 | |||
Microsoft Corp. | 154,650 | 3,603,345 | |||
Oracle Corp. (b) | 211,050 | 3,058,115 | |||
Red Hat, Inc. (b) (c) | 90,380 | 2,114,892 | |||
33,411,573 | |||||
Construction Materials (1.0%) | |||||
Vulcan Materials Co. | 26,760 | 2,087,280 | |||
Consumer Products (1.8%) | |||||
Colgate-Palmolive Co. | 61,600 | 3,689,840 | |||
Drugs (9.4%) | |||||
Adams Respiratory Therapeutics, Inc. (b) (c) | 33,900 | 1,512,618 | |||
Genentech, Inc. (b) | 51,900 | 4,245,420 | |||
Genzyme Corp. (b) | 23,400 | 1,428,570 | |||
Gilead Sciences, Inc. (b) | 65,630 | 3,882,671 | |||
PDL Biopharma, Inc. (b) | 40,300 | 741,923 | |||
Pharmaceutical Product Development, Inc. (c) | 35,920 | 1,261,510 | |||
Schering-Plough Corp. | 109,160 | 2,077,315 | |||
Shire Pharmaceuticals Group PLC ADR — UK (c) | 32,200 | 1,424,206 | |||
Wyeth | 69,730 | 3,096,709 | |||
19,670,942 | |||||
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
Electronics (5.0%) | |||||
Emerson Electric Co. | 49,400 | $ | 4,140,214 | ||
Harman International Industries, Inc. | 12,600 | 1,075,662 | |||
Mettler Toledo International, Inc. (b) | 25,700 | 1,556,649 | |||
Rockwell Collins, Inc. | 63,600 | 3,553,332 | |||
10,325,857 | |||||
Environmental Services (0.9%) | |||||
Republic Services, Inc. | 44,230 | 1,784,238 | |||
Financial Services (6.9%) | |||||
AmeriCredit Corp. (b) | 64,400 | 1,798,048 | |||
Capital One Financial Corp. | 23,870 | 2,039,692 | |||
Chicago Mercantile Exchange | 3,470 | 1,704,291 | |||
GFI Group, Inc. (b) | 24,760 | 1,335,802 | |||
Goldman Sachs Group, Inc. | 16,310 | 2,453,513 | |||
Hewitt Associates, Inc. (b) | 1 | 22 | |||
SLM Corp. | 29,750 | 1,574,370 | |||
State Street Corp. | 31,660 | 1,839,129 | |||
T. Rowe Price Group, Inc. | 40,360 | 1,526,012 | |||
14,270,879 | |||||
Food & Beverage (2.1%) | |||||
PepsiCo, Inc. | 74,060 | 4,446,562 | |||
Healthcare (9.0%) | |||||
Amgen, Inc. (b) | 34,390 | 2,243,260 | |||
Baxter International, Inc. | 54,800 | 2,014,448 | |||
Covance, Inc. (b) (c) | 33,910 | 2,075,970 | |||
Johnson & Johnson | 100,990 | 6,051,321 | |||
Manor Care, Inc. (c) | 31,440 | 1,475,165 | |||
Medcohealth Solutions, Inc. (b) | 32,890 | 1,883,939 | |||
UnitedHealth Group, Inc. | 63,910 | 2,861,890 | |||
18,605,993 | |||||
Hotels & Casinos (5.1%) | |||||
Hilton Hotels Corp. | 66,300 | 1,874,964 | |||
Penn National Gaming, Inc. (b) | 64,400 | 2,497,432 | |||
Starwood Hotels & Resorts Worldwide | 45,150 | 2,724,351 | |||
Station Casinos, Inc. (c) | 30,020 | 2,043,762 | |||
WMS Industries, Inc. (b) | 49,200 | 1,347,588 | |||
10,488,097 | |||||
Insurance (0.5%) | |||||
Progressive Corp. | 39,150 | 1,006,547 | |||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
Manufacturing (5.5%) | |||||
Caterpillar, Inc. | 12,240 | $ | 911,635 | ||
Danaher Corp. | 21,670 | 1,393,814 | |||
General Electric Co. | 109,090 | 3,595,606 | |||
Textron, Inc. | 9,570 | 882,163 | |||
Thermo Electron Corp. (b) | 40,970 | 1,484,753 | |||
WESCO International, Inc. (b) (c) | 28,800 | 1,987,200 | |||
Williams Scotsman International Inc. (b) | 48,490 | 1,059,022 | |||
11,314,193 | |||||
Medical Products (1.3%) | |||||
Invitrogen Corp. (b) (c) | 19,920 | 1,316,114 | |||
Medtronic, Inc. | 30,700 | 1,440,444 | |||
2,756,558 | |||||
Multimedia (2.8%) | |||||
Activision, Inc. (b) (c) | 89,950 | 1,023,631 | |||
Satyam Computer Services Ltd. ADR - IN (c) | 47,150 | 1,562,551 | |||
THQ, Inc. (b) | 47,550 | 1,027,080 | |||
Yahoo!, Inc. (b) | 65,000 | 2,145,000 | |||
5,758,262 | |||||
Oil & Gas (4.5%) | |||||
Denbury Resources, Inc. (b) (c) | 64,960 | 2,057,283 | |||
Exxon Mobil Corp. | 23,250 | 1,426,388 | |||
Halliburton Co. | 28,840 | 2,140,216 | |||
Tesoro Petroleum Corp. | 14,350 | 1,067,066 | |||
Transocean, Inc. (b) | 17,360 | 1,394,355 | |||
Weatherford International Ltd. (b) | 24,150 | 1,198,323 | |||
9,283,631 | |||||
Railroads (0.5%) | |||||
Norfolk Southern Corp. | 19,850 | 1,056,417 | |||
Retail (10.1%) | |||||
Abercrombie & Fitch Co. | 37,040 | 2,053,127 | |||
Best Buy Co., Inc. | 25,030 | 1,372,645 | |||
Coach, Inc. (b) | 101,270 | 3,027,973 | |||
CVS Corp. | 103,410 | 3,174,687 | |||
eBay, Inc. (b) | 98,150 | 2,874,814 | |||
Kohl’s Corp. (b) | 27,210 | 1,608,655 | |||
Lowe’s Cos., Inc. | 48,700 | 2,954,629 | |||
Target Corp. | 83,600 | 4,085,532 | |||
21,152,062 | |||||
Shares | Value | |||||
COMMON STOCKS (continued) | ||||||
Semiconductors (5.1%) | ||||||
Cymer, Inc. (b) (c) | 33,240 | $ | 1,544,330 | |||
Freescale Semiconductor, Inc. (b) | 55,760 | 1,639,344 | ||||
Marvel Technology Group Ltd. (b) | 45,450 | 2,014,799 | ||||
National Semiconductor Corp. | 67,110 | 1,600,574 | ||||
Sirf Technology Holdings, Inc. (b) (c) | 50,860 | 1,638,709 | ||||
Texas Instruments, Inc. | 67,990 | 2,059,417 | ||||
10,497,173 | ||||||
Telecommunications (5.1%) | ||||||
Amdocs Ltd. ADR — GG (b) | 42,740 | 1,564,284 | ||||
Comverse Technology, Inc. (b) | 102,850 | 2,033,345 | ||||
Corning, Inc. (b) | 92,740 | 2,243,380 | ||||
NeuStar, Inc., Class A (b) (c) | 48,590 | 1,639,913 | ||||
Qualcomm, Inc. | 49,460 | 1,981,862 | ||||
Tellabs, Inc. (b) | 77,320 | 1,029,129 | ||||
10,491,913 | ||||||
Transportation Services (1.9%) | ||||||
C.H. Robinson Worldwide, Inc. | 29,250 | 1,559,025 | ||||
United Parcel Service, Inc. | 28,000 | 2,305,240 | ||||
3,864,265 | ||||||
Total Common Stocks | 205,946,811 | |||||
COMMERCIAL PAPER (1.9%) | ||||||
Financial Services (1.9%) | ||||||
KBC Financial Products International, 5.33%, 07/03/06 | $ | 4,032,000 | 4,030,806 | |||
Total Commercial Paper | 4,030,806 | |||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (10.3%) | ||||||
Pool of short-term securities for Gartmore Variable Insurance Trust Funds — Note 2 (Securities Lending) | 21,373,696 | 21,373,696 | ||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 21,373,696 | |||||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Value | ||||||
Total Investments (Cost $230,477,223) (a) — 111.5% | 231,351,313 | |||||
Liabilities in excess of other assets — (11.5%) | (23,762,555 | ) | ||||
NET ASSETS — 100.0% | $ | 207,588,758 | ||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | All or part of the security was on loan as of June 30, 2006. |
ADR | American Depositary Receipt |
GG | Guernsey |
IN | India |
UK | United Kingdom |
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $230,477,223) | $ | 231,351,313 | ||
Cash | 232 | |||
Interest and dividends receivable | 104,164 | |||
Receivable for capital shares issued | 101,249 | |||
Receivable for investments sold | 10,802,356 | |||
Prepaid expenses and other assets | 2,728 | |||
Total Assets | 242,362,042 | |||
Liabilities: | ||||
Payable for investments purchased | 13,135,456 | |||
Payable for capital shares redeemed | 110,284 | |||
Payable for return of collateral received for securities on loan | 21,373,696 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 102,075 | |||
Fund administration and transfer agent fees | 14,213 | |||
Administrative servicing fees | 19,386 | |||
Other | 18,174 | |||
Total Liabilities | 34,773,284 | |||
Net Assets | $ | 207,588,758 | ||
Represented by: | ||||
Capital | $ | 507,566,629 | ||
Accumulated net investment income (loss) | (59,706 | ) | ||
Accumulated net realized gains (losses) from investment transactions | (300,792,255 | ) | ||
Net unrealized appreciation (depreciation) on investments | 874,090 | |||
Net Assets | $ | 207,588,758 | ||
Net Assets: | ||||
Class I Shares | $ | 174,841,676 | ||
Class IV Shares | 32,747,082 | |||
Total | $ | 207,588,758 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 15,753,323 | |||
Class IV Shares | 2,951,095 | |||
Total | 18,704,418 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 11.10 | ||
Class IV Shares | $ | 11.10 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 20,119 | ||
Dividend income | 842,298 | |||
Income from securities lending | 41,862 | |||
Total Income | 904,279 | |||
Expenses: | ||||
Investment advisory fees | 673,607 | |||
Fund administration and transfer agent fees | 79,495 | |||
Administrative servicing fees | 150,689 | |||
Administrative servicing fees | 27,640 | |||
Trustee fees | 3,984 | |||
Other | 29,719 | |||
Total expenses before earnings credit | 965,134 | |||
Earnings credit (Note 5) | (1,149 | ) | ||
Total Expenses | 963,985 | |||
Net Investment Income (Loss) | (59,706 | ) | ||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) | 3,655,686 | |||
Net change in unrealized appreciation/depreciation on investments | (9,784,523 | ) | ||
Net realized/unrealized gains (losses) on investments | (6,128,837 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (6,188,543 | ) | |
See notes to financial statements.
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GROWTH FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | (59,706 | ) | $ | 131,009 | |||
Net realized gains (losses) on investment transactions | 3,655,686 | 24,988,046 | ||||||
Net change in unrealized appreciation/depreciation on investments | (9,784,523 | ) | (10,295,991 | ) | ||||
Change in net assets resulting from operations | (6,188,543 | ) | 14,823,064 | |||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | — | (169,795 | ) | |||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | — | (30,322 | ) | |||||
Change in net assets from shareholder distributions | — | (200,117 | ) | |||||
Change in net assets from capital transactions | (21,877,282 | ) | (41,336,100 | ) | ||||
Change in net assets | (28,065,825 | ) | (26,713,153 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 235,654,583 | 262,367,736 | ||||||
End of period | $ | 207,588,758 | $ | 235,654,583 | ||||
Accumulated net investment income (loss) | $ | (59,706 | ) | $ | — | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 1,679,967 | $ | 6,011,991 | ||||
Dividends reinvested | — | 169,795 | ||||||
Cost of shares redeemed | (21,084,459 | ) | (43,429,477 | ) | ||||
(19,404,492 | ) | (37,247,691 | ) | |||||
Class IV Shares | ||||||||
Proceeds from shares issued | 990,164 | 2,705,314 | ||||||
Dividends reinvested | — | 30,322 | ||||||
Cost of shares redeemed | (3,462,954 | ) | (6,824,045 | ) | ||||
(2,472,790 | ) | (4,088,409 | ) | |||||
Change in net assets from capital transactions | $ | (21,877,282 | ) | $ | (41,336,100 | ) | ||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 144,446 | 559,238 | ||||||
Reinvested | — | 15,946 | ||||||
Redeemed | (1,811,069 | ) | (3,995,849 | ) | ||||
(1,666,623 | ) | (3,420,665 | ) | |||||
Class IV Shares | ||||||||
Issued | 86,050 | 249,161 | ||||||
Reinvested | — | 2,847 | ||||||
Redeemed | (298,075 | ) | (626,407 | ) | ||||
(212,025 | ) | (374,399 | ) | |||||
See notes to financial statements.
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Growth Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Unrealized | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 14.68 | (0.01 | ) | (4.12 | ) | (4.13 | ) | — | — | $ | 10.55 | (28.13% | ) | $ | 352,147 | 0.80% | (0.10% | ) | 0.85% | (0.15% | ) | 227.28% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.55 | — | (3.03 | ) | (3.03 | ) | — | — | $ | 7.52 | (28.72% | ) | $ | 201,689 | 0.85% | (0.03% | ) | 0.85% | (0.03% | ) | 231.69% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.52 | 0.01 | 2.45 | 2.46 | (e) | — | $ | 9.98 | 32.74% | $ | 244,671 | 0.84% | 0.09% | (h | ) | (h | ) | 293.58% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.98 | 0.02 | 0.79 | 0.81 | (0.03 | ) | (0.03 | ) | $ | 10.76 | 8.16% | $ | 224,301 | 0.85% | 0.26% | (h | ) | (h | ) | 282.41% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.76 | 0.01 | 0.69 | 0.70 | (0.01 | ) | (0.01 | ) | $ | 11.45 | 6.50% | $ | 199,446 | 0.87% | 0.05% | (h | ) | (h | ) | 275.31% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.45 | — | (0.35 | ) | (0.35 | ) | — | — | $ | 11.10 | (3.06% | )(f) | $ | 174,842 | 0.86% | (g) | (0.05% | )(g) | (h | ) | (h | ) | 130.58% | |||||||||||||||||
Class IV Shares | |||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 7.90 | — | 2.08 | 2.08 | (e) | — | $ | 9.98 | 26.37% | (f) | $ | 34,090 | 0.84% | (g) | 0.10% | (g) | (h | ) | (h | ) | 293.58% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.98 | 0.02 | 0.79 | 0.81 | (0.03 | ) | (0.03 | ) | $ | 10.76 | 8.16% | $ | 38,067 | 0.85% | 0.27% | (h | ) | (h | ) | 282.41% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.76 | 0.01 | 0.69 | 0.70 | (0.01 | ) | (0.01 | ) | $ | 11.45 | 6.50% | $ | 36,209 | 0.87% | 0.05% | (h | ) | (h | ) | 275.31% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.45 | — | (0.35 | ) | (0.35 | ) | — | — | $ | 11.10 | (3.06% | )(f) | $ | 32,747 | 0.86% | (g) | (0.05% | )(g) | (h | ) | (h | ) | 130.58% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | The amount is less than $0.005 per share. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See notes to financial statements.
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Growth Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a
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“Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
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June 30, 2006 (Unaudited)
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(e) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(f) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(g) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all
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June 30, 2006 (Unaudited)
times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Commercial Paper | Aegis Finance LLC | $ | 995,462 | 5.29% | 07/21/06 | ||||
Master Note — Floating | CDC Financial Product Inc. | 6,500,000 | 5.41% | 07/03/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 2,000,000 | 5.38% | 07/03/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 1,000,057 | 5.27% | 09/08/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 999,707 | 5.39% | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 9,878,470 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value of loan:
Value of Loaned Securities | Value of Collateral | ||
$21,237,608 | $ | 21,373,696 |
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||||
$ | 233,752,228 | $ | 9,447,009 | $ | (11,847,924 | ) | $ | (2,400,915 | ) |
* | The difference between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
Up to $250 million | 0.600% | |
Next $750 million | 0.575% | |
Next $1 billion | 0.550% | |
Next $3 billion | 0.525% | |
$5 billion or more | 0.500% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I shares of the Fund and 0.20% on Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $168,253 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $293,204,899 and sales of $314,748,517.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that, for the one- and three-year periods, the Fund outperformed its benchmark, the Russell 1000 Growth Index, by 275 and 130 basis points, respectively, and ranked in the second quartile of the Fund’s Lipper Large-Cap Growth Funds category for both periods. The Board also considered, however, that for the five-year period, the Fund under-performed its benchmark by 213 basis points and ranked in the fourth quartile of the Fund’s Lipper category. The Board then discussed the distribution of the Fund. Management discussed the challenges it has faced in marketing the Fund, given the five-year performance record, and the fact that growth style investing was not in favor over the last few years.
The Board next considered the contractual advisory fee and breakpoints for the Fund and noted that the contractual advisory fee placed the Fund in the second quintile of the Fund’s Lipper-constructed Expense Group and noted that the Fund’s total expense ratio placed the Fund below the median for the Fund’s Expense Group. The Board then reviewed the adviser’s profitability for the twelve month period ended September 30, 2005 and concluded that the adviser’s profitability during the period was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
20
Table of Contents
Gartmore GVIT Government Bond Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGB (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Government Bond Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Government Bond Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 993.70 | $ | 3.61 | 0.73% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.18 | $ | 3.66 | 0.73% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 992.50 | $ | 4.84 | 0.98% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.94 | $ | 4.92 | 0.98% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 993.80 | $ | 3.56 | 0.72% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.23 | $ | 3.61 | 0.72% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 993.70 | $ | 3.61 | 0.73% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.18 | $ | 3.66 | 0.73% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Government Bond Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
U.S. Government Sponsored & Agency Obligations | 44.2% | |
Mortgage-Backed Securities | 35.0% | |
U.S. Treasury Obligations | 12.5% | |
Cash Equivalents | 7.6% | |
Other Investments* | 6.1% | |
Liabilities in excess of other assets** | -5.4% | |
100.0% | ||
Top Holdings*** | ||
U.S. Treasury Bonds, 8.13%, 08/15/19 | 4.6% | |
Federal Home Loan Mortgage Corp., 5.75%, 05/23/11 | 4.5% | |
U.S. Treasury Bonds, 8.50%, 02/15/20 | 4.5% | |
Federal Home Loan Bank, 4.00%, 01/23/07 | 4.5% | |
AID - Israel, 5.50%, 12/04/23 | 3.6% | |
Federal Home Loan Mortgage Corp., 5.50%, 05/15/25 | 3.4% | |
Federal National Mortgage Association, 4.91%, 07/01/35 | 3.1% | |
Federal Home Loan Mortgage Corp., 5.16%, 06/01/35 | 2.9% | |
Federal National Mortgage Association, 3.55%, 01/12/07 | 2.8% | |
Federal Home Loan Mortgage Corp., 5.50%, 11/10/08 | 2.3% | |
Other Assets | 63.8% | |
100.0% | ||
Top Industries | ||
Federal National Mortgage Association | 30.0% | |
Federal Home Loan Mortgage Corp. | 26.8% | |
U.S. Treasury Obligations | 12.5% | |
Agency For International Development | 7.4% | |
Federal Home Loan Bank | 6.7% | |
Overseas Private Investment Corp. | 3.2% | |
Federal Farm Credit Bank | 3.2% | |
Veterans Administration | 1.0% | |
Housing and Urban Development | 0.8% | |
Government National Mortgage Association | 0.1% | |
Other Assets | 8.3% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GOVERNMENT BOND FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | |||||
U.S. GOVERNMENT SPONSORED & AGENCY OBLIGATIONS (44.2%) | ||||||
Agency For International Development (7.4%) | ||||||
AID–Israel, 5.50%, 09/18/23 | $ | 3,000,000 | $ | 2,977,008 | ||
AID–Israel, 5.50%, 12/04/23 | 40,500,000 | 40,188,798 | ||||
AID–Israel, 5.50%, 04/26/24 | 20,000,000 | 19,843,600 | ||||
AID–Israel, 5.13%, 11/01/24 | 6,000,000 | 5,696,034 | ||||
Government Backed Trust T–1, 5.41%, 05/15/07 | 10,000,000 | 9,549,650 | ||||
Government Loan Trust, 5.57%, 04/01/15 | 6,072,000 | 3,778,958 | ||||
82,034,048 | ||||||
Federal Farm Credit Bank (3.2%) | ||||||
5.00%, 03/03/14 | 12,146,000 | 11,778,778 | ||||
4.55%, 03/04/15 | 25,475,000 | 23,782,874 | ||||
35,561,652 | ||||||
Federal Home Loan Bank (6.7%) | ||||||
4.00%, 01/23/07 (b) | 50,000,000 | 49,574,999 | ||||
2.63%, 02/16/07 | 17,460,000 | 17,151,168 | ||||
5.91%, 04/07/09 | 6,860,000 | 6,951,554 | ||||
73,677,721 | ||||||
Federal Home Loan Mortgage Corporation (12.9%) | ||||||
6.70%, 01/09/07 | 5,000,000 | 5,028,415 | ||||
5.50%, 04/01/07 | 679,274 | 678,221 | ||||
4.26%, 07/19/07 | 20,000,000 | 19,745,900 | ||||
5.50%, 11/10/08 | 25,000,000 | 24,942,750 | ||||
5.75%, 05/23/11 | 50,000,000 | 49,820,199 | ||||
4.80%, 12/18/13 | 8,350,000 | 7,984,654 | ||||
5.16%, 06/01/35 (c) | 32,460,254 | 32,480,501 | ||||
140,680,640 | ||||||
Federal National Mortgage Association (10.0%) | ||||||
3.25%, 12/01/06 | 18,465,000 | 18,301,345 | ||||
3.55%, 01/12/07 | 30,970,000 | 30,650,328 | ||||
3.25%, 03/29/07 | 17,975,000 | 17,678,628 | ||||
4.50%, 04/01/10 | 13,291,818 | 12,947,627 | ||||
8.20%, 03/10/16 | 10,000,000 | 11,976,420 | ||||
6.68%, 05/01/16 | 3,871,231 | 3,973,788 | ||||
5.26%, 12/29/17 | 15,000,000 | 14,172,765 | ||||
109,700,901 | ||||||
Housing & Urban Development (0.8%) | ||||||
7.08%, 08/01/16 | 9,000,000 | 9,080,793 | ||||
Shares or Principal Amount | Value | |||||
U.S. GOVERNMENT SPONSORED & AGENCY OBLIGATIONS (continued) | ||||||
Overseas Private Investment Corp. (3.2%) | ||||||
4.09%, 12/16/06 | $ | 34,112,991 | $ | 35,639,890 | ||
Total U.S. Government Sponsored & Agency Obligations | 486,375,645 | |||||
MORTGAGE-BACKED SECURITIES (35.0%) | ||||||
Federal Home Loan Mortgage Corporation (13.9%) | ||||||
8.00%, 11/01/08 | 5,656 | 5,690 | ||||
5.50%, 09/15/10 | 4,401,191 | 4,382,080 | ||||
5.25%, 11/10/10 | 25,000,000 | 24,699,175 | ||||
5.50%, 08/15/13 | 6,488,277 | 6,442,287 | ||||
8.00%, 03/01/17 | 1,726 | 1,806 | ||||
5.50%, 10/15/17 | 15,000,000 | 14,887,086 | ||||
5.50%, 10/15/17 | 18,750,000 | 18,479,666 | ||||
5.50%, 01/15/20 | 8,000,000 | 7,897,137 | ||||
7.50%, 03/01/21 | 128,684 | 133,576 | ||||
6.00%, 09/15/21 | 490,878 | 489,953 | ||||
5.00%, 07/15/24 | 7,500,000 | 6,901,394 | ||||
4.50%, 12/15/24 | 18,605,000 | 16,583,130 | ||||
5.50%, 05/15/25 | 38,770,000 | 37,229,439 | ||||
6.50%, 03/15/31 | 1,232,260 | 1,249,822 | ||||
6.50%, 05/01/31 | 47,119 | 47,578 | ||||
6.50%, 06/01/31 | 10,708 | 10,812 | ||||
6.50%, 11/01/31 | 43,752 | 44,178 | ||||
5.50%, 05/15/34 | 13,838,045 | 13,663,004 | ||||
153,147,813 | ||||||
Federal National Mortgage Association (20.0%) | ||||||
7.28%, 09/01/07 | 1,354,824 | 1,358,421 | ||||
6.28%, 05/01/08 | 13,308,051 | 13,346,426 | ||||
6.50%, 07/25/08 | 1,408,130 | 1,411,584 | ||||
6.00%, 08/01/08 | 379,048 | 378,508 | ||||
5.70%, 01/01/09 | 4,522,526 | 4,502,115 | ||||
6.00%, 03/25/09 | 984,683 | 984,321 | ||||
5.00%, 09/01/09 | 1,642,046 | 1,607,448 | ||||
7.41%, 04/01/10 | 14,172,193 | 15,044,822 | ||||
5.50%, 09/25/11 | 6,215,000 | 6,190,315 | ||||
6.62%, 06/01/16 | 10,823,975 | 11,421,274 | ||||
6.00%, 09/01/17 | 226,406 | 227,271 | ||||
10.50%, 11/01/17 | 36,550 | 37,852 | ||||
5.50%, 12/01/17 | 1,924,784 | 1,892,928 | ||||
8.00%, 03/01/22 | 31,710 | 33,434 | ||||
8.00%, 06/01/23 | 56,415 | 59,532 | ||||
5.00%, 07/25/23 | 6,000,000 | 5,499,092 | ||||
7.00%, 08/25/23 | 5,723,240 | 5,885,110 | ||||
5.00%, 02/25/24 | 2,083,293 | 2,065,148 |
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GOVERNMENT BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
MORTGAGE-BACKED SECURITIES (continued) | ||||||
Federal National Mortgage Association (continued) | ||||||
5.50%, 04/25/24 | $ | 12,486,462 | $ | 12,104,333 | ||
7.50%, 03/01/26 | 24,790 | 25,885 | ||||
8.50%, 04/01/28 | 114,571 | 122,590 | ||||
7.00%, 09/01/28 | 130,923 | 134,261 | ||||
7.00%, 12/01/28 | 16,863 | 17,382 | ||||
7.00%, 02/01/30 | 50,351 | 51,621 | ||||
6.43%, 02/17/30 | 1,079,065 | 1,083,769 | ||||
7.00%, 02/01/31 | 47,520 | 48,714 | ||||
7.00%, 08/01/31 | 129,749 | 132,942 | ||||
6.50%, 07/01/32 | 75,238 | 75,902 | ||||
7.00%, 07/01/32 | 69,524 | 71,224 | ||||
3.50%, 11/25/32 | 3,087,560 | 2,789,846 | ||||
5.02%, 09/01/34 (c) | 19,440,705 | 18,992,182 | ||||
4.71%, 04/01/35 | 9,679,038 | 9,287,846 | ||||
4.74%, 04/01/35 (c) | 17,989,307 | 17,358,840 | ||||
4.84%, 05/01/35 | 16,791,872 | 16,257,745 | ||||
4.90%, 05/01/35 | 19,762,638 | 19,143,202 | ||||
5.27%, 05/01/35 | 16,681,572 | 16,307,588 | ||||
4.91%, 07/01/35 (c) | 35,696,355 | 34,593,895 | ||||
220,545,368 | ||||||
Government National Mortgage Association (0.1%) | ||||||
7.00%, 04/15/09 | 28,967 | 29,441 | ||||
7.50%, 06/15/23 | 100,867 | 105,465 | ||||
7.50%, 09/15/23 | 100,897 | 105,497 | ||||
7.50%, 11/15/30 | 10,707 | 11,193 | ||||
7.00%, 07/15/31 | 32,663 | 33,700 | ||||
7.00%, 03/15/32 | 61,416 | 63,356 | ||||
7.00%, 04/15/32 | 96,042 | 99,075 | ||||
7.00%, 02/15/33 | 131,806 | 135,996 | ||||
583,723 | ||||||
Veterans Administration (1.0%) | ||||||
Vendee Mortgage Trust, Series 1996-2, 6.75%, 06/15/26 | 11,165,293 | 11,385,149 | ||||
Total Mortgage-Backed Securities | 385,662,053 | |||||
Shares or Principal Amount | Value | ||||||
MORTGAGE-BACKED SECURITIES (continued) | |||||||
U.S. TREASURY OBLIGATIONS (12.5%) | |||||||
1.88%, 07/15/15 (b) | $ | 20,000,000 | $ | 19,659,386 | |||
8.88%, 02/15/19 (b) | 10,000,000 | 13,287,500 | |||||
8.13%, 08/15/19 (b) | 40,000,000 | 50,640,639 | |||||
8.50%, 02/15/20 (b) | 38,000,000 | 49,696,856 | |||||
3.88%, 04/15/29 (b) | 2,830,000 | 4,292,084 | |||||
Total U.S. Treasury Obligations | 137,576,465 | ||||||
CASH EQUIVALENTS (7.6%) | |||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $84,057,228) | 84,021,525 | 84,021,525 | |||||
Total Cash Equivalents | 84,021,525 | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (6.1%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Mutual Funds — note 2 (Securities Lending) | 67,379,081 | 67,379,081 | |||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 67,379,081 | ||||||
Total Investments (Cost $1,178,704,453) (a) — 105.4% | 1,161,014,769 | ||||||
Liabilities in excess of other assets — (5.4%) | (59,325,294 | ) | |||||
NET ASSETS — 100.0% | $ | 1,101,689,475 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | All or part of security was on loan as of June 30, 2006. |
(c) | Variable Rate Security. The rate reflected in the Statement of Investments is the rate in effect on June 30, 2006. The maturity date represents the actual maturity date. |
See notes to financial statements.
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GOVERNMENT BOND FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,094,682,928) | $ | 1,076,993,244 | ||
Repurchase agreements, at cost and value | 84,021,525 | |||
Total Investments | 1,161,014,769 | |||
Interest and dividends receivable | 9,762,729 | |||
Receivable for capital shares issued | 653,681 | |||
Prepaid expenses and other assets | 13,510 | |||
Total Assets | 1,171,444,689 | |||
Liabilities: | ||||
Payable to custodian | 606,627 | |||
Payable for capital shares redeemed | 1,038,838 | |||
Payable for return of collateral received for securities on loan | 67,379,081 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 435,200 | |||
Fund administration and transfer agent fees | 79,015 | |||
Distribution fees | 3,051 | |||
Administrative servicing fees | 97,390 | |||
Other | 116,012 | |||
Total Liabilities | 69,755,214 | |||
Net Assets | $ | 1,101,689,475 | ||
Represented by: | ||||
Capital | $ | 1,129,382,069 | ||
Accumulated net investment income (loss) | 1,087,931 | |||
Accumulated net realized gains (losses) from investment transactions | (11,090,841 | ) | ||
Net unrealized appreciation (depreciation) on investments | (17,689,684 | ) | ||
Net Assets | $ | 1,101,689,475 | ||
Net Assets: | ||||
Class I Shares | $ | 1,039,110,169 | ||
Class II Shares | 14,746,228 | |||
Class III Shares | 11,581,676 | |||
Class IV Shares | 36,251,402 | |||
Total | $ | 1,101,689,475 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 93,141,855 | |||
Class II Shares | 1,325,447 | |||
Class III Shares | 1,037,972 | |||
Class IV Shares | 3,249,960 | |||
Total | 98,755,234 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 11.16 | ||
Class II Shares | $ | 11.13 | ||
Class III Shares | $ | 11.16 | ||
Class IV Shares | $ | 11.15 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 26,132,570 | ||
Income from securities lending | 35,825 | |||
Total Income | 26,168,395 | |||
Expenses: | ||||
Investment advisory fees | 2,677,486 | |||
Fund administration and transfer agent fees | 395,340 | |||
Distribution fees Class II Shares | 18,842 | |||
Administrative servicing fees Class I Shares | 834,647 | |||
Administrative servicing fees | 11,891 | |||
Administrative servicing fees | 8,356 | |||
Administrative servicing fees | 29,609 | |||
Trustee fees | 19,546 | |||
Other | 153,808 | |||
Total expenses before earnings credit | 4,149,525 | |||
Earnings credit (Note 6) | (23,628 | ) | ||
Total Expenses | 4,125,897 | |||
Net Investment Income (Loss) | 22,042,498 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) | (8,742,644 | ) | ||
Net change in unrealized appreciation/depreciation on investments | (20,657,637 | ) | ||
Net realized/unrealized gains (losses) on investments | (29,400,281 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (7,357,783 | ) | |
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GOVERNMENT BOND FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 22,042,498 | $ | 44,678,951 | ||||
Net realized gains (losses) on investment transactions | (8,742,644 | ) | 7,045,144 | |||||
Net change in unrealized appreciation/depreciation on investments | (20,657,637 | ) | (13,152,094 | ) | ||||
Change in net assets resulting from operations | (7,357,783 | ) | 38,572,001 | |||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (20,080,904 | ) | (42,605,415 | ) | ||||
Net realized gains on investments | (8,191,701 | ) | (2,077,780 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (267,495 | ) | (567,945 | ) | ||||
Net realized gains on investments | (116,493 | ) | (30,292 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (221,944 | ) | (383,605 | ) | ||||
Net realized gains on investments | (91,621 | ) | (17,636 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (706,616 | ) | (1,484,028 | ) | ||||
Net realized gains on investments | (286,189 | ) | (73,151 | ) | ||||
Change in net assets from shareholder distributions | (29,962,963 | ) | (47,239,852 | ) | ||||
Change in net assets from capital transactions | (44,135,248 | ) | (96,317,789 | ) | ||||
Change in net assets | (81,455,994 | ) | (104,985,640 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 1,183,145,469 | 1,288,131,109 | ||||||
End of period | $ | 1,101,689,475 | $ | 1,183,145,469 | ||||
Accumulated net investment income (loss) | $ | 1,087,931 | $ | 322,392 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 61,273,641 | $ | 100,837,878 | ||||
Dividends reinvested | 28,272,478 | 44,683,195 | ||||||
Cost of shares redeemed | (132,757,056 | ) | (242,466,598 | ) | ||||
(43,210,937 | ) | (96,945,525 | ) | |||||
Class II Shares | ||||||||
Proceeds from shares issued | 292,346 | 557,535 | ||||||
Dividends reinvested | 383,986 | 598,237 | ||||||
Cost of shares redeemed | (1,195,085 | ) | (2,927,125 | ) | ||||
(518,753 | ) | (1,771,353 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 3,697,337 | 10,805,193 | ||||||
Dividends reinvested | 313,563 | 401,240 | ||||||
Cost of shares redeemed | (2,642,244 | ) | (7,331,746 | ) | ||||
1,368,656 | 3,874,687 | |||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 1,773,195 | 3,788,415 | ||||||
Dividends reinvested | 992,801 | 1,557,179 | ||||||
Cost of shares redeemed | (4,540,210 | ) | (6,821,192 | ) | ||||
(1,774,214 | ) | (1,475,598 | ) | |||||
Change in net assets from capital transactions | $ | (44,135,248 | ) | $ | (96,317,789 | ) | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GOVERNMENT BOND FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 5,373,210 | 8,647,290 | ||||
Reinvested | 2,523,339 | 3,849,635 | ||||
Redeemed | (11,620,862 | ) | (20,823,734 | ) | ||
(3,724,313 | ) | (8,326,809 | ) | |||
Class II Shares | ||||||
Issued | 25,729 | 48,179 | ||||
Reinvested | 34,369 | 51,678 | ||||
Redeemed | (104,745 | ) | (251,626 | ) | ||
(44,647 | ) | (151,769 | ) | |||
Class III Shares | ||||||
Issued | 322,585 | 925,545 | ||||
Reinvested | 27,973 | 34,552 | ||||
Redeemed | (231,597 | ) | (630,519 | ) | ||
118,961 | 329,578 | |||||
Class IV Shares | ||||||
Issued | 154,947 | 325,126 | ||||
Reinvested | 88,625 | 134,177 | ||||
Redeemed | (397,554 | ) | (585,120 | ) | ||
(153,982 | ) | (125,817 | ) | |||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Government Bond Fund
Investment Activities | Distributions: | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of (Prior to Net Assets(a) | Ratio of Net Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 11.44 | 0.58 | 0.24 | 0.82 | (0.58 | ) | (0.02 | ) | (0.60 | ) | $ | 11.66 | 7.25% | $ | 1,301,828 | 0.66% | 5.21% | 0.73% | 5.14% | 55.80% | ||||||||||||||||||||||
Year Ended December 31, 2002 | $ | 11.66 | 0.53 | 0.72 | 1.25 | (0.53 | ) | (0.10 | ) | (0.63 | ) | $ | 12.28 | 10.98% | $ | 1,982,676 | 0.73% | 4.53% | 0.73% | 4.53% | 49.00% | ||||||||||||||||||||||
Year Ended December 31, 2003(d) | $ | 12.28 | 0.50 | (0.25 | ) | 0.25 | (0.38 | ) | (0.02 | ) | (0.40 | ) | $ | 12.13 | 2.00% | $ | 1,488,089 | 0.73% | 4.12% | (j | ) | (j | ) | 40.46% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 12.13 | 0.47 | (0.08 | ) | 0.39 | (0.66 | ) | (0.24 | ) | (0.90 | ) | $ | 11.62 | 3.26% | $ | 1,222,615 | 0.73% | 3.75% | (j | ) | (j | ) | 69.37% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.62 | 0.43 | (0.06 | ) | 0.37 | (0.43 | ) | (0.02 | ) | (0.45 | ) | $ | 11.54 | 3.26% | $ | 1,117,512 | 0.73% | 3.65% | (j | ) | (j | ) | 87.79% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.54 | 0.23 | (0.30 | ) | (0.07 | ) | (0.22 | ) | (0.09 | ) | (0.31 | ) | $ | 11.16 | (0.63% | )(h) | $ | 1,039,110 | 0.73% | (i) | 3.94% | (i) | (j | ) | (j | ) | 53.33% | |||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 11.88 | 0.18 | 0.55 | 0.73 | (0.26 | ) | (0.09 | ) | (0.35 | ) | $ | 12.26 | 6.16% | (h) | $ | 10,111 | 0.97% | (i) | 3.93% | (i) | (j | ) | (j | ) | 49.00% | |||||||||||||||||
Year Ended December 31, 2003(d) | $ | 12.26 | 0.47 | (0.25 | ) | 0.22 | (0.36 | ) | (0.02 | ) | (0.38 | ) | $ | 12.10 | 1.77% | $ | 20,998 | 0.98% | 3.85% | (j | ) | (j | ) | 40.46% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 12.10 | 0.44 | (0.08 | ) | 0.36 | (0.63 | ) | (0.24 | ) | (0.87 | ) | $ | 11.59 | 3.01% | $ | 17,643 | 0.98% | 3.50% | (j | ) | (j | ) | 69.37% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.59 | 0.40 | (0.06 | ) | 0.34 | (0.40 | ) | (0.02 | ) | (0.42 | ) | $ | 11.51 | 3.01% | $ | 15,765 | 0.98% | 3.40% | (j | ) | (j | ) | 87.79% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.51 | 0.21 | (0.30 | ) | (0.09 | ) | (0.20 | ) | (0.09 | ) | (0.29 | ) | $ | 11.13 | (0.75% | )(h) | $ | 14,746 | 0.98% | (i) | 3.69% | (i) | (j | ) | (j | ) | 53.33% | |||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(f) | $ | 11.75 | 0.36 | 0.67 | 1.03 | (0.41 | ) | (0.10 | ) | (0.51 | ) | $ | 12.27 | 8.84% | (h) | $ | 7,625 | 0.73% | (i) | 4.12% | (i) | (j | ) | (j | ) | 49.00% | |||||||||||||||||
Year Ended December 31, 2003(d) | $ | 12.27 | 0.50 | (0.24 | ) | 0.26 | (0.37 | ) | (0.02 | ) | (0.39 | ) | $ | 12.14 | 2.11% | $ | 4,369 | 0.73% | 4.10% | (j | ) | (j | ) | 40.46% | |||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 12.14 | 0.46 | (0.07 | ) | 0.39 | (0.66 | ) | (0.24 | ) | (0.90 | ) | $ | 11.63 | 3.27% | $ | 6,854 | 0.73% | 3.72% | (j | ) | (j | ) | 69.37% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.63 | 0.40 | (0.04 | ) | 0.36 | (0.43 | ) | (0.02 | ) | (0.45 | ) | $ | 11.54 | 3.18% | $ | 10,604 | 0.73% | 3.66% | (j | ) | (j | ) | 87.79% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.54 | 0.22 | (0.29 | ) | (0.07 | ) | (0.22 | ) | (0.09 | ) | (0.31 | ) | $ | 11.16 | (0.62% | )(h) | $ | 11,582 | 0.72% | (i) | 3.95% | (i) | (j | ) | (j | ) | 53.33% | |||||||||||||||
Class IV Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(g) | $ | 12.29 | 0.34 | (0.24 | ) | 0.10 | (0.26 | ) | — | (0.26 | ) | $ | 12.13 | 0.84% | (h) | $ | 43,244 | 0.70% | (i) | 4.07% | (i) | (j | ) | (j | ) | 40.46% | |||||||||||||||||
Year Ended December 31, 2004 | $ | 12.13 | 0.46 | (0.07 | ) | 0.39 | (0.66 | ) | (0.24 | ) | (0.90 | ) | $ | 11.62 | 3.27% | $ | 41,019 | 0.73% | 3.74% | (j | ) | (j | ) | 69.37% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.62 | 0.43 | (0.07 | ) | 0.36 | (0.43 | ) | (0.02 | ) | (0.45 | ) | $ | 11.53 | 3.17% | $ | 39,264 | 0.73% | 3.65% | (j | ) | (j | ) | 87.79% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.53 | 0.23 | (0.30 | ) | (0.07 | ) | (0.22 | ) | (0.09 | ) | (0.31 | ) | $ | 11.15 | (0.63% | )(h) | $ | 36,251 | 0.73% | (i) | 3.94% | (i) | (j | ) | (j | ) | 53.33% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | Net investment income (loss) is calculated based on average shares outstanding during the period. |
(e) | For the period from July 8, 2002 (commencement of operations) through December 31, 2002. |
(f) | For the period from May 20, 2002 (commencement of operations) through December 31, 2002. |
(g) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(h) | Not annualized. |
(i) | Annualized. |
(j) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Government Bond Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(e) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount.
(f) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Bank Note — Floating Rate | Bank of America | $ | 2,000,000 | 5.31 | % | 07/03/06 | ||||
Bank Note — Floating Rate | Wachovia Bank N.A | 10,000,000 | 5.30 | % | 07/03/06 | |||||
Commercial Paper | Aegis Finance LLC | 7,963,696 | 5.29 | % | 07/21/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 25,000,000 | 5.41 | % | 07/03/06 | |||||
Medium Term Note — Floating | Macquarie Bank Ltd. | 4,999,541 | 5.30 | % | 07/21/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 17,415,844 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$65,094,162 | $ | 67,379,081 |
(g) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. Dividends and distributions that exceed net investment income and net realized gains for financial reporting purposes, but not for tax purposes, are reported as distributions in excess of net investment income or net realized gains. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(h) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||||
$ | 1,178,840,488 | $ | 3,233,498 | $ | (21,059,217 | ) | $ | (17,825,719 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(i) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following fee schedule:
Fee Schedule | Fees | |
Up to $250 million | 0.50% | |
Next $750 million | 0.475% | |
Next $1 billion | 0.45% | |
Next $3 billion | 0.425% | |
$5 billion or more | 0.40% |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all Funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I, Class II, and Class III shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $840,395 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
13
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $9,780.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $577,256,720 and sales of $561,583,994.
For the six months ended June 30, 2006, the Fund had purchases of $577,239,922 and sales of $448,487,159 of U.S. Government securities, which are included in the total purchases and sales in the sentence above.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
SUPPLEMENTAL INFORMATION
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that the Fund outperformed its benchmark, the Merrill Lynch Government Master Index by 68 basis points for the one-year period and 4 basis points for the three-year period, but slightly underperformed its benchmark by 4 basis points for the five-year period. In each of these periods, the Fund ranked in the second quartile of the Lipper General U.S. Government Funds category. The Board then considered the Fund’s contractual advisory fee and breakpoints. The Board noted that the contractual advisory fee placed the Fund in the third quintile of the Expense Group constructed by Lipper; however, the Fund’s total expenses were below the median of the Fund’s Expense Group. Finally, the Board considered the level of profitability reported by the adviser and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
17
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3 and GSA3. | N/A | N/A |
19
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3, and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
20
Table of Contents
GVIT Small Company Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
23 | Statement of Assets and Liabilities | |
23 | Statement of Operations | |
24 | Statements of Changes in Net Assets | |
26 | Financial Highlights | |
27 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GSCO (8/06)
Table of Contents
Shareholder
Expense Example | GVIT Small Company Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
GVIT Small Company Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,048.00 | $ | 5.99 | 1.18% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.95 | $ | 5.92 | 1.18% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,046.70 | $ | 7.31 | 1.44% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.66 | $ | 7.23 | 1.44% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,047.50 | $ | 6.04 | 1.19% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.90 | $ | 5.97 | 1.19% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,048.00 | $ | 5.94 | 1.17% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.00 | $ | 5.87 | 1.17% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | GVIT Small Company Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 97.8% | |
Cash Equivalents | 1.6% | |
Commercial Paper | 0.3% | |
Mutual Fund | 0.1% | |
Warrant | 0.0% | |
Right | 0.0% | |
Other assets in excess of liabilities | 0.2% | |
100.0% | ||
Top Holdings* | ||
Costar Group, Inc. | 0.8% | |
St. Mary Land & Exploration Co. | 0.7% | |
ITT Educational Services, Inc. | 0.6% | |
Factset Research Systems, Inc. | 0.6% | |
Gaylord Entertainment | 0.6% | |
Blabkbaud, Inc. | 0.6% | |
Landstar System, Inc. | 0.6% | |
IDEXX Laboratories, Inc. | 0.5% | |
Oceaneering International, Inc. | 0.5% | |
Helix Energy Solutions Group, Inc. | 0.5% | |
Other Assets | 94.0% | |
100.0% | ||
Top Industries | ||
Retail | 6.1% | |
Oil & Gas | 6.0% | |
Healthcare | 4.4% | |
Machinery | 3.2% | |
Building & Construction | 3.1% | |
Transportation | 3.0% | |
Financial | 3.0% | |
Real Estate Investment Trust | 2.9% | |
Auto & Auto Parts | 2.7% | |
Computer Software | 2.6% | |
Other Assets | 63.0% | |
100.0% | ||
Top Countries | ||
United States | 81.8% | |
Japan | 5.6% | |
United Kingdom | 2.6% | |
Sweden | 1.0% | |
Australia | 0.9% | |
China | 0.8% | |
France | 0.8% | |
Norway | 0.7% | |
Mexico | 0.7% | |
Netherlands | 0.6% | |
Other Assets | 4.5% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.8%) | |||||
AUSTRALIA (0.9%) | |||||
Banks (0.0%) | |||||
Adelaide Bank Ltd. (c) | 22,353 | $ | 215,369 | ||
Clothing (0.1%) | |||||
Ansell Ltd. (c) | 92,687 | 665,954 | |||
Engineering (0.4%) | |||||
Downer Edi Ltd. (c) | 329,864 | 1,822,006 | |||
WorleyParsons Ltd. (c) | 113,146 | 1,691,426 | |||
3,513,432 | |||||
Finance (0.1%) | |||||
Australian Stock Exchange Ltd. (c) | 45,661 | 1,105,441 | |||
Multimedia (0.0%) | |||||
APN News & Media Ltd. (c) | 43,604 | 164,288 | |||
Oil & Gas (0.0%) | |||||
Australian Pipeline Trust (c) | 53,385 | 169,294 | |||
Pharmaceuticals (0.1%) | |||||
Symbion Health Ltd. (c) | 434,842 | 987,465 | |||
Real Estate Investment Trust (0.0%) | |||||
ING Industrial Fund (c) | 175,122 | 289,343 | |||
Retail (0.2%) | |||||
Colorado Group Ltd. (c) | 121,235 | 390,749 | |||
David Jones Ltd. (c) | 290,036 | 639,902 | |||
Just Group Ltd. (c) | 167,590 | 425,859 | |||
1,456,510 | |||||
8,567,096 | |||||
AUSTRIA (0.2%) | |||||
Machinery (0.2%) | |||||
Andritz AG (c) | 6,902 | 1,139,241 | |||
Oil & Gas Equipment & Services (0.0%) | |||||
Schoeller-Blackman Oilfield Equipment AG (c) | 7,466 | 282,140 | |||
1,421,381 | |||||
BELGIUM (0.2%) | |||||
Broadcasting (0.0%) | |||||
Evs Broadcast Equipment S.A. (c) | 6,171 | 304,726 | |||
Metals (0.1%) | |||||
Cumerio (c) | 42,054 | 839,708 | |||
Telecommunication Equipment (0.0%) | |||||
Option NV (b) (c) | 14,752 | 353,345 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
BELGIUM (continued) | |||||
Ventures Business Trust (0.1%) | |||||
GIMV NV (b) (c) | 9,630 | $ | 559,563 | ||
2,057,342 | |||||
BERMUDA (0.2%) | |||||
Commercial Services (0.2%) | |||||
Steiner Leisure Ltd. (b) (c) | 40,400 | 1,597,012 | |||
CANADA (0.1%) | |||||
Mining (0.0%) | |||||
Pan American Silver Corp. (b) (c) | 18,400 | 331,016 | |||
Pharmaceuticals (0.1%) | |||||
Biovail Corp. International ADR (c) | 23,700 | 554,817 | |||
885,833 | |||||
CHINA (0.6%) | |||||
Advertising (0.2%) | |||||
Focus Media Holding Ltd. ADR (b) (c) | 24,400 | 1,589,904 | |||
E-Commerce (0.2%) | |||||
CTRIP.COM International ADR (c) | 33,200 | 1,694,860 | |||
Power Conversion/Supply Equipment (0.1%) | |||||
Harbin Power Equipment Co. Ltd. (c) | 554,000 | 660,799 | |||
Real Estate (0.0%) | |||||
Beijing North Star Co. Ltd. (c) | 922,000 | 206,968 | |||
Semiconductors (0.1%) | |||||
ASM Pacific Technology Ltd. (c) | 137,000 | 668,975 | |||
Telephone Communications (0.0%) | |||||
SmarTone Telecommunications Holdings Ltd. (c) | 364,500 | 362,472 | |||
Transportation (0.0%) | |||||
Orient Overseas International (c) | 42,900 | 155,520 | |||
5,339,498 | |||||
DENMARK (0.5%) | |||||
Banking (0.0%) | |||||
Roskilde Bank (c) | 1,330 | 259,770 | |||
Brewery (0.0%) | |||||
Royal Unibrew AS (c) | 2,617 | 290,579 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
DENMARK (continued) | |||||
Building & Construction (0.2%) | |||||
Sjaelso Gruppen AS (c) | 4,383 | $ | 1,465,504 | ||
Financial Services (0.1%) | |||||
Simcorp AS (c) | 5,675 | 926,786 | |||
Medical Products (0.1%) | |||||
ALK-ABELLO AS (b) (c) | 5,530 | 755,095 | |||
Transportation & Services (0.1%) | |||||
Torm D/S (c) | 15,719 | 748,099 | |||
4,445,833 | |||||
FINLAND (0.2%) | |||||
Machinery & Equipment (0.0%) | |||||
Ramirent Oyj (c) | 4,308 | 170,346 | |||
Steel (0.1%) | |||||
Rautaruukki Oyj (c) | 46,734 | 1,406,973 | |||
Telecommunication Equipment (0.1%) | |||||
Elcoteq Network Corp. (c) | 30,054 | 604,528 | |||
2,181,847 | |||||
FRANCE (0.8%) | |||||
Agricultural Operations (0.0%) | |||||
Ffr Provimi (c) | 4,786 | 158,353 | |||
Building—Residential/Commercial (0.1%) | |||||
Kaufman & Broad S.A. (c) | 13,754 | 747,796 | |||
Computer Services (0.1%) | |||||
GFI Informatique (c) | 19,125 | 147,969 | |||
Groupe Steria SCA (c) | 10,338 | 544,456 | |||
692,425 | |||||
Electrical Equipment (0.1%) | |||||
Nexans SA (c) | 9,710 | 689,938 | |||
Leisure (0.0%) | |||||
Trigano SA (c) | 6,240 | 330,983 | |||
Metals (0.1%) | |||||
CFF Recycling (c) | 23,431 | 853,794 | |||
Pharmaceuticals (0.1%) | |||||
Flamel Technologies SA ADR (b) (c) | 34,480 | 636,846 | |||
Publishing (0.0%) | |||||
Spir Communication (c) | 1,114 | 182,457 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Real Estate (0.2%) | |||||
Nexity (c) | 19,771 | $ | 1,146,743 | ||
Pierre & Vacances (c) | 4,178 | 457,687 | |||
1,604,430 | |||||
Software (0.1%) | |||||
Cie Generale de Geophysique SA (b) (c) | 9,726 | 1,668,528 | |||
7,565,550 | |||||
GERMANY (0.6%) | |||||
Metal Processors & Fabrication (0.3%) | |||||
Norddeutsche Affinerie AG (c) | 65,136 | 1,578,270 | |||
Metals (0.1%) | |||||
Salzgitter AG (c) | 12,865 | 1,079,845 | |||
Software (0.0%) | |||||
Software AG (c) | 5,231 | 272,760 | |||
Telecommunications (0.0%) | |||||
Telegate AG (c) | 16,691 | 312,473 | |||
Television (0.1%) | |||||
ProsiebenSAT.1 Media AG (c) | 53,087 | 1,324,911 | |||
Travel & Entertainment (0.0%) | |||||
Viad Corp. (c) | 3,800 | 118,940 | |||
Wire & Cable Products (0.1%) | |||||
Encore Wire Corp. (b) | 17,400 | 625,356 | |||
5,312,555 | |||||
GREECE (0.2%) | |||||
Entertainment (0.2%) | |||||
Intralot SA (c) | 57,623 | 1,537,055 | |||
HONG KONG (0.6%) | |||||
Banking (0.0%) | |||||
HKR International (c) | 544,000 | 270,274 | |||
Diversified Operations (0.0%) | |||||
Tianjin Development Holdings Ltd. (c) | 656,000 | 404,257 | |||
Electronics (0.2%) | |||||
VTech Holdings Ltd. (c) | 331,000 | 1,724,595 | |||
Financial Services (0.0%) | |||||
Guoco Group Ltd. (c) | 14,000 | 165,319 | |||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
HONG KONG (continued) | |||||
Hotels, Restaurants & Leisure (0.0%) | |||||
Hong Kong & Shanghai Hotels (c) | 323,500 | $ | 358,414 | ||
Oil & Gas Exploration & Production (0.1%) | |||||
Cnpc Hong Kong Ltd. (c) | 1,560,000 | 883,583 | |||
Public Thoroughfares (0.0%) | |||||
Anhui Expressway Co. Ltd. (c) | 524,000 | 391,905 | |||
Real Estate (0.3%) | |||||
Chinese Estates Ltd. (c) | 680,000 | 734,866 | |||
Hang Lung Group Ltd. (c) | 317,000 | 686,200 | |||
Wheelock & Co. Ltd. (c) | 125,000 | 209,985 | |||
1,631,051 | |||||
5,829,398 | |||||
IRELAND (0.4%) | |||||
Beverages (0.2%) | |||||
C&C Group PLC (c) | 202,447 | 1,758,051 | |||
Building & Construction (0.1%) | |||||
McInerney Holdings PLC (c) | 53,622 | 764,124 | |||
Medical Products (0.1%) | |||||
Icon PLC ADR (b) (c) | 15,300 | 846,090 | |||
3,368,265 | |||||
ITALY (0.4%) | |||||
Building Materials (0.0%) | |||||
Cementir (c) | 35,349 | 260,368 | |||
Clothing (0.2%) | |||||
Benetton Group Spa (c) | 111,006 | 1,660,044 | |||
Electric Products (0.0%) | |||||
Saes Getters (c) | 9,007 | 254,854 | |||
Electric Products-Miscellaneous (0.0%) | |||||
SAES Getters SPA (c) | 11,606 | 263,060 | |||
Food & Beverage (0.1%) | |||||
Cremonini SPA (c) | 248,509 | 666,089 | |||
Machinery (0.1%) | |||||
Biesse SPA (c) | 45,955 | 657,762 | |||
Software (0.0%) | |||||
Esprinet SPA (c) | 9,203 | 170,600 | |||
3,932,777 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (5.6%) | |||||
Auto & Auto Parts (0.5%) | |||||
Keihin Corp. (c) | 51,900 | $ | 1,114,661 | ||
Nissan Diesel Motor Co. Ltd. (c) | 386,000 | 1,965,307 | |||
Nissin Kogyo Co. Ltd. (c) | 95,600 | 1,763,160 | |||
4,843,128 | |||||
Banks (0.1%) | |||||
Keiyo Bank Ltd. (c) | 67,000 | 378,582 | |||
Shinki Co. Ltd. (c) | 71,900 | 442,100 | |||
820,682 | |||||
Beverages (0.1%) | |||||
Oenon Holdings, Inc. (c) | 208,000 | 810,087 | |||
Building & Construction (0.1%) | |||||
Bunka Shutter Co. Ltd. (c) | 26,000 | 176,216 | |||
Sumitomo Osaka Cement Co. Ltd. (c) | 98,000 | 301,822 | |||
478,038 | |||||
Business Services (0.0%) | |||||
Secom Techno Service Co. Ltd. (c) | 3,500 | 161,671 | |||
Chemicals (0.2%) | |||||
Mec Co. Ltd. (c) | 6,900 | 100,145 | |||
Nippon Synthetic Chemical Industry Co. (c) | 246,000 | 984,946 | |||
Tohcello Co. Ltd. (c) | 38,000 | 462,725 | |||
1,547,816 | |||||
Cosmetics (0.0%) | |||||
ADERANS Co. Ltd. (c) | 10,900 | 294,125 | |||
Electrical & Electronic (0.9%) | |||||
Japan Electronic Materials Corp. (c) | 20,200 | 543,919 | |||
Kenwood Corp. (c) | 596,000 | 1,115,226 | |||
KOA Corp. (c) | 77,100 | 1,061,253 | |||
Micronics Japan Co., Ltd (c) | 16,400 | 426,807 | |||
Nippon Signal (c) | 91,000 | 871,391 | |||
Osaki Electric Co. Ltd. (c) | 35,000 | 365,021 | |||
Shibaura Mechatronics Corp. (c) | 16,000 | 135,445 | |||
SHINKAWA Ltd. (c) | 12,500 | 326,452 | |||
Shinko Electric Industries Co. Ltd. (c) | 32,100 | 931,345 | |||
Star Micronics (c) | 92,000 | 1,863,966 | |||
UNIDEN Corp. (c) | 51,000 | 566,276 | |||
8,207,101 | |||||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Engineering (0.2%) | |||||
Kandenko Co. Ltd (c) | 113,000 | $ | 840,159 | ||
Shinko Plantech Ltd. (c) | 155,000 | 1,227,102 | |||
2,067,261 | |||||
Entertainment Software (0.1%) | |||||
Capcom Co. Ltd. (c) | 78,500 | 941,800 | |||
Financial Investments (0.0%) | |||||
UFJ Central Leasing (c) | 700 | 35,288 | |||
Food (0.0%) | |||||
Toyo Suisan Kaisha Ltd. (c) | 17,000 | 266,358 | |||
Food Products (0.0%) | |||||
Royal Co. (c) | 16,000 | 248,152 | |||
Gambling (0.0%) | |||||
Mars Engineering Corp. (c) | 10,800 | 344,687 | |||
Internet (0.0%) | |||||
eAccess Ltd. (c) | 351 | 230,048 | |||
Machinery (0.4%) | |||||
CKD Corp. (c) | 116,800 | 1,815,210 | |||
Nippon Thompson Co. Ltd. (c) | 35,000 | 411,162 | |||
Toshiba Machine Co. Ltd. (c) | 145,000 | 1,643,535 | |||
3,869,907 | |||||
Machinery & Equipment (0.1%) | |||||
Daihen (Metals) (c) | 103,000 | 518,981 | |||
Manufacturing (0.1%) | |||||
Fuji Heavy Industries Ltd. (c) | 28,000 | 163,996 | |||
Gunze Ltd. (c) | 177,000 | 1,055,119 | |||
1,219,115 | |||||
Medical Instruments (0.3%) | |||||
Nihon Kohden Corp. (c) | 85,000 | 1,395,248 | |||
Nipro Corp. (c) | 70,000 | 1,256,524 | |||
2,651,772 | |||||
Metal Fabricate/Hardware (0.1%) | |||||
Godo Steel (Metals) (c) | 117,000 | 700,436 | |||
Metal Processors & Fabrication (0.1%) | |||||
Kitz Corp. (c) | 79,000 | 599,816 | |||
Metals (0.5%) | |||||
Chuo Denki Kogyo Co. Ltd. (c) | 21,000 | 72,804 | |||
Osaka Steel Co. Ltd. (c) | 68,000 | 1,243,976 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Metals (continued) | |||||
Pacific Metals Co. Ltd. (c) | 193,000 | $ | 1,288,540 | ||
Yamato Kogyo (c) | 82,900 | 1,854,787 | |||
4,460,107 | |||||
Motion Pictures & Services (0.0%) | |||||
Toei Animation Co. Ltd. (c) | 3,700 | 220,165 | |||
Pharmaceuticals (0.4%) | |||||
Eiken Chemical Co. Ltd. (c) | 84,000 | 981,426 | |||
Kaken Pharmaceutical (c) | 45,000 | 337,816 | |||
Rohto Pharmaceutical Co. Ltd. (c) | 78,000 | 819,071 | |||
Santen Pharmaceutical Co. Ltd. (c) | 55,200 | 1,312,647 | |||
3,450,960 | |||||
Radio Broadcasting (0.1%) | |||||
Jsat Corp. (c) | 191 | 553,021 | |||
Real Estate (0.2%) | |||||
Creed Corp. (c) | 122 | 483,221 | |||
Tokyu Livable, Inc. (c) | 19,700 | 1,261,490 | |||
1,744,711 | |||||
Real Estate Management & Development (0.1%) | |||||
Daibiru Corp. (c) | 65,900 | 731,882 | |||
Retail (0.3%) | |||||
Hankyu Department Stores, Inc. (c) | 174,000 | 1,350,161 | |||
Kojima Co. Ltd. (c) | 23,800 | 322,374 | |||
Okuwa Co. Ltd. (c) | 47,000 | 603,695 | |||
Parco Co. Ltd. (c) | 75,300 | 770,103 | |||
3,046,333 | |||||
Software (0.2%) | |||||
Cac Corp. (c) | 32,800 | 371,914 | |||
Daiwabo Information System Co. Ltd. (c) | 18,000 | 289,542 | |||
DTS Corp. (c) | 8,700 | 321,992 | |||
Nippon System Development Co. Ltd. (c) | 20,000 | 695,302 | |||
Simplex Technology, Inc. (c) | 380 | 239,025 | |||
1,917,775 | |||||
Technology (0.0%) | |||||
Yen Tarmon Co. Ltd. (c) | 26,300 | 439,706 | |||
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Telecommunications (0.2%) | |||||
Hitachi Kokusai Electric Co. Ltd. (c) | 130,000 | $ | 1,485,414 | ||
New Japan Radio Co. Ltd. (c) | 71,000 | 491,463 | |||
1,976,877 | |||||
Transportation (0.1%) | |||||
Yusen Air & Sea Service Co. (c) | 22,200 | 524,097 | |||
Utilities (0.1%) | |||||
Okinawa Electric Power (c) | 9,600 | 573,601 | |||
Wire & Cable Products (0.1%) | |||||
Fujikura Ltd. (c) | 114,000 | 1,258,662 | |||
51,754,166 | |||||
MEXICO (0.7%) | |||||
Airports Development (0.3%) | |||||
Grupo Aeroportuario Del Pacifico SA de CV ADR (c) | 90,832 | 2,892,999 | |||
Construction (0.4%) | |||||
Desarrolladora Homex SA de CV ADR (b) (c) | 96,700 | 3,172,727 | |||
6,065,726 | |||||
NETHERLANDS (0.7%) | |||||
Business Services (0.2%) | |||||
USG People NV (c) | 26,906 | 2,058,402 | |||
Computer Software (0.0%) | |||||
Unit 4 Agresso NV (b) (c) | 9,005 | 181,405 | |||
Engineering Services (0.1%) | |||||
Arcadis NV (c) | 12,382 | 585,706 | |||
Insurance (0.2%) | |||||
Ing Groep NV (c) | 46,261 | 1,815,886 | |||
Packaging (0.0%) | |||||
Buhrmann NV (c) | 25,003 | 362,456 | |||
Pharmaceuticals (0.0%) | |||||
OPG Groep NV (c) | 3,764 | 327,534 | |||
Real Estate Investment Trust (0.1%) | |||||
Vastned Retail | 6,352 | 515,848 | |||
Transportation (0.1%) | |||||
Smit Internationale NV (c) | 6,770 | 473,963 | |||
6,321,200 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NEW ZEALAND (0.0%) | |||||
Building Materials (0.0%) | |||||
Fletcher Building Ltd. (c) | 64,550 | $ | 359,708 | ||
NORWAY (0.7%) | |||||
Banking & Finance (0.2%) | |||||
Abg Sundal Collier ASA (c) | 237,970 | 361,704 | |||
Aktiv Kapital ASA (c) | 8,900 | 155,800 | |||
Sparebanken Nord-Norge (c) | 17,640 | 391,255 | |||
Sparebanken Rogaland (c) | 15,342 | 443,787 | |||
1,352,546 | |||||
Computer Systems (0.0%) | |||||
Visma ASA (c) | 8,909 | 193,294 | |||
Construction (0.3%) | |||||
Aker Yards ASA (c) | 24,740 | 1,739,461 | |||
Veidekke ASA (c) | 12,800 | 425,385 | |||
2,164,846 | |||||
Finance (0.1%) | |||||
Acta Holding ASA (c) | 410,020 | 1,299,148 | |||
Fisheries (0.1%) | |||||
Leroy Seafood Group ASA (c) | 29,965 | 568,452 | |||
Oil—Field Services (0.0%) | |||||
Tgs Nopec Geophysical Company ASA (b) (c) | 12,612 | 223,594 | |||
Retail (0.0%) | |||||
Expert ASA (c) | 19,200 | 262,488 | |||
Transportation (0.0%) | |||||
Jinhui Shipping & Transportation Ltd. (c) | 83,073 | 244,330 | |||
6,308,698 | |||||
PORTUGAL (0.0%) | |||||
Building & Construction (0.0%) | |||||
SEMPA-Sociedade de Investimento e Gestao, SGPS (c) | 23,915 | 252,326 | |||
Food Distributors (0.0%) | |||||
Jeronimo Martins SA (c) | 9,631 | 164,503 | |||
416,829 | |||||
SINGAPORE (0.3%) | |||||
Computer Hardware Manufacturing (0.0%) | |||||
MFS Technology Ltd. (c) | 270,000 | 194,661 | |||
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SINGAPORE (continued) | |||||
Diversified Products (0.0%) | |||||
First Engineering Ltd. (c) | 173,000 | $ | 94,198 | ||
Food Distributors (0.0%) | |||||
Pacific Andes Holdings Ltd. (c) | 968,000 | 449,612 | |||
Machinery (0.2%) | |||||
MMI Holding Ltd. (c) | 1,506,000 | 680,923 | |||
Oil & Gas (0.0%) | |||||
Singapore Petroleum Co. Ltd. (c) | 104,000 | 332,590 | |||
Real Estate (0.1%) | |||||
Keppel Land Ltd. (c) | 130,000 | 333,074 | |||
Sgd the Ascott Group Ltd. (c) | 311,000 | 203,069 | |||
536,143 | |||||
Research & Development (0.0%) | |||||
Sembcorp Industries Ltd. (c) | 84,340 | 172,929 | |||
Services (0.0%) | |||||
Singapore Airport Terminal Services Ltd. (c) | 172,000 | 231,983 | |||
Transportation (0.0%) | |||||
Ezra Holdings Ltd. (c) | 259,200 | 362,864 | |||
3,055,903 | |||||
SOUTH KOREA (0.1%) | |||||
RETAIL (0.1%) | |||||
Gmarket, Inc. ADR (b) (c) | 66,802 | 1,026,747 | |||
SPAIN (0.0%) | |||||
Airlines (0.0%) | |||||
Iberia Lineas Aereas de Espana SA (c) | 63,688 | 164,290 | |||
SWEDEN (1.0%) | |||||
Building & Construction (0.2%) | |||||
NCC (c) | 76,236 | 1,843,327 | |||
Building-Heavy Construction (0.2%) | |||||
JM AB (c) | 115,876 | 1,839,757 | |||
Electronic Equipment (0.0%) | |||||
Gunnebo AB (c) | 23,200 | 257,632 | |||
Finance Services (0.2%) | |||||
D. Carnegie & Co. AB (c) | 85,193 | 1,559,652 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWEDEN (continued) | |||||
Home Furnishing (0.2%) | |||||
Nobia AB (c) | 44,289 | $ | 1,439,015 | ||
Real Estate (0.2%) | |||||
Kungsleden AB (c) | 162,396 | 1,903,820 | |||
Steel (0.0%) | |||||
SSAB Svenskt Stal AB (c) | 13,074 | 260,286 | |||
9,103,489 | |||||
SWITZERLAND (0.5%) | |||||
Appliances (0.1%) | |||||
AFG Arbonia-Forster Holding AG (c) | 1,841 | 583,879 | |||
Banking (0.0%) | |||||
Banque Cantonale Vaudois (c) | 1,110 | 379,791 | |||
Building & Construction (0.0%) | |||||
Sika Finanz AG (b) (c) | 407 | 451,870 | |||
Foreign Banking (0.1%) | |||||
Vontobel Holding AG (c) | 21,070 | 737,775 | |||
Manufacturing (0.1%) | |||||
Georg Fischer AG (b) (c) | 2,384 | 1,021,360 | |||
Retail (0.2%) | |||||
Charles Voegele Holding AG (b) (c) | 19,267 | 1,393,219 | |||
4,567,894 | |||||
UNITED KINGDOM (2.8%) | |||||
Auto & Auto Parts (0.1%) | |||||
European Motor Holdings PLC (c) | 53,558 | 445,282 | |||
Pendragon PLC (c) | 33,731 | 372,254 | |||
817,536 | |||||
Automotive (0.0%) | |||||
Lookers PLC (c) | 24,619 | 359,159 | |||
Banking & Finance (0.2%) | |||||
Paragon Group (c) | 147,384 | 1,780,975 | |||
Building & Construction (0.5%) | |||||
Babcock International Group PLC (c) | 150,600 | 918,258 | |||
Kier Group PLC (c) | 48,568 | 1,351,438 | |||
SIG PLC (c) | 74,229 | 1,206,122 | |||
3,475,818 | |||||
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Chemicals (0.0%) | |||||
Croda International PLC (c) | 47,999 | $ | 384,956 | ||
Commercial Services (0.1%) | |||||
Aggreko PLC (c) | 122,715 | 650,849 | |||
Construction (0.0%) | |||||
Morgan Sindall PLC (c) | 16,584 | 349,868 | |||
Consulting Services (0.1%) | |||||
Atkins (WS) PLC (c) | 16,625 | 255,806 | |||
Savills PLC (c) | 49,866 | 536,509 | |||
792,315 | |||||
Consumer Products (0.1%) | |||||
Body Shop International PLC (c) | 51,265 | 283,895 | |||
Mcbride PLC (c) | 233,482 | 766,301 | |||
1,050,196 | |||||
Electrical & Electronic (0.0%) | |||||
TT Electronics PLC (c) | 62,771 | 214,719 | |||
Food Diversified (0.2%) | |||||
Dairy Crest Group PLC (c) | 200,398 | 1,862,429 | |||
Devro PLC (c) | 173,394 | 374,950 | |||
2,237,379 | |||||
Insurance (0.3%) | |||||
Amlin PLC (c) | 337,639 | 1,471,615 | |||
Brit Insurance Holdings PLC (c) | 252,658 | 1,228,716 | |||
Hiscox PLC (c) | 73,074 | 281,657 | |||
2,981,988 | |||||
Machinery (0.0%) | |||||
Spirax-Sarco Engineering PLC (c) | 18,331 | 308,376 | |||
Medical—Information Systems (0.0%) | |||||
Isoft Group (c) | 96,284 | 137,137 | |||
Metals (0.2%) | |||||
Aquarius Platinum Ltd. (c) | 114,871 | 1,709,774 | |||
Pipelines (0.1%) | |||||
BPS Hunting Ord (c) | 83,026 | 596,295 | |||
Printing (0.2%) | |||||
DE LA Rue PLC (c) | 179,704 | 1,812,696 | |||
Real Estate (0.0%) | |||||
BPS Dtz Holdings PLC (c) | 35,542 | 446,215 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Retail (0.5%) | |||||
House of Fraser PLC (c) | 150,899 | $ | 371,088 | ||
N Brown Group PLC (c) | 81,903 | 323,526 | |||
Restaurant Group plc (c) | 82,023 | 307,206 | |||
Wetherspoon PLC (c) | 177,919 | 1,410,922 | |||
Woolworths Group PLC (c) | 2,204,305 | 1,283,138 | |||
3,695,880 | |||||
Storage (0.1%) | |||||
Wincanton PLC (c) | 132,601 | 762,904 | |||
Travel Services (0.0%) | |||||
First Choice Holidays PLC (c) | 96,412 | 407,144 | |||
Wire & Cable Products (0.1%) | |||||
Dem Leoni AG (c) | 18,008 | 678,200 | |||
25,650,379 | |||||
UNITED STATES (79.5%) | |||||
Advertising (0.6%) | |||||
Arbitron, Inc. | 37,380 | 1,432,775 | |||
Getty Images, Inc. (b) | 44,200 | 2,807,142 | |||
Harte-Hanks, Inc. | 43,800 | 1,123,032 | |||
5,362,949 | |||||
Aerospace & Defense (1.3%) | |||||
AAR Corp. (b) | 60,200 | 1,338,246 | |||
Alliant Techsystems, Inc. (b) | 5,629 | 429,774 | |||
Argon St., Inc. (b) | 34,300 | 913,409 | |||
Armor Holdings, Inc. (b) | 5,145 | 282,100 | |||
Curtiss-Wright Corp. | 34,200 | 1,056,096 | |||
DRS Technologies, Inc. | 45,884 | 2,236,846 | |||
Hexcel Corp. (b) | 49,100 | 771,361 | |||
Kaman Corp. | 32,000 | 582,400 | |||
Mantech International Corp., Class A (b) | 39,900 | 1,231,314 | |||
Moog, Inc., Class A (b) | 44,060 | 1,507,733 | |||
MTC Technologies, Inc. (b) | 40,000 | 945,200 | |||
Teledyne Technologies, Inc. (b) | 3,000 | 98,280 | |||
Triumph Group, Inc. (b) | 9,300 | 446,400 | |||
United Industrial Corp. | 10,124 | 458,111 | |||
12,297,270 | |||||
Agriculture (0.2%) | |||||
The Andersons, Inc. | 23,800 | 990,318 | |||
UAP Holding Corp. | 28,200 | 615,042 | |||
1,605,360 | |||||
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Airline Services (0.0%) | |||||
Frontier Airlines Holdings, Inc. (b) | 10,624 | $ | 76,599 | ||
Airlines (0.1%) | |||||
Alaska Air Group, Inc. (b) | 9,690 | 381,980 | |||
Mesa Air Group (b) | 30,189 | 297,362 | |||
Republic Airways Holdings, Inc. (b) | 25,500 | 434,009 | |||
1,113,351 | |||||
Aluminum (0.1%) | |||||
Century Aluminum Co. (b) | 38,600 | 1,377,634 | |||
Apparel (0.3%) | |||||
Guess?, Inc. (b) | 15,201 | 634,642 | |||
Perry Ellis International (b) | 21,518 | 544,621 | |||
Phillips-Van Heusen Corp. | 46,800 | 1,785,887 | |||
Steven Madden Ltd. | 5,100 | 151,062 | |||
3,116,212 | |||||
Auction House (0.6%) | |||||
Ritchie Brothers Auctioneers, Inc. | 79,400 | 4,222,492 | |||
Sotheby’s Holdings, Inc. (b) | 51,700 | 1,357,125 | |||
5,579,617 | |||||
Auto & Auto Parts (2.1%) | |||||
A.S.V., Inc. (b) | 118,900 | 2,739,456 | |||
Accuride Corp. (b) | 29,242 | 364,648 | |||
ArvinMeritor, Inc. | 106,138 | 1,824,512 | |||
Asbury Automotive Group (b) | 8,900 | 186,366 | |||
Clarcor, Inc. | 105,200 | 3,133,908 | |||
Directed Electronics, Inc. (b) | 83,980 | 1,101,818 | |||
Gentex Corp. | 83,000 | 1,162,000 | |||
Group 1 Automotive, Inc. | 41,622 | 2,344,983 | |||
LKQ Corp. (b) | 125,556 | 2,385,564 | |||
O’Reilly Automotive, Inc. (b) | 102,880 | 3,208,827 | |||
Oshkosh Truck Corp. | 10,800 | 513,216 | |||
Rush Enterprises Inc., Class A (b) | 19,400 | 352,498 | |||
Sonic Automotive, Inc. | 17,100 | 379,278 | |||
19,697,074 | |||||
Banking (2.1%) | |||||
Accredited Home Lenders (b) | 1,100 | 52,591 | |||
Alabama National Bankcorp | 10,400 | 708,760 | |||
Amcore Financial, Inc. | 20,500 | 600,855 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Banking (continued) | |||||
BancFirst Corp. | 5,398 | $ | 241,561 | ||
BOK Financial Corp. | 16,500 | 819,555 | |||
Boston Private Financial Holdings, Inc. | 13,000 | 362,700 | |||
Capital Crossing Bank (b) | 957 | 23,542 | |||
Center Financial Corp. | 8,245 | 194,912 | |||
Chittenden Corp. | 11,000 | 284,350 | |||
Citizens Banking Corp. | 3,600 | 87,876 | |||
City Bank Lynnwood | 1,000 | 46,660 | |||
City Holding Co. | 7,096 | 256,449 | |||
Columbia Banking System, Inc. | 1,000 | 37,380 | |||
Community Bancorp (b) | 1,600 | 49,728 | |||
Community Trust Bancorp, Inc. | 715 | 24,975 | |||
Corus Bankshares, Inc. | 83,982 | 2,198,648 | |||
Dime Community Bancshares | 63,350 | 859,660 | |||
First Citizens BancShares, Inc. | 4,550 | 912,275 | |||
First Commonwealth Financial Corp. | 23,200 | 294,640 | |||
First Community Bancorp | 1,400 | 82,712 | |||
First Indiana Corp. | 474 | 12,338 | |||
First Niagara Financial Group, Inc. | 13,000 | 182,260 | |||
First Regional Bancorp (b) | 1,438 | 126,544 | |||
Firstbank Corp. | 14,900 | 138,570 | |||
FirstFed Financial Corp. (b) | 23,637 | 1,363,145 | |||
Franklin Bank Corp. (b) | 31,900 | 644,061 | |||
Fremont General Corp. | 41,800 | 775,808 | |||
Hancock Holding Co. | 1,682 | 94,192 | |||
Hanmi Financial Corp. | 46,250 | 899,100 | |||
Independent Bank Corp. | 2,730 | 71,799 | |||
Intervest Bancshares Corp. (b) | 5,944 | 240,732 | |||
ITLA Capital Corp. | 1,883 | 99,008 | |||
MAF Bancorp, Inc. | 11,200 | 479,808 | |||
Mainsource Financial Group, Inc. | 3,700 | 64,491 | |||
Nara Bankcorp, Inc. | 1,810 | 33,938 | |||
National Penn Bancshares, Inc. | 45,005 | 893,799 | |||
New Century Financial Corp. | 8,650 | 395,738 | |||
Old Second Bancorp, Inc. | 3,863 | 119,753 | |||
Pacific Capital Bancorp | 12,327 | 383,616 | |||
Preferred Bank | 652 | 34,954 | |||
Provident Bankshares Corp. | 19,900 | 724,161 | |||
Republic Bancorp, Inc. | 13,800 | 170,982 | |||
Sterling Financial Corp. | 19,000 | 416,100 | |||
Suffolk Bancorp | 1,800 | 58,950 |
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Banking (continued) | |||||
Taylor Cap Group, Inc. | 1,739 | $ | 70,969 | ||
Texas Capital Bancshares, Inc. (b) | 9,000 | 209,700 | |||
TrustCo Bank Corp. | 25,400 | 279,908 | |||
UMB Financial | 22,400 | 746,816 | |||
Union Bankshares Corp. | 14,179 | 611,682 | |||
W Holding Co., Inc. | 10,100 | 67,165 | |||
Wilmington Trust Corp. | 24,329 | 1,026,197 | |||
19,576,113 | |||||
Broadcasting (0.2%) | |||||
CKX, Inc. (b) | 99,600 | 1,351,572 | |||
Sinclair Broadcast Group, Inc., Class A | 61,292 | 524,660 | |||
World Wrestling Federation Entertainment, Inc. | 14,500 | 244,905 | |||
2,121,137 | |||||
Building & Construction (2.1%) | |||||
Aaon, Inc. | 2,100 | 53,886 | |||
Apogee Enterprises | 5,000 | 73,500 | |||
Brookfield Homes Corp. | 43,035 | 1,418,003 | |||
Champion Enterprises (b) | 7,100 | 78,384 | |||
Chicago Bridge & Iron Co. | 116,800 | 2,820,719 | |||
Granite Construction, Inc. | 23,600 | 1,068,372 | |||
Lennox International, Inc. | 38,252 | 1,012,913 | |||
Louisiana-Pacific Corp. | 68,457 | 1,499,208 | |||
LSI Industries, Inc. | 13,200 | 224,268 | |||
Martin Marietta Materials | 3,400 | 309,910 | |||
Meritage Homes Corp. (b) | 29,100 | 1,374,975 | |||
NCI Building Systems, Inc. (b) | 14,400 | 765,648 | |||
NVR, Inc. (b) | 2,752 | 1,351,920 | |||
Orleans Homebuilders | 6,100 | 99,125 | |||
Simpson Manufacturing Co., Inc. | 64,900 | 2,339,645 | |||
U.S. Concrete Inc. (b) | 104,032 | 1,149,554 | |||
Universal Forest Products, Inc. | 21,934 | 1,375,920 | |||
USG Corp. (b) | 34,946 | 2,548,612 | |||
Williams Scotsman International, Inc. (b) | 20,340 | 444,226 | |||
20,008,788 | |||||
Building Products (0.2%) | |||||
Eagle Materials, Inc. | 30,517 | 1,449,558 | |||
PGT, Inc. (b) | 36,600 | 578,280 | |||
2,027,838 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Business Services (0.1%) | |||||
FTD Group, Inc. (b) | 4,072 | $ | 54,972 | ||
Herman Miller, Inc. | 13,600 | 350,472 | |||
ICT Group (b) | 1,385 | 33,974 | |||
KFORCE.COM, Inc. (b) | 10,067 | 155,938 | |||
Modis Professional Services, Inc. (b) | 8,200 | 123,492 | |||
Rewards Network, Inc. (b) | 11,196 | 91,471 | |||
Standard Parking Corp (b) | 2,302 | 62,338 | |||
872,657 | |||||
Chemicals (0.7%) | |||||
A. Schulman, Inc. | 19,600 | 448,644 | |||
Balchem Corp. | 1,950 | 43,875 | |||
Celanese Corp. | 35,612 | 727,197 | |||
FMC Corp. | 26,005 | 1,674,462 | |||
H. B. Fuller Co. | 2,800 | 121,996 | |||
Hercules, Inc. (b) | 9,854 | 150,372 | |||
Olin Corp. | 52,223 | 936,358 | |||
Pioneer Cos., Inc. (b) | 24,530 | 669,178 | |||
Sensient Technologies Corp. | 26,009 | 543,848 | |||
Spartech Corp. | 13,901 | 314,163 | |||
Westlake Chemical Corp. | 38,641 | 1,151,502 | |||
6,781,595 | |||||
Coal (0.2%) | |||||
Foundation Coal Holdings, Inc. | 8,100 | 380,133 | |||
James River Coal Co. (b) | 28,100 | 744,369 | |||
Massey Energy Co. | 17,559 | 632,124 | |||
1,756,626 | |||||
Commercial Services (1.4%) | |||||
Cbiz, Inc. (b) | 36,200 | 268,242 | |||
Coinstar, Inc. (b) | 46,000 | 1,101,240 | |||
Costar Group, Inc. (b) | 117,550 | 7,033,016 | |||
Deluxe Corp. | 20,500 | 358,340 | |||
DynCorp International, Inc. (b) | 30,100 | 312,438 | |||
Macquarie Infrastructure Co. Trust | 50,029 | 1,380,300 | |||
Plexus Corp. (b) | 70,850 | 2,423,779 | |||
12,877,355 | |||||
Communications (0.2%) | |||||
CenturyTel, Inc. | 19,954 | 741,292 | |||
R.H. Donnelley Corp. | 12,306 | 665,385 | |||
1,406,677 | |||||
11
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Computer Service (1.9%) | |||||
Acxiom Corp. | 69,279 | $ | 1,731,975 | ||
Agilysys, Inc. | 59,697 | 1,074,546 | |||
Cerner Corp. (b) | 72,600 | 2,694,186 | |||
Corel Corp. (b) | 106,630 | 1,285,958 | |||
IHS, Inc. (b) | 115,014 | 3,407,864 | |||
Lasercard Corp. (b) | 24,276 | 317,773 | |||
Micros Systems, Inc. (b) | 43,320 | 1,892,218 | |||
MTS Systems | 30,376 | 1,200,156 | |||
NCI, Inc. (b) | 49,800 | 652,380 | |||
SI International, Inc. (b) | 21,500 | 659,190 | |||
Silicon Storage Technology, Inc. (b) | 86,800 | 352,408 | |||
SRA Internatinal, Inc., Class A (b) | 23,100 | 615,153 | |||
Sykes Enterprises, Inc. (b) | 67,649 | 1,093,208 | |||
Trident Microsystems, Inc. (b) | 20,800 | 394,784 | |||
17,371,799 | |||||
Computer Software (2.6%) | |||||
Actuate Corp. (b) | 17,766 | 71,775 | |||
American Reprographics Co. (b) | 2,476 | 89,755 | |||
Aspen Technologies, Inc. (b) | 89,500 | 1,174,240 | |||
Avid Technology, Inc. (b) | 35,400 | 1,179,882 | |||
Blabkbaud, Inc. | 231,400 | 5,252,779 | |||
Docucorp International, Inc. (b) | 4,978 | 37,186 | |||
EPIQ Systems, Inc. (b) | 73,620 | 1,225,037 | |||
Lawson Software, Inc. (b) | 43,400 | 290,780 | |||
MapInfo Corp. (b) | 10,800 | 140,940 | |||
MicroStrategy, Inc. (b) | 34,421 | 3,356,736 | |||
Neoware Systems, Inc. (b) | 24,400 | 299,876 | |||
NETGEAR, Inc. (b) | 29,500 | 638,675 | |||
Quest Software, Inc. (b) | 95,600 | 1,342,224 | |||
Scientific Games Corp. (b) | 105,700 | 3,765,034 | |||
SPSS Inc. (b) | 8,975 | 288,457 | |||
Sybase, Inc. (b) | 46,985 | 911,509 | |||
Tradestation Group, Inc. (b) | 55,130 | 698,497 | |||
Vignette Corp. (b) | 41,300 | 602,154 | |||
Visicu, Inc. (b) | 144,006 | 2,541,706 | |||
Wind River Systems, Inc. (b) | 61,500 | 547,350 | |||
24,454,592 | |||||
Computer Systems (0.0%) | |||||
Brocade Communications Systems, Inc. (b) | 5,401 | 33,162 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Construction & Housing (0.1%) | |||||
Emcor Group, Inc. (b) | 18,160 | $ | 883,847 | ||
Consulting Services (0.7%) | |||||
Cra International, Inc. (b) | 2,000 | 90,280 | |||
LECG Corp. (b) | 68,700 | 1,268,889 | |||
Sourcecorp, Inc. (b) | 5,100 | 126,429 | |||
The Advisory Board Co. (b) | 87,900 | 4,227,111 | |||
Watson Wyatt Worldwide, Inc. | 11,400 | 400,596 | |||
6,113,305 | |||||
Consumer Goods & Services (1.3%) | |||||
AptarGroup, Inc. | 72,000 | 3,571,920 | |||
Church & Dwight Co., Inc. | 111,700 | 4,068,113 | |||
Jarden Corp. (b) | 19,750 | 601,388 | |||
Kellwood Co. | 39,069 | 1,143,550 | |||
Matthews International Corp., Class A | 65,900 | 2,271,573 | |||
11,656,544 | |||||
Consumer Products (0.1%) | |||||
Central Garden & Pet Co. (b) | 30,400 | 1,308,720 | |||
Containers (0.0%) | |||||
Silgan Holdings, Inc. | 12,149 | 449,634 | |||
Cosmetics (0.4%) | |||||
Alberto-Culver Co., Class B | 50,400 | 2,455,488 | |||
Elizabeth Arden, Inc. (b) | 46,500 | 831,420 | |||
Parlux Fragrances, Inc. (b) | 43,600 | 422,484 | |||
3,709,392 | |||||
Data Processing & Reproduction (0.8%) | |||||
Dun & Bradstreet Corp. (b) | 1,454 | 101,315 | |||
Fair, Issac and Co., Inc. | 27,875 | 1,012,141 | |||
Global Payment, Inc. | 59,682 | 2,897,561 | |||
infoUSA, Inc. | 3,236 | 33,363 | |||
Komag, Inc. (b) | 71,597 | 3,306,350 | |||
TheStreet.com, Inc. | 6,459 | 82,804 | |||
7,433,534 | |||||
Diagnostic Equipment (0.2%) | |||||
Biosite Diagnostics, Inc. (b) | 28,949 | 1,321,811 | |||
Orasure Technologies, Inc. (b) | 39,300 | 374,136 | |||
1,695,947 | |||||
Distribution (0.7%) | |||||
Bell Microproducts, Inc. (b) | 42,400 | 229,808 | |||
BlueLinx Holdings, Inc. | 41,301 | 538,152 |
12
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Distribution (continued) | |||||
Building Materials Holding Corp. | 73,359 | $ | 2,044,515 | ||
Pool Corp. | 75,200 | 3,280,976 | |||
6,093,451 | |||||
Diversified Manufacturing Operations (0.4%) | |||||
A.O. Smith Corp. | 23,294 | 1,079,910 | |||
Barnes Group, Inc. | 48,100 | 959,595 | |||
Teleflex, Inc. | 28,343 | 1,531,089 | |||
Trinity Industries | 6,200 | 250,480 | |||
3,821,074 | |||||
Education (1.4%) | |||||
Blackboard, Inc. (b) | 166,900 | 4,833,424 | |||
ITT Educational Services, Inc. (b) | 86,500 | 5,692,565 | |||
Skillsoft PLC (b) | 407,600 | 2,494,512 | |||
13,020,501 | |||||
Electronic Components (0.5%) | |||||
Ampex Corp. (b) | 1,959 | 22,842 | |||
Amphenol Corp., Class A | 6,300 | 352,548 | |||
Ansoft Corp. (b) | 13,274 | 271,852 | |||
Arrow Electronics, Inc. (b) | 59,593 | 1,918,894 | |||
Avnet, Inc. (b) | 20,400 | 408,408 | |||
AVX Corp. | 33,045 | 521,781 | |||
Greatbatch, Inc. (b) | 12,100 | 285,560 | |||
Methode Electronics | 11,500 | 120,865 | |||
Zoran Corp. (b) | 19,344 | 470,833 | |||
4,373,583 | |||||
Electronics (1.1%) | |||||
American Science & Engineering, Inc. (b) | 4,117 | 238,457 | |||
Analogic Corp. | 1,300 | 60,593 | |||
Bel Fuse, Inc. | 10,300 | 337,943 | |||
Brady Corp., Class A | 68,400 | 2,519,856 | |||
CH Energy Group, Inc. | 1,700 | 81,600 | |||
Conexant Systems, Inc. (b) | 193,100 | 482,750 | |||
Cree Research, Inc. (b) | 51,300 | 1,218,888 | |||
EMS Technologies (b) | 2,900 | 52,113 | |||
Kulicke & Soffa Industries, Inc. (b) | 22,297 | 165,221 | |||
Lxys Corp. (b) | 13,700 | 131,520 | |||
Mettler Toledo International, Inc. (b) | 16,620 | 1,006,673 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Electronics (continued) | |||||
MKS Instruments, Inc. (b) | 41,597 | $ | 836,932 | ||
Molecular Devices Corp. (b) | 15,754 | 481,442 | |||
Planar Systems, Inc. (b) | 31,480 | 379,019 | |||
Rogers Corp. (b) | 3,500 | 197,190 | |||
Silicon Laboratories (b) | 14,700 | 516,705 | |||
Teradyne, Inc. (b) | 27,540 | 383,632 | |||
Triquint Semiconductor, Inc. (b) | 87,800 | 391,588 | |||
WESCO International, Inc. (b) | 13,303 | 917,907 | |||
Zygo Corp. (b) | 18,721 | 306,837 | |||
10,706,866 | |||||
Energy (0.3%) | |||||
Covanta Holding Corp. (b) | 13,000 | 229,450 | |||
Headwaters, Inc. (b) | 19,000 | 485,640 | |||
KFx, Inc. (b) | 39,920 | 609,978 | |||
Sierra Pacific Resources (b) | 64,000 | 895,999 | |||
Vectren Corp. | 6,087 | 165,871 | |||
2,386,938 | |||||
Engineering Services (0.3%) | |||||
McDermott International, Inc. (b) | 42,750 | 1,943,843 | |||
Michael Baker Corp. (b) | 30,600 | 664,020 | |||
2,607,863 | |||||
Entertainment (0.5%) | |||||
LodgeNet Entertainment Corp. (b) | 14,919 | 278,239 | |||
Marvel Entertainment, Inc. (b) | 83,700 | 1,674,000 | |||
Multimedia Games, Inc. (b) | 51,677 | 523,488 | |||
New Frontier Media, Inc. (b) | 4,250 | 30,473 | |||
Speedway Motorsports, Inc. | 23,700 | 894,438 | |||
Take-Two Interactive Software, Inc. (b) | 158,810 | 1,692,914 | |||
5,093,552 | |||||
Environmental Services (0.4%) | |||||
Stericycle, Inc. (b) | 63,937 | 4,162,299 | |||
Financial (3.0%) | |||||
Affiliated Managers Group, Inc. (b) | 18,610 | 1,617,023 | |||
AmeriCredit Corp. (b) | 62,130 | 1,734,670 | |||
Central Pacific Financial Corp. | 22,400 | 866,880 | |||
Colonial Bancgroup, Inc. | 48,700 | 1,250,616 | |||
Commerce Bancshares, Inc. | 13,514 | 676,376 | |||
East-West Bancorp, Inc. | 73,210 | 2,775,391 |
13
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Financial (continued) | |||||
Financial Federal Corp. | 147,750 | $ | 4,108,928 | ||
First Midwest Bancorp, Inc. | 10,900 | 404,172 | |||
First State Bancorp | 3,100 | 73,718 | |||
Greater Bay Bancorp | 3,824 | 109,940 | |||
Greenhill & Co., Inc. | 73,774 | 4,482,507 | |||
Investment Technology Group, Inc. (b) | 9,400 | 478,084 | |||
Morningstar, Inc. (b) | 91,800 | 3,807,864 | |||
OceanFirst Financial Corp. | 3,500 | 77,770 | |||
Prosperity Bancshares, Inc. | 40,000 | 1,315,600 | |||
Texas Regional Bancshares, Inc., Class A | 31,430 | 1,191,826 | |||
TierOne, Corp. | 1,800 | 60,786 | |||
UCBH Holdings, Inc. | 30,800 | 509,432 | |||
United PanAm Financial Corp. (b) | 22,630 | 687,952 | |||
Westamerica Bankcorp. | 32,000 | 1,567,040 | |||
27,796,575 | |||||
Financial Services (2.5%) | |||||
ASTA Funding, Inc. | 8,200 | 307,090 | |||
Aventine Renewable Energy Holdings, Inc. (b) | 33,660 | 1,309,374 | |||
Bank of Hawaii Corp. | 36,471 | 1,808,962 | |||
Bankrate, Inc. (b) | 31,370 | 1,184,531 | |||
Cadence Financial Corp. | 48,300 | 1,075,641 | |||
City National Corp. | 14,689 | 956,107 | |||
CompuCredit Corp. (b) | 9,300 | 357,492 | |||
Corporate Executive Board Co. | 32,500 | 3,256,499 | |||
Cullen/Frost Bankers, Inc. | 7,409 | 424,536 | |||
Downey Financial Corp. | 31,035 | 2,105,725 | |||
Euronet Worldwide, Inc. (b) | 24,500 | 940,065 | |||
Factset Research Systems, Inc. | 118,250 | 5,593,224 | |||
Federal Agricultural Mortgage Corp. | 2,900 | 80,330 | |||
Ocwen Financial Corp. (b) | 15,332 | 194,870 | |||
Protective Life Corp. | 32,080 | 1,495,570 | |||
SWS Group, Inc. | 19,661 | 474,223 | |||
Thomas Weisel Partners Group, Inc. (b) | 57,570 | 1,094,406 | |||
Whitney Holding Corp. | 2,445 | 86,480 | |||
World Acceptance (b) | 4,381 | 155,613 | |||
WSFS Financial Corp. | 800 | 49,160 | |||
22,949,898 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Food & Beverage (1.1%) | |||||
AFC Enterprises, Inc. (b) | 138,350 | $ | 1,763,963 | ||
Chiquita Brands International, Inc. | 33,454 | 460,996 | |||
Del Monte Foods Co. | 157,257 | 1,765,996 | |||
Domino’s Pizza, Inc. | 68,185 | 1,686,897 | |||
Hansen Natural Corp. (b) | 677 | 128,880 | |||
J & J Snack Foods Corp. | 1,097 | 36,278 | |||
Krispy Kreme Doughnuts, Inc. (b) | 85,047 | 692,283 | |||
M & F Worldwide Corp. (b) | 15,771 | 253,913 | |||
Mueller Water Products, Inc., Class A (b) | 72,728 | 1,266,194 | |||
Peet’s Coffee & Tea, Inc. (b) | 60,500 | 1,826,495 | |||
9,881,895 | |||||
Food Distributors, Supermarkets & Wholesalers (0.5%) | |||||
Seaboard Corp. | 875 | 1,120,000 | |||
Spartan Stores, Inc. | 13,332 | 195,047 | |||
Tootsie Roll Industries | 34,642 | 1,009,121 | |||
United Natural Foods, Inc. (b) | 47,600 | 1,571,753 | |||
Weis Markets, Inc. | 10,300 | 424,360 | |||
Wild Oats Markets, Inc. (b) | 15,779 | 309,268 | |||
4,629,549 | |||||
Forest Products (0.1%) | |||||
Deltic Timber Corp. | 22,000 | 1,240,140 | |||
Gaming (0.2%) | |||||
Dover Downs Gaming and Entertainment | 5,700 | 111,948 | |||
Monarch Casino & Resort (b) | 2,685 | 75,502 | |||
Shuffle Master, Inc. (b) | 52,000 | 1,704,560 | |||
1,892,010 | |||||
Healthcare (4.4%) | |||||
American Retirement Corp. (b) | 5,300 | 173,681 | |||
Amsurg Corp. (b) | 185,316 | 4,215,939 | |||
Apria Healthcare Group, Inc. (b) | 5,700 | 107,730 | |||
Charles River Laboratories International, Inc. (b) | 26,000 | 956,800 | |||
Dendrite International, Inc. (b) | 109,400 | 1,010,856 | |||
Haemonetics Corp. (b) | 30,693 | 1,427,531 | |||
Healthways, Inc. (b) | 84,800 | 4,463,871 | |||
Henry Schein, Inc. (b) | 28,827 | 1,347,086 | |||
IDEXX Laboratories, Inc. (b) | 68,222 | 5,125,518 | |||
Immucor, Inc. (b) | 43,400 | 834,582 |
14
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Healthcare (continued) | |||||
K-V Pharmaceutical Co. (b) | 158,050 | $ | 2,949,213 | ||
Magellan Health Services, Inc. (b) | 44,896 | 2,034,238 | |||
Mentor Corp. | 78,900 | 3,432,150 | |||
Odyssey Healthcare, Inc. (b) | 8,584 | 150,821 | |||
Pediatrix Medical Group, Inc. (b) | 1,222 | 55,357 | |||
Respironics, Inc. (b) | 70,048 | 2,397,043 | |||
Sierra Health Services, Inc. (b) | 74,455 | 3,352,709 | |||
Sunrise Assisted Living, Inc. (b) | 1,500 | 41,475 | |||
Techne Corp. (b) | 68,805 | 3,503,551 | |||
Vertrue, Inc. (b) | 41,893 | 1,802,656 | |||
WellCare Health Plans Inc. (b) | 36,054 | 1,768,449 | |||
41,151,256 | |||||
Home Furnishings (0.5%) | |||||
American Woodmark Corp. | 5,400 | 189,216 | |||
Bassett Furniture Industries, Inc. | 33,894 | 627,378 | |||
Select Comfort Corp. (b) | 151,500 | 3,479,955 | |||
4,296,549 | |||||
Hospitals (0.1%) | |||||
Kinetic Concept (b) | 19,132 | 844,678 | |||
Hotels, Restaurants & Leisure (0.4%) | |||||
Great Wolf Resorts, Inc. (b) | 156,270 | 1,876,803 | |||
Interstate Hotels & Resorts, Inc. (b) | 22,107 | 205,374 | |||
Isle of Capris Casino (b) | 2,500 | 64,125 | |||
LaSalle Hotel Properties | 25,200 | 1,166,760 | |||
Marcus Corp. | 17,746 | 370,536 | |||
Six Flags, Inc. (b) | 42,800 | 240,536 | |||
3,924,134 | |||||
Human Resources (0.2%) | |||||
Hudson Highland Group, Inc. (b) | 12,200 | 131,638 | |||
Labor Ready, Inc. (b) | 8,534 | 193,295 | |||
Resources Connection, Inc. (b) | 16,000 | 400,320 | |||
Spherion Corp. (b) | 75,056 | 684,511 | |||
1,409,764 | |||||
Industrial Equipment (0.1%) | |||||
Nordson Corp. | 26,400 | 1,298,352 | |||
Information Technology (0.1%) | |||||
Symbol Technologies, Inc. | 46,000 | 496,340 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Insurance (1.6%) | |||||
21st Century Insurance Group | 6,000 | $ | 86,400 | ||
American Financial Group, Inc. | 25,050 | 1,074,645 | |||
American Physicians Capital, Inc. (b) | 5,600 | 294,504 | |||
Argonaut Group, Inc. (b) | 7,300 | 219,292 | |||
Aspen Insurance Holdings Ltd. | 91,260 | 2,125,445 | |||
Brown & Brown, Inc. | 51,600 | 1,507,752 | |||
Conseco, Inc. (b) | 5,355 | 123,701 | |||
EMC Insurance Group | 3,984 | 114,580 | |||
Endurance Specialty Holdings Ltd. | 20,000 | 640,000 | |||
FPIC Insurance Group, Inc. (b) | 2,288 | 88,660 | |||
HCC Insurance Holdings, Inc. | 30,150 | 887,616 | |||
Hilb, Rogal & Hamilton Co. | 26,300 | 980,201 | |||
LandAmerica Financial Group, Inc. | 42,014 | 2,714,104 | |||
Ohio Casualty Corp. | 18,900 | 561,897 | |||
Safety Insurance Group, Inc. | 24,516 | 1,165,736 | |||
Selective Insurance Group, Inc. | 2,912 | 162,693 | |||
United Fire & Casualty Co. | 17,200 | 518,236 | |||
Zenith National Insurance Corp. | 43,637 | 1,731,080 | |||
14,996,542 | |||||
Internet Content (0.8%) | |||||
Checkfree Corp. (b) | 93,585 | 4,638,073 | |||
CNET Networks, Inc. (b) | 172,849 | 1,379,335 | |||
Infospace, Inc. (b) | 8,600 | 194,962 | |||
Internet Capital Group, Inc. (b) | 11,000 | 99,000 | |||
Websense, Inc. (b) | 74,900 | 1,538,446 | |||
7,849,816 | |||||
Internet Services (0.8%) | |||||
ECOLLEGE.COM, Inc. (b) | 5,700 | 120,498 | |||
Equinix, Inc. (b) | 64,528 | 3,540,005 | |||
Interwoven, Inc. (b) | 62,600 | 537,108 | |||
Online Resources & Commmunications Corp. (b) | 9,200 | 95,128 | |||
RealNetworks, Inc. (b) (c) (b) | 115,548 | 1,236,364 | |||
Tibco Software, Inc. (b) | 85,140 | 600,237 | |||
Trizetto Group, Inc. (b) | 51,302 | 758,757 | |||
United Online, Inc. | 74,392 | 892,704 | |||
7,780,801 | |||||
15
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Investment Company (0.1%) | |||||
Calamos Asset Management, Inc. | 7,819 | $ | 226,673 | ||
Labranche & Co., Inc. (b) | 46,200 | 559,482 | |||
786,155 | |||||
Leisure (1.1%) | |||||
Gaylord Entertainment (b) | 126,200 | 5,507,368 | |||
Steinway Musical Instruments, Inc. (b) | 8,909 | 218,449 | |||
Sunterra Corp. (b) | 16,784 | 171,868 | |||
Vail Resorts, Inc. (b) | 74,840 | 2,776,564 | |||
WMS Industries, Inc. (b) | 56,700 | 1,553,013 | |||
10,227,262 | |||||
Machinery (2.5%) | |||||
Applied Industrial Technology, Inc. | 71,533 | 1,738,967 | |||
Astec Industries, Inc. (b) | 19,400 | 661,928 | |||
Bucyrus Internaional Inc., Class A | 53,850 | 2,719,424 | |||
Cognex Corp. | 39,900 | 1,038,597 | |||
Columbus McKinnon Corp. (b) | 1,853 | 40,284 | |||
Commercial Metals Co. | 34,100 | 876,370 | |||
Cummins Engine, Inc. | 21,170 | 2,588,033 | |||
Dionex Corp. (b) | 38,600 | 2,109,876 | |||
Flow International Corp. (b) | 18,941 | 266,500 | |||
Intevac (b) | 20,300 | 440,104 | |||
JLG Industries, Inc. | 47,700 | 1,073,250 | |||
Joy Global, Inc. | 51,950 | 2,706,076 | |||
Kennametal, Inc. | 12,300 | 765,675 | |||
Middleby Corp. (b) | 16,400 | 1,419,584 | |||
Mitcham Industries, Inc. (b) | 13,096 | 167,236 | |||
Regal-Beloit Corp. | 9,100 | 401,765 | |||
Roper Industries, Inc. | 42,800 | 2,000,900 | |||
Wabtec Corp. | 15,900 | 594,660 | |||
Zebra Technologies Corp. (b) | 38,247 | 1,306,518 | |||
22,915,747 | |||||
Manufacturing (0.3%) | |||||
Actuant Corp. | 14,300 | 714,285 | |||
Acuity Brands, Inc. | 13,296 | 517,347 | |||
Belden CDT, Inc. | 23,200 | 766,760 | |||
Lone Star Technologies, Inc. (b) | 20,195 | 1,090,934 | |||
3,089,326 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Materials (0.3%) | |||||
Ceradyne Inc. (b) | 22,300 | $ | 1,103,627 | ||
Crane Co. | 26,436 | 1,099,738 | |||
Mueller Industries, Inc. | 15,610 | 515,598 | |||
2,718,963 | |||||
Medical Equipment & Supplies (1.1%) | |||||
Alliance Imaging, Inc. (b) | 19,474 | 124,634 | |||
Allscripts Healthcare Solutions, Inc. (b) | 161,400 | 2,832,570 | |||
American Medical Systems Holdings, Inc. (b) | 42,900 | 714,285 | |||
Candela Corp. (b) | 44,901 | 712,130 | |||
Kyphon, Inc. (b) | 68,300 | 2,619,988 | |||
STERIS Corp. | 7,376 | 168,615 | |||
Wright Medical Group, Inc. (b) | 40,100 | 839,293 | |||
Young Innovations, Inc. | 60,500 | 2,131,415 | |||
10,142,930 | |||||
Medical Products (2.0%) | |||||
Arrow International, Inc. | 34,013 | 1,118,007 | |||
Bio-Rad Laboratories, Inc., Class A (b) | 9,700 | 629,918 | |||
Cantel Medical Corp. (b) | 1,937 | 27,583 | |||
Dade Behring Holdings, Inc. | 39,509 | 1,645,155 | |||
Gen-Probe, Inc. (b) | 43,270 | 2,335,715 | |||
Healthtronics, Inc. (b) | 11,203 | 85,703 | |||
Hologic, Inc. (b) | 22,800 | 1,125,408 | |||
ICU Medical, Inc. (b) | 73,600 | 3,108,863 | |||
Impax Laboratories, Inc. (b) | 23,600 | 147,500 | |||
Integra LifeSciences Holdings (b) | 10,200 | 395,862 | |||
IntraLase Corp (b) | 114,600 | 1,918,404 | |||
Nutraceutical International Corp. (b) | 15,085 | 231,253 | |||
Owens & Minor, Inc. | 25,700 | 735,020 | |||
Pain Therapeutics. Inc. (b) | 29,196 | 243,787 | |||
PSS World Medical, Inc. (b) | 149,426 | 2,637,369 | |||
Surmodics, Inc. (b) | 10,638 | 384,138 | |||
Telik, Inc. (b) | 22,800 | 376,200 | |||
Vital Signs, Inc. | 2,743 | 135,861 | |||
West Pharmaceutical Services, Inc. | 15,625 | 566,875 | |||
Zoll Medical Corp. (b) | 11,886 | 389,385 | |||
18,238,006 | |||||
16
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Medical Systems (0.0%) | |||||
Computer Programs & Systems, Inc. | 7,600 | $ | 303,696 | ||
Tripath Imaging, Inc. (b) | 15,000 | 99,300 | |||
402,996 | |||||
Metals (0.5%) | |||||
Cleveland Cliffs, Inc. | 25,900 | 2,053,611 | |||
Coeur d’Alene Mines Corp. (b) | 118,800 | 571,428 | |||
Dynamic Materials, Corp. | 36,300 | 1,224,399 | |||
Quanex Corp. | 29,200 | 1,257,644 | |||
5,107,082 | |||||
Minerals (0.1%) | |||||
AMCOL International | 28,150 | 741,753 | |||
Mining (0.4%) | |||||
Apex Silver Mines Ltd. (b) | 34,800 | 523,740 | |||
Compass Minerals International, Inc. | 84,000 | 2,095,800 | |||
Novagold Resources Inc. (b) | 54,200 | 694,844 | |||
Royal Gold | 28,200 | 784,524 | |||
4,098,908 | |||||
Motion Pictures & Services (0.0%) | |||||
Dreamworks Animation SKG, Inc. (b) | 7,830 | 179,307 | |||
Multimedia (0.0%) | |||||
Media General, Inc. | 5,600 | 234,584 | |||
Networking Products (0.2%) | |||||
3Com Corp. (b) | 383,600 | 1,964,032 | |||
Office Equipment & Supplies (0.6%) | |||||
Acco Brands Corp. (b) | 60,100 | 1,316,190 | |||
CompX International, Inc. (b) | 2,866 | 51,301 | |||
Global Imaging Systems, Inc. (b) (b) | 3,771 | 155,667 | |||
John H. Harland, Co. | 45,099 | 1,961,807 | |||
Knoll, Inc. | 22,220 | 407,959 | |||
Standard Register Co. | 4,200 | 49,770 | |||
United Stationers, Inc. (b) | 38,316 | 1,889,745 | |||
5,832,439 | |||||
Oil & Gas (5.8%) | |||||
Aurora Oil and Gas Corp. (b) | 11,641 | 46,564 | |||
Bill Barrett Corp. (b) | 58,500 | 1,732,185 | |||
Carbo Ceramics, Inc. | 53,350 | 2,621,086 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Oil & Gas (continued) | |||||
Cimarex Energy Co. | 42,748 | $ | 1,838,164 | ||
Encore Acquisition Co. (b) | 120,450 | 3,231,674 | |||
Energen Corp. | 64,090 | 2,461,697 | |||
Frontier Oil Corp. | 100,420 | 3,253,608 | |||
Giant Industries, Inc. (b) | 1,321 | 87,913 | |||
Grey Wolf, Inc. (b) | 199,792 | 1,538,398 | |||
Helix Energy Solutions Group, Inc. (b) | 120,400 | 4,859,343 | |||
Hydril Co. (b) | 18,800 | 1,476,176 | |||
Maverick Tube Corp. (b) | 10,100 | 638,219 | |||
National-Oilwell, Inc. (b) | 46,452 | 2,941,341 | |||
New Jersey Resources Corp. | 13,794 | 645,283 | |||
Newfield Exploration Co. (b) | 68,100 | 3,332,814 | |||
Oceaneering International, Inc. (b) | 108,200 | 4,960,969 | |||
Oil States International, Inc. (b) | 26,800 | 918,704 | |||
Parker Drilling Co. (b) | 19,800 | 142,164 | |||
Pioneer Drilling Co. (b) | 23,700 | 365,928 | |||
Range Resources Corp. | 81,250 | 2,209,188 | |||
Seacor Holdings, Inc. (b) | 6,289 | 516,327 | |||
St. Mary Land & Exploration Co. | 169,957 | 6,840,768 | |||
Swift Energy Co. (b) | 40,387 | 1,733,814 | |||
Tesoro Petroleum Corp. | 12,920 | 960,731 | |||
UGI Corp. | 61,901 | 1,524,003 | |||
Unit Corp. (b) | 59,800 | 3,402,022 | |||
W-H Energy Services, Inc. (b) | 15,100 | 767,533 | |||
55,046,616 | |||||
Oil & Gas Exploration Services (1.5%) | |||||
Bronco Drilling Co., Inc. (b) | 17,790 | 371,633 | |||
Carrizo Oil & Gas, Inc. (b) | 26,400 | 826,584 | |||
Comstock Resources, Inc. (b) | 28,600 | 853,996 | |||
EXCO Resources, Inc. (b) | 144,400 | 1,646,160 | |||
Gmx Resources, Inc. (b) | 34,800 | 1,076,016 | |||
Harvest Natural Resources, Inc. (b) | 81,997 | 1,110,239 | |||
KCS Energy, Inc. (b) | 26,600 | 790,020 | |||
Penn Virginia Corp. | 615 | 42,976 | |||
Petrohawk Energy Corp. (b) | 63,800 | 803,880 | |||
Pogo Producing Co. | 38,603 | 1,779,598 | |||
Quicksilver Resources, Inc. (b) | 34,290 | 1,262,215 | |||
RPC, Inc. | 14,400 | 349,632 | |||
Seitel Inc. (b) | 183,523 | 653,342 |
17
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Oil & Gas Exploration Services (continued) | |||||
Superior Well Services, Inc. (b) | 25,000 | $ | 622,500 | ||
Trico Marine Services, Inc. (b) | 2,800 | 95,200 | |||
W&T Offshore, Inc. | 21,884 | 851,069 | |||
World Fuel Services Corp. | 6,211 | 283,781 | |||
13,418,841 | |||||
Packaging (0.2%) | |||||
STAMPS.COM, Inc. (b) | 53,400 | 1,485,588 | |||
Paper & Related Products (0.0%) | |||||
Glatfelter Co. | 18,300 | 290,421 | |||
Patient Monitoring Equipment (0.0%) | |||||
Aspect Medical Systems, Inc. (b) | 10,500 | 183,120 | |||
Pharmaceuticals (1.6%) | |||||
Adams Respiratory Therapeutics, Inc. (b) | 36,216 | 1,615,958 | |||
Alkermes, Inc. (b) | 128,269 | 2,426,849 | |||
Alpharma, Inc., Class A | 116,634 | 2,803,881 | |||
Biomarin Pharmaceutical, Inc. (b) | 29,500 | 423,915 | |||
Enzon Pharmaceuticals, Inc. (b) | 36,386 | 274,350 | |||
ICOS Corp. (b) | 2,800 | 61,572 | |||
ImClone Systems, Inc. (b) | 19,873 | 767,893 | |||
King Pharmaceuticals, Inc. (b) | 96,860 | 1,646,620 | |||
Mannatech, Inc. | 4,100 | 51,701 | |||
Medarex, Inc. (b) | 6,600 | 63,426 | |||
Medicis Pharmaceutical Corp., Class A | 127,600 | 3,062,401 | |||
Noven Pharmaceuticals, Inc. (b) | 49,500 | 886,050 | |||
United Therapeutics Corp. (b) | 10,600 | 612,362 | |||
14,696,978 | |||||
Photographic Products (0.0%) | |||||
CPI Corp. | 1,058 | 32,481 | |||
Power Conversion/Supply Equipment (0.0%) | |||||
Vicor Corp. | 21,400 | 354,598 | |||
Printing (0.3%) | |||||
Consolidated Graphics, Inc. (b) | 17,300 | 900,638 | |||
Vistaprint Ltd. (b) | 71,500 | 1,911,910 | |||
2,812,548 | |||||
Printing & Publishing (0.0%) | |||||
Bowne & Co., Inc. | 4,100 | 58,630 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Publishing (0.1%) | |||||
John Wiley & Sons, Inc. | 9,649 | $ | 320,347 | ||
Journal Register Co. | 23,900 | 214,144 | |||
534,491 | |||||
Real Estate Investment Trust (2.7%) | |||||
Affordable Residential Communities | 13,300 | 142,975 | |||
American Financial Realty Trust | 54,400 | 526,592 | |||
American Home Mortgage Investment Corp. | 15,100 | 556,586 | |||
Arbor Realty Trust, Inc. | 4,800 | 120,240 | |||
Ashford Hospitality Trust, Inc. | 85,950 | 1,084,689 | |||
Biomed Realty Trust, Inc. | 22,850 | 684,129 | |||
CBL & Associates Properties, Inc. | 44,055 | 1,715,061 | |||
Cedarshopping Centers, Inc. | 38,000 | 559,360 | |||
Centracore Properties Trust | 2,400 | 59,400 | |||
Deerfield Triarc Capital Corp. | 60,900 | 790,482 | |||
Education Realty Trust, Inc. | 8,800 | 146,520 | |||
Entertainment Properties Trust | 22,100 | 951,405 | |||
Equity Inns, Inc. | 77,700 | 1,286,712 | |||
Felcor Lodging Trust, Inc. | 38,471 | 836,360 | |||
First Industrial Realty Trust, Inc. | 21,700 | 823,298 | |||
Getty Realty Corp. | 5,900 | 167,796 | |||
Glimcher Realty Trust | 23,400 | 580,554 | |||
GMH Communities Trust | 4,500 | 59,310 | |||
Healthcare Realty Trust, Inc. | 12,700 | 404,495 | |||
Hersha Hospitality Trust | 73,900 | 686,531 | |||
Highwood Properties, Inc. | 9,300 | 336,474 | |||
HomeBanc Corp. | 17,800 | 141,332 | |||
Hospitality Properties Trust | 16,300 | 715,896 | |||
Housevalues, Inc. (b) | 93,500 | 647,955 | |||
Inland Real Estate Corp. | 45,200 | 672,576 | |||
InnKeepers USA Trust | 7,585 | 131,069 | |||
Investors Real Estate Trust | 7,900 | 71,337 | |||
JER Investors Trust, Inc. | 21,400 | 332,770 | |||
Jones Lang LaSalle, Inc. | 28,900 | 2,530,195 | |||
KKR Financial Corp. | 28,400 | 591,004 | |||
Lexington Corporate Properties Trust | 18,100 | 390,960 | |||
LTC Properties, Inc. | 10,700 | 239,145 | |||
Mission West Properties, Inc. | 16,772 | 185,834 | |||
Nationwide Health Properties, Inc. | 45,700 | 1,028,707 |
18
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Real Estate Investment Trust (continued) | |||||
Northstar Realty Finance Corp. | 61,118 | $ | 734,027 | ||
OMEGA Healthcare Investors, Inc. | 82,480 | 1,090,386 | |||
Post Properties | 13,000 | 589,420 | |||
Republic Property Trust | 65,500 | 647,140 | |||
Saul Centers, Inc. | 2,976 | 121,361 | |||
Taubman Centers, Inc. | 59,986 | 2,453,427 | |||
Winston Hotels, Inc. | 12,900 | 158,025 | |||
25,991,535 | |||||
Real Estate Management & Development (0.1%) | |||||
Avatar Holdings (b) | 2,500 | 142,425 | |||
Loopnet, Inc. (b) | 9,800 | 182,378 | |||
Realty Income | 14,400 | 315,360 | |||
Tarragon Realty Investors, Inc. | 3,600 | 49,860 | |||
690,023 | |||||
Recreation (0.0%) | |||||
Main Street & Main (b) | 19,755 | 126,037 | |||
Recreational Vehicles (0.0%) | |||||
Thor Industries, Inc. | 2,500 | 121,125 | |||
Recycling (0.1%) | |||||
Aleris International, Inc. (b) | 13,800 | 632,730 | |||
Research & Development (0.0%) | |||||
Albany Molecular Research (b) | 20,100 | 214,668 | |||
Kendle International (b) | 3,775 | 138,656 | |||
353,324 | |||||
Restaurants (1.2%) | |||||
Bob Evans Farms, Inc. | 11,900 | 357,119 | |||
IHOP Corp. | 23,700 | 1,139,496 | |||
Lone Star Steakhouse & Saloon, Inc. | 75,880 | 1,990,332 | |||
Luby’s Cafeteria, Inc. (b) | 29,065 | 303,148 | |||
Panera Bread Co. (b) | 35,000 | 2,353,400 | |||
Papa John’s International, Inc. (b) | 56,829 | 1,886,723 | |||
PF Chang’s China Bistro, Inc. (b) | 72,100 | 2,741,242 | |||
Ryan’s Restaurant Group, Inc. (b) | 42,600 | 507,366 | |||
11,278,826 | |||||
Retail (5.0%) | |||||
Barnes & Noble, Inc. | 43,245 | 1,578,443 | |||
Big 5 Sporting Goods Corp. | 66,000 | 1,287,000 | |||
BJ’s Restaurants, Inc. (b) | 90,535 | 2,022,552 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Retail (continued) | |||||
Blair Corp. | 953 | $ | 28,352 | ||
Blue Nile, Inc. (b) | 102,400 | 3,293,183 | |||
Bon-Ton Stores, Inc. | 33,287 | 728,320 | |||
Brown Shoe Company, Inc. | 56,850 | 1,937,448 | |||
Build-A-Bear Workshop, Inc. (b) | 78,300 | 1,684,233 | |||
Carter’s, Inc. (b) | 59,800 | 1,580,514 | |||
CBRL Group, Inc. | 3,100 | 105,152 | |||
Charlotte Russe Holding, Inc. (b) | 55,500 | 1,328,670 | |||
Chipotle Mexican Grill, Inc. (b) | 40,504 | 2,468,719 | |||
Citi Trends, Inc. (b) | 50,265 | 2,145,813 | |||
Conn’s, Inc. (b) | 17,200 | 456,660 | |||
Dollar Tree Stores, Inc. (b) | 33,537 | 888,731 | |||
EZCorp, Inc. (b) | 6,330 | 238,578 | |||
Genesco, Inc. (b) | 12,400 | 419,988 | |||
Gymboree (b) | 35,246 | 1,225,151 | |||
J Crew Group, Inc. (b) | 91,612 | 2,514,749 | |||
Loews Corp. | 65,860 | 3,383,227 | |||
Longs Drug Stores Corp. | 3,072 | 140,145 | |||
New York & Company, Inc. (b) | 55,200 | 539,304 | |||
Officemax, Inc. | 786 | 32,030 | |||
Pacific Sunwear of California, Inc. (b) | 23,000 | 412,390 | |||
Pantry, Inc. (b) | 58,170 | 3,347,101 | |||
Rare Hospitality International, Inc. (b) | 5,800 | 166,808 | |||
Rent-A-Center, Inc. (b) | 1,392 | 34,605 | |||
Rex Stores Corp. (b) | 28,270 | 405,675 | |||
School Specialty, Inc. (b) | 22,800 | 726,180 | |||
Shoe Carnival (b) | 9,500 | 226,670 | |||
Spectrum Brands, Inc. (b) | 102,400 | 1,323,008 | |||
Stage Store, Inc. | 35,405 | 1,168,365 | |||
Talbots, Inc. | 31,600 | 583,020 | |||
The Dress Barn, Inc. (b) | 107,367 | 2,721,753 | |||
The Finish Line, Inc. | 22,800 | 269,724 | |||
Tractor Supply Co. (b) | 56,189 | 3,105,566 | |||
Tuesday Morning Corp. | 30,400 | 399,760 | |||
Zumiez, Inc. (b) | 41,000 | 1,540,370 | |||
46,457,957 | |||||
Retirement & Aged Care (0.1%) | |||||
Five Star Quality Care, Inc. (b) | 89,000 | 985,230 | |||
Schools (0.5%) | |||||
Strayer Education, Inc. | 48,491 | 4,709,446 | |||
19
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Semiconductor Equipment (0.7%) | |||||
Axcelis Technologies, Inc. (b) | 124,600 | $ | 735,140 | ||
Entegris, Inc. (b) | 38,800 | 369,764 | |||
Integrated Device Technology, Inc. (b) | 41,500 | 588,470 | |||
Micrel, Inc. (b) | 36,200 | 362,362 | |||
ON Semiconductor Corp. (b) | 254,529 | 1,496,631 | |||
Power Integrations, Inc. (b) | 32,100 | 561,108 | |||
Silicon Image, Inc. (b) | 15,600 | 168,168 | |||
Tessera Technologies, Inc. (b) | 83,300 | 2,290,750 | |||
6,572,393 | |||||
Services (0.1%) | |||||
Rollins, Inc. | 36,400 | 714,896 | |||
Software (0.0%) | |||||
Convera Corp., Class A (b) | 68,000 | 456,960 | |||
Steel (1.2%) | |||||
Chaparral Steel (b) | 8,084 | 582,210 | |||
Novamerican Steel, Inc. (b) | 2,835 | 114,732 | |||
Olympic Steel, Inc. | 21,704 | 768,105 | |||
Oregon Steel Mills, Inc. (b) | 14,900 | 754,834 | |||
Reliance Steel & Aluminum Co. | 8,114 | 673,056 | |||
Ryerson Tull, Inc. | 43,601 | 1,177,227 | |||
Shaw Group, Inc. (b) | 33,310 | 926,018 | |||
Shiloh Industries, Inc. (b) | 8,178 | 122,997 | |||
Steel Dynamics, Inc. | 56,064 | 3,685,647 | |||
Texas Industries, Inc. | 41,100 | 2,182,410 | |||
10,987,236 | |||||
Storage (0.1%) | |||||
Mobile Mini, Inc. (b) | 44,300 | 1,296,218 | |||
Technology (0.5%) | |||||
Atheros Communications (b) | 26,600 | 504,336 | |||
C&D Technologies, Inc. | 30,800 | 231,616 | |||
CACI International, Inc., Class A (b) | 23,100 | 1,347,423 | |||
Coherent, Inc. (b) | 7,000 | 236,110 | |||
Electronics For Imaging, Inc. (b) | 40,000 | 835,200 | |||
Intergraph Corp. (b) | 33,942 | 1,068,834 | |||
Tessco Technologies, Inc. (b) | 9,830 | 196,993 | |||
Watts Industries, Inc., Class A | 11,500 | 385,825 | |||
4,806,337 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Telecommunication Equipment (0.1%) | |||||
Anaren Microwave, Inc. (b) | 4,400 | $ | 90,156 | ||
Polycom, Inc. (b) | 25,400 | 556,768 | |||
646,924 | |||||
Telecommunication Services (1.0%) | |||||
Alaska Communications Systems Group, Inc. | 40,085 | 507,075 | |||
Arbinet Holdings, Inc. (b) | 7,815 | 43,842 | |||
Broadwing Corp. (b) | 29,200 | 302,220 | |||
Ciena Corp. (b) | 94,900 | 456,469 | |||
CommScope, Inc. (b) | 13,100 | 411,602 | |||
CT Communications, Inc. | 13,532 | 309,477 | |||
Fairpoint Communications, Inc. | 26,500 | 381,600 | |||
First Avenue Networks, Inc. (b) | 75,804 | 824,748 | |||
Golden Telecom, Inc. | 6,400 | 162,240 | |||
IDT Corp. (b) | 78,905 | 1,088,100 | |||
Level 3 Communications, Inc. (b) | 138,900 | 616,716 | |||
Oplink Communications, Inc. (b) | 7,200 | 131,832 | |||
RCN Corp. (b) | 5,300 | 132,129 | |||
SBA Communications Corp. (b) | 158,112 | 4,133,048 | |||
Talk America Holdings, Inc. (b) | 12,700 | 78,613 | |||
Valor Communications Group | 4,807 | 55,040 | |||
9,634,751 | |||||
Textiles (0.1%) | |||||
DHB Industries, Inc. (b)(c) | 69,348 | 52,011 | |||
Greif, Inc. | 2,684 | 201,193 | |||
Myers Industries, Inc. | 18,800 | 323,172 | |||
576,376 | |||||
Toys (0.3%) | |||||
Hasbro, Inc. | 65,157 | 1,179,993 | |||
Jakks Pacific, Inc. (b) | 85,514 | 1,717,977 | |||
2,897,970 | |||||
Transportation (2.8%) | |||||
Air Methods Corp (b) | 15,191 | 397,700 | |||
Arkansas Best Corp. | 7,495 | 376,324 | |||
Bristow Group, Inc. (b) | 6,993 | 251,748 | |||
Continental Airlines, Inc., Class B (b) | 15,500 | 461,900 | |||
EGL, Inc. (b) | 14,544 | 730,109 | |||
Forward Air Corp. | 9,728 | 396,221 |
20
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Transportation (continued) | |||||
Genesee & Wyoming, Inc. (b) | 17,800 | $ | 631,366 | ||
Greenbrier Cos., Inc. | 67,640 | 2,214,534 | |||
Heartland Express, Inc. | 43,759 | 782,849 | |||
J.B. Hunt Transport Services, Inc. | 137,800 | 3,432,598 | |||
Kansas City Southern Industries, Inc. (b) | 170,092 | 4,711,548 | |||
Kirby Corp. (b) | 42,404 | 1,674,958 | |||
Knight Transportation, Inc. | 20,216 | 408,363 | |||
Landstar System, Inc. | 109,913 | 5,191,191 | |||
Old Dominion Freight Line, Inc. (b) | 8,793 | 330,529 | |||
Omega Navigation Enterprises, Inc., Class A (b) | 125,320 | 1,807,114 | |||
Pacer International, Inc. | 24,400 | 794,952 | |||
SkyWest, Inc. | 17,231 | 427,329 | |||
Werner Enterprises, Inc. | 51,000 | 1,033,770 | |||
26,055,103 | |||||
Travel Services (0.3%) | |||||
Ambassadors Group, Inc. | 97,360 | 2,811,757 | |||
Utilities (0.7%) | |||||
Cleco Corp. | 10,100 | 234,825 | |||
Gasco Energy, Inc. (b) | 272,300 | 1,211,735 | |||
IDACORP, Inc. | 15,100 | 517,779 | |||
Northwestern Corp. | 36,607 | 1,257,450 | |||
Pepco Holdings, Inc. | 8,457 | 199,416 | |||
Pico Holdings, Inc. (b) | 5,880 | 189,630 | |||
PNM Resources, Inc. | 29,600 | 738,816 | |||
UniSource Energy Corp. | 34,626 | 1,078,600 | |||
Westar Energy, Inc. | 33,805 | 743,710 | |||
6,171,961 | |||||
Waste Disposal (0.1%) | |||||
Metal Management, Inc. | 23,552 | 721,162 | |||
Wholesale Distribution (0.2%) | |||||
Beacon Roofing Supply, Inc. (b) | 80,250 | 1,766,302 | |||
Brightpoint, Inc. (b) | 1,320 | 17,860 | |||
1,784,162 | |||||
Wireless Equipment (0.3%) | |||||
CalAmp Corp. (b) | 18,409 | 163,656 | |||
Glenayre Technologies, Inc. (b) | 27,714 | 73,165 |
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
UNITED STATES (continued) | ||||||
Wireless Equipment (continued) | ||||||
Powerwave Technologies, Inc. (b) | 101,800 | $ | 928,416 | |||
RF Micro Devices, Inc. (b) | 248,000 | 1,480,560 | ||||
2,645,797 | ||||||
743,189,792 | ||||||
Total Common Stocks | 912,026,263 | |||||
MUTUAL FUND (0.1%) | ||||||
Infinity BIO-ENERGY Ltd. | 94,500 | 496,125 | ||||
Total Mutual Fund | 496,125 | |||||
RIGHT (0.0%) | ||||||
Tianjin Development Holdings Ltd. (b) | 41,981 | 0 | ||||
Total Right | 0 | |||||
WARRANT (0.0%) | ||||||
Infinity BIO-ENERGY Ltd. Warrant (b) | 189,000 | 90,720 | ||||
Total Warrant | 90,720 | |||||
COMMERCIAL PAPER (0.3%) | ||||||
KBC Financial Products International, 5.33%, 07/03/06 | $ | 2,880,000 | $ | 2,879,147 | ||
Total Commercial Paper | 2,879,147 | |||||
CASH EQUIVALENTS (1.6%) | ||||||
AIM Liquid Assets Portfolio | 15,230,769 | 15,230,769 | ||||
Total Cash Equivalents | 15,230,769 | |||||
Total Investments (Cost $785,033,423) (a) — 99.8% | 930,723,024 | |||||
Other assets in excess of liabilities — 0.2% | 1,682,097 | |||||
NET ASSETS — 100.0% | $ | 932,405,121 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security |
(c) | Fair Valued Security |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
21
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
22
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation (Depreciation) | ||||||||||
Short Contracts: | ||||||||||||||
Euro | 07/05/06 | $ | (1,234,731 | ) | $ | (1,242,772 | ) | $ | (8,041 | ) | ||||
British Sterling Pound | 07/05/06 | (1,227,284 | ) | (1,237,942 | ) | (10,658 | ) | |||||||
Japanese Yen | 07/05/06 | (848,034 | ) | (850,257 | ) | (2,223 | ) | |||||||
Total Short Contracts: | $ | (3,310,049 | ) | $ | (3,330,971 | ) | $ | (20,922 | ) |
See notes to financial statements.
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $769,802,654) | $ | 915,492,255 | |
Repurchase agreements, at cost and value | 15,230,769 | ||
Total Investments | 930,723,024 | ||
Cash | 854 | ||
Foreign currencies, at value (cost $235,154) | 235,198 | ||
Interest and dividends receivable | 622,846 | ||
Receivable for capital shares issued | 502,189 | ||
Receivable for investments sold | 13,000,988 | ||
Reclaims receivable | 99,279 | ||
Prepaid expenses and other assets | 11,974 | ||
Total Assets | 945,196,352 | ||
Liabilities: | |||
Payable for investments purchased | 11,189,586 | ||
Payable for capital shares redeemed | 658,936 | ||
Unrealized depreciation on forward foreign currency contracts | 20,922 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 693,540 | ||
Fund administration and transfer agent fees | 57,568 | ||
Distribution fees | 16,424 | ||
Administrative servicing fees | 83,317 | ||
Other | 70,938 | ||
Total Liabilities | 12,791,231 | ||
Net Assets | $ | 932,405,121 | |
Represented by: | |||
Capital | $ | 717,350,321 | |
Accumulated net investment income (loss) | 544,045 | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 68,811,650 | ||
Net unrealized appreciation (depreciation) on investment sand translation of assets and liabilities denominated in foreign currencies | 145,699,105 | ||
Net Assets | $ | 932,405,121 | |
Net Assets: | |||
Class I Shares | $ | 800,925,276 | |
Class II Shares | 86,155,042 | ||
Class III Shares | 3,327,875 | ||
Class IV Shares | 41,996,928 | ||
Total | $ | 932,405,121 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 34,232,425 | ||
Class II Shares | 3,728,579 | ||
Class III Shares | 142,126 | ||
Class IV Shares | 1,794,954 | ||
Total | 39,898,084 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 23.40 | |
Class II Shares | $ | 23.11 | |
Class III Shares | $ | 23.41 | |
Class IV Shares | $ | 23.40 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 449,060 | ||
Dividend income (net of foreign withholding tax of $301,994) | 5,968,933 | |||
Total Income | 6,417,993 | |||
Expenses: | ||||
Investment advisory fees | 4,528,207 | |||
Fund administration and transfer agent fees | 364,422 | |||
Distribution fees Class II Shares | 104,573 | |||
Administrative servicing fees Class I Shares | 617,387 | |||
Administrative servicing fees | 62,701 | |||
Administrative servicing fees | 2,300 | |||
Administrative servicing fees | 29,797 | |||
Custodian fees | 2,802,772 | |||
Trustee fees | 17,235 | |||
Other | 115,673 | |||
Total expenses before earnings credit | 8,645,067 | |||
Earnings credit (Note 6) | (2,775,069 | ) | ||
Total Expenses | 5,869,998 | |||
Net Investment Income (Loss) | 547,995 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 80,050,904 | |||
Net realized gains (losses) on foreign currency transactions | (15,367 | ) | ||
Net realized gains (losses) on investment and foreign currency transactions | 80,035,537 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (33,930,956 | ) | ||
Net realized/unrealized gains (losses) on investments, futures and foreign currencies | 46,104,581 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 46,652,576 | ||
See notes to financial statements.
23
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 547,995 | $ | (1,301,141 | ) | |||
Net realized gains (losses) on investment and foreign currency transactions | 80,035,537 | 121,452,717 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (33,930,956 | ) | (14,764,220 | ) | ||||
Change in net assets resulting from operations | 46,652,576 | 105,387,356 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net realized gains on investments | (15,390,122 | ) | (98,327,246 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net realized gains on investments | (1,643,475 | ) | (8,568,979 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net realized gains on investments | (63,680 | ) | (286,066 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net realized gains on investments | (804,451 | ) | (5,128,514 | ) | ||||
Change in net assets from shareholder distributions | (17,901,728 | ) | (112,310,805 | ) | ||||
Change in net assets from capital transactions | (48,042,906 | ) | 49,630,032 | |||||
Change in net assets | (19,292,058 | ) | 42,706,583 | |||||
Net Assets: | ||||||||
Beginning of period | 951,697,179 | 908,990,596 | ||||||
End of period | $ | 932,405,121 | $ | 951,697,179 | ||||
Accumulated net investment income (loss) | $ | 544,045 | $ | (3,950 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 46,149,039 | $ | 67,059,444 | ||||
Dividends reinvested | 15,393,461 | 98,327,163 | ||||||
Cost of shares redeemed | (117,965,434 | ) | (144,232,974 | ) | ||||
(56,422,934 | ) | 21,153,633 | ||||||
Class II Shares | ||||||||
Proceeds from shares issued | 18,645,351 | 27,932,996 | ||||||
Dividends reinvested | 1,643,469 | 8,568,973 | ||||||
Cost of shares redeemed | (10,164,372 | ) | (7,594,280 | ) | ||||
10,124,448 | 28,907,689 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 2,166,683 | 1,343,097 | ||||||
Dividends reinvested | 63,680 | 286,066 | ||||||
Cost of shares redeemed | (1,444,941 | ) | (629,517 | ) | ||||
785,422 | 999,646 | |||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 1,103,482 | 2,139,926 | ||||||
Dividends reinvested | 804,448 | 5,128,510 | ||||||
Cost of shares redeemed | (4,437,772 | ) | (8,699,372 | ) | ||||
(2,529,842 | ) | (1,430,936 | ) | |||||
Change in net assets from capital transactions | $ | (48,042,906 | ) | $ | 49,630,032 | |||
24
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL COMPANY FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 1,885,853 | 2,859,443 | ||||
Reinvested | 679,921 | 4,289,345 | ||||
Redeemed | (4,850,195 | ) | (6,147,433 | ) | ||
(2,284,421 | ) | 1,001,355 | ||||
Class II Shares | ||||||
Issued | 788,803 | 1,185,745 | ||||
Reinvested | 73,500 | 377,859 | ||||
Redeemed | (425,595 | ) | (329,150 | ) | ||
436,708 | 1,234,454 | |||||
Class III Shares | ||||||
Issued | 87,622 | 53,774 | ||||
Reinvested | 2,810 | 12,469 | ||||
Redeemed | (60,074 | ) | (27,606 | ) | ||
30,358 | 38,637 | |||||
Class IV Shares | ||||||
Issued | 46,085 | 90,850 | ||||
Reinvested | 35,532 | 223,721 | ||||
Redeemed | (183,500 | ) | (369,438 | ) | ||
(101,883 | ) | (54,867 | ) | |||
See notes to financial statements.
25
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GVIT Small Company Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Portfolio Turnover(a) | ||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(b) | $ | 20.00 | — | (1.34 | ) | (1.34 | ) | (0.02 | ) | — | (0.02 | ) | $ | 18.64 | (6.70% | ) | $ | 743,468 | 1.20% | 0.02% | 135.90% | |||||||||||||||||
Year Ended December 31, 2002 | $ | 18.64 | (0.07 | ) | (3.16 | ) | (3.23 | ) | — | — | — | $ | 15.41 | (17.33% | ) | $ | 561,836 | 1.18% | (0.33% | ) | 92.59% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 15.41 | (0.07 | ) | 6.39 | 6.32 | — | — | — | $ | 21.73 | 41.01% | $ | 760,078 | 1.17% | (0.37% | ) | 93.72% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.73 | (0.04 | ) | 4.17 | 4.13 | — | (2.90 | ) | (2.90 | ) | $ | 22.96 | 19.02% | $ | 815,585 | 1.19% | (0.17% | ) | 131.75% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 22.96 | (0.03 | ) | 2.84 | 2.81 | — | (2.99 | ) | (2.99 | ) | $ | 22.78 | 12.32% | $ | 831,778 | 1.20% | (0.12% | ) | 128.34% | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 22.78 | 0.02 | 1.06 | 1.08 | — | (0.46 | ) | (0.46 | ) | $ | 23.40 | 4.80% | (f) | $ | 800,925 | 1.18% | (g) | 0.13% | (g) | 59.99% | |||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(c) | $ | 18.70 | (0.03 | ) | (3.28 | ) | (3.31 | ) | — | — | — | $ | 15.39 | (17.70% | )(f) | $ | 2,325 | 1.44% | (g) | (0.54% | )(g) | 92.59% | ||||||||||||||||
Year Ended December 31, 2003 | $ | 15.39 | (0.12 | ) | 6.37 | 6.25 | — | — | — | $ | 21.64 | 40.61% | $ | 18,345 | 1.42% | (0.63% | ) | 93.72% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.64 | (0.07 | ) | 4.13 | 4.06 | — | (2.90 | ) | (2.90 | ) | $ | 22.80 | 18.78% | $ | 46,906 | 1.44% | (0.42% | ) | 131.75% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 22.80 | (0.07 | ) | 2.79 | 2.72 | — | (2.99 | ) | (2.99 | ) | $ | 22.53 | 12.01% | $ | 74,165 | 1.45% | (0.37% | ) | 128.34% | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 22.53 | (0.01 | ) | 1.05 | 1.04 | — | (0.46 | ) | (0.46 | ) | $ | 23.11 | 4.67% | (f) | $ | 86,155 | 1.44% | (g) | (0.10% | )(g) | 59.99% | ||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 17.48 | (0.01 | ) | (2.05 | ) | (2.06 | ) | — | — | — | $ | 15.42 | (11.78% | )(f) | $ | 51 | 1.15% | (g) | (0.25% | )(g) | 92.59% | ||||||||||||||||
Year Ended December 31, 2003 | $ | 15.42 | (0.08 | ) | 6.40 | 6.32 | — | — | — | $ | 21.74 | 40.99% | $ | 1,199 | 1.17% | (0.39% | ) | 93.72% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.74 | (0.03 | ) | 4.17 | 4.14 | — | (2.90 | ) | (2.90 | ) | $ | 22.98 | 19.06% | $ | 1,681 | 1.19% | (0.15% | ) | 131.75% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 22.98 | (0.02 | ) | 2.83 | 2.81 | — | (2.99 | ) | (2.99 | ) | $ | 22.80 | 12.31% | $ | 2,548 | 1.22% | (0.14% | ) | 128.34% | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 22.80 | 0.01 | 1.06 | 1.07 | — | (0.46 | ) | (0.46 | ) | $ | 23.41 | 4.75% | (f) | $ | 3,328 | 1.19% | (g) | 0.12% | (g) | 59.99% | |||||||||||||||||
Class IV Shares | ||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(e) | $ | 15.61 | (0.05 | ) | 6.17 | 6.12 | — | — | — | $ | 21.73 | 39.21% | (f) | $ | 48,252 | 1.16% | (g) | (0.36% | )(g) | 93.72% | ||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.73 | (0.04 | ) | 4.17 | 4.13 | — | (2.90 | ) | (2.90 | ) | $ | 22.96 | 19.02% | $ | 44,819 | 1.19% | (0.18% | ) | 131.75% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 22.96 | (0.03 | ) | 2.84 | 2.81 | — | (2.99 | ) | (2.99 | ) | $ | 22.78 | 12.32% | $ | 43,206 | 1.20% | (0.12% | ) | 128.34% | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 22.78 | 0.02 | 1.06 | 1.08 | — | (0.46 | ) | (0.46 | ) | $ | 23.40 | 4.80% | (f) | $ | 41,997 | 1.17% | (g) | 0.15% | (g) | 59.99% |
(a) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(b) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(c) | For the period from March 5, 2002 (commencement of operations) through December 31, 2002. |
(d) | For the period from July 1, 2002 (commencement of operations) through December 31, 2002. |
(e) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(f) | Not annualized. |
(g) | Annualized. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT Small Company Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
“Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(l) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(m) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||||
$ | 791,868,739 | $ | 183,701,188 | $ | (44,846,903 | ) | $ | 138,854,285 |
* | The difference between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(n) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadvisers, for the Fund. The subadvisers listed below manage all or a portion of the Fund’s investments and have the responsibility for making all investment decisions for that portion of the Fund unless otherwise indicated. Below is a list of the subadvisers to the Fund:
Subadvisers*** | ||
- The Dreyfus Corporation (until April 30, 2006) | ||
- Franklin Portfolio Associates, LLC (Effective May 1, 2006) | ||
- Neuberger Berman Management, Inc. | ||
- Gartmore Global Partners** | ||
- American Century Investment Management, Inc. | ||
- Morgan Stanley Investment Management, Inc. | ||
- Waddell & Reed Investment Management Company |
** | GMF, as investment adviser, directly manages a portion of the Fund. |
*** | Affiliate of GMF and GGAMT. |
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.93% based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, GMF pays fees of 0.60% to the subadvisers.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I, Class II, and Class III shares of the Fund and 0.20% of Class IV shares of the Fund.
As of June 30, 2006, Nationwide Financial Services received $730,190 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III and Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III or Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III or Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III or Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $2,675.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $573,632,272 and sales of $638,716,890.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that the Fund outperformed its benchmark, the Russell 2000 Index for the one- and five-year periods, while underperforming the benchmark for the three-year period ended September 30, 2005. During these periods, the Fund ranked in the top quartile of the Lipper Small-Cap Growth Funds category. In particular, the Board noted that over the one-year period, the Fund outperformed the median of its Lipper category by 391 points. Moreover, the Board considered that this Fund has undergone changes in portfolio managers on the Gartmore-managed sleeve and the Dreyfus subadvised sleeve over the past one-year period.
The Board also reviewed and considered the Fund’s contractual advisory fee, which placed the Fund in the fifth quintile of its Lipper-constructed Expense Group, but within the range of the advisory fees charged by peer funds in the Lipper Expense Group. The Board also considered that the Fund’s total expense ratio was slightly higher than the median of its Lipper Expense Group. The Board discussed with management the absence of breakpoints on the Fund’s advisory fee and determined that management’s decision not to provide breakpoints on this capacity-constrained fund was reasonable. The Board determined that although the contractual advisory fee was higher than the median of the Lipper Expense Group, the
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Fund had consistently delivered good relative performance. The Board considered the adviser’s profitability, in light of the absence of breakpoints, and concluded it was not excessive.
Finally, the Board discussed with the Fund’s chief compliance officer and management, the “dual employee” arrangement Dreyfus had implemented whereby the portfolio managers who provide daily portfolio management services to the Fund on behalf of Dreyfus, do so as dual employees of another Dreyfus-affiliate, Franklin Portfolio Associates, LLC (“FPA)” The Board considered that although Dreyfus and FPA are affiliated companies, under certain circumstances their management structures, supervisory chains of command and internal resources may be distinct. Therefore, the Board concluded that it would be in the best interests of the Fund and its shareholders to terminate the subadvisory agreement with Dreyfus and to hire FPA directly as the Fund’s subadviser effective on May 1, 2006, as permitted under the Fund’s exemptive order (which permits the Fund’s investment adviser to hire and fire unaffiliated subadvisers with Board but not shareholder approval). The Board was satisfied that this will not result in any change to the Fund’s portfolio managers, investment objective or policies.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Board approve a new Subadvisory agreement with newly-unaffiliated GGP, in reliance upon the Manager of Managers Exemptive order the Funds have obtained from the SEC to take effect immediately upon the closing of the U.K. Sale to ensure continued provision of Subadvisory services by GGP to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale: (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of affiliated GGP at this time; (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies used by affiliated GGP now; and (3) the Subadvisory fees paid to unaffiliated GGP will be the same as those currently paid to affiliated GGP. At the time the Board selected and approved the adviser to the Fund, Board considered, among other factors, the advisory fee compared to a peer group of funds, the extent to which economies of scale would be realized as the Fund grows, and whether the advisory fee levels reflect these economies of scale for the benefit of Fund shareholders. Since the adviser will pay the sub-adviser from the fees paid by the Fund to the adviser, and since the fees and expenses for the Fund will not change as a result of the change to the sub-adviser, the Board did not further consider these factors. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the continuation of affiliated GGP’s subadvisory agreement with new unaffiliated GGP, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
35
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
36
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
37
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
38
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
39
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
40
Table of Contents
Gartmore GVIT Money Market Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
7 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statements of Changes in Net Assets | |
10 | Financial Highlights | |
11 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GMM (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Money Market Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Money Market Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,020.70 | $ | 3.26 | 0.65% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.58 | $ | 3.26 | 0.65% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,021.40 | $ | 2.51 | 0.50% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.32 | $ | 2.51 | 0.50% | ||||||
Class V | Actual | $ | 1,000.00 | $ | 1,021.10 | $ | 2.81 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
Class ID | Actual | $ | 1,000.00 | $ | 1,007.60 | $ | 0.81a | 0.48%a | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.42 | $ | 2.41b | 0.48%b |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
a | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
b | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Money Market Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Asset Backed Commercial Paper | 38.4% | |
Commercial Paper | 25.4% | |
Floating Rate Notes | 22.4% | |
U.S. Government Agencies | 5.7% | |
Corporate Bonds | 5.6% | |
Municipal Bonds | 2.1% | |
Certificates of Deposit | 1.0% | |
Liabilities in excess of other assets | -0.6% | |
100.0% | ||
Top Holdings | ||
Northern Rock PLC, 5.30%, 07/26/06 | 2.5% | |
Kitty Hawk Funding Corp., 5.28%, 07/20/06 | 2.1% | |
Lockhart Funding LLC, 5.18%, 07/10/06 | 2.0% | |
Greyhawk Funding LLC, 5.27%, 07/17/06 | 2.0% | |
Georgetown Funding Co., 5.31%, 07/26/06 | 2.0% | |
Falcon Asset Securitization Corp., 5.32%, 07/28/06 | 2.0% | |
Giro Funding Corp., 5.14%, 07/10/06 | 1.8% | |
Federal National Mortgage Association, 4.00%, 08/08/06 | 1.8% | |
Dresdner U.S. Finance, Inc., 5.09%, 07/07/06 | 1.8% | |
Ormond Quay Funding LLC, 5.35%, 07/31/06 | 1.7% | |
Other Assets | 80.3% | |
100.0% | ||
Top Industries | ||
Asset Backed — Yankee | 16.2% | |
Banks — Foreign | 9.8% | |
Asset Backed Trade & Term Receivables | 9.6% | |
Asset Backed — Domestic | 6.4% | |
Asset Backed — Mortgages | 6.4% | |
Security Brokers & Dealers | 5.7% | |
Asset Backed — Residential Mortgages | 5.5% | |
Banks — Mortgages | 3.6% | |
Asset Backed CDO — Trust Preferred | 3.6% | |
Finance Lessors | 3.4% | |
Other Assets | 29.8% | |
100.0% | ||
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statement of Investments — June 30, 2006 (Unaudited)
Principal Amount | Value | |||||
ASSET BACKED COMMERCIAL PAPER (38.4%) | ||||||
Asset Backed CDO—Trust Preferred (3.6%) | ||||||
Lockhart Funding LLC (b) (3.6%) | ||||||
5.32%, 07/03/06 | $ | 25,000,000 | $ | 24,992,611 | ||
5.18%, 07/10/06 | 40,000,000 | 39,948,950 | ||||
5.13%, 08/01/06 | 5,000,000 | 4,978,171 | ||||
69,919,732 | ||||||
Asset Backed—Domestic (3.0%) | ||||||
CC USA, Inc. (b) (0.9%) | ||||||
5.28%, 07/17/06 | 3,173,000 | 3,165,582 | ||||
5.16%, 08/14/06 | 15,000,000 | 14,906,500 | ||||
18,072,082 | ||||||
Harrier Financial Funding US LLC (b) (2.1%) | ||||||
5.31%, 07/07/06 | 10,589,000 | 10,579,706 | ||||
5.15%, 07/25/06 | 11,100,000 | 11,061,740 | ||||
5.26%, 08/02/06 | 10,000,000 | 9,953,600 | ||||
5.41%, 08/21/06 | 10,000,000 | 9,923,925 | ||||
41,518,971 | ||||||
59,591,053 | ||||||
Asset Backed—Mortgages (6.4%) | ||||||
Georgetown Funding Co. (b) (3.6%) | ||||||
5.31%, 07/26/06 | 40,000,000 | 39,853,333 | ||||
5.37%, 07/27/06 | 30,000,000 | 29,884,300 | ||||
69,737,633 | ||||||
Thornburg Mortgage Capital (b) (2.8%) | ||||||
5.14%, 07/06/06 | 14,000,000 | 13,990,044 | ||||
5.22%, 07/11/06 | 15,400,000 | 15,377,611 | ||||
5.27%, 07/17/06 | 20,000,000 | 19,953,334 | ||||
5.39%, 07/21/06 | 5,507,000 | 5,490,571 | ||||
54,811,560 | ||||||
124,549,193 | ||||||
Asset Backed—Repurchase Agreement (1.6%) | ||||||
Liquid Funding (b) (1.6%) | ||||||
5.34%, 07/03/06 | 20,000,000 | 19,994,066 | ||||
5.14%, 08/09/06 | 12,011,000 | 11,945,030 | ||||
31,939,096 | ||||||
Asset Backed—Residential Mortgages (5.5%) | ||||||
Klio II Funding Corp. (b) (2.2%) | ||||||
5.30%, 07/20/06 | 15,000,000 | 14,958,200 | ||||
5.34%, 07/25/06 | 11,096,000 | 11,056,646 | ||||
5.14%, 08/07/06 | 16,367,000 | 16,281,714 | ||||
42,296,560 | ||||||
Principal Amount | Value | |||||
ASSET BACKED COMMERCIAL PAPER (continued) | ||||||
Asset Backed—Residential Mortgages (continued) | ||||||
Ormond Quay Funding LLC (b) (3.3%) | ||||||
5.34%, 07/05/06 | $ | 1,739,000 | $ | 1,737,970 | ||
5.24%, 07/11/06 | 30,000,000 | 29,956,444 | ||||
5.35%, 07/31/06 | 33,000,000 | 32,853,701 | ||||
64,548,115 | ||||||
106,844,675 | ||||||
Asset Backed—Trade & Term Receivables (9.6%) | ||||||
Falcon Asset Securitization Corp. (b) (2.7%) | ||||||
5.09%, 07/05/06 | 12,000,000 | 11,993,253 | ||||
5.32%, 07/28/06 | 40,000,000 | 39,841,000 | ||||
51,834,253 | ||||||
Golden Funding Corp. (b) (2.4%) | ||||||
5.09%, 07/05/06 | 15,000,000 | 14,991,567 | ||||
5.12%, 07/07/06 | 7,000,000 | 6,994,050 | ||||
5.32%, 07/20/06 | 25,000,000 | 24,930,069 | ||||
46,915,686 | ||||||
Kitty Hawk Funding Corp. (b) (3.1%) | ||||||
5.28%, 07/20/06 | 40,252,000 | 40,139,728 | ||||
5.32%, 07/26/06 | 16,766,000 | 16,704,408 | ||||
5.33%, 07/27/06 | 4,016,000 | 4,000,599 | ||||
60,844,735 | ||||||
Old Line Funding Corp. (b) (1.4%) | ||||||
5.09%, 07/06/06 | 20,000,000 | 19,985,944 | ||||
5.30%, 07/07/06 | 8,000,000 | 7,992,947 | ||||
�� | 27,978,891 | |||||
187,573,565 | ||||||
Asset Backed—Yankee (8.7%) | ||||||
Giro Funding Corp. (b) (3.5%) | ||||||
5.12%, 07/06/06 | 18,583,000 | 18,569,810 | ||||
5.14%, 07/10/06 | 36,000,000 | 35,953,919 | ||||
5.15%, 08/14/06 | 14,063,000 | 13,975,513 | ||||
68,499,242 | ||||||
Greyhawk Funding LLC (b) (3.1%) | ||||||
5.27%, 07/17/06 | 40,000,000 | 39,906,667 | ||||
5.31%, 07/20/06 | 20,000,000 | 19,944,161 | ||||
59,850,828 | ||||||
K(2) USA LLC (b) (1.0%) | ||||||
5.35%, 08/21/06 | 5,300,000 | 5,260,206 | ||||
5.03%, 09/28/06 | 15,000,000 | 14,818,292 | ||||
20,078,498 | ||||||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
ASSET BACKED COMMERCIAL PAPER (continued) | ||||||
Asset Backed—Yankee (continued) | ||||||
Stanfield Victoria Funding LLC (b) (1.1%) | ||||||
5.34%, 07/05/06 | $ | 11,812,000 | $ | 11,805,069 | ||
5.12%, 09/29/06 | 10,000,000 | 9,875,250 | ||||
21,680,319 | ||||||
170,108,887 | ||||||
Total Asset Backed Commercial Paper | 750,526,201 | |||||
COMMERCIAL PAPER (25.4%) | ||||||
Banks—Foreign (8.8%) | ||||||
Alliance & Leicester PLC (b) (1.3%) | ||||||
4.63%, 07/10/06 | 25,000,000 | 24,971,737 | ||||
5.11%, 09/06/06 | 1,000,000 | 990,676 | ||||
25,962,413 | ||||||
ANZ National Int’l Ltd. (b) (0.1%) | ||||||
5.12%, 07/12/06 | 1,600,000 | 1,597,521 | ||||
Barclays U.S. Funding Corp. (2.4%) | ||||||
5.31%, 07/05/06 | 4,800,000 | 4,797,168 | ||||
5.13%, 07/25/06 | 5,000,000 | 4,983,033 | ||||
5.17%, 08/22/06 | 25,000,000 | 24,815,653 | ||||
5.18%, 08/24/06 | 12,000,000 | 11,908,020 | ||||
46,503,874 | ||||||
Dresdner U.S. Finance, Inc. (3.1%) | ||||||
5.09%, 07/07/06 | 35,000,000 | 34,970,541 | ||||
5.27%, 07/21/06 | 25,000,000 | 24,927,083 | ||||
59,897,624 | ||||||
Societe Generale North American (0.1%) | ||||||
5.15%, 08/24/06 | 2,500,000 | 2,480,988 | ||||
Svenska Handelsbank, Inc. (0.2%) | ||||||
5.08%, 07/06/06 | 4,200,000 | 4,197,054 | ||||
UBS Finance (DE) LLC (1.6%) | ||||||
5.08%, 07/05/06 | 8,400,000 | 8,395,277 | ||||
5.32%, 08/08/06 | 22,800,000 | 22,672,688 | ||||
31,067,965 | ||||||
171,707,439 | ||||||
Banks—Mortgage (3.0%) | ||||||
Northern Rock PLC (b) (3.0%) | ||||||
5.30%, 07/26/06 | 48,300,000 | 48,122,900 | ||||
5.31%, 07/31/06 | 10,000,000 | 9,955,917 | ||||
58,078,817 | ||||||
Principal Amount | Value | |||||
COMMERCIAL PAPER (continued) | ||||||
Book Publishing (3.8%) | ||||||
McGraw—Hill Cos., Inc. (1.0%) | ||||||
5.28%, 07/27/06 | $ | 19,102,000 | $ | 19,029,434 | ||
Danaher Corp. (b) (2.8%) | ||||||
5.30%, 07/14/06 | 25,000,000 | 24,952,243 | ||||
5.32%, 07/18/06 | 30,000,000 | 29,924,775 | ||||
54,877,018 | ||||||
Finance Lessors (3.4%) | ||||||
PB Finance (Delaware) (3.4%) | ||||||
5.10%, 07/05/06 | 12,195,000 | 12,188,117 | ||||
5.16%, 07/10/06 | 25,000,000 | 24,967,874 | ||||
5.32%, 07/11/06 | 8,000,000 | 7,988,200 | ||||
5.32%, 07/12/06 | 3,000,000 | 2,995,133 | ||||
5.11%, 07/14/06 | 15,000,000 | 14,972,538 | ||||
5.27%, 07/17/06 | 3,783,000 | 3,774,173 | ||||
66,886,035 | ||||||
Financial Services (1.8%) | ||||||
ING U.S. Funding (1.3%) | ||||||
5.10%, 07/06/06 | 25,000,000 | 24,982,362 | ||||
Private Export Funding Corp. (b) (0.5%) | ||||||
5.31%, 07/17/06 | 10,000,000 | 9,976,444 | ||||
34,958,806 | ||||||
Personal Credit Institutions (0.5%) | ||||||
General Electric Capital Corp. (0.5%) | ||||||
5.14%, 10/10/06 | 10,000,000 | 9,859,442 | ||||
Security Brokers & Dealers (1.3%) | ||||||
Bear Stearns Cos., Inc. (0.8%) | ||||||
5.11%, 07/05/06 | 15,000,000 | 14,991,516 | ||||
Morgan Stanley Dean Witter & Co. (0.5%) | ||||||
5.28%, 07/14/06 | 9,857,000 | 9,838,242 | ||||
24,829,758 | ||||||
Subdividers & Developers (2.8%) | ||||||
Yorkshire Building Society (2.8%) | ||||||
5.34%, 07/03/06 | 21,600,000 | 21,593,592 | ||||
5.10%, 07/28/06 | 10,000,000 | 9,962,200 | ||||
5.11%, 08/04/06 | 10,000,000 | 9,952,400 | ||||
5.14%, 10/02/06 | 14,091,000 | 13,906,713 | ||||
55,414,905 | ||||||
Total Commercial Paper | 495,641,654 | |||||
4
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
FLOATING RATE NOTES (c) (22.4%) | ||||||
Asset Backed—CDO (3.3%) | ||||||
Commodore CDO I Ltd. (b) (1.2%) | ||||||
5.38%, 09/12/06 | $ | 25,000,000 | $ | 25,000,000 | ||
Newcastle CDO Ltd. (b) (0.8%) | ||||||
5.35%, 09/25/06 | 15,000,000 | 15,000,000 | ||||
NorthLake CDO (b) (1.3%) | ||||||
5.33%, 09/06/06 | 25,000,000 | 25,000,000 | ||||
65,000,000 | ||||||
Asset Backed—Domestic (2.3%) | ||||||
CC USA, Inc. (b) (1.0%) | ||||||
5.06%, 05/23/07 | 20,000,000 | 19,998,214 | ||||
Harrier Financial Funding US LLC (b) (1.3%) | ||||||
5.16%, 09/15/06 | 25,000,000 | 24,999,130 | ||||
44,997,344 | ||||||
Asset Backed—Yankee (6.8%) | ||||||
K(2) USA LLC (b) (1.3%) | ||||||
5.15%, 10/17/06 | 25,000,000 | 24,998,542 | ||||
Premier Asset Collateralized Entity LLC (b) (3.1%) | ||||||
5.16%, 09/15/06 | 30,000,000 | 29,998,751 | ||||
5.43%, 06/25/07 | 30,000,000 | 29,997,717 | ||||
59,996,468 | ||||||
Sigma Finance, Inc. (b) (0.8%) | ||||||
5.16%, 09/12/06 | 15,000,000 | 14,999,673 | ||||
Stanfield Victoria Funding LLC (b) (1.6%) | ||||||
5.15%, 08/09/06 | 17,000,000 | 16,999,725 | ||||
5.30%, 06/25/07 | 15,000,000 | 14,998,623 | ||||
31,998,348 | ||||||
131,993,031 | ||||||
Banks—Domestic (2.0%) | ||||||
HBOS Treasury Services PLC (1.1%) | ||||||
5.26%, 06/20/07 | 22,000,000 | 22,000,000 | ||||
Wells Fargo & Co. (b) (0.9%) | ||||||
5.16%, 07/02/07 | 17,000,000 | 17,000,000 | ||||
39,000,000 | ||||||
Banks—Mortgage (0.6%) | ||||||
Northern Rock PLC (b) (0.6%) | ||||||
5.35%, 07/09/07 | 12,500,000 | 12,500,000 | ||||
Principal Amount | Value | |||||
FLOATING RATE NOTES (c) (continued) | ||||||
Insurance (1.4%) | ||||||
Allstate Global Life Funding (b) (1.4%) | ||||||
5.35%, 06/27/07 | $ | 12,500,000 | $ | 12,500,000 | ||
5.19%, 07/06/07 | 15,000,000 | 15,000,000 | ||||
27,500,000 | ||||||
Personal Credit Institutions (1.5%) | ||||||
General Electric Capital Corp. (b) (1.5%) | ||||||
5.35%, 03/16/07 | 8,000,000 | 8,000,000 | ||||
5.25%, 07/09/07 | 21,000,000 | 21,000,000 | ||||
29,000,000 | ||||||
Security Brokers & Dealers (4.5%) | ||||||
Bear Stearns Cos., Inc. (1.0%) | ||||||
5.27%, 01/12/07 | 20,000,000 | 20,000,000 | ||||
Goldman Sachs Group, Inc. (2.0%) | ||||||
5.19%, 05/15/07 | 12,000,000 | 12,000,000 | ||||
5.42%, 05/17/07 | 25,000,000 | 25,000,000 | ||||
37,000,000 | ||||||
Morgan Stanley Dean Witter & Co. (b) (1.5%) | ||||||
5.15%, 07/03/07 | 30,000,000 | 30,000,000 | ||||
87,000,000 | ||||||
Total Floating Rate Notes (c) | 436,990,375 | |||||
U.S. GOVERNMENT AGENCIES (5.7%) | ||||||
Federal Home Loan Bank (1.7%) | ||||||
4.50%, 11/03/06 | 23,000,000 | 23,000,000 | ||||
4.75%, 12/21/06 | 10,000,000 | 10,000,000 | ||||
33,000,000 | ||||||
Federal Home Loan Mortgage Corp. (2.2%) | ||||||
4.75%, 12/29/06 | 17,620,000 | 17,620,000 | ||||
5.30%, 05/11/07 | 10,000,000 | 10,000,000 | ||||
5.38%, 06/04/07 | 16,500,000 | 16,500,000 | ||||
44,120,000 | ||||||
Federal National Mortgage Association (1.8%) | ||||||
4.00%, 08/08/06 | 35,000,000 | 35,000,000 | ||||
Total U.S. Government Agencies | 112,120,000 | |||||
5
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (5.6%) | ||||||
Asset Backed—Domestic (1.0%) | ||||||
CC USA, Inc. (b) (1.0%) | ||||||
5.26%, 04/30/07 | $ | 20,000,000 | $ | 20,000,000 | ||
Asset Backed—Yankee (4.6%) | ||||||
K(2) USA LLC (b) (0.8%) | ||||||
5.43%, 05/29/07 | 15,000,000 | 15,000,000 | ||||
Sigma Finance, Inc. (b) (2.8%) | ||||||
4.76%, 11/08/06 | 20,000,000 | 20,000,000 | ||||
4.80%, 01/24/07 | 10,000,000 | 10,000,000 | ||||
5.25%, 04/30/07 | 15,000,000 | 15,000,000 | ||||
5.50%, 06/05/07 | 10,000,000 | 10,000,000 | ||||
55,000,000 | ||||||
Stanfield Victoria Funding LLC (1.0%) | ||||||
5.72%, 06/25/07 | 20,000,000 | 20,000,000 | ||||
90,000,000 | ||||||
Total Corporate Bonds | 110,000,000 | |||||
MUNICIPAL BONDS (2.1%) | ||||||
South Carolina Public Service Authority (0.4%) | ||||||
5.09%, 07/05/06 | 7,300,000 | 7,295,912 | ||||
Sunshine State Governmental Financing Commission (1.7%) | ||||||
5.09%, 07/07/06 | 9,761,000 | 9,752,752 | ||||
5.22%, 07/11/06 | 2,055,000 | 2,052,032 | ||||
5.19%, 07/12/06 | 1,320,000 | 1,317,915 | ||||
5.34%, 08/07/06 | 21,630,000 | 21,512,176 | ||||
34,634,875 | ||||||
Total Municipal Bonds | 41,930,787 | |||||
Principal Amount | Value | ||||||
CERTIFICATES OF DEPOSIT (1.0%) | |||||||
Banks—Foreign (1.0%) | |||||||
HBOS Treasury Services PLC (1.0%) | |||||||
5.25%, 04/11/07 | $ | 20,000,000 | $ | 20,000,000 | |||
Total Certificates of Deposit | 20,000,000 | ||||||
Total Investments (Cost $1,967,209,017) (a) — 100.6% | 1,967,209,017 | ||||||
Liabilities in excess of other assets — (0.6%) | (11,149,231 | ) | |||||
NET ASSETS — 100.0% | $ | 1,956,059,786 | |||||
(a) | See Notes to Financial Statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Restricted securities issued pursuant to Section 4(2) of the Securities Act of 1933. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees. |
(c) | Variable Rate Security. The rate reflected in the Statement of Investments is the rate in effect on June 30, 2006. The maturity date represents the actual maturity date. |
CDO | Collateralized Debt Obligation |
See notes financial statements.
6
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $1,967,209,017) | $ | 1,967,209,017 | ||
Interest and dividends receivable | 4,087,836 | |||
Receivable for capital shares issued | 471,145 | |||
Receivable from adviser | 5,485 | |||
Prepaid expenses and other assets | 19,034 | |||
Total Assets | 1,971,792,517 | |||
Liabilities: | ||||
Payable to custodian | 400 | |||
Payable for capital shares redeemed | 14,643,155 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 617,146 | |||
Fund administration and transfer agent fees | 120,021 | |||
Administrative servicing fees | 224,632 | |||
Other | 127,377 | |||
Total Liabilities | 15,732,731 | |||
Net Assets | $ | 1,956,059,786 | ||
Represented by: | ||||
Capital | $ | 1,956,093,358 | ||
Accumulated net investment income (loss) | 6 | |||
Accumulated net realized gains (losses) from investment transactions | (33,578 | ) | ||
Net Assets | $ | 1,956,059,786 | ||
Net Assets: | ||||
Class I Shares | $ | 1,501,939,158 | ||
Class IV Shares | 85,602,514 | |||
Class V Shares | 353,043,773 | |||
Class ID Shares | 15,474,341 | |||
Total | $ | 1,956,059,786 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 1,501,964,072 | |||
Class IV Shares | 85,604,564 | |||
Class V Shares | 353,054,028 | |||
Class ID Shares | 15,474,341 | |||
Total | 1,956,097,005 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 1.00 | ||
Class IV Shares | $ | 1.00 | ||
Class V Shares | $ | 1.00 | ||
Class ID Shares | $ | 1.00 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 39,356,513 | ||
Dividend income | 1,043 | |||
Total Income | 39,357,556 | |||
Expenses: | ||||
Investment advisory fees | 3,210,758 | |||
Fund administration and transfer agent fees | 563,916 | |||
Administrative servicing fees Class I Shares | 972,309 | |||
Administrative servicing fees Class IV Shares | 59,407 | |||
Administrative servicing fees Class V Shares | 119,106 | |||
Trustee fees | 26,275 | |||
Other | 202,310 | |||
Total expenses before waived or reimbursed expenses and earnings credit | 5,154,081 | |||
Expenses waived or reimbursed | (53,221 | ) | ||
Earnings credit (Note 5) | (9,542 | ) | ||
Total Expenses | 5,091,318 | |||
Net Investment Income (Loss) | 34,266,238 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 15 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 34,266,253 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 34,266,238 | $ | 47,830,923 | ||||
Net realized gains (losses) on investment transactions | 15 | 725 | ||||||
Change in net assets resulting from operations | 34,266,253 | 47,831,648 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (25,434,409 | ) | (33,261,965 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (1,721,537 | ) | (2,223,527 | ) | ||||
Distributions to Class V shareholders from: | ||||||||
Net investment income | (6,989,552 | ) | (12,345,425 | ) | ||||
Distributions to Class ID shareholders from: | ||||||||
From net investment income | (120,740 | )(a) | — | |||||
Change in net assets from shareholder distributions | (34,266,238 | ) | (47,830,917 | ) | ||||
Change in net assets from capital transactions | 389,670,697 | (221,263,202 | ) | |||||
Change in net assets | 389,670,712 | (221,262,471 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 1,566,389,074 | 1,787,651,545 | ||||||
End of period | $ | 1,956,059,786 | $ | 1,566,389,074 | ||||
Accumulated net investment income (loss) | $ | 6 | $ | 6 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 587,821,836 | $ | 855,265,030 | ||||
Dividends reinvested | 25,434,395 | 34,952,440 | ||||||
Cost of shares redeemed | (284,618,009 | ) | (940,447,391 | ) | ||||
328,638,222 | (50,229,921 | ) | ||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 26,827,170 | 35,014,549 | ||||||
Dividends reinvested | 1,721,439 | 2,344,782 | ||||||
Cost of shares redeemed | (17,061,371 | ) | (47,659,286 | ) | ||||
11,487,238 | (10,299,955 | ) | ||||||
Class V Shares | ||||||||
Proceeds from shares issued | 217,431,129 | 419,876,240 | ||||||
Dividends reinvested | 6,989,553 | 12,960,742 | ||||||
Cost of shares redeemed | (190,349,786 | ) | (593,570,308 | ) | ||||
34,070,896 | (160,733,326 | ) | ||||||
Class ID Shares | ||||||||
Proceeds from shares issued | 16,920,882 | (a) | — | |||||
Dividends reinvested | 120,735 | (a) | — | |||||
Cost of shares redeemed | (1,567,276 | )(a) | — | |||||
15,474,341 | — | |||||||
Change in net assets from capital transactions | $ | 389,670,697 | $ | (221,263,202 | ) | |||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
8
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 587,821,835 | 855,265,031 | ||||
Reinvested | 25,434,395 | 34,952,440 | ||||
Redeemed | (284,618,009 | ) | (940,447,392 | ) | ||
328,638,221 | (50,229,921 | ) | ||||
Class IV Shares | ||||||
Issued | 26,827,170 | 35,014,549 | ||||
Reinvested | 1,721,439 | 2,344,782 | ||||
Redeemed | (17,061,371 | ) | (47,659,286 | ) | ||
11,487,238 | (10,299,955 | ) | ||||
Class V Shares | ||||||
Issued | 217,431,129 | 419,876,240 | ||||
Reinvested | 6,989,553 | 12,960,742 | ||||
Redeemed | (190,349,786 | ) | (593,570,308 | ) | ||
34,070,896 | (160,733,326 | ) | ||||
Class ID Shares | ||||||
Issued | 16,982,289 | (a) | — | |||
Reinvested | 59,328 | (a) | — | |||
Redeemed | (1,567,276 | )(a) | — | |||
15,474,341 | — | |||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
9
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Money Market Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | |||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(b) | $ | 1.00 | 0.04 | 0.04 | (0.04 | ) | (0.04 | ) | $ | 1.00 | 3.60% | $ | 2,869,354 | 0.55% | 3.41% | 0.61% | 3.35% | |||||||||||||||||||
Year Ended December 31, 2002 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 1.21% | $ | 2,436,783 | 0.62% | 1.21% | 0.62% | 1.21% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.63% | $ | 1,573,895 | 0.63% | 0.63% | (h | ) | (h | ) | |||||||||||||||||
Year Ended December 31, 2004 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.81% | $ | 1,223,530 | 0.62% | 0.79% | (h | ) | (h | ) | |||||||||||||||||
Year Ended December 31, 2005 | $ | 1.00 | 0.03 | 0.03 | (0.03 | ) | (0.03 | ) | $ | 1.00 | 2.67% | $ | 1,173,301 | 0.65% | 2.63% | (h | ) | (h | ) | |||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 1.00 | 0.02 | 0.02 | (0.02 | ) | (0.02 | ) | $ | 1.00 | 2.07% | (f) | $ | 1,501,939 | 0.65% | (g) | 4.16% | (g) | (h | ) | (h | ) | ||||||||||||||
Class IV Shares | ||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(c) | $ | 1.00 | (e | ) | (e | ) | (e | ) | (e | ) | $ | 1.00 | 0.46% | (f) | $ | 103,515 | 0.50% | (g) | 0.67% | (g) | 0.63% | (g) | 0.55% | (g) | ||||||||||||
Year Ended December 31, 2004 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.94% | $ | 84,415 | 0.50% | 0.91% | 0.62% | 0.79% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 1.00 | 0.03 | 0.03 | (0.03 | ) | (0.03 | ) | $ | 1.00 | 2.82% | $ | 74,115 | 0.50% | 2.76% | 0.65% | 2.62% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 1.00 | 0.02 | 0.02 | (0.02 | ) | (0.02 | ) | $ | 1.00 | 2.14% | (f) | $ | 85,603 | 0.50% | (g) | 4.30% | (g) | 0.64% | (g) | 4.16% | (g) | ||||||||||||||
Class V Shares | ||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 1.00 | (e | ) | (e | ) | (e | ) | (e | ) | $ | 1.00 | 0.22% | (f) | $ | 324,950 | 0.56% | (g) | 1.11% | (g) | (h | ) | (h | ) | ||||||||||||
Year Ended December 31, 2003 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.71% | $ | 365,299 | 0.55% | 0.70% | (h | ) | (h | ) | |||||||||||||||||
Year Ended December 31, 2004 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.89% | $ | 479,706 | 0.55% | 0.92% | (h | ) | (h | ) | |||||||||||||||||
Year Ended December 31, 2005 | $ | 1.00 | 0.03 | 0.03 | (0.03 | ) | (0.03 | ) | $ | 1.00 | 2.75% | $ | 318,973 | 0.57% | 2.69% | (h | ) | (h | ) | |||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 1.00 | 0.02 | 0.02 | (0.02 | ) | (0.02 | ) | $ | 1.00 | 2.11% | (f) | $ | 353,044 | 0.56% | (g) | 4.24% | (g) | (h | ) | (h | ) | ||||||||||||||
Class ID Shares | ||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(i) | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.76% | (f) | $ | 15,474 | 0.48% | (g) | 4.61% | (g) | (h | ) | (h | ) |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(c) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(d) | For the period from October 21, 2002 (commencement of operations) through December 31, 2002. |
(e) | The amount is less than $0.005. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
(i) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Money Market Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Investments of the Fund are valued at amortized cost, which approximates market value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant (straight-line) basis to the maturity of the security.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issues from developing countries.
(d) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount.
(e) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared daily and paid monthly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(f) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized | Unrealized | Net Unrealized | |||
$1,967,209,017 | $— | $— | $— |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(g) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of settled shares outstanding. Under this method, earnings are allocated based on the fair value of settled shares. Expenses specific to a class (such as administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Schedule | Fees | |
Up to $1 billion | 0.40% | |
Next $1 billion | 0.38% | |
Next $3 billion | 0.36% | |
$5 billion or more | 0.34% |
Effective May 1, 2006, GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) limiting operating expenses from exceeding 0.50% for Class IV shares until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the Fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
For the six months ended June 30, 2006, the cumulative potential reimbursements for the Class IV shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF would be:
Amount | Amount | Amount | Six Months | |||
$103,443 | $116,217 | $119,939 | $53,221 |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25%, 0.20% and 0.10% of the average daily net assets of Class I, Class IV, and Class V shares, respectively, of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $1,094,415 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, the Fund had purchases of $26,500,000 of U.S. Government securities.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that, for the one-, three-, and five years periods, the Fund underperformed the Fund’s benchmark, the iMoney Net First Tier Index, by 63, 62 and 67 basis points, respectively and ranked in the third quartile of the Fund’s Lipper Money Market Funds category for all periods. However, the Board considered that performance of the Fund placed the Fund in the second quintile of the Performance Group constructed by Lipper over the one-, two-, three-, and four-year periods presented in the Lipper report, and in the third quintile over the five-year period presented in the Lipper report. Lipper uses several factors in selecting the comparative peer groups, and one such factor is asset size comparability. Lipper attempts to select some funds whose total average net assets are larger and some funds whose total average net assets are smaller, within a reasonable size range. The Board next reviewed and considered the contractual advisory fee and breakpoints for the Fund and noted that the contractual advisory fee placed the Fund in the third quintile of the Fund’s Lipper-constructed Expense Group and the Fund’s total expense ratio placed the Fund below the median of the Fund’s Expense Group. Finally, the Board received and considered the adviser’s profitability and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Money Market Fund II
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
7 | Financial Highlights | |
8 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GMM2
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Money Market Fund II |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of | Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Money Market II Fund | |||||||||||||
Class Ia | Actual | $ | 1,000.00 | $ | 1,018.70 | $ | 5.11 | 1.02% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.84 | $ | 5.12 | 1.02% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
a | The Money Market Fund II shares have no class designation. |
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Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Money Market Fund II |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Commercial Paper | 87.7% | |
Asset Backed Commercial Paper | 9.2% | |
Government Bond | 3.1% | |
Other assets in excess of liabilities | 0.0% | |
100.0% | ||
Top Holdings | ||
Anheuser-Busch Cos., Inc. 5.20%, 07/03/06 | 3.7% | |
UBS Finance Delaware LLC, 5.27%, 07/03/06 | 3.4% | |
Falcon Asset Securitization Corp., 5.28%, 07/03/06 | 3.4% | |
ING (US) Funding LLC, 5.30%, 07/03/06 | 3.1% | |
Calyon North American, 5.25%, 07/05/06 | 3.1% | |
Old Line Funding Corp., 5.06%, 07/05/06 | 3.1% | |
National Australia Funding (DE), 5.21%, 07/11/06 | 3.1% | |
Federal Home Loan Bank, 5.12%, 07/12/06 | 3.1% | |
Abbey National N America LLC, 5.25%, 07/12/06 | 3.1% | |
HSBC USA, Inc., 5.25%, 07/13/06 | 3.1% | |
Other Assets | 67.8% | |
100.0% | ||
Top Industries | ||
Banks - Foreign | 15.9% | |
Personal Credit Institutions | 9.1% | |
Asset Backed Trade & Term Receivables | 8.6% | |
Financial Services | 8.2% | |
Miscellaneous Manufacturing | 6.2% | |
Variety Stores | 5.7% | |
Bank Holdings Companies | 4.2% | |
Asset Backed Securities - Yankee | 4.1% | |
Brewery | 3.7% | |
Agricultural Services | 3.7% | |
Other Assets | 30.6% | |
100.0% | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND II
Statement of Investments — June 30, 2006 (Unaudited)
Principal Amount | Value | |||||
COMMERCIAL PAPER (87.7%) | ||||||
Agricultural Services (3.7%) | ||||||
Cargill, Inc., 5.25%, 07/03/06 (b) | $ | 3,000,000 | $ | 2,999,125 | ||
Cargill, Inc., 5.28%, 07/12/06 (b) | 10,000,000 | 9,983,867 | ||||
12,982,992 | ||||||
Asset Backed Securities—Yankee (1.3%) | ||||||
Greyhawk Funding LLC, 5.30%, 07/10/06 (b) | 4,600,000 | 4,593,905 | ||||
Asset Backed Trade & Term Receivables (8.6%) | ||||||
Falcon Asset Securitization Corp., 5.28%, 07/03/06 (b) | 12,000,000 | 11,996,480 | ||||
Kitty Hawk Funding Corp., 5.25%, 07/05/06 | 7,550,000 | 7,545,596 | ||||
Old Line Funding Corp., 5.06%, 07/05/06 (b) | 11,000,000 | 10,993,547 | ||||
30,535,623 | ||||||
Bank Holdings Companies (4.2%) | ||||||
KBC Financial Products International, 5.33%, 07/03/06 | 4,818,000 | 4,816,573 | ||||
State Street Corp., 5.22%, 07/10/06 | 10,000,000 | 9,986,950 | ||||
14,803,523 | ||||||
Banks—Domestic (3.1%) | ||||||
HSBC USA, Inc., 5.25%, 07/13/06 | 11,000,000 | 10,980,750 | ||||
Banks—Foreign (15.9%) | ||||||
Abbey National N America LLC, 5.25%, 07/12/06 | 11,000,000 | 10,982,354 | ||||
Calyon North American, 5.25%, 07/05/06 | 11,000,000 | 10,993,588 | ||||
National Australia Funding (DE), 5.21%, 07/11/06 | 11,000,000 | 10,984,081 | ||||
Societe Generale, 5.24%, 07/14/06 | 11,000,000 | 10,979,186 | ||||
UBS Finance Delaware LLC, 5.27%, 07/03/06 | 12,000,000 | 11,996,486 | ||||
55,935,695 | ||||||
Principal Amount | Value | |||||
COMMERCIAL PAPER (continued) | ||||||
Brewery (3.7%) | ||||||
Anheuser-Busch Cos., Inc., 5.20%, 07/03/06 (b) | $ | 13,000,000 | $ | 12,996,244 | ||
Consumer Durables (3.1%) | ||||||
Colgate-Palmolive Co., 5.21%, 07/14/06 (b) | 11,000,000 | 10,979,305 | ||||
Finance—Consumer Sales (1.7%) | ||||||
Harley-Davidson Funding Corp., 5.11%, 07/07/06 (b) | 6,100,000 | 6,094,805 | ||||
Finance Lessors (2.8%) | ||||||
PB Finance (Delaware), 5.30%, 07/10/06 | 10,000,000 | 9,986,750 | ||||
Financial Services (8.2%) | ||||||
Private Export Funding Corp., 5.26%, 07/05/06 (b) | 3,000,000 | 2,998,247 | ||||
Prudential Funding LLC, 5.22%, 07/07/06 | 3,000,000 | 2,997,390 | ||||
Prudential Funding LLC, 5.23%, 07/11/06 | 10,000,000 | 9,985,472 | ||||
Rabobank USA Finance Corp., 5.26%, 07/05/06 | 3,000,000 | 2,998,247 | ||||
Rabobank USA Finance Corp., 5.24%, 07/13/06 | 10,000,000 | 9,982,533 | ||||
28,961,889 | ||||||
Insurance Carriers (3.1%) | ||||||
ING (US) Funding LLC, 5.30%, 07/03/06 | 11,000,000 | 10,996,761 | ||||
Miscellaneous Manufacturing (6.2%) | ||||||
Danaher Corp., 5.28%, 07/07/06 (b) | 4,000,000 | 3,996,480 | ||||
Danaher Corp., 5.17%, 07/11/06 (b) | 8,000,000 | 7,988,289 | ||||
Honeywell International, 5.24%, 07/05/06 (b) | 10,000,000 | 9,994,178 | ||||
21,978,947 | ||||||
Mortgage Bankers (1.4%) | ||||||
Northern Rock PLC, 5.27%, 07/11/06 | 5,000,000 | 4,992,688 | ||||
Newspapers (2.8%) | ||||||
Gannett Co., 5.13%, 07/05/06 (b) | 10,000,000 | 9,994,300 | ||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND II
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
COMMERCIAL PAPER (continued) | ||||||
Personal Credit Institutions (9.1%) | ||||||
American General Finance Corp., 5.18%, 07/07/06 | $ | 5,000,000 | $ | 4,995,683 | ||
American General Finance Corp., 5.25%, 07/12/06 | 5,000,000 | 4,991,979 | ||||
General Electric Capital Corp., 5.14%, 07/05/06 | 6,000,000 | 5,996,573 | ||||
General Electric Capital Corp., 5.22%, 07/07/06 | 6,000,000 | 5,994,780 | ||||
Toyota Motor Credit Corp., 5.50%, 07/07/06 | 10,000,000 | 9,991,334 | ||||
31,970,349 | ||||||
Short-Term Business Credit (3.1%) | ||||||
American Express Credit Corp., 5.23%, 07/14/06 | 11,000,000 | 10,979,225 | ||||
Variety Stores (5.7%) | ||||||
Target Corp., 5.22%, 07/10/06 | 10,000,000 | 9,986,950 | ||||
Wal-Mart Stores, 5.18%, 07/06/06 | 10,000,000 | 9,992,806 | ||||
19,979,756 | ||||||
Total Commercial Paper | 309,743,507 | |||||
ASSET—BACKED COMMERCIAL PAPER (9.2%) | ||||||
Asset Backed—Residential Mortgages (2.8%) | ||||||
Ormond Quay Funding LLC, 5.33%, 07/05/06 | 10,000,000 | 9,994,078 | ||||
Asset Backed CDO—Trust Preferred (3.6%) | ||||||
Lockhart Funding LLC, 5.32%, 07/03/06 (b) | 9,498,000 | 9,495,193 | ||||
Lockhart Funding LLC, 5.25%, 07/06/06 (b) | 3,191,000 | 3,188,673 | ||||
12,683,866 | ||||||
Asset Backed Securities—Yankee (2.8%) | ||||||
Stanfield Victoria Funding LLC, 5.18%, 07/05/06 | 10,000,000 | 9,994,244 | ||||
Total Asset-Backed Commercial Paper | 32,672,188 | |||||
Principal Amount | Value | |||||
GOVERNMENT BONDS (3.1%) | ||||||
U.S. Government Agencies (FHLB) (3.1%) | ||||||
Federal Home Loan Bank, 5.12%, 07/12/06 | $ | 11,000,000 | $ | 10,982,791 | ||
Total Government Bonds | 10,982,791 | |||||
Total Investments (Cost $353,398,486) (a) — 100.0% | 353,398,486 | |||||
Other assets in excess of liabilities — 0.0% | 28,102 | |||||
NET ASSETS — 100.0% | $ | 353,426,588 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Restricted Securities issued pursuant to Section 4(2) of the Securities Act of 1933. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees. |
CDO | Collateralized Debt Obligation |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND II
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $353,398,486) | $ | 353,398,486 | |
Cash | 674 | ||
Interest and dividends receivable | 1,765 | ||
Receivable for capital shares issued | 2,162,746 | ||
Total Assets | 355,563,671 | ||
Liabilities: | |||
Payable for capital shares redeemed | 1,835,275 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 152,445 | ||
Fund administration and transfer agent fees | 20,972 | ||
Distribution fees | 76,223 | ||
Administrative servicing fees | 31,450 | ||
Other | 20,718 | ||
Total Liabilities | 2,137,083 | ||
Net Assets | $ | 353,426,588 | |
Represented by: | |||
Capital | $ | 353,424,300 | |
Accumulated net realized gains (losses) from investment transactions | 2,288 | ||
Net Assets | $ | 353,426,588 | |
Net Assets: | |||
Class I Shares* | $ | 353,426,588 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares* | 353,424,300 | ||
Net asset value and offering price per share:** | |||
Class I Shares* | $ | 1.00 |
* | Shares have no class designation. |
** | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 7,010,334 | ||
Dividend income | 127,469 | |||
Total Income | 7,137,803 | |||
Expenses: | ||||
Investment advisory fees | 748,220 | |||
Fund administration and transfer agent fees | 101,496 | |||
Distribution fees | 374,110 | |||
Administrative servicing fees Class I Shares* | 221,348 | |||
Trustee fees | 10,633 | |||
Other | 72,506 | |||
Total expenses before earnings credit | 1,528,313 | |||
Earnings credit (Note 5) | (32,284 | ) | ||
Total Expenses | 1,496,029 | �� | ||
Net Investment Income (Loss) | 5,641,774 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | (42 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 5,641,732 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MONEY MARKET FUND II
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income | $ | 5,641,774 | $ | 6,675,341 | ||||
Net realized gains (losses) on investment transactions | (42 | ) | 2,366 | |||||
Change in net assets resulting from operations | 5,641,732 | 6,677,707 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (5,641,774 | ) | (6,675,341 | ) | ||||
Change in net assets from capital transactions | 92,870,083 | 67,734,090 | ||||||
Change in net assets | 92,870,041 | 67,736,456 | ||||||
Net Assets: | ||||||||
Beginning of period | 260,556,547 | 192,820,091 | ||||||
End of period | $ | 353,426,588 | $ | 260,556,547 | ||||
Accumulated net investment income (loss) | $ | — | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Proceeds from shares issued | $ | 822,463,601 | $ | 1,564,322,849 | ||||
Dividends reinvested | 5,641,767 | 6,902,929 | ||||||
Cost of shares redeemed | (735,235,285 | ) | (1,503,491,688 | ) | ||||
$ | 92,870,083 | $ | 67,734,090 | |||||
SHARE TRANSACTIONS: | ||||||||
Issued | 822,463,601 | 1,564,322,850 | ||||||
Reinvested | 5,641,767 | 6,902,929 | ||||||
Redeemed | (735,235,285 | ) | (1,503,491,688 | ) | ||||
92,870,083 | 67,734,091 | |||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Money Market Fund II
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | |||||||||||||||||||||||||
Period Ended December 31, 2001(b) | $ | 1.00 | (c) | (c) | (c) | (c) | $ | 1.00 | 0.24% | (d) | $ | 37,411 | 1.30% | (e) | 0.93% | (e) | 1.45% | (e) | 0.78% | (e) | ||||||||||||||||
Year Ended December 31, 2002 | $ | 1.00 | 0.01 | 0.01 | (0.01 | ) | (0.01 | ) | $ | 1.00 | 0.70% | $ | 110,041 | 0.99% | 0.66% | 0.99% | 0.66% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 1.00 | (c) | (c) | (c) | (c) | $ | 1.00 | 0.18% | $ | 147,736 | 0.95% | 0.17% | 0.99% | 0.13% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 1.00 | (c) | (c) | (c) | (c) | $ | 1.00 | 0.41% | $ | 192,820 | 0.96% | 0.43% | 0.99% | 0.40% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 1.00 | 0.02 | 0.02 | (0.02 | ) | (0.02 | ) | $ | 1.00 | 2.26% | $ | 260,557 | 1.01% | 2.24% | (f) | (f | ) | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 1.00 | 0.02 | 0.02 | (0.02 | ) | (0.02 | ) | $ | 1.00 | 1.87% | (d) | $ | 353,427 | 1.02% | (e) | 3.75% | (e) | (f) | (f | ) |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | For the period from October 2, 2001 (commencement of operations) through December 31, 2001. |
(c) | The amount is less than $0.005. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Money Market Fund II (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Investments of the Funds are valued at amortized cost, which approximates market value. Under the amortized cost method, premium or discount, if any, is amortized or accreted, respectively, on a constant (straight-line) basis to the maturity of the security.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issues from developing countries.
(d) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount.
(e) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared daily and paid monthly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(f) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||
$ | 353,398,486 | $ | — | $ | — | $ | — |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(g) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocation is based on the fair value of settled shares outstanding. Under this method, earnings are allocated based on the fair value of settled shares.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
Up to $1 billion | 0.50% | |
Next $1 billion | 0.48% | |
Next $3 billion | 0.46% | |
$5 billion or more | 0.44% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $227,244 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, the Fund had purchases of $228,785,552 of U.S. Government securities.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following such review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that, for the one- and three-year periods, the Fund underperformed its benchmark, the iMoney Net First Tier Index, by 104 and 106 basis points, respectively, and ranked in the fourth quartile of the Lipper Money Market Funds category for both periods. The Board also considered that performance of the Fund placed it in the fifth quintile of the Performance Group constructed by Lipper over the one-, two-, and three-year period presented in the Report. The Board discussed the Fund’s performance with Gartmore who reminded the Board that the Fund was designed for high inflows and outflows as part of a tactical market allocation product, to accommodate short-term trading. Therefore, the Fund must be managed with a much shorter duration, and the Fund has higher expenses (as discussed below), each of which adversely affects relative performance.
The Board then reviewed and considered the contractual advisory fee and breakpoints for the Fund and noted that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Expense Group constructed by Lipper. The Trustees considered that total expenses for the Fund placed the Fund above the median of the Fund’s Expense Group. The Board also reviewed and considered the Adviser’s profitability and concluded it was not excessive.
The Board concluded that the Fund has performed as expected, given the need to manage to a shorter duration, and the higher expenses incurred by the Fund. The Board also concluded that while the Fund’s advisory fee when compared to the advisory fees of the Lipper Expense Group is slightly higher than the median of the advisory fees of the Lipper Expense Group, it is
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
within the range of the advisory fees charged by the funds in the Lipper Expense Group. Also, while the Fund’s total expenses are higher than the median of the total expenses of the funds in the Lipper Expense Group, this too is understandable given the higher distribution expenses, and the requirements of the Fund to accommodate short-term trading.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
18
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J.P. Morgan GVIT Balanced Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
24 | Statement of Assets and Liabilities | |
24 | Statement of Operations | |
25 | Statements of Changes in Net Assets | |
26 | Financial Highlights | |
27 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-JPGB (8/06)
Table of Contents
Shareholder
Expense Example | J.P. Morgan GVIT Balanced Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
J.P. Morgan GVIT Balanced Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,022.50 | $ | 5.06 | 1.01% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.07 | 1.01% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,023.00 | $ | 4.61 | 0.92% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.24 | $ | 4.62 | 0.92% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Portfolio Summary
June 30, 2006 (Unaudited) | J.P. Morgan GVIT Balanced Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 61.2% | |
Mortgage-Backed Securities | 21.9% | |
Commercial Paper | 10.7% | |
Corporate Bonds | 9.3% | |
U.S. Government Long-Term Obligations | 5.3% | |
Cash Equivalents | 2.1% | |
Liabilities in excess of other assets | -10.5% | |
100.0% | ||
Top Holdings* | ||
Federal National Mortgage Association, TBA, 6.50%, 08/01/32 | 2.3% | |
Federal Home Loan Mortgage Corporation, TBA, 5.50%, 08/15/36 | 2.2% | |
Federal Home Loan Mortgage Corporation, TBA, 6.00%, 08/15/36 | 1.9% | |
Exxon Mobil Corp. | 1.6% | |
General Electric Co. | 1.3% | |
Citigroup, Inc. | 1.3% | |
Bank of America Corp. | 1.1% | |
Federal National Mortgage Association, TBA, 5.50%, 08/01/19 | 0.9% | |
Altria Group, Inc. | 0.9% | |
U.S. Treasury Note, 4.88%, 05/31/11 | 0.9% | |
Other Assets | 85.6% | |
100.0% | ||
Top Industries | ||
Financial Services | 21.5% | |
Federal National Mortgage Association | 7.2% | |
Federal Home Loan Mortgage Corporation | 6.4% | |
Oil & Gas | 6.3% | |
Financial | 4.0% | |
Insurance | 3.7% | |
U.S. Treasury Notes | 3.6% | |
Financial/Banks | 3.5% | |
Drugs | 3.1% | |
Retail | 2.9% | |
Other Assets | 37.8% | |
100.0% | ||
Top Countries | ||
United States | 82.8% | |
United Kingdom | 3.5% | |
Japan | 3.0% | |
France | 1.5% | |
Switzerland | 0.7% | |
Netherlands | 0.7% | |
Bermuda | 0.6% | |
Germany | 0.6% | |
Spain | 0.6% | |
Italy | 0.6% | |
Other Assets | 5.4% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (61.2%) | |||||
AUSTRALIA (0.3%) | |||||
Banking (0.1%) | |||||
Australia & New Zealand Banking Group Ltd. (f) | 12,585 | $ | 248,751 | ||
Westpac Banking Corp. (f) | 4,229 | 72,869 | |||
321,620 | |||||
Financial Services (0.2%) | |||||
Macquarie Bank Ltd. (f) | 2,865 | 146,616 | |||
Macquarie Infrastructure Group (f) | 96,301 | 240,203 | |||
386,819 | |||||
708,439 | |||||
AUSTRIA (0.1%) | |||||
Building & Construction (0.1%) | |||||
Wienerberger AG (f) | 2,802 | 132,959 | |||
Machinery (0.0%) | |||||
Andritz AG (f) | 374 | 61,732 | |||
194,691 | |||||
BELGIUM (0.1%) | |||||
Banking (0.0%) | |||||
KBC Groep NV (f) | 896 | 96,153 | |||
Chemicals (0.1%) | |||||
Solvay SA (f) | 901 | 103,514 | |||
199,667 | |||||
BRAZIL (0.0%) | |||||
Telecommunications (0.0%) | |||||
Telekom Austria AG (f) | 2,195 | 48,864 | |||
DENMARK (0.3%) | |||||
Automotive (0.1%) | |||||
Volkswagen AG (f) | 3,618 | 181,117 | |||
Financial Services (0.2%) | |||||
Deutsche Bank AG (f) | 2,529 | 284,056 | |||
Insurance (0.0%) | |||||
Allianz AG (f) | 429 | 67,502 | |||
Pharmaceuticals (0.0%) | |||||
Novo Nordisk A/S (f) | 655 | 41,650 | |||
Transportation Services (0.0%) | |||||
A P Moller — Maersk A/S (f) | 7 | 54,615 | |||
628,940 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FINLAND (0.2%) | |||||
Computer Software & Services (0.0%) | |||||
TietoEnator Oyj (f) | 966 | $ | 27,873 | ||
Machinery (0.1%) | |||||
Metso Corp. (f) | 4,105 | 148,636 | |||
Paper & Related Products (0.1%) | |||||
Stora Enso (f) | 9,953 | 138,919 | |||
Wireless Equipment (0.0%) | |||||
Nokia Oyj (f) | 3,068 | 62,190 | |||
377,618 | |||||
FRANCE (1.2%) | |||||
Banking (0.3%) | |||||
Banque Nationale de Paris (f) | 3,873 | 370,310 | |||
Societe Generale (f) | 1,801 | 264,404 | |||
634,714 | |||||
Building & Construction (0.0%) | |||||
Bouygues SA (f) | 979 | 50,265 | |||
Building Products (0.0%) | |||||
Lafarge SA (f) | 425 | 53,265 | |||
Chemicals—Diversified (0.1%) | |||||
Arkema (b) | 2,917 | 113,812 | |||
Chemicals—Specialty (0.1%) | |||||
Rhodia SA (b) (f) | 55,338 | 109,977 | |||
Electric Utilities (0.1%) | |||||
Suez SA (f) | 3,793 | 157,498 | |||
Financial Services (0.1%) | |||||
Credit Agricole SA (f) | 4,100 | 155,577 | |||
Insurance (0.1%) | |||||
Axa (f) | 7,266 | 235,142 | |||
Manufacturing (0.1%) | |||||
Compagnie de Saint-Gobain (f) | 3,015 | 215,120 | |||
Oil & Gas (0.2%) | |||||
Total SA (f) | 5,952 | 390,952 | |||
Pharmaceuticals (0.1%) | |||||
Sanofi-Aventis (f) | 2,581 | 251,439 | |||
Telecommunications (0.0%) | |||||
France Telecom SA (f) | 4,093 | 87,322 | |||
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Television (0.0%) | |||||
Societe Television Francaise 1 (f) | 1,364 | $ | 44,435 | ||
2,499,518 | |||||
GERMANY (0.4%) | |||||
Auto Manufacturers (0.1%) | |||||
Bayerische Motoren Werke AG (f) | 1,741 | 86,813 | |||
Porsche AG (f) | 111 | 107,366 | |||
194,179 | |||||
Auto Parts & Equipment (0.1%) | |||||
Continental AG (f) | 1,615 | 164,986 | |||
Chemicals (0.2%) | |||||
Bayer AG (f) | 5,245 | 241,007 | |||
Lanxess (b) (f) | 3,318 | 130,388 | |||
371,395 | |||||
730,560 | |||||
GREECE (0.2%) | |||||
Building Materials (0.0%) | |||||
Titan Cement Co. (f) | 2,065 | 96,946 | |||
Gambling (0.2%) | |||||
OPAP SA (f) | 5,876 | 213,521 | |||
310,467 | |||||
HONG KONG (0.2%) | |||||
Diversified Operations (0.2%) | |||||
Swire Pacific Ltd., Class A (f) | 24,000 | 247,718 | |||
Real Estate (0.0%) | |||||
Henderson Land Development Co. (f) | 14,000 | 72,804 | |||
320,522 | |||||
IRELAND (0.0%) | |||||
Building Products (0.0%) | |||||
C.R.H. PLC (f) | 1,681 | 54,718 | |||
ITALY (0.5%) | |||||
Building Products (0.1%) | |||||
Buzzi Unicem SPA (f) | 5,264 | 120,626 | |||
Commercial Banks (0.1%) | |||||
Banche Popolari Unite Scpa (f) | 5,940 | 153,794 | |||
Banco Popolare di Verona e Novara Scrl (f) | 1,804 | 48,326 | |||
202,120 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
ITALY (continued) | |||||
Insurance (0.1%) | |||||
Assicurazioni Generali SPA (f) | 4,454 | $ | 161,949 | ||
Oil & Gas (0.2%) | |||||
Eni SPA (f) | 16,525 | 485,332 | |||
970,027 | |||||
JAPAN (3.0%) | |||||
Automotive (0.2%) | |||||
Honda Motor Co. Ltd. (f) | 8,400 | 266,865 | |||
Toyota Motor Corp. (f) | 1,900 | 99,320 | |||
366,185 | |||||
Banking (0.1%) | |||||
Sumitomo Mitsui Financial Group, Inc. (f) | 11 | 116,508 | |||
Sumitomo Trust & Banking Co. Ltd. (The) (f) | 4,000 | 43,800 | |||
160,308 | |||||
Building & Construction (0.1%) | |||||
Obayashi Corp. (f) | 21,000 | 144,442 | |||
Building—Residential/Commercial (0.0%) | |||||
Daiwa House Industry Co. Ltd. (f) | 3,000 | 47,983 | |||
Chemicals (0.3%) | |||||
Asahi Kasei Corp. (f) | 18,000 | 117,734 | |||
Dainippon Ink & Chemical, Inc. (f) | 20,000 | 75,207 | |||
Mitsubishi Chemical Holdings Corp. (f) | 25,500 | 159,456 | |||
Mitsui Chemicals, Inc. (f) | 19,000 | 124,193 | |||
Showa Denko KK (f) | 30,000 | 133,559 | |||
610,149 | |||||
Computer Software & Services (0.2%) | |||||
Capcom Co. Ltd. (f) | 2,000 | 23,995 | |||
CSK Corp. (f) | 2,100 | 95,887 | |||
Elpida Memory, Inc. (b) (f) | 2,600 | 97,846 | |||
Fujitsu Ltd. (f) | 26,000 | 201,541 | |||
Hitachi Information Systems Ltd. (f) | 3,900 | 93,263 | |||
512,532 | |||||
Consumer Products (0.1%) | |||||
Shiseido Co. Ltd. (f) | 8,000 | 156,990 | |||
Education (0.0%) | |||||
Benesse Corp. (f) | 800 | 27,615 | |||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Electric Utilities (0.4%) | |||||
Chubu Electric Power Co., Inc. (f) | 8,200 | $ | 221,524 | ||
Kyushu Electric Power Co., Inc. (f) | 3,800 | 88,379 | |||
Matsushita Electric Industrial Co. Ltd. (f) | 8,000 | 168,934 | |||
Tokyo Electric Power Co. (The) (f) | 14,600 | 403,465 | |||
882,302 | |||||
Electrical & Electronic (0.0%) | |||||
Toshiba Corp. (f) | 13,000 | 84,898 | |||
Electrical Equipment (0.1%) | |||||
Mitsubishi Electric Corp. (f) | 20,000 | 160,350 | |||
Electronic Components (0.0%) | |||||
NEC Corp. (f) | 14,000 | 74,682 | |||
Financial Services (0.3%) | |||||
Daiwa Securities Group, Inc. (f) | 13,000 | 154,932 | |||
Mitsubishi UFJ Financial Group, Inc. (f) | 17 | 238,347 | |||
Mizuho Financial Group, Inc. (f) | 14 | 118,753 | |||
ORIX Corp. (f) | 470 | 114,706 | |||
626,738 | |||||
Food Products (0.2%) | |||||
Yakult Honsha Co. Ltd. (f) | 11,600 | 315,064 | |||
Import/Export (0.1%) | |||||
Itochu Corp. (f) | 13,000 | 114,432 | |||
Sumitomo Corp. (f) | 8,000 | 105,781 | |||
220,213 | |||||
Office Equipment & Supplies (0.2%) | |||||
Canon, Inc. (f) | 7,050 | 345,576 | |||
Ricoh Co. Ltd. (f) | 6,000 | 117,722 | |||
463,298 | |||||
Oil & Gas (0.1%) | |||||
Tokyo Gas Co. Ltd. (f) | 42,000 | 197,971 | |||
Pharmaceuticals (0.3%) | |||||
Chugai Pharmaceutical Ltd. (f) | 10,200 | 208,310 | |||
Daiichi Sankyo Co. Ltd. (f) | 11,500 | 316,553 | |||
Suzuken Co. Ltd. (f) | 700 | 27,776 | |||
552,639 | |||||
Photographic Products (0.1%) | |||||
Konica Minolta Holdings, Inc. (f) | 14,500 | 183,503 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Real Estate (0.1%) | |||||
Cheung Kong Holdings Ltd. (f) | 16,000 | $ | 173,593 | ||
Daito Trust Construction Co. (f) | 300 | 16,645 | |||
190,238 | |||||
Tobacco (0.1%) | |||||
Japan Tobacco, Inc. (f) | 45 | 164,368 | |||
Toys (0.0%) | |||||
Nintendo Co. Ltd. (f) | 200 | 33,610 | |||
6,176,078 | |||||
NETHERLANDS (0.7%) | |||||
Banking (0.1%) | |||||
ABN AMRO Holding NV (f) | 5,243 | 143,568 | |||
Building & Construction (0.0%) | |||||
Koninklijke BAM Groep NV (f) | 2,545 | 50,491 | |||
Distribution (0.1%) | |||||
Hagemeyer NV (b) (f) | 32,196 | 148,301 | |||
Financial Services (0.3%) | |||||
ING Groep NV (f) | 12,865 | 504,990 | |||
Human Resources (0.1%) | |||||
USG People NV (f) | 1,878 | 143,674 | |||
Vedior NV (f) | 1,953 | 40,984 | |||
184,658 | |||||
Insurance (0.0%) | |||||
Aegon NV (f) | 2,476 | 42,264 | |||
Oil & Gas (0.0%) | |||||
Royal Dutch Shell PLC (f) | 2,663 | 89,495 | |||
Printing & Publishing (0.1%) | |||||
Wolters Kluwer NV (f) | 4,978 | 117,500 | |||
Publishing (0.0%) | |||||
Wegener NV (f) | 4,448 | 66,192 | |||
1,347,459 | |||||
NORWAY (0.0%) | |||||
Food & Beverage (0.0%) | |||||
Orkla ASA (f) | 1,001 | 46,354 | |||
Transportation & Shipping (0.0%) | |||||
Bergesen Worldwide Gas ASA (f) | 3,668 | 53,883 | |||
100,237 | |||||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SINGAPORE (0.1%) | |||||
Electronic Components (0.0%) | |||||
Venture Corporation Ltd. (f) | 11,000 | $ | 73,782 | ||
Semiconductors (0.0%) | |||||
Chartered Semiconductor Manufacturing Ltd. (b) (f) | 47,000 | 40,757 | |||
Telecommunications (0.1%) | |||||
Singapore Telecommunications Ltd. (f) | 103,000 | 165,483 | |||
280,022 | |||||
SPAIN (0.6%) | |||||
Banking (0.2%) | |||||
Banco Bilbao Vizcaya Argentaria SA (f) | 18,779 | 386,376 | |||
Building & Construction (0.0%) | |||||
Actividades de Construcciony Servicios SA (f) | 2,438 | 101,583 | |||
Oil & Gas (0.1%) | |||||
Repsol YPF SA | 8,372 | 239,729 | |||
Retail (0.1%) | |||||
Industria de Diseno Textil SA (f) | 4,251 | 179,194 | |||
Telecommunications (0.2%) | |||||
Telefonica SA (f) | 25,231 | 419,358 | |||
1,326,240 | |||||
SWEDEN (0.2%) | |||||
Banking (0.0%) | |||||
Svenska Handelsbanked AB, A Shares (f) | 834 | 21,492 | |||
Machinery (0.0%) | |||||
Atlas Copco AB (f) | 2,936 | 76,429 | |||
Manufacturing (0.2%) | |||||
AB SKF (f) | 15,489 | 244,356 | |||
Retail (0.0%) | |||||
Hennes & Mauritz AB, B Shares (f) | 1,900 | 73,595 | |||
Wireless Equipment (0.0%) | |||||
Telefonakitiebolaget LM Ericsson, B Shares (f) | 13,222 | 43,650 | |||
459,522 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITZERLAND (0.7%) | |||||
Building Products (0.1%) | |||||
Holcim Ltd. (f) | 2,003 | $ | 153,595 | ||
Chemicals-Specialty (0.1%) | |||||
Clariant AG (f) | 8,891 | 125,917 | |||
Financial Services (0.2%) | |||||
Credit Suisse Group (f) | 1,297 | 72,383 | |||
UBS AG (f) | 2,989 | 327,285 | |||
399,668 | |||||
Food & Beverage (0.0%) | |||||
Barry Callebaut AG (b) (f) | 139 | 58,677 | |||
Medical-Drugs (0.1%) | |||||
Serono SA (f) | 162 | 111,536 | |||
Pharmaceuticals (0.1%) | |||||
Roche Holding AG (f) | 2,185 | 360,655 | |||
Retail (0.1%) | |||||
Compagnie Finaciere Richemont AG (f) | 5,386 | 246,163 | |||
1,456,211 | |||||
UNITED KINGDOM (3.5%) | |||||
Auto Parts & Equipment (0.1%) | |||||
Renault SA (f) | 1,499 | 160,835 | |||
Banking (0.1%) | |||||
UniCredito Italiano SPA (f) | 36,664 | 286,719 | |||
Brewery (0.0%) | |||||
Scottish & Newcastle PLC (f) | 3,695 | 34,787 | |||
Building—Residential/Commercial (0.1%) | |||||
Taylor Woodrow PLC (f) | 21,236 | 130,946 | |||
Business Services (0.1%) | |||||
Michael Page International PLC (f) | 17,586 | 113,864 | |||
Chemicals (0.1%) | |||||
Yule Catto & Co. PLC (f) | 25,993 | 109,093 | |||
Consumer Durables (0.1%) | |||||
Reckitt Benckiser PLC (f) | 7,639 | 285,005 | |||
Distribution (0.1%) | |||||
Wolseley PLC (f) | 7,294 | 160,555 | |||
Diversified Minerals (0.0%) | |||||
Anglo American PLC (f) | 1,596 | 65,106 | |||
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Diversified Operations (0.1%) | |||||
LVMH Moet Hennessy Louis Vuitton SA (f) | 2,455 | $ | 243,303 | ||
Electric Utilities (0.1%) | |||||
E.ON AG (f) | 574 | 65,960 | |||
International Power PLC (f) | 24,389 | 128,081 | |||
Scottish & Southern Energy PLC (f) | 1,206 | 25,646 | |||
219,687 | |||||
Financial Services (0.7%) | |||||
3i Group PLC (f) | 7,791 | 129,695 | |||
Barclays PLC (f) | 23,386 | 265,082 | |||
HBOS PLC (f) | 5,063 | 87,854 | |||
HSBC Holdings PLC (f) | 38,317 | 674,122 | |||
Legal & General Group PLC (f) | 41,107 | 97,289 | |||
Royal Bank of Scotland Group PLC (f) | 8,608 | 282,527 | |||
1,536,569 | |||||
Food & Beverage (0.2%) | |||||
Cadbury Schweppes PLC (f) | 5,650 | 54,402 | |||
Premier Foods PLC (f) | 34,032 | 191,950 | |||
Tate & Lyle PLC (f) | 10,902 | 121,953 | |||
368,305 | |||||
Gambling (0.0%) | |||||
Sportingbet PLC (f) | 13,639 | 99,155 | |||
Human Resources (0.0%) | |||||
Hays PLC (f) | 29,005 | 72,306 | |||
Insurance (0.2%) | |||||
Aviva PLC (f) | 16,613 | 235,095 | |||
Prudential PLC (f) | 12,339 | 139,513 | |||
374,608 | |||||
Metals (0.0%) | |||||
Rio Tinto PLC (f) | 1,154 | 60,758 | |||
Mining (0.0%) | |||||
BHP Billiton PLC (f) | 2,704 | 52,602 | |||
Multimedia (0.1%) | |||||
Vivendi Universal SA (f) | 4,126 | 144,116 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Oil & Gas (0.4%) | |||||
BG Group PLC (f) | 19,738 | $ | 263,429 | ||
BP PLC (f) | 47,528 | 551,016 | |||
814,445 | |||||
Pharmaceuticals (0.2%) | |||||
AstraZeneca PLC (f) | 3,321 | 199,674 | |||
GlaxoSmithKline PLC (f) | 10,961 | 305,857 | |||
505,531 | |||||
Printing & Publishing (0.1%) | |||||
EMAP PLC (f) | 4,110 | 64,594 | |||
Trinity Mirror PLC (f) | 8,023 | 72,311 | |||
136,905 | |||||
Retail (0.2%) | |||||
Next PLC (f) | 3,829 | 115,380 | |||
Tesco PLC (f) | 43,685 | 269,639 | |||
385,019 | |||||
Technology (0.1%) | |||||
Cookson Group PLC (f) | 10,682 | 103,582 | |||
Telecommunications (0.3%) | |||||
BT Group PLC (f) | 11,860 | 52,392 | |||
Vodafone Group PLC (f) | 217,627 | 463,136 | |||
515,528 | |||||
Tobacco (0.1%) | |||||
Imperial Tobacco Group PLC (f) | 3,417 | 105,377 | |||
Transportation (0.0%) | |||||
British Airways PLC (b) (f) | 15,456 | 97,903 | |||
Water (0.0%) | |||||
Northumbrian Water Group PLC (f) | 15,827 | 71,661 | |||
7,254,270 | |||||
UNITED STATES (48.8%) | |||||
Advertising (0.1%) | |||||
Omnicom Group, Inc. | 2,850 | 253,907 | |||
Aerospace & Defense (1.1%) | |||||
Armor Holdings, Inc. (b) | 1,300 | 71,279 | |||
Boeing Co. (The) | 5,150 | 421,836 | |||
General Dynamics Corp. | 1,750 | 114,555 |
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Aerospace & Defense (continued) | |||||
Goodrich Corp. | 1,400 | $ | 56,406 | ||
Lockheed Martin Corp. | 5,275 | 378,429 | |||
Northrop Grumman Corp. | 11,225 | 719,073 | |||
Orbital Sciences Corp. (b) | 2,900 | 46,806 | |||
Raytheon Co. | 9,250 | 412,273 | |||
2,220,657 | |||||
Agricultural Operations (0.2%) | |||||
Archer-Daniels-Midland Co. | 7,100 | 293,088 | |||
Seaboard Corp. | 35 | 44,800 | |||
337,888 | |||||
Apparel (0.3%) | |||||
Coach, Inc. (b) | 8,400 | 251,160 | |||
Nike, Inc., Class B | 2,700 | 218,700 | |||
Skechers U.S.A., Inc. (b) | 825 | 19,891 | |||
Steven Madden Ltd. | 250 | 7,405 | |||
Talbots, Inc. (The) | 1,600 | 29,520 | |||
526,676 | |||||
Auto Parts & Equipment (0.1%) | |||||
Arvinmeritor, Inc. | 1,525 | 26,215 | |||
Autoliv, Inc. | 1,300 | 73,541 | |||
AutoNation, Inc. (b) | 3,450 | 73,967 | |||
CSK Auto Corp. (b) | 5,750 | 68,828 | |||
TRW Automotive Holdings Corp. (b) | 1,725 | 47,058 | |||
289,609 | |||||
Broadcast Media/Cable Television (1.2%) | |||||
CBS Corp., Class B | 19,300 | 522,065 | |||
Cumulus Media, Inc. (b) | 1,300 | 13,871 | |||
E.W. Scripps Co., Class A | 8,000 | 345,120 | |||
News Corp., Class A | 47,850 | 917,763 | |||
Sinclair Broadcast Group, Inc., Class A | 5,575 | 47,722 | |||
Time Warner, Inc. | 1,600 | 27,680 | |||
Viacom, Inc., Class B (b) | 16,500 | 591,360 | |||
2,465,581 | |||||
Building—Residential & Commercial (0.1%) | |||||
D.R. Horton, Inc. | 1,200 | 28,584 | |||
Lennar Corp., Class A | 1,300 | 57,681 | |||
NVR, Inc. (b) | 100 | 49,125 | |||
Toll Brothers, Inc. (b) | 4,900 | 125,293 | |||
260,683 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Business Services (0.7%) | |||||
Acxiom Corp. | 2,500 | $ | 62,500 | ||
BEA Systems, Inc. (b) | 5,500 | 71,995 | |||
Catalina Marketing Corp. | 2,750 | 78,265 | |||
Ceridian Corp. (b) | 2,600 | 63,544 | |||
Convergys Corp. (b) | 3,850 | 75,075 | |||
CSG Systems International, Inc. (b) | 500 | 12,370 | |||
eBay, Inc. (b) | 16,300 | 477,426 | |||
Fair Issac Corp. | 100 | 3,631 | |||
FedEx Corp. | 2,200 | 257,092 | |||
Global Payment, Inc. | 1,250 | 60,688 | |||
Services Acquisition Corp. International (b) | 1,525 | 15,098 | |||
Spherion Corp. (b) | 9,025 | 82,308 | |||
Sykes Enterprises, Inc. (b) | 5,475 | 88,476 | |||
TeleTech Holdings, Inc. (b) | 1,725 | 21,839 | |||
1,370,307 | |||||
Capital Goods (0.1%) | |||||
PerkinElmer, Inc. | 2,425 | 50,683 | |||
Stanley Works (The) | 1,550 | 73,191 | |||
123,874 | |||||
Chemicals/Diversified (0.6%) | |||||
Air Products & Chemicals, Inc. | 3,300 | 210,936 | |||
Dow Chemical Co. | 6,600 | 257,598 | |||
Innospec, Inc. | 800 | 20,336 | |||
Praxair, Inc. | 8,600 | 464,400 | |||
Rohm & Haas Co. | 3,800 | 190,456 | |||
Spartech Corp. | 1,000 | 22,600 | |||
1,166,326 | |||||
Communication Equipment (1.2%) | |||||
CommScope, Inc. (b) | 600 | 18,852 | |||
Corning, Inc. (b) | 29,900 | 723,281 | |||
InterDigital Communications Corp. (b) | 1,425 | 49,747 | |||
Motorola, Inc. | 38,675 | 779,301 | |||
Qualcomm, Inc. | 19,200 | 769,344 | |||
Tellabs, Inc. (b) | 8,400 | 111,804 | |||
2,452,329 | |||||
Computer Equipment (1.7%) | |||||
Advanced Digital Information Corp. (b) | 400 | 4,708 | |||
Apple Computer, Inc. (b) | 1,700 | 97,104 | |||
Arrow Electronics, Inc. (b) | 2,250 | 72,450 |
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Computer Equipment (continued) | |||||
Avnet, Inc. (b) | 2,750 | $ | 55,055 | ||
Avocent Corp (b) | 800 | 21,000 | |||
Cirrus Logic, Inc. (b) | 4,025 | 32,764 | |||
EMC Corp. (b) | 8,500 | 93,245 | |||
Hewlett-Packard Co. | 32,925 | 1,043,064 | |||
International Business Machines Corp. | 19,700 | 1,513,353 | |||
Juniper Networks, Inc. (b) | 8,700 | 139,113 | |||
Palm, Inc. (b) | 3,150 | 50,715 | |||
Sun Microsystems, Inc. (b) | 47,700 | 197,955 | |||
Western Digital Corp. (b) | 3,550 | 70,326 | |||
3,390,852 | |||||
Computer Software & Services (2.4%) | |||||
Aspen Technology, Inc. (b) | 5,150 | 67,568 | |||
Black Box Corp. | 1,525 | 58,453 | |||
BMC Software, Inc. (b) | 7,400 | 176,860 | |||
Cadence Design Systems, Inc. (b) | 4,100 | 70,315 | |||
Cisco Systems, Inc. (b) | 40,900 | 798,777 | |||
Citrix Systems, Inc. (b) | 1,700 | 68,238 | |||
Computer Sciences Corp. (b) | 1,250 | 60,550 | |||
EarthLink, Inc. (b) | 4,625 | 40,053 | |||
Emulex Corp. (b) | 4,575 | 74,435 | |||
EPIQ Systems, Inc. (b) | 1,150 | 19,136 | |||
Google, Inc., Class A (b) | 1,050 | 440,297 | |||
infoUSA, Inc. | 500 | 5,155 | |||
Inter-Tel, Inc. | 2,300 | 48,438 | |||
Intuit, Inc. (b) | 1,300 | 78,507 | |||
Magma Design Automation, Inc. (b) | 800 | 5,880 | |||
Microsoft Corp. | 61,700 | 1,437,609 | |||
MicroStrategy, Inc. (b) | 400 | 39,008 | |||
NCR Corp. (b) | 1,800 | 65,952 | |||
NVIDIA Corp. (b) | 2,700 | 57,483 | |||
Oracle Corp. (b) | 71,725 | 1,039,295 | |||
SonicWALL, Inc. (b) | 2,750 | 24,723 | |||
Sybase, Inc. (b) | 6,475 | 125,615 | |||
Synopsys, Inc. (b) | 2,425 | 45,517 | |||
TriZetto Group, Inc. (The) (b) | 5,475 | 80,975 | |||
Unisys Corp. (b) | 6,075 | 38,151 | |||
4,966,990 | |||||
Conglomerates (0.8%) | |||||
Johnson Controls, Inc. | 5,800 | 476,876 | |||
Tyco International Ltd. | 25,000 | 687,500 | |||
United Technologies Corp. | 8,300 | 526,386 | |||
1,690,762 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Construction & Building Materials (0.4%) | |||||
Caterpillar, Inc. | 4,800 | $ | 357,504 | ||
Centex Corp. | 2,400 | 120,720 | |||
Deere & Co. | 2,500 | 208,725 | |||
LSI Industries, Inc. | 400 | 6,796 | |||
Sherwin Williams Co. | 1,575 | 74,781 | |||
Texas Industries, Inc. | 600 | 31,860 | |||
USG Corp. (b) | 775 | 56,521 | |||
856,907 | |||||
Consumer Products (1.1%) | |||||
Black & Decker Corp. | 900 | 76,014 | |||
Colgate-Palmolive Co. | 2,350 | 140,765 | |||
CSS Industries, Inc. | 200 | 5,750 | |||
Fortune Brands, Inc. | 100 | 7,101 | |||
Furniture Brands International, Inc. | 2,825 | 58,873 | |||
Kellwood Co. | 800 | 23,416 | |||
Kimberly-Clark Corp. | 8,275 | 510,568 | |||
Newell Rubbermaid, Inc. | 2,850 | 73,616 | |||
Playtex Products, Inc. (b) | 3,075 | 32,072 | |||
Procter & Gamble Co. | 21,700 | 1,206,519 | |||
Smurfit-Stone Container Corp. (b) | 9,050 | 99,007 | |||
Stanley Furniture Co., Inc. | 1,100 | 26,367 | |||
Whirlpool Corp. | 850 | 70,253 | |||
2,330,321 | |||||
Containers & Packaging (0.0%) | |||||
Graphic Packaging Corp. (b) | 8,775 | 33,257 | |||
Silgan Holdings, Inc. | 1,225 | 45,338 | |||
78,595 | |||||
Diversified Manufacturing Operations (0.4%) | |||||
Danaher Corp. | 4,600 | 295,872 | |||
Illinois Tool Works, Inc. | 3,100 | 147,250 | |||
Ingersoll-Rand Co. | 6,700 | 286,626 | |||
SPX Corp. | 1,700 | 95,115 | |||
Teleflex, Inc. | 1,625 | 87,783 | |||
912,646 | |||||
Drugs (3.1%) | |||||
Abbott Laboratories | 16,100 | 702,120 | |||
Adolor Corp. (b) | 1,050 | 26,261 | |||
Alpharma, Inc., Class A | 225 | 5,409 | |||
Amgen, Inc. (b) | 19,450 | 1,268,723 | |||
Amylin Pharmaceuticals, Inc. (b) | 475 | 23,451 | |||
Barr Pharmaceuticals, Inc. (b) | 100 | 4,769 | |||
Cardiome Pharma Corp. (b) | 1,725 | 15,249 |
9
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Drugs (continued) | |||||
CV Therapeutics, Inc. (b) | 250 | $ | 3,493 | ||
Cypress Bioscience (b) | 3,225 | 19,802 | |||
Eli Lilly & Co. | 5,900 | 326,093 | |||
Endo Pharmaceuticals Holdings, Inc. (b) | 2,500 | 82,450 | |||
Illumina, Inc. (b) | 2,425 | 71,926 | |||
ImClone Systems, Inc. (b) | 1,850 | 71,484 | |||
Johnson & Johnson, Inc. | 8,000 | 479,360 | |||
King Pharmaceuticals, Inc. (b) | 4,350 | 73,950 | |||
Martek Biosciences Corp. (b) | 175 | 5,066 | |||
Medicis Pharmaceutical Corp., Class A | 200 | 4,800 | |||
Merck & Co., Inc. | 31,675 | 1,153,919 | |||
MGI Pharma, Inc. (b) | 500 | 10,750 | |||
Myogen, Inc. (b) | 850 | 24,650 | |||
Nektar Therapeutic (b) | 1,450 | 26,593 | |||
OSI Pharmaceuticals, Inc. (b) | 1,300 | 42,848 | |||
Pfizer, Inc. | 52,900 | 1,241,562 | |||
Schering-Plough Corp. | 27,100 | 515,713 | |||
Theravance, Inc. (b) | 500 | 11,440 | |||
United Therapeutics Corp. (b) | 350 | 20,220 | |||
Watson Pharmaceutical, Inc. (b) | 1,300 | 30,264 | |||
6,262,365 | |||||
Electrical Equipment (1.6%) | |||||
Eaton Corp. | 5,100 | 384,540 | |||
EMCOR Group, Inc. (b) | 1,125 | 54,754 | |||
Energizer Holdings, Inc. (b) | 1,400 | 81,998 | |||
General Electric Co. | 82,300 | 2,712,608 | |||
3,233,900 | |||||
Electrical Services (1.7%) | |||||
American Electric Power Co., Inc. | 400 | 13,700 | |||
CMS Energy Corp. (b) | 13,200 | 170,808 | |||
Consolidated Edison, Inc. | 1,400 | 62,216 | |||
Duke Energy Corp. | 19,900 | 584,462 | |||
Edison International | 11,700 | 456,300 | |||
FirstEnergy Corp. | 5,150 | 279,182 | |||
Florida Power & Light, Inc. | 1,400 | 57,932 | |||
Headwaters, Inc. (b) | 200 | 5,112 | |||
Northeast Utilities | 9,800 | 202,566 | |||
NorthWestern Corp. | 1,625 | 55,819 | |||
Pinnacle West Capital Corp. | 3,300 | 131,703 | |||
PPL Corp. | 7,300 | 235,790 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Electrical Services (continued) | |||||
Scana Corp. | 2,200 | $ | 84,876 | ||
Sempra Energy | 1,625 | 73,905 | |||
Sierra Pacific Resources (b) | 14,100 | 197,400 | |||
TXU Corp. | 8,350 | 499,247 | |||
Westar Energy, Inc. | 700 | 14,735 | |||
Xcel Energy, Inc. | 18,100 | 347,158 | |||
3,472,911 | |||||
Electronics (0.2%) | |||||
Coherent, Inc. (b) | 2,325 | 78,422 | |||
Lam Research Corp. (b) | 1,600 | 74,592 | |||
Mettler Toledo International, Inc. (b) | 300 | 18,171 | |||
Molecular Devices Corp. (b) | 1,000 | 30,560 | |||
MTS Systems Corp. | 2,425 | 95,812 | |||
Omnivision Technologies, Inc. (b) | 3,750 | 79,200 | |||
Sanmina-SCI Corp. (b) | 14,200 | 65,320 | |||
Solectron Corp. (b) | 400 | 1,368 | |||
443,445 | |||||
Financial (4.0%) | |||||
American Express Co. | 13,300 | 707,826 | |||
AmeriCredit Corp. (b) | 6,175 | 172,406 | |||
BISYS Group, Inc. (b) | 1,000 | 13,700 | |||
CharterMac | 900 | 16,839 | |||
CIT Group, Inc. | 5,300 | 277,137 | |||
Citigroup, Inc. | 55,500 | 2,677,319 | |||
CompuCredit Corp. (b) | 1,725 | 66,309 | |||
Countrywide Credit Industries, Inc. | 8,100 | 308,448 | |||
Credit Acceptance Corp (b) | 300 | 8,142 | |||
Dollar Financial Corp. (b) | 1,264 | 22,752 | |||
E*TRADE Financial Corp. (b) | 3,200 | 73,024 | |||
Fannie Mae | 700 | 33,670 | |||
Federal Agricultural Mortgage Corp., | 3,875 | 107,338 | |||
Class C | |||||
Federated Investors, Inc. | 1,300 | 40,950 | |||
Franklin Resources, Inc. | 1,250 | 108,513 | |||
Freddie Mac | 10,200 | 581,502 | |||
Gladstone Capital Corp. | 400 | 8,556 | |||
Golden West Financial Corp. | 2,250 | 166,950 | |||
Goldman Sachs Group, Inc. | 7,550 | 1,135,746 | |||
Lehman Brothers Holdings, Inc. | 3,650 | 237,798 | |||
Mellon Financial Corp. | 900 | 30,987 |
10
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Financial (continued) | |||||
Merrill Lynch & Co., Inc. | 1,300 | $ | 90,428 | ||
Morgan Stanley | 14,200 | 897,581 | |||
Radian Group, Inc. | 1,200 | 74,136 | |||
Raymond James Financial, Inc. | 2,050 | 62,054 | |||
Washington Mutual, Inc. | 7,916 | 360,811 | |||
World Acceptance Corp. (b) | 600 | 21,312 | |||
8,302,234 | |||||
Financial/Banks (3.5%) | |||||
1st Source Corp. | 200 | 6,766 | |||
A.G. Edwards, Inc. | 325 | 17,979 | |||
BancFirst Corp. | 2,325 | 104,044 | |||
Bank of America Corp. | 46,300 | 2,227,029 | |||
Bank of New York Co., Inc. | 1,600 | 51,520 | |||
BB&T Corp. | 3,900 | 162,201 | |||
Camden National Corp. | 700 | 27,930 | |||
Capital One Financial Corp. | 4,500 | 384,525 | |||
Comerica, Inc. | 4,500 | 233,955 | |||
Commerce Bancshares, Inc. | 300 | 15,015 | |||
Community Bank System, Inc. | 400 | 8,068 | |||
Corus Bankshares, Inc. | 1,225 | 32,071 | |||
FNB Corp. | 1,900 | 70,300 | |||
Great Southern Bancorp, Inc. | 1,900 | 58,007 | |||
Heartland Financial USA, Inc. | 1,325 | 35,311 | |||
Horizon Financial Corp. | 700 | 19,201 | |||
KeyCorp | 1,800 | 64,224 | |||
Lakeland Financial Corp. | 1,400 | 34,006 | |||
Marshall & Ilsley Corp. | 5,000 | 228,700 | |||
New York Community Bancorp, Inc. | 6,200 | 102,362 | |||
PNC Financial Services Group | 3,925 | 275,417 | |||
Simmons First National Corp., Class A | 2,225 | 64,547 | |||
State Street Corp. | 6,600 | 383,394 | |||
Suffolk Bancorp | 1,425 | 46,669 | |||
Taylor Capital Group, Inc. | 700 | 28,567 | |||
TCF Financial Corp. | 11,350 | 300,208 | |||
U.S. Bancorp | 29,300 | 904,784 | |||
W Holding Co., Inc. | 800 | 5,320 | |||
Wachovia Corp. | 4,897 | 264,830 | |||
Wells Fargo Co. | 16,800 | 1,126,943 | |||
7,283,893 | |||||
Funeral Services (0.0%) | |||||
Alderwoods Group, Inc. (b) | 2,625 | 51,083 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Food & Beverage (1.1%) | |||||
Coca-Cola Co. (The) | 24,500 | $ | 1,053,989 | ||
Coca-Cola Enterprises, Inc. | 11,400 | 232,218 | |||
Del Monte Foods Co. | 8,650 | 97,140 | |||
General Mills, Inc. | 4,400 | 227,304 | |||
Kellogg Co. | 1,100 | 53,273 | |||
Kraft Foods, Inc. | 10,700 | 330,630 | |||
M & F Worldwide Corp. (b) | 1,625 | 26,163 | |||
Pilgrim’s Pride Corp. | 400 | 10,320 | |||
SYSCO Corp. | 8,400 | 256,704 | |||
2,287,741 | |||||
Healthcare (2.0%) | |||||
Becton, Dickinson & Co. | 300 | 18,339 | |||
Boston Scientific Corp. (b) | 3,200 | 53,888 | |||
Coventry Health Care, Inc. (b) | 1,362 | 74,828 | |||
Datascope Corp. | 1,225 | 37,779 | |||
Emdeon Corp. (b) | 6,250 | 77,563 | |||
Gilead Sciences, Inc. (b) | 1,050 | 62,118 | |||
Humana, Inc. (b) | 1,700 | 91,290 | |||
Immucor, Inc. (b) | 500 | 9,615 | |||
LifeCell Corp. (b) | 875 | 27,055 | |||
Magellan Health Services (b) | 1,425 | 64,567 | |||
McKesson Corp. | 10,750 | 508,260 | |||
Medco Health Solutions, Inc. (b) | 3,100 | 177,568 | |||
Medtronic, Inc. | 1,700 | 79,764 | |||
Mentor Corp. | 1,025 | 44,588 | |||
Pediatrix Medical Group, Inc. (b) | 1,400 | 63,420 | |||
PER-SE Technologies, Inc. (b) | 2,325 | 58,544 | |||
Sepracor, Inc. (b) | 6,100 | 348,554 | |||
UnitedHealth Group, Inc. | 5,400 | 241,812 | |||
WellPoint, Inc. (b) | 15,050 | 1,095,188 | |||
Wyeth | 18,400 | 817,143 | |||
Zimmer Holdings, Inc. (b) | 2,200 | 124,784 | |||
4,076,667 | |||||
Hotels & Motels (0.3%) | |||||
Hilton Hotels Corp. | 600 | 16,968 | |||
Host Marriott Corp. | 17,800 | 389,286 | |||
Marriott International, Inc., Class A | 900 | 34,308 | |||
Starwood Hotels & Resorts Worldwide, Inc. | 2,800 | 168,952 | |||
Vail Resorts, Inc. (b) | 1,125 | 41,738 | |||
651,252 | |||||
11
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Household Furnishing & Appliances (0.1%) | |||||
Kimball International, Inc., Class B | 2,225 | $ | 43,855 | ||
Mohawk Industries, Inc. (b) | 2,000 | 140,700 | |||
184,555 | |||||
Industrial Goods & Services (0.1%) | |||||
Fuller (H. B.) Co. | 2,225 | 96,943 | |||
Kaman, Class A | 2,425 | 44,135 | |||
Nordson Corp. | 2,325 | 114,344 | |||
255,422 | |||||
Insurance (2.6%) | |||||
ACE Ltd. | 3,650 | 184,654 | |||
Aetna, Inc. | 19,600 | 782,627 | |||
AFLAC, Inc. | 1,200 | 55,620 | |||
Allstate Corp. (The) | 600 | 32,838 | |||
AMBAC Financial Group, Inc. | 8,500 | 689,350 | |||
American Financial Group, Inc. | 1,550 | 66,495 | |||
American International Group, Inc. | 4,000 | 236,200 | |||
AmerUs Group Co. | 300 | 17,565 | |||
Argonaut Group, Inc. (b) | 700 | 21,028 | |||
Assurant, Inc. | 4,400 | 212,960 | |||
Chubb Corp. (The) | 5,650 | 281,935 | |||
CIGNA Corp. | 500 | 49,255 | |||
Conseco, Inc. (b) | 1,350 | 31,185 | |||
Genworth Financial, Inc., Class A | 11,800 | 411,112 | |||
Great American Financial Resources, Inc. | 2,250 | 47,093 | |||
Hartford Financial Services Group, Inc. | 9,000 | 761,399 | |||
LandAmerica Financial Group, Inc. | 400 | 25,840 | |||
Lincoln National Corp. | 1,300 | 73,372 | |||
MBIA, Inc. | 4,900 | 286,895 | |||
MetLife, Inc. | 1,300 | 66,573 | |||
Navigators Group, Inc. (The) (b) | 500 | 21,910 | |||
ProAssurance Corp. (b) | 500 | 24,090 | |||
Protective Life Corp. | 2,800 | 130,536 | |||
Prudential Financial, Inc. | 3,800 | 295,260 | |||
St. Paul Travelers Cos., Inc. | 5,050 | 225,129 | |||
W.R. Berkley Corp. | 10,350 | 353,246 | |||
5,384,167 | |||||
Leisure & Amusements (0.2%) | |||||
Carnival Corp. | 6,700 | 279,658 | |||
Dover Downs Gaming & Entertainment, Inc. | 150 | 2,946 | |||
Walt Disney Co. (The) | 5,350 | 160,500 | |||
443,104 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Machinery (0.3%) | |||||
AGCO Corp. (b) | 4,050 | $ | 106,595 | ||
Cummins, Inc. | 650 | 79,463 | |||
Cymer, Inc. (b) | 1,525 | 70,852 | |||
Flowserve Corp. (b) | 625 | 35,563 | |||
Imation Corp. | 2,425 | 99,546 | |||
Parker-Hannifin Corp. | 800 | 62,080 | |||
Terex Corp. (b) | 2,125 | 209,737 | |||
Toro Co. (The) | 1,025 | 47,868 | |||
711,704 | |||||
Medical Products (0.4%) | |||||
Baxter International, Inc. | 13,800 | 507,288 | |||
Bruker BioSciences Corp. (b) | 11,875 | 63,650 | |||
Cooper Co., Inc. (The) | 800 | 35,432 | |||
DJ Orthopedics, Inc. (b) | 1,625 | 59,849 | |||
LCA-Vision, Inc. | 600 | 31,746 | |||
MedImmune, Inc. (b) | 200 | 5,420 | |||
St. Jude Medical, Inc. (b) | 500 | 16,210 | |||
Zoll Medical Corp. (b) | 800 | 26,208 | |||
745,803 | |||||
Metals & Mining (0.7%) | |||||
Alcoa, Inc. | 13,600 | 440,095 | |||
Century Aluminum Co. (b) | 725 | 25,875 | |||
Cleveland-Cliffs, Inc. | 750 | 59,468 | |||
Commercial Metals Co. | 725 | 18,633 | |||
Freeport-McMoRan Copper & Gold, Inc., Class B | 1,400 | 77,574 | |||
Phelps Dodge Corp. | 3,150 | 258,804 | |||
Quanex Corp. | 850 | 36,610 | |||
Reliance Steel & Aluminum Co. | 900 | 74,655 | |||
Southern Copper Corp. | 850 | 75,761 | |||
Stillwater Mining Co. (b) | 2,450 | 31,066 | |||
United States Steel Corp. | 6,100 | 427,731 | |||
USEC, Inc. | 1,000 | 11,850 | |||
1,538,122 | |||||
Office Equipment & Services (0.1%) | |||||
CompX International, Inc. | 825 | 14,768 | |||
Marlin Business Services, Inc. (b) | 1,450 | 32,712 | |||
Standard Register Co. (The) | 6,600 | 78,210 | |||
125,690 | |||||
Oil & Gas (4.8%) | |||||
Baker Hughes, Inc. | 2,100 | 171,885 | |||
BJ Services Co. | 1,200 | 44,712 |
12
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Oil & Gas (continued) | |||||
ChevronTexaco Corp. | 14,100 | $ | 875,045 | ||
Clayton Williams Energy, Inc. (b) | 525 | 18,134 | |||
ConocoPhillips | 18,328 | 1,201,033 | |||
Devon Energy Corp. | 400 | 24,164 | |||
Dynegy, Inc. (b) | 1,200 | 6,564 | |||
EOG Resources, Inc. | 4,700 | 325,898 | |||
Exxon Mobil Corp. | 53,950 | 3,309,832 | |||
Forest Oil Corp. (b) | 1,050 | 34,818 | |||
Frontier Oil Corp. | 1,300 | 42,120 | |||
Giant Industries, Inc. (b) | 200 | 13,310 | |||
Global Industries Ltd. (b) | 2,125 | 35,488 | |||
Halliburton Co. | 5,400 | 400,734 | |||
Harvest Natural Resources, Inc. (b) | 600 | 8,124 | |||
Helmerich & Payne, Inc. | 300 | 18,078 | |||
Holly | 400 | 19,280 | |||
Kerr-Mcgee Corp. | 200 | 13,870 | |||
Marathon Oil Corp. | 3,575 | 297,798 | |||
Mariner Energy, Inc. (b) | 809 | 14,861 | |||
NICOR, Inc. | 2,625 | 108,938 | |||
Occidental Petroleums Corp. | 6,850 | 702,467 | |||
ONEOK, Inc. | 1,850 | 62,974 | |||
Plains Exploration & Product (b) | 2,425 | 98,310 | |||
Schlumberger Ltd. | 6,100 | 397,171 | |||
Swift Energy Co. (b) | 100 | 4,293 | |||
Todco, Class A | 625 | 25,531 | |||
Valero Energy Corp. | 11,500 | 764,979 | |||
Veritas DGC, Inc. (b) | 2,525 | 130,240 | |||
Weatherford International Ltd. (b) | 4,600 | 228,252 | |||
XTO Energy, Inc. | 4,100 | 181,507 | |||
9,580,410 | |||||
Paper & Forest Products (0.1%) | |||||
International Paper Co. | 1,600 | 51,680 | |||
Louisiana-Pacific Corp. | 2,900 | 63,510 | |||
115,190 | |||||
Pharmaceuticals (0.2%) | |||||
Alexion Pharmaceuticals, Inc. (b) | 750 | 27,089 | |||
Alkermes, Inc. (b) | 525 | 9,933 | |||
AmerisourceBergen Corp. | 1,600 | 67,071 | |||
AVANIR Pharmaceuticals (b) | 1,575 | 10,773 | |||
Cubist Pharmaceuticals, Inc. (b) | 1,025 | 25,810 | |||
ICOS Corp. (b) | 400 | 8,796 | |||
Isis Pharmaceuticals, Inc. (b) | 2,100 | 12,705 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Pharmaceuticals (continued) | |||||
Nastech Pharmaceutical Co., Inc. (b) | 1,125 | $ | 17,775 | ||
Neurocrine Biosciences, Inc. (b) | 200 | 2,120 | |||
Progenics Pharmaceuticals, Inc. (b) | 375 | 9,023 | |||
Renovis, Inc. (b) | 1,325 | 20,286 | |||
Teva Pharmaceutical Industries Ltd. | 5,250 | 165,847 | |||
Viropharma, Inc. (b) | 625 | 5,388 | |||
Xenoport, Inc. (b) | 850 | 15,394 | |||
398,010 | |||||
Printing & Publishing (0.6%) | |||||
American Greetings Corp., Class A | 2,425 | 50,949 | |||
Gannett Co., Inc. | 13,900 | 777,427 | |||
McGraw-Hill Cos., Inc. (The) | 4,325 | 217,245 | |||
New York Times Co. (The), Class A | 1,000 | 24,540 | |||
R.H. Donnelley Corp. | 400 | 21,628 | |||
R.R. Donnelley & Sons Co. | 1,975 | 63,101 | |||
1,154,890 | |||||
Railroads (0.9%) | |||||
Burlington Northern Santa Fe Corp. | 2,000 | 158,500 | |||
CSX Corp. | 9,300 | 655,092 | |||
Norfolk Southern Corp. | 21,350 | 1,136,247 | |||
1,949,839 | |||||
Real Estate (0.3%) | |||||
Crescent Real Estate Equities Co. | 3,400 | 63,104 | |||
General Growth Properties, Inc. | 1,525 | 68,717 | |||
Mills Corp. (The) | 300 | 8,025 | |||
ProLogis | 1,000 | 52,120 | |||
Simon Property Group, Inc. | 3,725 | 308,951 | |||
Ventas, Inc. | 1,850 | 62,678 | |||
563,595 | |||||
Real Estate Investment Trusts (0.4%) | |||||
American Home Mortgage Investment Corp. | 1,125 | 41,468 | |||
Anthracite Capital, Inc. | 5,275 | 64,144 | |||
Apartment Investment & Management Co. | 2,400 | 104,279 | |||
Arbor Realty Trust, Inc. | 600 | 15,030 | |||
Centracore Properties Trust | 1,025 | 25,369 | |||
Colonial Properties Trust | 1,500 | 74,100 |
13
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Real Estate Investment Trusts (continued) | |||||
Cousins Properties, Inc. | 2,725 | $ | 84,284 | ||
Hospitality Properties Trust | 1,300 | 57,096 | |||
Mid-America Apartment Communities, Inc. | 1,725 | 96,169 | |||
New Century Financial Corp. | 1,500 | 68,625 | |||
Ramco-Gershenson Properties Trust | 2,225 | 59,919 | |||
Sunstone Hotel Investors, Inc. | 2,625 | 76,283 | |||
Winston Hotels, Inc. | 2,425 | 29,706 | |||
796,472 | |||||
Restaurants (0.3%) | |||||
Darden Restaurants, Inc. | 1,850 | 72,890 | |||
Luby’s Cafeteria, Inc. (b) | 4,350 | 45,371 | |||
McDonald’s Corp. | 10,950 | 367,920 | |||
Papa John’s International, Inc. (b) | 1,400 | 46,480 | |||
532,661 | |||||
Retail (2.5%) | |||||
Abercrombie & Fitch Co. | 2,300 | 127,489 | |||
American Eagle Outfitters Ltd. | 2,250 | 76,590 | |||
Barnes & Noble, Inc. | 4,425 | 161,513 | |||
Best Buy Co., Inc. | 1,300 | 71,292 | |||
Big Lots, Inc. (b) | 700 | 11,956 | |||
Books-A-Million, Inc. | 1,700 | 28,356 | |||
Claire’s Stores, Inc. | 2,700 | 68,877 | |||
Costco Wholesale Corp. | 2,150 | 122,830 | |||
CVS Corp. | 3,500 | 107,450 | |||
Family Dollar Stores, Inc. | 500 | 12,215 | |||
Foot Locker, Inc. | 300 | 7,347 | |||
Home Depot, Inc. | 10,250 | 366,848 | |||
J.C. Penney Co., Inc. | 7,650 | 516,451 | |||
Jones Apparel Group, Inc. | 600 | 19,074 | |||
Kohl’s Corp. (b) | 15,100 | 892,711 | |||
Kroger Co. (The) | 10,100 | 220,786 | |||
Longs Drug Stores Corp. | 1,025 | 46,761 | |||
Lowe’s Cos., Inc. | 5,700 | 345,819 | |||
Nordstrom, Inc. | 3,200 | 116,800 | |||
Payless ShoeSource, Inc. (b) | 4,450 | 120,907 | |||
Rite Aid Corp. (b) | 6,275 | 26,606 | |||
Ross Stores, Inc. | 200 | 5,610 | |||
Safeway, Inc. | 12,400 | 322,400 | |||
Staples, Inc. | 17,000 | 413,439 | |||
SUPERVALU, INC. | 2,425 | 74,448 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Retail (continued) | |||||
Target Corp. | 9,200 | $ | 449,603 | ||
Wal-Mart Stores, Inc. | 7,400 | 356,458 | |||
WESCO International, Inc. (b) | 1,000 | 69,000 | |||
Yum! Brands, Inc. | 700 | 35,189 | |||
5,194,825 | |||||
Semiconductors (1.1%) | |||||
Altera Corp. (b) | 12,000 | 210,600 | |||
Amkor Technology, Inc. (b) | 4,600 | 43,516 | |||
Applied Materials, Inc. | 14,850 | 241,758 | |||
Asyst Technologies, Inc. (b) | 1,000 | 7,530 | |||
Broadcom Corp., Class A (b) | 8,400 | 252,420 | |||
Freescale Semiconductor, Inc., Class B (b) | 2,300 | 67,620 | |||
Intel Corp. | 8,800 | 166,760 | |||
Intersil Holding Corp., Class A | 1,300 | 30,225 | |||
KLA-Tencor Corp. | 1,200 | 49,884 | |||
Linear Technology Corp. | 7,100 | 237,779 | |||
LSI Logic Corp. (b) | 17,175 | 153,716 | |||
Mattson Technology, Inc. (b) | 1,000 | 9,770 | |||
Maxim Integrated Products, Inc. | 2,500 | 80,275 | |||
National Semiconductor Corp. | 2,950 | 70,358 | |||
ON Semiconductor Corp. (b) | 9,250 | 54,390 | |||
Texas Instruments, Inc. | 9,800 | 296,842 | |||
Xilinx, Inc. | 8,900 | 201,585 | |||
2,175,028 | |||||
Steel (0.2%) | |||||
Chaparral Steel Co. (b) | 700 | 50,414 | |||
Nucor Corp. | 4,450 | 241,412 | |||
Steel Dynamics, Inc. | 1,525 | 100,254 | |||
392,080 | |||||
Technology (0.1%) | |||||
Intergraph Corp. (b) | 2,625 | 82,662 | |||
Micrel, Inc. (b) | 4,125 | 41,291 | |||
Sensient Technologies Corp. | 900 | 18,819 | |||
Tech Data Corp. (b) | 100 | 3,831 | |||
146,603 | |||||
Telecommunications (1.6%) | |||||
ADTRAN, Inc. | 800 | 17,944 | |||
AT&T, Inc. | 41,875 | 1,167,893 | |||
Bellsouth Corp. | 5,400 | 195,480 | |||
Carrier Access Corp. (b) | 600 | 4,962 |
14
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J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
UNITED STATES (continued) | ||||||
Telecommunications (continued) | ||||||
CenturyTel, Inc. | 1,950 | $ | 72,443 | |||
Citizens Communications Co. | 2,800 | 36,540 | ||||
Dobson Communications Corp., Class A (b) | 6,375 | 49,279 | ||||
EchoStar Communications Corp., Class A (b) | 400 | 12,324 | ||||
Embarq Corp. (b) | 437 | 17,913 | ||||
Harris Corp. | 1,750 | 72,643 | ||||
Lightbridge, Inc. (b) | 400 | 5,180 | ||||
Sprint Corp. | 19,450 | 388,805 | ||||
TALK America Holdings, Inc. (b) | 2,325 | 14,392 | ||||
Verizon Communications, Inc. | 36,400 | 1,219,035 | ||||
3,274,833 | ||||||
Tobacco (1.0%) | ||||||
Altria Group, Inc. | 24,400 | 1,791,692 | ||||
Loews Corp — Carolina Group | 1,525 | 78,339 | ||||
Reynolds American, Inc. | 2,350 | 270,955 | ||||
2,140,986 | ||||||
Toys (0.0%) | ||||||
Marvel Entertainment, Inc. (b) | 4,200 | 84,000 | ||||
Transportation Services (0.2%) | ||||||
Arkansas Best Corp. | 400 | 20,084 | ||||
Con-way, Inc. | 600 | 34,758 | ||||
Continental Airlines, Class B (b) | 5,675 | 169,115 | ||||
EGL, Inc. (b) | 400 | 20,080 | ||||
Laidlaw International, Inc. | 3,050 | 76,860 | ||||
Pacer International, Inc. | 800 | 26,064 | ||||
Sabre Holdings, Inc. | 3,450 | 75,900 | ||||
422,861 | ||||||
Waste Management (0.1%) | ||||||
Waste Management, Inc. | 3,450 | 123,786 | ||||
100,195,037 | ||||||
Total Common Stocks | 125,639,107 | |||||
COMMERCIAL PAPER (10.7%) | ||||||
Financial Services (10.7%) | ||||||
Alpine Securitization Corp., 5.07%, 07/06/06 | $ | 1,250,000 | 1,249,438 | |||
Cafco LLC, 5.03%, 07/19/06 | 1,250,000 | 1,246,856 |
Principal Amount | Value | |||||
COMMERCIAL PAPER (continued) | ||||||
Financial Services (continued) | ||||||
Citigroup, 5.12%, 08/02/06 | $ | 1,250,000 | $ | 1,244,488 | ||
Dexia Delaware LLC, 5.15%, 08/16/06 | 1,500,000 | 1,490,265 | ||||
Edison Asset Securitization LLC, 5.24%, 08/15/06 | 1,250,000 | 1,242,025 | ||||
Fairway Finance Corp., 5.24%, 07/20/06 | 1,500,000 | 1,496,205 | ||||
Intesa Funding LLC, 5.04%, 07/03/06 | 1,500,000 | 1,499,999 | ||||
KBC Financial Products International, 5.00%, 07/05/06 | 1,500,000 | 1,499,166 | ||||
Metlife, Inc., 5.09%, 08/08/06 | 1,500,000 | 1,492,035 | ||||
Ranger Funding Co. LLC, 5.02%, 07/05/06 | 1,000,000 | 999,442 | ||||
Sheffield Receivables, 5.16%, 08/09/06 | 1,250,000 | 1,243,138 | ||||
Silver Tower, 5.26%, 08/16/06 | 1,500,000 | 1,490,160 | ||||
Skandinaviska Enskilda Banken, 5.02%, 07/12/06 | 1,250,000 | 1,248,085 | ||||
St. George Bank Ltd., 5.04%, 07/17/06 | 1,250,000 | 1,247,425 | ||||
Stadshypotek Delaware, Inc., 5.13%, 08/10/06 | 1,000,000 | 994,410 | ||||
Windmill Funding Corp., 5.04%, 07/05/06 | 1,000,000 | 999,700 | ||||
Yorktown Capital, 5.18%, 07/17/06 | 1,250,000 | 1,247,122 | ||||
Total Commercial Paper | 21,929,959 | |||||
�� | ||||||
CORPORATE BONDS (9.3%) | ||||||
Auto Related (0.6%) | ||||||
Breed Technologies, Inc., 0.00%, 04/15/08 (e) (f) (g) | 125,000 | 0 | ||||
Carmax Auto Owner Trust, 4.13%, 05/15/09 | 885,000 | 874,173 | ||||
Carmax Auto Owner Trust, 4.21%, 01/15/10 | 335,000 | 329,147 | ||||
General Motors Acceptance Corp., 6.88%, 08/28/12 | 25,000 | 23,554 | ||||
1,226,874 | ||||||
15
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J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Banking (1.1%) | ||||||
Commonwealth Bank of Australia, 6.02%, 03/15/16 (d) (h) | $ | 225,000 | $ | 214,310 | ||
Glitnir Banki HF, 6.69%, 06/15/16 (d) | 145,000 | 144,170 | ||||
HBOS PLC, 5.92%, 10/01/15 (d) | 200,000 | 184,254 | ||||
Industrial Bank of Korea, 4.00%, 05/19/14 (d) | 180,000 | 169,621 | ||||
Korea First Bank, 7.27%, 03/03/34 (d) | 165,000 | 170,124 | ||||
Shinhan Bank, 5.66%, 03/02/35 | 180,000 | 162,275 | ||||
Shinsei Finance, 7.16%, 07/25/16 (d) (i) | 225,000 | 212,004 | ||||
Suntrust Bank, 2.50%, 11/01/06 | 275,000 | 272,197 | ||||
United Overseas Bank Ltd., 5.38%, 09/03/19 (d) | 275,000 | 257,126 | ||||
Wachovia Capital Trust III, 5.80%, 03/15/11 | 340,000 | 329,936 | ||||
Woori Bank, 5.75%, 03/13/14 (d) | 160,000 | 158,021 | ||||
2,274,038 | ||||||
Broadcast Media/Cable Television (0.1%) | ||||||
Charter Communications LLC, 8.00%, 04/30/12 (d) | 20,000 | 19,900 | ||||
Comcast Corp., 6.50%, 01/15/15 | 125,000 | 125,979 | ||||
Comcast Corp., 5.90%, 03/15/16 | 70,000 | 67,254 | ||||
Comcast Corp., 4.95%, 06/15/16 | 30,000 | 26,736 | ||||
DIRECTV Holdings/Finance, 6.38%, 06/15/15 | 15,000 | 13,838 | ||||
Echostar DBS Corp., 7.13%, 02/01/16 (d) | 45,000 | 43,313 | ||||
297,020 | ||||||
Building—Residential/Commercial (0.0%) | ||||||
Beazer Homes USA, Inc., 6.88%, 07/15/15 | 30,000 | 27,300 | ||||
D.R. Horton, Inc., 8.50%, 04/15/12 | 30,000 | 31,564 | ||||
D.R. Horton, Inc., 5.25%, 02/15/15 | 20,000 | 17,776 | ||||
76,640 | ||||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Casino Hotels (0.0%) | ||||||
MGM Mirage, Inc., 5.88%, 02/27/14 | $ | 30,000 | $ | 26,888 | ||
Chemicals (0.0%) | ||||||
Huntsman LLC, 11.50%, 07/15/12 | 30,000 | 33,525 | ||||
Polyone Corp., 10.63%, 05/15/10 | 10,000 | 10,750 | ||||
44,275 | ||||||
Commercial Services (0.0%) | ||||||
Iron Mountain, Inc., 6.63%, 01/01/16 | 35,000 | 31,500 | ||||
Computer Services (0.2%) | ||||||
Cisco Systems, Inc., 5.25%, 02/22/11 | 395,000 | 387,673 | ||||
Sungard Data Systems, Inc., 9.13%, 08/15/13 (d) | 15,000 | 15,563 | ||||
UGS Corp., 10.00%, 06/01/12 | 25,000 | 26,875 | ||||
430,111 | ||||||
Construction Equipment (0.1%) | ||||||
CNH Equipment Trust, 4.27%, 01/15/10 | 125,000 | 122,775 | ||||
Containers (0.0%) | ||||||
Owens-Brockway Glass Container, 8.25%, 05/15/13 | 20,000 | 20,050 | ||||
Diversified Manufacturing Operations (0.1%) | ||||||
Hutchinson Whamp International Ltd., 7.45%, 11/24/33 (d) | 145,000 | 153,274 | ||||
Diversified Minerals (0.1%) | ||||||
Teck Cominco Ltd., 6.13%, 10/01/35 | 120,000 | 107,413 | ||||
Electrical Services (0.8%) | ||||||
Alabama Power Co., 2.80%, 12/01/06 | 130,000 | 128,506 | ||||
Appalachian Power Co., 5.80%, 10/01/35 | 110,000 | 98,145 | ||||
Dominion Resources, Inc., 8.13%, 06/15/10 | 50,000 | 53,660 | ||||
Dominion Resources, Inc., 7.20%, 09/15/14 | 95,000 | 99,812 |
16
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J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Electrical Services (continued) | ||||||
Dominion Resources, Inc., 5.15%, 07/15/15 | $ | 120,000 | $ | 110,305 | ||
FPL Group Capital, Inc., 7.63%, 09/15/06 | 215,000 | 215,758 | ||||
GE Equipment Small Ticket LLC, 4.38%, 07/22/09 | 200,000 | 197,096 | ||||
MidAmerican Energy Holdings, 6.13%, 04/01/36 (d) | 250,000 | 233,696 | ||||
Nisource Finance Corp., 5.45%, 09/15/20 | 215,000 | 194,062 | ||||
Ohio Power Co. IBC, 6.00%, 06/01/16 | 80,000 | 78,887 | ||||
Pacific Gas & Electric, 6.05%, 03/01/34 | 70,000 | 66,067 | ||||
Pacificorp, 4.30%, 09/15/08 | 125,000 | 121,605 | ||||
Xcel Energy, Inc., 6.50%, 07/01/36 | 80,000 | 78,458 | ||||
1,676,057 | ||||||
Electronics—Military (0.0%) | ||||||
L-3 Communications Corp., 5.88%, 01/15/15 | 15,000 | 13,988 | ||||
Financial Services (2.1%) | ||||||
American General Finance Corp., 3.00%, 11/15/06 | 315,000 | 312,117 | ||||
American General Finance Corp., 4.50%, 11/15/07 | 330,000 | 325,040 | ||||
Anadarko Finance Co., 7.50%, 05/01/31 | 110,000 | 118,185 | ||||
Arch Western Finance, 6.75%, 07/01/13 | 25,000 | 23,938 | ||||
Capital One Financial, 8.75%, 02/01/07 | 375,000 | 381,103 | ||||
Ford Motor Credit Co., 6.62%, 01/15/10 | 15,000 | 13,665 | ||||
Ford Motor Credit Co., 7.25%, 10/25/11 | 20,000 | 17,742 | ||||
Goldman Sachs Group, Inc., 6.45%, 05/01/36 | 250,000 | 239,505 | ||||
HSBC Finance Cap Trust IX, 5.91%, 11/30/35 | 100,000 | 95,432 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Financial Services (continued) | ||||||
International Lease Finance Corp,, 4.88%, 09/01/10 | $ | 115,000 | $ | 111,228 | ||
Kaupthing Bank, 7.13%, 05/19/16 (d) | 190,000 | 190,057 | ||||
Merrill Lynch & Co., 6.05%, 05/16/16 | 130,000 | 129,144 | ||||
Mizuho JGB Investment, 9.87%, 06/30/08 (d) (h) | 190,000 | 203,441 | ||||
Mizuho Preferred Capital, 8.79%, 06/30/08 (d) (h) | 310,000 | 325,759 | ||||
Residential Capital Corp., 6.13%, 11/21/08 | 315,000 | 311,349 | ||||
Residential Capital Corp., 6.38%, 06/30/10 | 485,000 | 478,399 | ||||
Residential Capital Corp., 6.97%, 04/17/09 (d) (i) | 455,000 | 454,974 | ||||
Service Corp. International, 6.75%, 04/01/16 | 30,000 | 27,600 | ||||
Temasek Financial I Ltd., 4.50%, 09/21/15 (d) | 300,000 | 271,874 | ||||
UBS Preferred Funding TR V, 6.24%, 05/15/16 | 130,000 | 128,072 | ||||
4,158,624 | ||||||
Healthcare (0.0%) | ||||||
HCA, Inc., 6.95%, 05/01/12 | 10,000 | 9,762 | ||||
HCA, Inc., 6.50%, 02/15/16 | 10,000 | 9,246 | ||||
19,008 | ||||||
Home Furnishings (0.0%) | ||||||
Sealy Mattress Co., 8.25%, 06/15/14 | 25,000 | 25,000 | ||||
Hotels & Motels (0.0%) | ||||||
Starwood Hotels & Resorts, 7.38%, 11/15/15 | 20,000 | 20,150 | ||||
Vail Resorts, Inc., 6.75%, 02/15/14 | 30,000 | 28,500 | ||||
48,650 | ||||||
Insurance (0.7%) | ||||||
Axis Capital Holdings, 5.75%, 12/01/14 | 130,000 | 122,638 | ||||
Axis Capital Holdings, 7.50%, 12/01/15 | 110,000 | 108,659 |
17
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Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Insurance (continued) | ||||||
Endurance Specialty Holdings, 7.00%, 07/15/34 | $ | 125,000 | $ | 115,806 | ||
Great West Life & Annuity, 7.15%, 05/16/46 (d) | 175,000 | 170,928 | ||||
ING Groep NV, 5.78%, 12/08/15 (h) | 240,000 | 227,739 | ||||
Lincoln National Corp., 7.00%, 05/17/66 | 95,000 | 94,263 | ||||
Oil Insurance Ltd., 7.56%, 06/30/11 (d) (h) | 220,000 | 219,008 | ||||
Stingray Pass Through, 5.90%, 01/12/15 (d) | 300,000 | 283,489 | ||||
1,342,530 | ||||||
Mining (0.1%) | ||||||
Newmont Mining Corp., 5.88%, 04/01/35 | 120,000 | 107,397 | ||||
Motion Pictures & Services (0.1%) | ||||||
Viacom, Inc., 6.25%, 04/30/16 (d) | 110,000 | 106,782 | ||||
Viacom, Inc., 6.88%, 04/30/36 (d) | 110,000 | 106,157 | ||||
212,939 | ||||||
Motor Vehicles (0.3%) | ||||||
Daimler Chrysler NA Holding Corp, 5.88%, 03/15/11 | 550,000 | 541,008 | ||||
Daimler Chrysler NA Holding Corp., 4.75%, 01/15/08 | 125,000 | 122,956 | ||||
TRW Automotive, Inc., 9.38%, 02/15/13 | 21,000 | 22,313 | ||||
686,277 | ||||||
Office Supplies (0.0%) | ||||||
Acco Brands Corp., 7.63%, 08/15/15 | 25,000 | 23,188 | ||||
Oil & Gas (0.5%) | ||||||
BP Capital Markets PLC, 2.75%, 12/29/06 | 205,000 | 202,463 | ||||
Chesapeake Energy Corp., 6.50%, 08/15/17 | 20,000 | 18,250 | ||||
Enterprise Production Operations, 5.00%, 03/01/15 | 175,000 | 158,035 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Oil & Gas (continued) | ||||||
Enterprise Production Operations, 6.65%, 10/15/34 | $ | 125,000 | $ | 118,598 | ||
Gazprom International SA, 5.63%, 07/22/13 (d) | 3,322 | 3,239 | ||||
Gazprom International SA, 7.20%, 02/01/20 | 305,000 | 308,934 | ||||
Kinder Morgan Energy Partners, 7.40%, 03/15/31 | 60,000 | 62,073 | ||||
Smith International, Inc., 6.00%, 06/15/16 | 130,000 | 128,845 | ||||
XTO Energy, 5.65%, 04/01/16 | 80,000 | 75,859 | ||||
1,076,296 | ||||||
Paper & Forest Products (0.0%) | ||||||
Georgia-Pacific Corp., 7.70%, 06/15/15 | 20,000 | 19,100 | ||||
Pharmaceuticals (0.0%) | ||||||
Teva Pharmaceutical Finance LLC, 6.15%, 02/01/36 | 110,000 | 98,771 | ||||
Private Corrections (0.0%) | ||||||
Corrections Corp. of America, 6.25%, 03/15/13 | 10,000 | 9,400 | ||||
Real Estate (0.0%) | ||||||
SocGen Real Estate LLC, 7.64%, 09/30/07 (d) (h) | 90,000 | 91,908 | ||||
Sovereign (0.7%) | ||||||
Federal Republic of Brazil, 12.25%, 03/06/30 | 160,000 | 234,800 | ||||
Republic of Argentina, 4.01%, 08/03/12 (i) | 205,000 | 169,535 | ||||
Republic of Peru, 7.35%, 07/21/25 | 75,000 | 72,000 | ||||
Republic of Venezuela, 5.75%, 02/26/16 | 110,000 | 97,350 | ||||
Republic of Venezuela, 7.00%, 12/01/18 | 10,000 | 9,400 | ||||
Republic of Venezuela, 9.38%, 01/13/34 | 45,000 | 52,763 | ||||
Russian Federation, 12.75%, 06/24/28 | 350,000 | 591,044 | ||||
United Mexican States, 8.00%, 09/24/22 | 225,000 | 250,875 | ||||
1,477,767 | ||||||
18
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Special Purpose Entity (1.0%) | ||||||
Consolidated Communications Holdings, 9.75%, 04/01/12 | $ | 15,000 | $ | 15,450 | ||
Core Invest Grade Trust, 4.73%, 11/30/07 | 600,000 | 590,267 | ||||
Fresenius Medical Capital Trust II, 7.88%, 02/01/08 | 45,000 | 45,675 | ||||
ILFC E-Capital Trust I, 5.90%, 12/21/65 (d) (i) | 190,000 | 185,213 | ||||
Jostens, Inc., 7.63%, 10/01/12 | 15,000 | 14,550 | ||||
Mantis Reef Ltd. II, 4.80%, 11/03/09 (d) | 200,000 | 192,027 | ||||
Mizuho Capital Investment 1 Ltd., 6.69%, 06/30/16 (d) (h) (i) | 204,000 | 193,580 | ||||
MUFG Capital Finance 1 Ltd., 6.35%, 07/25/16 (h) | 180,000 | 173,626 | ||||
Pricoa Global Funding I, 3.90%, 12/15/08 (d) | 400,000 | 383,480 | ||||
Resona PFD Global Securities, 7.19%, 07/30/15 (d) | 130,000 | 130,402 | ||||
Swiss RE Capital I LP, 6.85%, 05/25/16 (d) (h) (i) | 115,000 | 112,866 | ||||
2,037,136 | ||||||
Telecommunications (0.5%) | ||||||
AT&T, Inc., 7.50%, 05/01/07 | 150,000 | 152,098 | ||||
AT&T, Inc., 6.80%, 05/15/36 | 195,000 | 193,279 | ||||
Embarq Corp., 7.08%, 06/01/16 | 165,000 | 164,094 | ||||
Embarq Corp., 8.00%, 06/01/36 | 70,000 | 70,357 | ||||
Qwest Communications International, 8.86%, 02/15/09 (i) | 20,000 | 20,375 | ||||
Qwest Corp., 8.88%, 03/15/12 | 5,000 | 5,275 | ||||
Rogers Wireless, Inc., 6.38%, 03/01/14 | 20,000 | 19,050 | ||||
Sprint Capital Corp., 6.90%, 05/01/19 | 205,000 | 210,614 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Telecommunications (continued) | ||||||
Tele-Communications, Inc., 7.88%, 08/01/13 | $ | 30,000 | $ | 32,318 | ||
Verizon Global Funding Corp., 5.85%, 09/15/35 | 225,000 | 195,738 | ||||
1,063,198 | ||||||
Transportation—Rail (0.1%) | ||||||
BNSF Funding Trust I, 6.61%, 12/15/55 | 145,000 | 136,112 | ||||
Total Corporate Bonds | 19,134,204 | |||||
MORTGAGE-BACKED SECURITIES (21.9%) | ||||||
Federal Home Loan Mortgage Corporation (6.4%) | ||||||
5.13%, 10/15/08 | 850,000 | 844,030 | ||||
5.00%, 11/15/28 | 670,137 | 659,063 | ||||
6.75%, 03/15/31 | 375,000 | 430,305 | ||||
6.50%, 09/25/33 | 446,876 | 450,505 | ||||
6.00%, 02/01/35 | 295,209 | 290,838 | ||||
6.50%, 05/15/35 | 349,777 | 354,642 | ||||
TBA, 5.50%, 08/15/36 | 4,620,000 | 4,433,759 | ||||
TBA, 6.00%, 07/01/34 | 1,750,000 | 1,722,656 | ||||
TBA, 6.00%, 08/15/36 | 4,050,000 | 3,982,924 | ||||
13,168,722 | ||||||
Federal National Mortgage Association (7.2%) | ||||||
5.00%, 03/15/16 | 1,355,000 | 1,300,998 | ||||
6.63%, 11/15/30 | 30,000 | 33,972 | ||||
6.50%, 10/25/33 | 425,000 | 428,660 | ||||
6.50%, 10/25/33 | 425,000 | 428,660 | ||||
6.50%, 12/25/33 | 330,000 | 332,797 | ||||
6.50%, 12/25/33 | 420,000 | 423,559 | ||||
6.50%, 02/01/35 | 432,521 | 434,853 | ||||
7.00%, 02/01/35 | 122,653 | 125,494 | ||||
TBA, 6.00%, 07/01/35 | 850,000 | 836,453 | ||||
TBA, 5.50%, 07/01/20 | 1,406,000 | 1,379,638 | ||||
TBA, 5.50%, 08/01/19 | 1,900,000 | 1,863,188 | ||||
TBA, 5.50%, 08/15/36 | 847,000 | 812,856 | ||||
TBA, 6.00%, 08/01/29 | 1,650,000 | 1,622,156 | ||||
TBA, 6.50%, 08/01/32 | 4,790,000 | 4,809,456 | ||||
14,832,740 | ||||||
Financial Services (6.7%) | ||||||
Americredit Automobile Receivables Trust, Series 04-BM, Class A4, 2.67%, 03/07/11 | 550,000 | 535,145 |
19
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J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
MORTGAGE-BACKED SECURITIES (continued) | ||||||
Financial Services (continued) | ||||||
Americredit Automobile Receivables Trust, Series 04-DF, Class A3, 2.98%, 07/06/09 | $ | 96,370 | $ | 95,188 | ||
Bear Stearns Commercial Mortgage Securities, Series 04-PWR6, Class A4, 4.52%, 11/11/41 | 260,000 | 244,371 | ||||
Bear Stearns Commercial Mortgage Securities, Series 05-PWR7, Class A3, 5.12%, 02/11/41 | 380,000 | 360,179 | ||||
Capital Auto Receivables Asset Trust, Series 06-1, Class A3, 5.03%, 10/15/09 | 340,000 | 336,849 | ||||
Capital One Master Trust, Series 01-BA, Class A, 4.60%, 08/17/09 | 420,000 | 419,004 | ||||
Capital One Multi-Asset Execution Trust, Series 03-A4, Class A4, 3.65%, 07/15/11 | 520,000 | 499,979 | ||||
Citigroup Commercial Mortgage Trust, Series 06-C4, Class A3, 5.77%, 03/15/49 (i) | 265,000 | 262,735 | ||||
Countrywide Alternative Loan Trust, Series 04-28CB, Class 3A1, 6.00%, 01/25/35 | 732,561 | 716,079 | ||||
Countrywide Alternative Loan Trust, Series 06-12CB, Class A6, 6.00%, 05/25/36 | 520,248 | 513,760 | ||||
Countrywide Asset-Backed Certificates, Series 03-5, Class MF1, 5.41%, 01/25/34 | 180,000 | 177,473 | ||||
Credit Suisse Mortgage Capital Certificates, Series 06-C3, Class A3, 5.83%, 06/15/38 | 400,000 | 399,625 | ||||
CS First Boston Mortgage Securities Corp., Series 01-CK1, Class A3, 6.38%, 12/18/35 | 270,000 | 275,814 |
Principal Amount | Value | |||||
MORTGAGE-BACKED SECURITIES (continued) | ||||||
Financial Services (continued) | ||||||
CS First Boston Mortgage Securities Corp., Series 03-29, Class 7A1, 6.50%, 12/25/33 | $ | 126,164 | $ | 126,032 | ||
CS First Boston Mortgage Securities Corp., Series 03-C4, Class A4, 5.14%, 08/15/36 | 480,000 | 460,226 | ||||
Greenwich Capital Commercial Funding Corp., Series 04-GG1, Class A3, 4.34%, 06/10/36 | 1,185,000 | 1,147,100 | ||||
Greenwich Capital Commerical Funding Corp., Series 05-GG3, Class A4, 4.80%, 08/10/42 | 285,000 | 264,654 | ||||
Household Automotive Trust, Series 03-2, Class A4, 3.02%, 12/17/10 | 350,000 | 340,984 | ||||
Indymac Index Mortgage Loan Trust, Series 04-AR7, Class A1, 5.76%, 09/25/34 | 255,358 | 257,639 | ||||
LB-UBS Commercial Mortgage Trust, Series 05-C1, Class A4, 4.74%, 02/15/30 | 485,000 | 449,129 | ||||
LB-UBS Commercial Mortgage Trust, Series 06-C1, Class A4, 5.16%, 02/15/31 | 250,000 | 236,983 | ||||
LB-UBS Commercial Mortgage Trust, Series 06-C4, Class A4, 5.86%, 06/15/38 | 190,000 | 190,938 | ||||
MBNA Credit Card Master Note Trust, Series 03-A1, Class A1, 3.30%, 07/15/10 | 485,000 | 468,228 | ||||
Merrill Lynch Mortgage Trust, Series 06-C1, Class A4, 5.84%, 05/12/39 | 120,000 | 118,764 | ||||
Morgan Stanley Capital I, Series 04-HQ3, Class A2, 4.05%, 01/13/41 | 390,000 | 369,649 |
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
MORTGAGE-BACKED SECURITIES (continued) | ||||||
Financial Services (continued) | ||||||
Morgan Stanley Capital I, Series 05, Class IQ9, 4.70%, 07/15/56 | $ | 265,000 | $ | 244,519 | ||
Morgan Stanley Dean Witter Capital I, Series 03-HQ2, Class A2, 4.92%, 03/12/35 | 250,000 | 237,330 | ||||
Onyx Acceptance Auto Trust, Series 03-D, Class A4, 3.20%, 03/15/10 | 119,926 | 118,234 | ||||
Onyx Acceptance Auto Trust, Series 04-C, Class A4, 3.50%, 12/15/11 | 370,000 | 361,002 | ||||
PSE&G Transition Funding LLC, Series 01-1, Class A6, 6.61%, 06/15/15 | 240,000 | 251,185 | ||||
Residential Accredit Loans, Inc., Series 06-QS6, Class 1A2, 6.00%, 06/25/36 | 400,000 | 397,563 | ||||
Residential Asset Securities Corp., Series 02-KS4, Class AIIB, 5.57%, 07/25/32 | 25,656 | 25,662 | ||||
Residential Asset Securities Corp., Series 03-KS5, Class AIIB, 5.61%, 07/25/33 | 48,978 | 49,037 | ||||
Residential Asset Securitization Trust, Series 06-A2, Class A3, 6.00%, 05/25/36 | 416,614 | 411,198 | ||||
Special Underwriting & Residential Finance, Series 06-BC2, Class A2B, 5.57%, 02/25/37 | 750,000 | 742,433 | ||||
Triad Auto Receivables Owner Trust, Series 03-B, Class A4, 3.20%, 12/13/10 | 235,000 | 229,954 | ||||
Volkswagen Auto Lease Trust, Series 04-A, Class A3, 2.84%, 07/20/07 | 203,758 | 202,969 | ||||
Volkswagen Auto Loan Enhanced Trust, Series 03-2, Class A4, 2.94%, 03/22/10 | 275,000 | 269,084 | ||||
Wachovia Asset Securitization, Inc., Series 03-HE2, Class AII1, 5.58%, 07/25/33 | 122,056 | 122,386 |
Principal Amount | Value | |||||
MORTGAGE-BACKED SECURITIES (continued) | ||||||
Financial Services (continued) | ||||||
Wachovia Bank Commerical Mortgage Trust, Series 06-C26, Class A3, 6.01%, 06/15/45 | $ | 265,000 | $ | 266,316 | ||
WFS Financial Owner Trust, Series 03-4, Class A4, 3.15%, 05/20/11 | 149,072 | 146,393 | ||||
Wmalt Mortgage Pass-Through Certificates, Series 06-5, Class 2CB1, 6.00%, 07/01/36 | 405,000 | 401,472 | ||||
13,743,264 | ||||||
Government National Mortgage Association (1.6%) | ||||||
TBA, 5.50%, 07/01/34 | 1,623,000 | 1,572,788 | ||||
TBA, 6.00%, 07/01/34 | 1,700,000 | 1,685,655 | ||||
3,258,443 | ||||||
Total Mortgage-Backed Securities | 45,003,169 | |||||
U.S. GOVERNMENT LONG-TERM OBLIGATIONS (5.3%) | ||||||
U.S. Treasury Bills (0.0%) | ||||||
4.65%, 09/28/06 (c) | 40,000 | 39,550 | ||||
U.S. Treasury Bonds (1.7%) | ||||||
6.25%, 05/15/30 | 1,425,000 | 1,614,035 | ||||
5.38%, 02/15/31 | 750,000 | 762,950 | ||||
4.50%, 02/15/36 | 1,055,000 | 945,956 | ||||
8.88%, 02/15/19 (c) | 200,000 | 265,750 | ||||
3,588,691 | ||||||
U.S. Treasury Notes (3.6%) | ||||||
3.63%, 06/30/07 | 75,000 | 73,802 | ||||
4.63%, 03/31/08 | 550,000 | 544,801 | ||||
4.88%, 05/31/08 | 835,000 | 830,336 | ||||
4.88%, 04/30/11 | 725,000 | 717,609 | ||||
4.88%, 05/31/11 | 1,805,000 | 1,786,667 | ||||
5.13%, 05/15/16 | 1,715,000 | 1,712,990 | ||||
2.38%, 08/15/06 (c) | 1,295,000 | 1,291,054 | ||||
2.88%, 11/30/06 (c) | 25,000 | 24,758 | ||||
4.13%, 05/15/15 (c) | 200,000 | 185,711 | ||||
7,167,728 | ||||||
Total U.S. Government Long-Term Obligations | 10,795,969 | |||||
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
CASH EQUIVALENTS (2.1%) | ||||||
AIM Liquid Assets Portfolio | 4,294,687 | $ | 4,294,687 | |||
Total Cash Equivalents | 4,294,687 | |||||
Total Investments (Cost $219,026,531) (a) — 110.5% | 226,797,095 | |||||
Liabilities in excess of other assets — (10.5)% | (21,590,058 | ) | ||||
NET ASSETS — 100.0% | $ | 205,207,037 | ||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Pledged as collateral for futures. |
(d) | Represents a restricted security acquired and eligible for resale under Rule 144A, which limits the resale to certain qualified buyers. |
(e) | Bond in default. |
(f) | Fair Valued Security. |
(g) | Security has been deemed illiquid. The pricing committee has deemed the security to have zero value based upon procedures adopted by the Board of Trustees. |
(h) | Securities with perpetual maturity. First call date disclosed. |
(i) | Variable Rate Security. The rate reflected in the Statement of Investments is the rate in effect on June 30, 2006. The maturity date represents the actual maturity date. |
TBA | To Be Announced |
At June 30, 2006 the Fund’s open futures contracts were as follows:
Number of Contracts | Contracts | Expiration | Market Value Covered by Contracts | Unrealized Appreciation (Depreciation) | ||||||||
Long Contracts: | ||||||||||||
2 | S&P 500 Emini | 09/15/06 | $ | 127,950 | $ | (70 | ) | |||||
1 | Russell 2000 | 09/15/06 | 365,750 | 6,120 | ||||||||
3 | Dow Jones Euro Stoxx 50 | 09/15/06 | 140,500 | 9,688 | ||||||||
1 | Finanical Times 100 Index | 09/15/06 | 107,705 | 6,069 | ||||||||
104 | U.S. 5yr Note | 09/29/06 | 10,754,250 | 985 | ||||||||
11 | U.S. 2yr Note | 09/29/06 | 2,230,594 | (3,362 | ) | |||||||
Total Long Contracts | $ | 13,726,749 | $ | 19,430 | ||||||||
Short Contracts: | ||||||||||||
20 | Euro Bobl Future | 08/24/06 | $ | (2,791,590 | ) | $ | 7,704 | |||||
5 | S&P 500 | 09/15/06 | (1,599,250 | ) | (23,524 | ) | ||||||
24 | U.S. 10yr Treasury Note | 09/20/06 | (2,516,625 | ) | (9,414 | ) | ||||||
9 | U.S. 30yr Treasury Note | 09/20/06 | (959,906 | ) | (10,150 | ) | ||||||
Total Short Contracts | $ | (7,867,371 | ) | $ | (35,384 | ) |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||
Short Contracts: | ||||||||||||
Euro | 07/03/06 | $ | 75,162 | $ | 76,751 | $ | (1,589 | ) | ||||
Swiss Franc | 08/14/06 | 132,370 | 131,868 | 502 | ||||||||
Danish Kroner | 08/14/06 | 159,023 | 158,911 | 112 | ||||||||
Euro | 08/14/06 | 1,106,379 | 1,107,216 | (837 | ) | |||||||
British Sterling Pound | 08/14/06 | 571,376 | 568,493 | 2,883 | ||||||||
Japanese Yen | 08/14/06 | 499,974 | 481,279 | 18,695 | ||||||||
Singapore Dollar | 08/14/06 | 134,971 | 135,981 | (1,010 | ) | |||||||
Total Short Contracts | $ | 2,679,255 | $ | 2,660,499 | $ | 18,756 |
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||
Long Contracts: | �� | |||||||||||
Australia Dollar | 08/14/06 | $ | 604,207 | $ | 586,798 | $ | (17,409 | ) | ||||
Swiss Franc | 08/14/06 | 366,130 | 364,067 | (2,063 | ) | |||||||
Danish Kroner | 08/14/06 | 112,877 | 112,115 | (762 | ) | |||||||
Euro | 08/14/06 | 134,971 | 136,407 | 1,436 | ||||||||
British Sterling Pound | 08/14/06 | 357,933 | 355,612 | (2,321 | ) | |||||||
Japanese Yen | 08/14/06 | 815,051 | 801,560 | (13,491 | ) | |||||||
Swedish Krone | 08/14/06 | 154,698 | 156,445 | 1,747 | ||||||||
Singapore Dollars | 08/14/06 | 70,533 | 69,575 | (958 | ) | |||||||
Total Long Contracts | $ | 2,616,400 | $ | 2,582,579 | $ | (33,821 | ) |
The following is a summary of option activity for the period ended June 30, 2006, by the Fund (amounts in thousands):
Covered Call Options | Shares Subject To Contract | Premiums | ||||
Balance at beginning of period | 0 | $ | 0 | |||
Options written | 674 | 125 | ||||
Options closed | (390) | (68 | ) | |||
Options expired | (199) | (17 | ) | |||
Options exercised | 0 | 0 | ||||
Options outstanding at end of period | 85 | $ | 40 | |||
At June 30, 2006, the Fund had the following outstanding options:
Contracts | Type | Expiration Date | Exercise Price | Number of Contracts | Value | Unrealized Appreciation (Depreciation) | |||||||||
90 Day Euro Future | Call | September 2006 | 94.9 | 52 | $ | 260 | $ | (1,706 | ) | ||||||
90 Day Euro Future | Call | September 2006 | 95 | 104 | 260 | 1,529 | |||||||||
90 Day Euro Future | Call | September 2006 | 95.2 | 52 | 130 | (536 | ) | ||||||||
U.S. Treasury Five Year | Call | August 2006 | 102.5 | 12 | 11,436 | 4,334 | |||||||||
U.S. Treasury Five Year | Call | August 2006 | 103 | 24 | 12,750 | (3,976 | ) | ||||||||
U.S. Treasury Ten Year | Put | August 2006 | 103 | 30 | 937.50 | 1,788 | |||||||||
U.S. Treasury Ten Year | Put | August 2006 | 104 | 97 | 13,641 | (15,562 | ) | ||||||||
U.S. Treasury Note Future | Put | September 2006 | 103 | 30 | 4,219 | (4,072 | ) | ||||||||
U.S. Treasury Bond Future | Put | September 2006 | 103 | 12 | 2,063 | 1,278 | |||||||||
U.S. Treasury Long Bond | Put | June 2006 | 101 | 12 | 750 | (4,721 | ) | ||||||||
U.S. Treasury Long Bond | Put | June 2006 | 102 | 12 | 1,125 | 715 | |||||||||
U.S. Treasury Long Bond | Put | June 2006 | 104 | 12 | 3,750 | (1,722 | ) | ||||||||
Net Unrealized Appreciation (Depreciation) on Written Option Contracts | $ | (22,651 | ) |
23
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $214,731,844) | $ | 222,502,408 | ||
Repurchase agreements, at cost and value | 4,294,687 | |||
Total Investments | 226,797,095 | |||
Cash collateral pledged for futures | 34,187 | |||
Put options written, at fair value (premiums received $39,703) | 17,052 | |||
Foreign currencies, at value (cost $21,948) | 18,730 | |||
Interest and dividends receivable | 1,754,779 | |||
Receivable for capital shares issued | 17,137 | |||
Receivable for investments sold | 43,060,534 | |||
Receivable for variation margin on futures contracts | 31,642 | |||
Reclaims receivable | 2,857 | |||
Prepaid expenses and other assets | 2,755 | |||
Total Assets | 271,736,768 | |||
Liabilities: | ||||
Payable to custodian | 138,889 | |||
Securities sold short, at value (proceeds $126,586) | 127,607 | |||
Payable for capital shares redeemed | 78,254 | |||
Payable for investments purchased | 65,993,307 | |||
Unrealized depreciation of forward foreign currency contracts | 15,065 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 126,478 | |||
Fund administration and transfer agent fees | 17,122 | |||
Administrative servicing fees | 24,367 | |||
Other | 8,642 | |||
Total Liabilities | 66,529,731 | |||
Net Assets | $ | 205,207,037 | ||
Represented by: | ||||
Capital | $ | 198,445,950 | ||
Accumulated net investment income (loss) | 95,341 | |||
Accumulated net realized gains (losses) from investment, futures and foreign currency transactions | (1,046,027 | ) | ||
Net unrealized appreciation (depreciation) on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | 7,711,773 | |||
Net Assets | $ | 205,207,037 | ||
Net Assets: | ||||
Class I Shares | $ | 159,016,144 | ||
Class IV Shares | 46,190,893 | |||
Total | $ | 205,207,037 | ||
Shares outstanding (unlimited number of | ||||
Class I Shares | 15,666,726 | |||
Class IV Shares | 4,550,286 | |||
Total | 20,217,012 | |||
Net asset value and offering price per | ||||
Class I Shares | $ | 10.15 | ||
Class IV Shares | $ | 10.15 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 2,166,579 | ||
Dividend income (net of foreign withholding tax of $49,628) | 1,448,926 | |||
Total Income | 3,615,505 | |||
Expenses: | ||||
Investment advisory fees | 800,274 | |||
Fund administration and transfer agent fees | 94,856 | |||
Administrative servicing fees Class I Shares | 148,013 | |||
Administrative servicing fees | 35,886 | |||
Trustee fees | 3,866 | |||
Other | 31,092 | |||
Total expenses before reimbursed expenses or earnings credit | 1,113,987 | |||
Expenses reimbursed | (16,988 | ) | ||
Earnings credit (Note 5) | (2,679 | ) | ||
Total Expenses | 1,094,320 | |||
Net Investment Income (Loss) | 2,521,185 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 5,274,755 | |||
Net realized gains (losses) on futures transactions | (225,359 | ) | ||
Net realized gains (losses) on foreign currency transactions | 62,683 | |||
Net realized gains (losses) on investment, futures and foreign currency transactions | 5,112,079 | |||
Net change in unrealized appreciation/depreciation on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | (2,513,454 | ) | ||
Net realized/unrealized gains (losses) on investments, futures, options, and foreign currencies | 2,598,625 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 5,119,810 | ||
See notes to financial statements.
24
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GARTMORE VARIABLE INSURANCE TRUST
J.P. MORGAN GVIT BALANCED FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 2,521,185 | $ | 4,623,170 | ||||
Net realized gains (losses) on investment, futures and foreign currency transactions | 5,112,079 | 14,932,975 | ||||||
Net change in unrealized appreciation/depreciation on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | (2,513,454 | ) | (13,608,174 | ) | ||||
Change in net assets resulting from operations | 5,119,810 | 5,947,971 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (1,864,872 | ) | (3,659,435 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (548,218 | ) | (1,015,674 | ) | ||||
Change in net assets from shareholder distributions | (2,413,090 | ) | (4,675,109 | ) | ||||
Change in net assets from capital transactions | (23,872,049 | ) | (15,193,383 | ) | ||||
Change in net assets | (21,165,329 | ) | (13,920,521 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 226,372,366 | 240,292,887 | ||||||
End of period | $ | 205,207,037 | $ | 226,372,366 | ||||
Accumulated net investment income (loss) | $ | 95,341 | $ | (12,754 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 4,840,212 | $ | 14,520,328 | ||||
Dividends reinvested | 1,864,872 | 3,659,435 | ||||||
Cost of shares redeemed | (28,377,108 | ) | (29,871,913 | ) | ||||
(21,672,024 | ) | (11,692,150 | ) | |||||
Class IV Shares | ||||||||
Proceeds from shares issued | 765,832 | 1,984,880 | ||||||
Dividends reinvested | 548,218 | 1,015,674 | ||||||
Cost of shares redeemed | (3,514,075 | ) | (6,501,787 | ) | ||||
(2,200,025 | ) | (3,501,233 | ) | |||||
Change in net assets from capital transactions | $ | (23,872,049 | ) | $ | (15,193,383 | ) | ||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 471,858 | 1,467,988 | ||||||
Reinvested | 184,025 | 369,490 | ||||||
Redeemed | (2,791,196 | ) | (3,005,670 | ) | ||||
(2,135,313 | ) | (1,168,192 | ) | |||||
Class IV Shares | ||||||||
Issued | 74,683 | 199,890 | ||||||
Reinvested | 54,110 | 102,530 | ||||||
Redeemed | (343,207 | ) | (655,691 | ) | ||||
(214,414 | ) | (353,271 | ) | |||||
See notes to financial statements.
25
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
JP Morgan GVIT Balanced Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 10.00 | 0.22 | (0.60 | ) | (0.38 | ) | (0.22 | ) | (0.22 | ) | $ | 9.40 | (3.77% | ) | $ | 149,875 | 0.90% | 2.34% | 1.03% | 2.21% | 181.89% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 9.40 | 0.19 | (1.34 | ) | (1.15 | ) | (0.19 | ) | (0.19 | ) | $ | 8.06 | (12.31% | ) | $ | 147,289 | 0.99% | 2.22% | 1.00% | 2.21% | 297.08% | ||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.06 | 0.15 | 1.32 | 1.47 | (0.15 | ) | (0.15 | ) | $ | 9.38 | 18.41% | $ | 182,056 | 0.98% | 1.80% | (g | ) | (g | ) | 310.16% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.38 | 0.19 | 0.60 | 0.79 | (0.19 | ) | (0.19 | ) | $ | 9.98 | 8.49% | $ | 189,232 | 0.98% | 1.96% | (g | ) | (g | ) | 293.17% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 9.98 | 0.20 | 0.05 | 0.25 | (0.20 | ) | (0.20 | ) | $ | 10.03 | 2.54% | $ | 178,569 | 0.99% | 1.97% | (g | ) | (g | ) | 328.26% | |||||||||||||||||||
Six months ended June 30, 2006 (Unaudited) | $ | 10.03 | 0.11 | 0.12 | 0.23 | (0.11 | ) | (0.11 | ) | $ | 10.15 | 2.25% | (e) | $ | 159,016 | 1.01% | (f) | 2.24% | (f) | (g | ) | (g | ) | 224.38% | ||||||||||||||||
Class IV Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 8.23 | 0.11 | 1.16 | 1.27 | (0.12 | ) | (0.12 | ) | $ | 9.38 | 15.47% | (e) | $ | 50,811 | 0.91% | (f) | 1.79% | (f) | 0.96% | (f) | 1.74% | (f) | 310.16% | ||||||||||||||||
Year Ended December 31, 2004 | $ | 9.38 | 0.19 | 0.60 | 0.79 | (0.19 | ) | (0.19 | ) | $ | 9.98 | 8.54% | $ | 51,061 | 0.91% | 2.02% | 0.98% | 1.95% | 293.17% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 9.98 | 0.21 | 0.05 | 0.26 | (0.21 | ) | (0.21 | ) | $ | 10.03 | 2.62% | $ | 47,803 | 0.91% | 2.05% | 0.99% | 1.96% | 328.26% | |||||||||||||||||||||
Six months ended June 30, 2006 (Unaudited) | $ | 10.03 | 0.12 | 0.12 | 0.24 | (0.12 | ) | (0.12 | ) | $ | 10.15 | 2.30% | (e) | $ | 46,191 | 0.92% | (f) | 2.33% | (f) | 0.99% | (f) | 2.26% | (f) | 224.38% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
See notes to financial statements.
26
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the J.P. Morgan GVIT Balanced Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is
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determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
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Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(e) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(f) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(g) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(h) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in capital.
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(i) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||
$ | 220,386,437 | $ | (5,555,707 | ) | $ | 11,966,365 | $ | 6,410,658 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(j) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund. JPMorgan Investment Management, Inc. (the “subadviser”) manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, the adviser pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||
Up to $100 million | 0.75% | 0.40% | 0.35% | |||
$100 million or more | 0.70% | 0.40% | 0.30% |
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets
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exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, the cumulative potential reimbursements for the Class IV shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF would be:
Amount 2003 | Amount Fiscal Year 2004 | Amount Fiscal Year 2005 | Amount Six Months Ended June 30, 2006 | |||
$20,093 | $32,438 | $41,390 | $16,988 |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $165,981 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $482,056,243 and sales of $594,200,819.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
For the six months ended June 30, 2006, the Fund had purchases of $283,781,709 and sales of $277,753,725 of U.S. Government securities, which are included in the total purchases and sales in the sentence above.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund had underperformed its composite benchmark (60% S&P 500 Index and 40% Lehman Brothers Aggregate Bond Index) for the one-, three-, and five-year periods ended September 30, 2005. The Board further noted that the Fund’s performance ranked in the fourth quartile of the Lipper Balanced Funds category for the one-year period, and in the third quartile for the three- and five- year periods. The Board then discussed with management the steps being taken to improve the Fund’s performance, including the addition by JPMorgan of more small-cap and international exposure to the Fund’s equity weighting. The Board directed the Performance Committee to closely monitor the Fund’s future performance to assess the effectiveness of the recent steps taken and to work with the adviser, and to recommend whether further steps should be required to improve performance.
Next, the Board considered the Fund’s contractual advisory fees and breakpoints and noted the Fund’s contractual advisory fee placed it in the fourth quintile of the Fund’s Lipper-constructed Expense Group. The Board also reviewed the Fund’s total expenses which were at the median of its Lipper Expense Group. The Board and management then discussed the
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Supplemental Information (Continued)
June 30, 2006 (Unaudited)
expense cap that had been in place since the acquisition of this Fund in 2003. As current expenses are running below the cap, management proposed not to renew the expense limitation and the Board agreed. Effective May 1, 2006, the expense cap for this Fund was terminated. Finally, the Board reviewed the adviser’s profitability and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President–Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
38
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
39
Table of Contents
Gartmore GVIT Mid Cap Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
6 | Statement of Operations | |
7 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GMCG (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Mid Cap Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Mid Cap Growth Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,036.50 | $ | 4.90 | 0.97% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.99 | $ | 4.87 | 0.97% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,034.70 | $ | 6.26 | 1.24% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.65 | $ | 6.23 | 1.24% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,036.40 | $ | 4.95 | 0.98% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.94 | $ | 4.92 | 0.98% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,036.40 | $ | 4.80 | 0.95% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.09 | $ | 4.77 | 0.95% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Mid Cap Growth Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stock | 98.3% | |
Cash Equivalents | 2.5% | |
Other Investments* | 26.3% | |
Liabilities in excess of other assets** | -27.1% | |
100.0% | ||
Top Holdings*** | ||
Alliance Data Systems Corp. | 2.7% | |
L-3 Communications Holdings, Inc. | 2.5% | |
NII Holdings, Inc. | 2.4% | |
ResMed, Inc. | 2.4% | |
XTO Energy, Inc. | 2.1% | |
Marvel Technology Group Ltd. | 2.1% | |
Coach, Inc. | 1.9% | |
J.B. Hunt Transport Services, Inc. | 1.9% | |
W.R. Berkley Corp. | 1.9% | |
Penn National Gaming, Inc. | 1.8% | |
Other Assets | 78.3% | |
100.0% | ||
Top Industries | ||
Medical Products & Services | 9.3% | |
Retail | 8.4% | |
Oil & Gas | 7.9% | |
Electronics | 6.8% | |
Consumer Products | 6.8% | |
Telecommunications | 6.6% | |
Computer Software & Services | 6.6% | |
Financial Services | 5.5% | |
Consumer & Commercial Services | 5.0% | |
Semiconductors | 4.3% | |
Other Assets | 32.8% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MID CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (98.3%) | |||||
Aerospace & Defense (2.5%) | |||||
L-3 Communications Holdings, Inc. | 96,600 | $ | 7,285,572 | ||
Auction Houses & Art Dealers (1.0%) | |||||
Ritchie Brothers Auctioneers, Inc. ADR — CA | 51,860 | 2,757,915 | |||
Banks (1.3%) | |||||
East West Bancorp, Inc. (c) | 100,200 | 3,798,582 | |||
Business Services (1.2%) | |||||
Corporate Executive Board Co. (The) | 35,500 | 3,557,100 | |||
Computer Software & Services (6.6%) | |||||
F5 Networks, Inc. (b) | 40,700 | 2,176,636 | |||
Factset Research Systems, Inc. (c) | 68,950 | 3,261,335 | |||
Intuit, Inc. (b) | 49,000 | 2,959,110 | |||
Navteq Corp. (b) | 55,900 | 2,497,612 | |||
Network Appliance, Inc. (b) | 147,400 | 5,203,220 | |||
Satyam Computer Services Ltd. ADR — IN (c) | 84,400 | 2,797,016 | |||
18,894,929 | |||||
Construction (3.0%) | |||||
D.R. Horton, Inc. | 94,033 | 2,239,866 | |||
Florida Rock Industries (c) | 76,600 | 3,804,722 | |||
Pool Corp. (c) | 56,900 | 2,482,547 | |||
8,527,135 | |||||
Consumer & Commercial Services (5.0%) | |||||
Alliance Data Systems Corp. (b) | 133,500 | 7,852,470 | |||
Dun & Bradstreet Corp. (b) | 49,500 | 3,449,160 | |||
Heartland Payment Systems, Inc. (b) (c) | 109,500 | 3,052,860 | |||
14,354,490 | |||||
Consumer Products (6.8%) | |||||
Crocs, Inc. (b) (c) | 132,710 | 3,337,657 | |||
Ecolab, Inc. | 81,700 | 3,315,386 | |||
Fortune Brands, Inc. | 27,700 | 1,966,977 | |||
Gildan Activewear, Inc., Class A ADR — CA (b) | 63,900 | 3,003,300 | |||
Jarden Corp. (b) (c) | 141,950 | 4,322,377 | |||
Nutri/System, Inc. (b) (c) | 56,900 | 3,535,197 | |||
19,480,894 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Electronics (6.8%) | |||||
Diodes, Inc. (b) (c) | 83,915 | $ | 3,477,438 | ||
FLIR Systems, Inc. (b) (c) | 134,300 | 2,962,658 | |||
Jabil Circuit, Inc. | 158,900 | 4,067,840 | |||
Microchip Technology, Inc. | 154,500 | 5,183,475 | |||
Multi-Fineline Electronix, Inc. (b) (c) | 114,300 | 3,793,617 | |||
19,485,028 | |||||
Energy (1.2%) | |||||
Headwaters, Inc. (b) (c) | 135,000 | 3,450,600 | |||
Financial Services (5.5%) | |||||
Affiliated Managers Group, Inc. (b) (c) | 29,900 | 2,598,011 | |||
BlackRock, Inc. (c) | 19,600 | 2,727,732 | |||
Investors Financial Services Corp. (c) | 79,000 | 3,547,100 | |||
SEI Investments Co. | 85,600 | 4,184,128 | |||
TD Ameritrade Holding Corp. | 186,200 | 2,757,622 | |||
15,814,593 | |||||
Gaming & Leisure (4.0%) | |||||
Penn National Gaming, Inc. (b) | 134,700 | 5,223,666 | |||
Scientific Games Corp. (b) | 80,600 | 2,870,972 | |||
Shuffle Master, Inc. (b) (c) | 100,300 | 3,287,834 | |||
11,382,472 | |||||
Healthcare (3.4%) | |||||
Express Scripts, Inc. (b) | 16,300 | 1,169,362 | |||
Patterson Cos., Inc. (b) (c) | 105,500 | 3,685,115 | |||
St. Jude Medical, Inc. (b) | 155,100 | 5,028,342 | |||
9,882,819 | |||||
Industrial Services & Supplies (0.9%) | |||||
Copart, Inc. (b) (c) | 108,700 | 2,669,672 | |||
Insurance (1.9%) | |||||
W.R. Berkley Corp. | 155,500 | 5,307,215 | |||
Machinery (0.5%) | |||||
Graco, Inc. | 30,700 | 1,411,586 | |||
Medical Products & Services (9.3%) | |||||
Dade Behring Holdings, Inc. | 88,700 | 3,693,468 | |||
Fisher Scientific International, Inc. (b) | 58,300 | 4,258,815 | |||
Kinetic Concept, Inc. (b) | 72,153 | 3,185,555 |
3
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MID CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Medical Products & Services (continued) | |||||
Palomar Medical Technologies, Inc. (b) (c) | 40,200 | $ | 1,834,326 | ||
QIAGEN N.V. ADR — NL (b) (c) | 208,500 | 2,860,620 | |||
ResMed, Inc. (b) (c) | 144,600 | 6,788,969 | |||
VCA Antech, Inc. (c) (b) (c) | 131,500 | 4,198,795 | |||
26,820,548 | |||||
Oil & Gas (7.9%) | |||||
EOG Resources, Inc. | 61,800 | 4,285,212 | |||
Kinder Morgan, Inc. | 34,300 | 3,426,227 | |||
Patterson-UTI Energy, Inc. | 158,900 | 4,498,459 | |||
World Fuel Services Corp. (c) | 97,300 | 4,445,637 | |||
XTO Energy, Inc. | 136,830 | 6,057,464 | |||
22,712,999 | |||||
Pharmaceuticals (1.3%) | |||||
Barr Pharmaceuticals, Inc. (b) | 76,600 | 3,653,054 | |||
Retail (8.4%) | |||||
Abercrombie & Fitch Co. | 56,300 | 3,120,709 | |||
Bed, Bath & Beyond, Inc. (b) (c) | 96,500 | 3,200,905 | |||
Coach, Inc. (b) | 180,600 | 5,399,939 | |||
J. Crew Group, Inc. (b) | 107,690 | 2,956,091 | |||
Office Depot, Inc. (b) | 136,000 | 5,168,000 | |||
Williams-Sonoma, Inc. | 125,600 | 4,276,680 | |||
24,122,324 | |||||
Scientific & Technical Instruments (1.3%) | |||||
Waters Corp. (b) | 84,700 | 3,760,680 | |||
Security & Commodity Exchanges (1.0%) | |||||
Chicago Mercantile Exchange | 5,600 | 2,750,440 | |||
Semiconductors (4.3%) | |||||
KLA-Tencor Corp. | 7,800 | 324,246 | |||
Marvel Technology Group Ltd. (b) | 132,700 | 5,882,591 | |||
MEMC Electronic Materials, Inc. (b) | 65,200 | 2,445,000 | |||
QLogic Corp. (b) | 180,700 | 3,115,268 | |||
Tessera Technologies, Inc. (b) (c) | 17,601 | 484,028 | |||
12,251,133 | |||||
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Telecommunications (6.6%) | ||||||
Amdocs Ltd. ADR — GG (b) | 130,400 | $ | 4,772,640 | |||
Comverse Technology, Inc. (b) | 207,100 | 4,094,367 | ||||
Neustar, Inc. (b) | 89,600 | 3,024,000 | ||||
NII Holdings, Inc. (b) | 124,500 | 7,019,310 | ||||
18,910,317 | ||||||
Transportation (4.2%) | ||||||
Expeditors International of Washington, Inc. | 60,800 | 3,405,408 | ||||
J.B. Hunt Transport Services, Inc. | 216,600 | 5,395,506 | ||||
Oshkosh Truck Corp. | 66,200 | 3,145,824 | ||||
11,946,738 | ||||||
Utilities (1.3%) | ||||||
MDU Resources Group, Inc. | 102,200 | 3,741,542 | ||||
Waste Disposal (1.1%) | ||||||
Stericycle, Inc. (b) (c) | 47,200 | 3,072,720 | ||||
Total Common Stocks | 281,803,097 | |||||
CASH EQUIVALENTS (2.5%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $7,242,505) | $ | 7,239,429 | 7,239,429 | |||
Total Cash Equivalents | 7,239,429 | |||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (26.3%) | ||||||
Pool of short-term securities for Gartmore Mutual Funds — Note 2 (Securities Lending) | 75,402,140 | 75,402,140 | ||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 75,402,140 | |||||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MID CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
Total Investments (Cost $324,536,190) (a) — 127.1% | $ | 364,444,666 | ||||
Liabilities in excess of other assets — (27.1%) | (77,883,796 | ) | ||||
NET ASSETS — 100.0% | $ | 286,560,870 | ||||
(a) | See notes to financial statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Represents non-income producing securities. |
(c) | All or part of this security was on loan as of June 30, 2006. |
ADR | American Depositary Receipt |
CA | Canada |
GG | Guernsey |
IN | India |
NL | Netherlands |
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MID CAP GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $317,296,762) | $ | 357,205,238 | ||
Repurchase agreements, at cost and value | 7,239,428 | |||
Total Investments | 364,444,666 | |||
Interest and dividends receivable | 126,609 | |||
Receivable for capital shares issued | 504,477 | |||
Receivable for investments sold | 1,617,459 | |||
Prepaid expenses and other assets | 2,233 | |||
Total Assets | 366,695,444 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 15,775 | |||
Payable for investments purchased | 4,484,029 | |||
Payable for return of collateral received for securities on loan | 75,402,140 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 168,520 | |||
Fund administration and transfer agent fees | 18,891 | |||
Distribution fees | 11,746 | |||
Administrative servicing fees | 18,108 | |||
Other | 15,365 | |||
Total Liabilities | 80,134,574 | |||
Net Assets | $ | 286,560,870 | ||
Represented by: | ||||
Capital | $ | 352,147,401 | ||
Accumulated net investment income (loss) | 269,647 | |||
Accumulated net realized gains (losses) from investments | (105,764,654 | ) | ||
Net unrealized appreciation (depreciation) on investments | 39,908,476 | |||
Net Assets | $ | 286,560,870 | ||
Net Assets: | ||||
Class I Shares | $ | 129,175,267 | ||
Class II Shares | 63,139,878 | |||
Class III Shares | 1,368,528 | |||
Class IV Shares | 92,877,197 | |||
Total | $ | 286,560,870 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 4,591,006 | |||
Class II Shares | 2,254,735 | |||
Class III Shares | 48,582 | |||
Class IV Shares | 3,297,005 | |||
Total | 10,191,328 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 28.14 | ||
Class II Shares | $ | 28.00 | ||
Class III Shares | $ | 28.17 | ||
Class IV Shares | $ | 28.17 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 183,454 | ||
Dividend income | 1,325,015 | |||
Income from securities lending | 167,443 | |||
Total Income | 1,675,912 | |||
Expenses: | ||||
Investment advisory fees | 1,030,806 | |||
Fund administration and transfer agent fees | 97,530 | |||
Distribution fees Class II Shares | 53,515 | |||
Administrative servicing fees | 94,468 | |||
Administrative servicing fees | 33,139 | |||
Administrative servicing fees | 1,094 | |||
Administrative servicing fees | 66,312 | |||
Trustee fees | 4,374 | |||
Other | 35,027 | |||
Total expenses before reimbursed expenses or earnings credit | 1,416,265 | |||
Expenses reimbursed | (9,983 | ) | ||
Earnings credit (Note 6) | (17 | ) | ||
Total Expenses | 1,406,265 | |||
Net Investment Income (Loss) | 269,647 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 24,014,647 | |||
Net change in unrealized appreciation/depreciation on investments | (15,830,991 | ) | ||
Net realized/unrealized gains (losses) on investments | 8,183,656 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 8,453,303 | ||
See notes to financial statements.
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT MID CAP GROWTH FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 269,647 | $ | (1,122,131 | ) | |||
Net realized gains (losses) on investment transactions | 24,014,647 | 21,483,712 | ||||||
Net change in unrealized appreciation/depreciation on investments | (15,830,991 | ) | 1,009,545 | |||||
Change in net assets resulting from operations | 8,453,303 | 21,371,126 | ||||||
Change in net assets from capital transactions | 20,539,767 | (24,426,694 | ) | |||||
Change in net assets | 28,993,070 | (3,055,568 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 257,567,800 | 260,623,368 | ||||||
End of period | $ | 286,560,870 | $ | 257,567,800 | ||||
Accumulated net investment income (loss) | $ | 269,647 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 12,602,747 | $ | 29,092,365 | ||||
Cost of shares redeemed | (22,230,549 | ) | (55,193,118 | ) | ||||
(9,627,802 | ) | (26,100,753 | ) | |||||
Class II Shares | ||||||||
Proceeds from shares issued | 37,215,372 | 14,803,430 | ||||||
Cost of shares redeemed | (975,038 | ) | (3,915,587 | ) | ||||
36,240,334 | 10,887,843 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 154,678 | 691,702 | ||||||
Cost of shares redeemed | (222,298 | ) | (590,368 | ) | ||||
(67,620 | ) | 101,334 | ||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 2,141,269 | 4,534,590 | ||||||
Cost of shares redeemed | (8,146,414 | ) | (13,849,708 | ) | ||||
(6,005,145 | ) | (9,315,118 | ) | |||||
Change in net assets from capital transactions | $ | 20,539,767 | $ | (24,426,694 | ) | |||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 433,623 | 1,144,146 | ||||||
Redeemed | (781,545 | ) | (2,240,933 | ) | ||||
(347,922 | ) | (1,096,787 | ) | |||||
Class II Shares | ||||||||
Issued | 1,297,028 | 574,663 | ||||||
Redeemed | (33,700 | ) | (160,673 | ) | ||||
1,263,328 | 413,990 | |||||||
Class III Shares | ||||||||
Issued | 5,251 | 27,362 | ||||||
Redeemed | (7,869 | ) | (24,190 | ) | ||||
(2,618 | ) | 3,172 | ||||||
Class IV Shares | ||||||||
Issued | 74,656 | 179,589 | ||||||
Redeemed | (282,312 | ) | (547,483 | ) | ||||
(207,656 | ) | (367,894 | ) | |||||
See notes to financial statements.
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Mid Cap Growth Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(c) | $ | 16.53 | (0.07 | ) | 4.99 | 4.92 | — | — | — | $ | 21.45 | 29.76% | (e) | $ | 137,837 | 0.98% | (f) | (0.49% | )(f) | (g | ) | (g | ) | 109.73% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.45 | (0.11 | ) | 3.40 | 3.29 | — | — | — | $ | 24.74 | 15.34% | $ | 149,324 | 0.98% | (0.51% | ) | (g | ) | (g | ) | 90.14% | ||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 24.74 | (0.13 | ) | 2.54 | 2.41 | — | — | — | $ | 27.15 | 9.74% | $ | 134,094 | 1.01% | (0.48% | ) | (g | ) | (g | ) | 56.01% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 27.15 | 0.04 | 0.95 | 0.99 | — | — | — | $ | 28.14 | 3.65% | (e) | $ | 129,175 | 0.97% | (f) | 0.24% | (f) | (g | ) | (g | ) | 40.06% | |||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(c) | $ | 16.77 | (0.03 | ) | 4.69 | 4.66 | — | — | — | $ | 21.43 | 27.79% | (e) | $ | 2,388 | 1.17% | (f) | (0.64% | )(f) | (g | ) | (g | ) | 109.73% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.43 | (0.09 | ) | 3.35 | 3.26 | — | — | — | $ | 24.69 | 15.21% | $ | 14,256 | 1.08% | (0.61% | ) | (g | ) | (g | ) | 90.14% | ||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 24.69 | (0.11 | ) | 2.48 | 2.37 | — | — | — | $ | 27.06 | 9.60% | $ | 26,825 | 1.16% | (0.63% | ) | (g | ) | (g | ) | 56.01% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 27.06 | (0.01 | ) | 0.95 | 0.94 | — | — | — | $ | 28.00 | 3.47% | (e) | $ | 63,140 | 1.24% | (f) | (0.15% | )(f) | (g | ) | (g | ) | 40.06% | ||||||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(c) | $ | 16.53 | (0.03 | ) | 4.98 | 4.95 | — | — | — | $ | 21.48 | 29.95% | (e) | $ | 628 | 0.98% | (f) | (0.48% | )(f) | (g | ) | (g | ) | 109.73% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.48 | (0.10 | ) | 3.39 | 3.29 | — | — | — | $ | 24.77 | 15.32% | $ | 1,190 | 0.98% | (0.50% | ) | (g | ) | (g | ) | 90.14% | ||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 24.77 | (0.11 | ) | 2.52 | 2.41 | — | — | — | $ | 27.18 | 9.73% | $ | 1,392 | 1.01% | (0.48% | ) | (g | ) | (g | ) | 56.01% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 27.18 | 0.03 | 0.96 | 0.99 | — | — | — | $ | 28.17 | 3.64% | (e) | $ | 1,369 | 0.98% | (f) | 0.23% | (f) | (g | ) | (g | ) | 40.06% | |||||||||||||||||||||
Class IV Shares(d) | ||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001 | $ | 27.71 | (0.07 | ) | (1.00 | ) | (1.07 | ) | (0.18 | ) | (6.45 | ) | (6.63 | ) | $ | 20.01 | (3.36% | ) | $ | 98,214 | 0.92% | (0.37% | ) | 1.01% | (0.46% | ) | 135.00% | |||||||||||||||||
Year Ended December 31, 2002 | $ | 20.01 | (0.11 | ) | (4.35 | ) | (4.46 | ) | — | (0.09 | ) | (0.09 | ) | $ | 15.46 | (22.38% | ) | $ | 70,669 | 0.95% | (0.61% | ) | 1.00% | (0.66% | ) | 64.00% | ||||||||||||||||||
Year Ended December 31, 2003 | $ | 15.46 | (0.10 | ) | 6.10 | 6.00 | — | — | — | $ | 21.46 | 38.81% | $ | 89,413 | 0.95% | (0.51% | ) | 1.02% | (0.58% | ) | 109.73% | |||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 21.46 | (0.11 | ) | 3.40 | 3.29 | — | — | — | $ | 24.75 | 15.33% | $ | 95,854 | 0.95% | (0.48% | ) | 0.98% | (0.51% | ) | 90.14% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 24.75 | (0.11 | ) | 2.54 | 2.43 | — | — | — | $ | 27.18 | 9.82% | $ | 95,257 | 0.95% | (0.42% | ) | 1.01% | (0.48% | ) | 56.01% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 27.18 | 0.04 | 0.95 | 0.99 | — | — | — | $ | 28.17 | 3.64% | (e) | $ | 92,877 | 0.95% | (f) | 0.27% | (f) | 0.97% | (f) | 0.25% | (f) | 40.06% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(d) | The Gartmore Mid Cap Growth Fund retained the financial history of the Market Street Mid Cap Growth Fund and the existing shares of the Fund were designated Class IV shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Mid Cap Growth Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing counties.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(f) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(g) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Commercial Paper | Aegis Finance LLC | $ | 6,968,234 | 5.29 | % | 07/21/06 | ||||
Funding Agreement — GIC | Protecetive Life Insurance Company | 10,000,000 | 5.25 | % | 07/31/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 8,500,000 | 5.41 | % | 07/03/06 | |||||
Medium Term Note — Floating | American Express Credit Corp. | 1,000,000 | 5.17 | % | 07/12/06 | |||||
Medium Term Note — Floating | Deutsche Bank Financial | 3,000,000 | 5.44 | % | 07/03/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 2,000,114 | 5.27 | % | 09/08/06 | |||||
Medium Term Note — Floating | ISLANDSBANKI HF Corp. | 5,000,000 | 5.34 | % | 07/24/06 | |||||
Medium Term Note — Floating | Northern Rock PLC | 14,000,000 | 5.35 | % | 09/11/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 1,999,414 | 5.39 | % | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 22,934,378 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | |
$ 75,008,074 | $75,402,140 |
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$324,609,967 | $50,283,125 | $(10,448,426) | $39,834,699 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GMF”). GMF is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
Up to $200 million | 0.75% | |
$200 million or more | 0.70% |
Effective May 1, 2006, GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) limiting operating expenses from exceeding 0.95% for Class IV Shares until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, the cumulative potential reimbursements for the Class IV shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF would be:
Amount Fiscal Year | Amount Fiscal Year | Amount Fiscal Year | Amount Six months | |||
$56,667 | $26,956 | $54,418 | $9,983 |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of the Class I, Class II, and Class III shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $210,407 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had no contributions to capital due to collection of redemption fees.
14
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $131,693,339 and sales of $109,958,243.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
15
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the Russell Mid Cap Growth Index, for the one- and three-year periods ended September 30, 2005 while significantly outperforming its benchmark for the five-year period. The Board also noted that the Fund ranked in the top half of the Lipper Mid-Cap Growth Funds category over the one- and five-year periods and outperformed the median for this Lipper category by 84 basis points over the one-year period. The Board then discussed with management the Fund’s loss of assets over the past year and future plans for distributing the Fund.
Next, the Board reviewed the Fund’s contractual advisory fee and breakpoints noting that the contractual advisory fee placed the Fund in the second quintile of its Lipper-constructed Expense Group and the Fund’s total expenses placed it below the median for the Fund’s Lipper Expense Group. The Board also noted that the adviser manages institutional accounts in a similar manner to the Fund and determined that while the Fund’s management fee was higher, this was understandable given the more-extensive regulations and regulatory restrictions to which mutual funds are subject. The Board then reviewed the adviser’s profitability in light of this information and concluded that it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Table of Contents
.
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President-Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
21
Table of Contents
Van Kampen GVIT Comstock Value Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
6 | Statement of Operations | |
7 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-VKGC (8/06)
Table of Contents
Shareholder
Expense Example | Van Kampen GVIT Comstock Value Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, January 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Van Kampen GVIT Comstock Value Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,038.00 | $ | 4.70 | 0.93% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.19 | $ | 4.67 | 0.93% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,035.90 | $ | 6.46 | 1.28% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.45 | $ | 6.43 | 1.28% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,038.10 | $ | 4.55 | 0.90% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.34 | $ | 4.52 | 0.90% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Van Kampen GVIT Comstock Value Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stock | 92.3% | |
Cash Equivalents | 9.2% | |
Other Investments* | 10.8% | |
Liabilities in excess of other assets** | -12.3% | |
100.0% | ||
Top Holdings*** | ||
AT&T, Inc. | 4.2% | |
GlaxoSmithKline PLC ADR - GB | 4.0% | |
International Paper Co. | 3.8% | |
Verizon Communications, Inc. | 3.7% | |
Freddie Mac | 3.5% | |
Bristol-Myers Squibb Co. | 3.4% | |
Bank of America Corp. | 3.3% | |
Citigroup, Inc. | 3.2% | |
Alcoa, Inc. | 2.5% | |
Wells Fargo & Co. | 2.4% | |
Other Assets | 66.0% | |
100.0% | ||
Top Industries | ||
Pharmaceuticals | 15.6% | |
Banks | 14.7% | |
Telecommunications | 10.3% | |
Broadcast Media & Cable Television | 8.2% | |
Insurance | 5.4% | |
Food & Related | 5.3% | |
Financial Services | 5.0% | |
Paper & Forest Products | 3.8% | |
Chemicals | 3.2% | |
Computer Software & Services | 2.5% | |
Other Assets | 26.0% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT COMSTOCK VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or | Value | ||||
COMMON STOCKS (92.3%) | |||||
Airlines (0.5%) | |||||
Southwest Airlines | 92,300 | $ | 1,510,951 | ||
Banks (14.7%) | |||||
Bank of America Corp. | 192,834 | 9,275,315 | |||
Bank of New York Co., Inc. | 84,000 | 2,704,800 | |||
Barclays PLC ADR — GB (c) | 9,900 | 453,222 | |||
Citigroup, Inc. | 190,500 | 9,189,720 | |||
J.P. Morgan Chase & Co. | 63,400 | 2,662,800 | |||
PNC Bank Corp. | 45,200 | 3,171,684 | |||
Suntrust Banks, Inc. | 15,400 | 1,174,404 | |||
U.S. Bancorp | 33,500 | 1,034,480 | |||
Wachovia Corp. | 94,805 | 5,127,054 | |||
Wells Fargo & Co. | 102,900 | 6,902,532 | |||
41,696,011 | |||||
Broadcast Media & Cable Television (8.2%) | |||||
CBS Corp., Class B | 26,400 | 714,120 | |||
Clear Channel Communications, Inc. | 204,800 | 6,338,560 | |||
Comcast Corp., Class A (b) | 147,600 | 4,832,424 | |||
Liberty Media Holding Corp. — Capital, Series A (b) | 20,015 | 1,676,657 | |||
News Corp., Class B (c) | 107,000 | 2,159,260 | |||
Time Warner, Inc. | 260,500 | 4,506,650 | |||
Viacom, Inc., Class A (b) | 1,800 | 64,710 | |||
Viacom, Inc., Class B (b) | 83,500 | 2,992,640 | |||
23,285,021 | |||||
Chemicals (3.2%) | |||||
Dow Chemical Co. | 22,700 | 885,981 | |||
E.I. du Pont de Nemours & Co. | 154,600 | 6,431,360 | |||
Rohm & Haas Co. | 37,100 | 1,859,452 | |||
9,176,793 | |||||
Computer Hardware (1.6%) | |||||
Dell, Inc. (b) | 107,000 | 2,611,870 | |||
Hewlett-Packard Co. | 27,100 | 858,528 | |||
International Business Machines Corp. | 14,800 | 1,136,936 | |||
4,607,334 | |||||
Computer Software & Services (2.5%) | |||||
Affiliated Computer Services, Inc., Class A (b) (c) | 13,452 | 694,258 | |||
Cisco Systems, Inc. (b) | 80,400 | 1,570,212 | |||
First Data Corp. | 31,700 | 1,427,768 |
Shares or | Value | ||||
COMMON STOCKS (continued) | |||||
Computer Software & Services (continued) | |||||
Liberty Media Holding Corp. — Interactive, Class A (b) | 99,975 | $ | 1,725,568 | ||
McAfee, Inc. (b) (c) | 28,200 | 684,414 | |||
Microsoft Corp. | 48,200 | 1,123,060 | |||
7,225,280 | |||||
Consulting Services (0.1%) | |||||
Accenture Ltd., Class A | 10,200 | 288,864 | |||
Consumer Products (1.7%) | |||||
Kimberly-Clark Corp. | 79,900 | 4,929,830 | |||
Electronics (0.3%) | |||||
Cognex Corp. (c) | 15,300 | 398,259 | |||
Credence Systems Corp. (b) | 32,000 | 112,000 | |||
Flextronics International Ltd. ADR — SG (b) (c) | 36,800 | 390,816 | |||
901,075 | |||||
Entertainment (1.6%) | |||||
Walt Disney Co. (The) | 154,800 | 4,644,000 | |||
Financial Services (5.0%) | |||||
AMBAC Financial, Inc. | 11,600 | 940,760 | |||
Fannie Mae | 19,750 | 949,975 | |||
Freddie Mac | 175,580 | 10,009,816 | |||
Merrill Lynch & Co., Inc. | 34,300 | 2,385,908 | |||
14,286,459 | |||||
Food & Related (5.3%) | |||||
Anheuser-Busch Cos., Inc. | 33,950 | 1,547,781 | |||
Cadbury Schweppes PLC ADR — GB | 3,200 | 124,224 | |||
Coca-Cola Co. | 105,700 | 4,547,214 | |||
Kraft Foods, Inc. (c) | 115,200 | 3,559,680 | |||
Unilever NV ADR — NL | 235,500 | 5,310,525 | |||
15,089,424 | |||||
Healthcare (1.4%) | |||||
Boston Scientific Corp. (b) | 109,700 | 1,847,348 | |||
Cardinal Health, Inc. (c) | 33,900 | 2,180,787 | |||
4,028,135 | |||||
Industrial Goods & Services (0.5%) | |||||
General Electric Co. | 43,900 | 1,446,944 | |||
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT COMSTOCK VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or | Value | ||||
COMMON STOCKS (continued) | |||||
Insurance (5.4%) | |||||
AFLAC, Inc. | 23,100 | $ | 1,070,685 | ||
American International Group, Inc. | 33,300 | 1,966,365 | |||
Berkshire Hathaway, Inc., Class B (b) (c) | 470 | 1,430,210 | |||
Chubb Corp. (The) | 72,280 | 3,606,772 | |||
Genworth Financial, Inc. | 27,300 | 951,132 | |||
Hartford Financial Services Group, Inc. (The) | 4,200 | 355,320 | |||
MetLife, Inc. (c) | 32,700 | 1,674,567 | |||
St. Paul Travelers Cos., Inc. | 52,400 | 2,335,992 | |||
Torchmark Corp. (c) | 32,900 | 1,997,688 | |||
15,388,731 | |||||
Metals & Mining (2.5%) | |||||
Alcoa, Inc. | 219,700 | 7,109,492 | |||
Oil & Gas (0.8%) | |||||
Total SA ADR — FR (c) | 33,500 | 2,194,920 | |||
Paper & Forest Products (3.8%) | |||||
International Paper Co. (c) | 332,836 | 10,750,603 | |||
Pharmaceuticals (15.6%) | |||||
Abbott Laboratories | 67,500 | 2,943,675 | |||
Bristol-Myers Squibb Co. | 375,200 | 9,702,671 | |||
Eli Lilly & Co. | 10,600 | 585,862 | |||
GlaxoSmithKline PLC ADR — GB (c) | 205,500 | 11,466,899 | |||
Pfizer, Inc. | 166,900 | 3,917,143 | |||
Roche Holding AG ADR — CH | 52,500 | 4,330,715 | |||
Sanofi-Aventis ADR — FR (c) | 62,700 | 3,053,490 | |||
Schering-Plough Corp. | 221,100 | 4,207,533 | |||
Wyeth | 92,170 | 4,093,270 | |||
44,301,258 | |||||
Printing & Publishing (0.4%) | |||||
Gannett Co. | 19,100 | 1,068,263 | |||
Retail (2.4%) | |||||
Federated Department Stores, Inc. | 30,670 | 1,122,522 | |||
Wal-Mart Stores, Inc. (c) | 120,300 | 5,794,851 | |||
6,917,373 | |||||
Shares or | Value | |||||
COMMON STOCKS (continued) | ||||||
Semiconductors (1.6%) | ||||||
Intel Corp. | 171,200 | $ | 3,244,240 | |||
KLA-Tencor Corp. | 28,400 | 1,180,588 | ||||
Novellus Systems, Inc. (b) | 3,800 | 93,860 | ||||
4,518,688 | ||||||
Telecommunications (10.3%) | ||||||
AT&T, Inc. (c) | 430,400 | 12,003,856 | ||||
Embarq Corp. (b) | 14,085 | 577,344 | ||||
Sprint Corp. (c) | 297,900 | 5,955,021 | ||||
Verizon Communications, Inc. | 319,010 | 10,683,645 | ||||
29,219,866 | ||||||
Telecommunications Equipment (0.3%) | ||||||
Ericsson (LM) Tel-SP ADR — SE (c) | 11,000 | 363,440 | ||||
Nokia Corp. ADR — FI | 23,100 | 468,006 | ||||
831,446 | ||||||
Tobacco (1.6%) | ||||||
Altria Group, Inc. | 63,850 | 4,688,506 | ||||
Utilities (1.0%) | ||||||
American Electric Power Co., Inc. | 46,040 | 1,576,870 | ||||
FirstEnergy Corp. | 19,900 | 1,078,779 | ||||
FPL Group, Inc. (c) | 7,400 | 306,212 | ||||
2,961,861 | ||||||
Total Common Stocks | 263,067,128 | |||||
CASH EQUIVALENTS (9.2%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $26,323,405) | $ | 26,312,224 | 26,312,224 | |||
Total Cash Equivalents | 26,312,224 | |||||
4
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT COMSTOCK VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (10.8%) | |||||||
Pool of short-term securities for Gartmore Mutual Funds — Note 2 (Securities Lending) | $ | 30,838,631 | $ | 30,838,631 | |||
Total Short-Term Securities Held as Collateral for Securities on Loan | 30,838,631 | ||||||
Total Investments (Cost $303,984,357) (a) — 112.3% | 320,217,983 | ||||||
Liabilities in excess of other assets — (12.3%) | (35,095,362 | ) | |||||
NET ASSETS — 100.0% | $ | 285,122,621 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security |
(c) | All or part of the security was on loan as of June 30, 2006. |
ADR | American Depository Receipt |
CH | Switzerland |
FI | Finland |
FR | France |
GB | United Kingdom |
NL | Netherlands |
SE | Sweden |
SG | Singapore |
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT COMSTOCK VALUE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $277,672,133) | $ | 293,905,759 | ||
Repurchase agreements, at cost and value | 26,312,224 | |||
Total Investments | 320,217,983 | |||
Interest and dividends receivable | 493,292 | |||
Receivable for capital shares issued | 586,386 | |||
Receivable for investments sold | 1,478,365 | |||
Prepaid expenses and other assets | 2,980 | |||
Total Assets | 322,779,006 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 149,754 | |||
Payable for investments purchased | 6,436,338 | |||
Payable for return of collateral received for securities on loan | 30,838,631 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 151,372 | |||
Fund administration and transfer agent fees | 17,257 | |||
Distribution fees | 23,856 | |||
Administrative servicing fees | 30,966 | |||
Other | 8,211 | |||
Total Liabilities | 37,656,385 | |||
Net Assets | $ | 285,122,621 | ||
Represented by: | ||||
Capital | $ | 269,538,908 | ||
Accumulated net investment income (loss) | 54,583 | |||
Accumulated net realized gains (losses) from investments | (704,496 | ) | ||
Net unrealized appreciation (depreciation) on investments | 16,233,626 | |||
Net Assets | $ | 285,122,621 | ||
Net Assets: | ||||
Class I Shares | $ | 104,666,599 | ||
Class II Shares | 125,963,244 | |||
Class IV Shares | 54,492,778 | |||
Total | $ | 285,122,621 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 9,088,559 | |||
Class II Shares | 10,972,173 | |||
Class IV Shares | 4,731,918 | |||
Total | 24,792,650 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 11.52 | ||
Class II Shares | $ | 11.48 | ||
Class IV Shares | $ | 11.52 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 520,885 | ||
Dividend income | 2,933,743 | |||
Income from securities lending | 19,698 | |||
Total Income | 3,474,326 | |||
Expenses: | ||||
Investment advisory fees | 834,170 | |||
Fund administration and transfer agent fees | 85,223 | |||
Distribution fees Class II Shares | 108,619 | |||
Administrative servicing fees Class I Shares | 76,619 | |||
Administrative servicing fees Class II Shares | 108,619 | |||
Administrative servicing fees Class IV Shares | 32,905 | |||
Trustee fees | 4,058 | |||
Other | 32,505 | |||
Total expenses before earnings credit | 1,282,718 | |||
Earnings credit (Note 5) | (1,350 | ) | ||
Total Expenses | 1,281,368 | |||
Net Investment Income (Loss) | 2,192,958 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 3,689,083 | |||
Net change in unrealized appreciation/depreciation on investments | 2,665,374 | |||
Net realized/unrealized gains (losses) on investments | 6,354,457 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 8,547,415 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT COMSTOCK VALUE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 2,192,958 | $ | 3,244,786 | ||||
Net realized gains (losses) on investment transactions | 3,689,083 | 21,718,127 | ||||||
Net change in unrealized appreciation/depreciation on investments | 2,665,374 | (16,307,605 | ) | |||||
Change in net assets resulting from operations | 8,547,415 | 8,655,308 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (910,211 | ) | (1,711,326 | ) | ||||
Net realized gains on investments | (2,978,456 | ) | (2,606,630 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (773,911 | ) | (622,244 | ) | ||||
Net realized gains on investments | (3,480,871 | ) | (1,511,572 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (486,777 | ) | (888,749 | ) | ||||
Net realized gain on investment | (1,553,879 | ) | (1,389,338 | ) | ||||
Change in net assets from shareholder distributions | (10,184,105 | ) | (8,729,859 | ) | ||||
Change in net assets from capital transactions | 67,280,160 | 17,356,343 | ||||||
Change in net assets | 65,643,470 | 17,281,792 | ||||||
Net Assets: | ||||||||
Beginning of period | 219,479,151 | 202,197,359 | ||||||
End of period | $ | 285,122,621 | $ | 219,479,151 | ||||
Accumulated net investment income (loss) | $ | 54,583 | $ | 32,524 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 12,388,406 | $ | 18,628,732 | ||||
Dividends reinvested | 3,888,664 | 4,317,954 | ||||||
Cost of shares redeemed | (15,183,469 | ) | (31,519,127 | ) | ||||
1,093,601 | (8,572,441 | ) | ||||||
Class II Shares | ||||||||
Proceeds from shares issued | 62,813,504 | 27,870,088 | ||||||
Dividends reinvested | 4,254,778 | 2,133,816 | ||||||
Cost of shares redeemed | (69,927 | ) | (3,673,723 | ) | ||||
66,998,355 | 26,330,181 | |||||||
Class IV Shares | ||||||||
Proceeds from shares issued | 1,525,516 | 4,616,712 | ||||||
Dividends reinvested | 2,040,655 | 2,278,086 | ||||||
Cost of shares redeemed | (4,377,967 | ) | (7,296,195 | ) | ||||
(811,796 | ) | (401,397 | ) | |||||
Change in net assets from capital transactions | $ | 67,280,160 | $ | 17,356,343 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 1,046,393 | 1,635,483 | ||||||
Reinvested | 340,870 | 375,367 | ||||||
Redeemed | (1,279,712 | ) | (2,765,203 | ) | ||||
107,551 | (754,353 | ) | ||||||
Class II Shares | ||||||||
Issued | 5,332,951 | 2,424,630 | ||||||
Reinvested | 374,944 | 185,478 | ||||||
Redeemed | (5,749 | ) | (323,560 | ) | ||||
5,702,146 | 2,286,548 | |||||||
Class IV Shares | ||||||||
Issued | 129,383 | 403,069 | ||||||
Reinvested | 178,829 | 198,000 | ||||||
Redeemed | (371,653 | ) | (637,238 | ) | ||||
(63,441 | ) | (36,169 | ) | |||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Van Kampen GVIT Comstock Value Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 11.99 | 0.15 | (1.61 | ) | (1.46 | ) | (0.15 | ) | — | (0.15 | ) | $ | 10.38 | (12.15% | ) | $ | 52,848 | 0.95% | 1.41% | 1.09% | 1.27% | 127.03% | ||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.38 | 0.12 | (2.72 | ) | (2.60 | ) | (0.12 | ) | — | (0.12 | ) | $ | 7.66 | (25.14% | ) | $ | 39,424 | 1.11% | 1.30% | 1.11% | 1.30% | 245.24% | ||||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.66 | 0.11 | 2.28 | 2.39 | (0.11 | ) | — | (0.11 | ) | $ | 9.94 | 31.43% | $ | 62,517 | 0.99% | 1.37% | (h | ) | (h | ) | 71.31% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.94 | 0.14 | 1.59 | 1.73 | (0.14 | ) | — | (0.14 | ) | $ | 11.53 | 17.50% | $ | 112,202 | 0.94% | 1.41% | (h | ) | (h | ) | 31.95% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.53 | 0.20 | 0.29 | 0.49 | (0.19 | ) | (0.30 | ) | (0.49 | ) | $ | 11.53 | 4.25% | $ | 103,565 | 0.94% | 1.65% | (h | ) | (h | ) | 33.13% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.53 | 0.11 | 0.32 | 0.43 | (0.10 | ) | (0.34 | ) | (0.44 | ) | $ | 11.52 | 3.80% | (f) | $ | 104,667 | 0.93% | (g) | 1.91% | (g) | (h | ) | (h | ) | 8.95% | |||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 7.47 | 0.08 | 2.47 | 2.55 | (0.09 | ) | — | (0.09 | ) | $ | 9.93 | 34.20% | (f) | $ | 6,092 | 1.20% | (g) | 1.27% | (g) | 1.31% | (g) | 1.16% | (g) | 71.31% | ||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.93 | 0.11 | 1.58 | 1.69 | (0.12 | ) | — | (0.12 | ) | $ | 11.50 | 17.08% | $ | 34,312 | 1.20% | 1.20% | 1.28% | 1.11% | 31.95% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.50 | 0.14 | 0.31 | 0.45 | (0.15 | ) | (0.30 | ) | (0.45 | ) | $ | 11.50 | 3.95% | $ | 60,617 | 1.28% | 1.31% | 1.31% | 1.29% | 33.13% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.50 | 0.08 | 0.33 | 0.41 | (0.09 | ) | (0.34 | ) | (0.43 | ) | $ | 11.48 | 3.59% | (f) | $ | 125,963 | 1.28% | (g) | 1.54% | (g) | (h | ) | (h | ) | 8.95% | |||||||||||||||||
Class IV Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(e) | $ | 7.76 | 0.09 | 2.18 | 2.27 | (0.09 | ) | — | (0.09 | ) | $ | 9.94 | 29.38% | (f) | $ | 48,070 | 0.94% | (g) | 1.50% | (g) | (h | ) | (h | ) | 71.31% | ||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.94 | 0.15 | 1.57 | 1.72 | (0.14 | ) | — | (0.14 | ) | $ | 11.52 | 17.42% | $ | 55,683 | 0.91% | 1.42% | (h | ) | (h | ) | 31.95% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.52 | 0.19 | 0.31 | 0.50 | (0.19 | ) | (0.30 | ) | (0.49 | ) | $ | 11.53 | 4.36% | $ | 55,297 | 0.93% | 1.67% | (h | ) | (h | ) | 33.13% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.53 | 0.12 | 0.32 | 0.44 | (0.11 | ) | (0.34 | ) | (0.45 | ) | $ | 11.52 | 3.81% | (f) | $ | 54,493 | 0.90% | (g) | 1.93% | (g) | (h | ) | (h | ) | 8.95% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from March 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See notes to financial statements.
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Van Kampen GVIT Comstock Value Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by
9
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(e) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(f) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(g) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 10,200,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 3,484,117 | 5.29% | 07/21/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 6,000,000 | 5.41% | 07/03/06 | |||||
Medium Term Note — Floating | Macquarie Bank Ltd. | 4,999,541 | 5.30% | 07/21/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 6,154,972 | 5.32% | 07/03/06 |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | |
$30,572,115 | $30,838,631 |
(h) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(i) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$305,478,086 | $23,375,872 | $(8,635,975) | $14,739,897 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(j) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such a rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GMF advises. Van Kampen Asset Management, Inc. (the “subadviser”), manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||
Up to $50 million | 0.80% | 0.45% | 0.35% | |||
Next $200 million | 0.65% | 0.35% | 0.30% | |||
Next $250 million | 0.60% | 0.35% | 0.25% | |||
$500 million or more | 0.55% | 0.35% | 0.20% |
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, the cumulative potential reimbursements for the Class IV shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF would be:
Amount Fiscal Year 2003 | Amount Fiscal Year 2004 | Amount Fiscal Year 2005 | Amount Six months ended June 30, 2006 | |||
$1,369 | $14,072 | $10,247 | $0 |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I and Class II shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $220,820 in Administrative Services Fees from the Fund.
For the six months ended June 30, 2006, the advisers or affiliates of the advisers directly held 4% of the shares outstanding of the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $72,954,395 and sales of $20,340,310.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensation balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the S&P 500 Index, for the one- and five-year periods ended September 30, 2005 while outperforming its benchmark for the three-year period. During those same periods, the Fund ranked in the fourth quartile of the Lipper Equity Funds category for the one- and five-year periods, and in the first quartile for the three-year period. The Board then discussed with management the Funds’ volatile performance and the actions management had recently taken to address the Fund’s underperformance and volatility. Management explained that the Fund employs a “deep value” style and deep value funds are generally very volatile. Moreover, the Board noted that some of the funds included in the Fund’s Lipper Equity Income Funds peer category, are not “deep value” funds and, consequently, the Fund’s performance should reasonably be expected to be more volatile than the performance of those funds. The Board considered that, in management’s view, the Fund’s performance has performed in line with management’s expectations for a deep value Fund.
The Board reviewed and considered the contractual advisory fee and breakpoints for the Fund and noted that the contractual advisory fee (including the subadvisory fee) placed the Fund in the third quintile of the Fund’s Lipper-constructed Expense
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Group. The Trustees considered the total expenses for the Fund and noted that the expense ratio placed the Fund in the second quintile of the Fund’s Lipper Expense Group. The Board and management then discussed the expense cap that had been in place since the acquisition of this Fund in 2003. As current expenses are running below the cap, management proposed not to renew the expense limitation and the Board agreed. Effective May 1, 2006, the expense cap for this Fund was terminated. The Board reviewed the adviser’s profitability, giving consideration to the expiring expense cap, and concluded that the adviser’s profitability was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Federated GVIT High Income Bond Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
13 | Statement of Assets and Liabilities | |
13 | Statement of Operations | |
14 | Statements of Changes in Net Assets | |
15 | Financial Highlights | |
16 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-FGHIB (8/06)
Table of Contents
Shareholder
Expense Example | Federated GVIT High Income Bond Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Federated GVIT High Income Bond Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,028.10 | $ | 4.63 | 0.92% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.24 | $ | 4.62 | 0.92% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,027.90 | $ | 4.88 | 0.97% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,023.13 | $ | 4.87 | 0.97% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Federated GVIT High Income Bond Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Corporate Bonds | 95.7% | |
Cash Equivalents | 2.5% | |
Preferred Stocks | 0.4% | |
Common Stocks | 0.3% | |
Warrants | 0.1% | |
Other assets in excess of liabilities | 1.0% | |
100.0% | ||
Top Holdings* | ||
Qwest Corp., 8.88%, 03/15/12 | 1.6% | |
Ford Motor Credit Co., 7.25%, 10/25/11 | 1.1% | |
Intelsat Bermuda, 11.25%, 06/15/16 | 1.0% | |
General Motors Acceptance Corp., 8.00%, 11/01/31 | 0.8% | |
Kabel Deutschland GMBH, 10.63%, 07/01/14 | 0.8% | |
Tennessee Gas Pipeline, 8.38%, 06/15/32 | 0.8% | |
Dex Media West LLC, 9.88%, 08/15/13 | 0.8% | |
General Motors Acceptance Corp., 6.88%, 09/15/11 | 0.7% | |
Charter Communications, 10.25%, 09/15/10 | 0.7% | |
CDRV Investors, Inc., 10.44%, 01/01/15 | 0.7% | |
Other Assets | 91.0% | |
100.0% | ||
Top Industries | ||
Media - Non-Cable | 11.1% | |
Healthcare | 6.8% | |
Gaming | 6.1% | |
Automotive | 6.0% | |
Industrial - Other | 5.8% | |
Consumer Products | 5.8% | |
Utility - Natural Gas | 5.8% | |
Chemicals | 5.6% | |
Food & Beverage | 4.0% | |
Technology | 3.8% | |
Other Assets | 39.2% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (0.3%) | ||||||
Chemicals (0.1%) | ||||||
General Chemical Industrial Products, Inc. (d) (h) (i) | 143 | $ | 137,000 | |||
Consumer Products (0.0%) | ||||||
Sleepmaster LLC (c) (d) (i) | 185 | 463 | ||||
Food & Beverage (0.1%) | ||||||
B&G Foods, Inc. | 19,220 | 311,556 | ||||
Media—Cable (0.1%) | ||||||
NTL, Inc. (h) | 5,650 | 140,685 | ||||
Packaging (0.0%) | ||||||
Russell Stanley Holdings, Inc. (d) (g) (h) | 4,000 | 0 | ||||
Wireline Communications (0.0%) | ||||||
Viatel Holdings (Bermuda) (h) | 2,209 | 22 | ||||
Total Common Stocks | 589,726 | |||||
CORPORATE BONDS (95.7%) | ||||||
Aerospace/Defense (1.6%) | ||||||
Alliant Techsystems, Inc., | ||||||
6.75%, 04/01/16 | $ | 800,000 | 772,000 | |||
DRS Technologies, Inc., | ||||||
6.63%, 02/01/16 | 725,000 | 705,063 | ||||
K&F Acquisition, Inc., | ||||||
7.75%, 11/15/14 | 250,000 | 247,500 | ||||
L-3 Communications Corp., | ||||||
6.13%, 01/15/14 | 1,425,000 | 1,360,874 | ||||
L-3 Communications Corp., | ||||||
5.88%, 01/15/15 | 225,000 | 210,938 | ||||
L-3 Communications Corp., | ||||||
6.38%, 10/15/15 | 375,000 | 360,000 | ||||
3,656,375 | ||||||
Automotive (6.0%) | ||||||
Advanced Accessory Systems, | ||||||
10.75%, 06/15/11 | 600,000 | 619,500 | ||||
Cooper-Standard Automotive, Inc., | ||||||
8.38%, 12/15/14 | 1,000,000 | 793,750 | ||||
Ford Motor Co., | ||||||
7.45%, 07/16/31 | 1,675,000 | 1,218,563 | ||||
Ford Motor Credit Co., | ||||||
7.25%, 10/25/11 | 2,700,000 | 2,397,634 | ||||
General Motors Acceptance Corp., | ||||||
6.88%, 09/15/11 | 1,775,000 | 1,695,441 | ||||
General Motors Acceptance Corp., | ||||||
8.00%, 11/01/31 | 1,925,000 | 1,855,095 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Automotive (continued) | ||||||
General Motors Corp., | ||||||
7.13%, 07/15/13 | $ | 450,000 | $ | 372,375 | ||
General Motors Corp., | ||||||
8.38%, 07/15/33 | 925,000 | 749,250 | ||||
Stanadyne Corp., | ||||||
10.00%, 08/15/14 | 700,000 | 658,000 | ||||
Stanadyne Holdings, Inc., | ||||||
16.31%, 02/15/15 (j) | 450,000 | 227,250 | ||||
Stoneridge, Inc., | ||||||
11.50%, 05/01/12 | 575,000 | 554,875 | ||||
Tenneco Automotive, Inc., | ||||||
8.63%, 11/15/14 | 650,000 | 651,625 | ||||
TRW Automotive, Inc., | ||||||
9.38%, 02/15/13 | 400,000 | 427,000 | ||||
TRW Automotive, Inc., | ||||||
11.00%, 02/15/13 | 534,000 | 586,065 | ||||
United Components, Inc., | ||||||
9.38%, 06/15/13 | 750,000 | 742,500 | ||||
13,548,923 | ||||||
Building Materials (2.3%) | ||||||
Collins & Aikman Floorcoverings, Inc., | ||||||
9.75%, 02/15/10 | 375,000 | 370,313 | ||||
ERICO International Corp., | ||||||
8.88%, 03/01/12 | 625,000 | 642,188 | ||||
Goodman Global Holdings, | ||||||
8.33%, 06/15/12, (e) | 250,000 | 251,250 | ||||
Goodman Global Holdings, | ||||||
7.88%, 12/15/12 | 725,000 | 696,000 | ||||
Norcraft Cos. LLC, | ||||||
9.00%, 11/01/11 | 500,000 | 511,250 | ||||
Norcraft Holdings LP, | ||||||
9.76%, 09/01/12 (j) | 1,250,000 | 1,018,749 | ||||
Nortek Holdings, Inc., | ||||||
10.52%, 03/01/14 (j) | 625,000 | 455,469 | ||||
Nortek Holdings, Inc., | ||||||
8.50%, 09/01/14 | 350,000 | 340,375 | ||||
Texas Industries Inc, | ||||||
7.25%, 07/15/13 | 150,000 | 149,250 | ||||
U.S. Concrete, Inc., | ||||||
8.38%, 04/01/14 | 725,000 | 735,875 | ||||
5,170,719 | ||||||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Chemicals (5.6%) | ||||||
Chemtura Corp., | $ | 600,000 | $ | 582,750 | ||
6.88%, 06/01/16 | ||||||
Compass Mineral International, | ||||||
7.69%, 12/15/12 (j) | 500,000 | 477,500 | ||||
Compass Mineral International, | ||||||
7.94%, 06/01/13 (j) | 1,050,000 | 960,750 | ||||
Crystal US Holdings, | ||||||
9.63%, 06/15/14 | 575,000 | 626,750 | ||||
Crystal US Holdings, | ||||||
8.87%, 10/01/14 (j) | 1,689,000 | 1,330,087 | ||||
Hexion U.S. Finance Corp., | ||||||
9.00%, 07/15/14 | 1,200,000 | 1,220,999 | ||||
Huntsman ICI Chemicals LLC, | ||||||
10.13%, 07/01/09 | 869,000 | 886,380 | ||||
Invista, | ||||||
9.25%, 05/01/12 (b) | 950,000 | 1,002,250 | ||||
Koppers, Inc., | ||||||
9.88%, 10/15/13 | 440,000 | 474,100 | ||||
Lyondell Chemical Co., | ||||||
9.63%, 05/01/07 | 475,000 | 484,500 | ||||
Lyondell Chemical Co., | ||||||
9.50%, 12/15/08 | 191,000 | 197,208 | ||||
Lyondell Chemical Co., | ||||||
10.88%, 05/01/09 | 450,000 | 459,000 | ||||
Nalco Co., | ||||||
8.88%, 11/15/13 | 875,000 | 885,938 | ||||
Nalco Co., | ||||||
9.47%, 02/01/14 (j) | 481,000 | 363,155 | ||||
Nell AF SARL, | ||||||
8.38%, 08/15/15 (b) | 1,100,000 | 1,062,875 | ||||
PQ Corp., | ||||||
7.50%, 02/15/13 | 525,000 | 496,125 | ||||
Union Carbide Corp., | ||||||
7.88%, 04/01/23 | 225,000 | 235,608 | ||||
Union Carbide Corp., | ||||||
7.50%, 06/01/25 | 350,000 | 357,438 | ||||
VeraSun Energy Corp., | ||||||
9.88%, 12/15/12 (b) | 550,000 | 583,000 | ||||
12,686,413 | ||||||
Construction Machinery (0.6%) | ||||||
Case New Holland, Inc., | ||||||
9.25%, 08/01/11 | 675,000 | 713,813 | ||||
Clark Material Handling, Inc., | ||||||
0.00%, 11/15/06 (c) (d) (g) (h) | 100,000 | 0 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Construction Machinery (continued) | ||||||
NationsRent Cos., Inc., | ||||||
9.50%, 10/15/10 | $ | 500,000 | $ | 535,000 | ||
1,248,813 | ||||||
Consumer Products (5.8%) | ||||||
AAC Group Holding Corp., | ||||||
10.62%, 10/01/12 (j) | 950,000 | 745,750 | ||||
AAC Group Holding Corp., | ||||||
12.75%, 10/01/12 (b) | 325,000 | 326,625 | ||||
Alltrista Corp., | ||||||
9.75%, 05/01/12 | 825,000 | 845,625 | ||||
American Achievement Corp., | ||||||
8.25%, 04/01/12 | 250,000 | 247,500 | ||||
American Greetings, | ||||||
7.38%, 06/01/16 | 550,000 | 555,500 | ||||
Ames True Temper, Inc., | ||||||
10.00%, 07/15/12 | 850,000 | 697,000 | ||||
Church & Dwight Co., | ||||||
6.00%, 12/15/12 | 625,000 | 581,250 | ||||
Diamond Brands, Inc., | ||||||
0.00%, 04/15/09 (c) (d) (f) (g) (h) | 50,000 | 0 | ||||
Jostens Holding Corp., | ||||||
10.18%, 12/01/13 (j) | 1,675,000 | 1,323,250 | ||||
Jostens IH Corp., | ||||||
7.63%, 10/01/12 | 1,050,000 | 1,023,750 | ||||
Leiner Health Products, | ||||||
11.00%, 06/01/12 | 500,000 | 475,625 | ||||
Nutro Products, Inc., | ||||||
10.75%, 04/15/14 (b) | 475,000 | 491,031 | ||||
Playtex Products, Inc., | ||||||
9.38%, 06/01/11 | 925,000 | 967,781 | ||||
Rayovac Corp., | ||||||
8.50%, 10/01/13 | 175,000 | 150,500 | ||||
Sealy Mattress Co., | ||||||
8.25%, 06/15/14 | 450,000 | 452,250 | ||||
Spectrum Brands, Inc., | ||||||
7.38%, 02/01/15 | 1,240,000 | 1,013,700 | ||||
Steinway Musical Instruments, | ||||||
7.00%, 03/01/14 (b) | 225,000 | 218,813 | ||||
Tempur World, | ||||||
10.25%, 08/15/10 | 429,000 | 454,740 | ||||
True Temper Sports, Inc., | ||||||
8.38%, 09/15/11 | 1,150,000 | 1,052,250 | ||||
Visant Holding Corp., | ||||||
8.75%, 12/01/13 (b) | 900,000 | 873,000 |
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Consumer Products (continued) | ||||||
WH Holdings Ltd., | ||||||
9.50%, 04/01/11 | $ | 615,000 | $ | 676,500 | ||
13,172,440 | ||||||
Energy (1.7%) | ||||||
Basic Energy Services, | ||||||
7.13%, 04/15/16 (b) | 550,000 | 514,250 | ||||
Chesapeake Energy Corp., | ||||||
6.88%, 11/15/20 | 875,000 | 813,750 | ||||
Grant Prideco, Inc., | ||||||
6.13%, 08/15/15 | 200,000 | 187,500 | ||||
Hilcorp Energy, | ||||||
9.00%, 06/01/16 (b) | 350,000 | 354,375 | ||||
Pioneer Natural Resources, | ||||||
6.88%, 05/01/18 | 850,000 | 823,314 | ||||
Range Resources Corp., | ||||||
7.38%, 07/15/13 | 250,000 | 249,375 | ||||
Range Resources Corp., | ||||||
6.38%, 03/15/15 | 450,000 | 417,375 | ||||
Range Resources Corp., | ||||||
7.50%, 05/15/16 | 550,000 | 545,875 | ||||
3,905,814 | ||||||
Entertainment (2.2%) | ||||||
AMC Entertainment, Inc., | ||||||
9.88%, 02/01/12 | 575,000 | 575,000 | ||||
Cinemark USA, Inc., | ||||||
9.00%, 02/01/13 | 400,000 | 422,000 | ||||
Cinemark, Inc., | ||||||
9.62%, 03/15/14 (j) | 1,575,000 | 1,228,500 | ||||
Hard Rock Park Operation, | ||||||
9.82%, 04/01/12, (b) (e) | 575,000 | 572,125 | ||||
Intrawest Corp., | ||||||
7.50%, 10/15/13 | 900,000 | 900,000 | ||||
Universal City Development, | ||||||
11.75%, 04/01/10 | 950,000 | 1,039,063 | ||||
Universal City Florida Holding Co., | ||||||
9.90%, 05/01/10, (e) | 250,000 | 259,375 | ||||
4,996,063 | ||||||
Environmental (0.7%) | ||||||
Allied Waste North America, | ||||||
9.25%, 09/01/12 | 300,000 | 319,500 | ||||
Allied Waste North America, | ||||||
7.13%, 05/15/16, (b) | 850,000 | 805,375 | ||||
Clean Harbors, Inc., | ||||||
11.25%, 07/15/12 | 341,000 | 385,330 | ||||
1,510,205 | ||||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Financial Institutions (0.2%) | ||||||
American Real Estate Partners LP, | ||||||
7.13%, 02/15/13 | $ | 575,000 | $ | 554,875 | ||
Food & Beverage (4.0%) | ||||||
Agrilink Foods, Inc., | ||||||
11.88%, 11/01/08 | 350,000 | 358,313 | ||||
ASG Consolidated LLC, | ||||||
9.16%, 11/01/11 (j) | 1,675,000 | 1,419,562 | ||||
B&G Foods, Inc., 8.00%, 10/01/11 | 725,000 | 728,625 | ||||
Constellation Brands, Inc., | ||||||
8.00%, 02/15/08 | 650,000 | 664,625 | ||||
Cott Beverages, Inc., | ||||||
8.00%, 12/15/11 | 500,000 | 501,250 | ||||
Del Monte Corporation, | ||||||
6.75%, 02/15/15 | 1,275,000 | 1,188,937 | ||||
Eagle Family Foods, Inc., | ||||||
8.75%, 01/15/08 | 250,000 | 203,125 | ||||
Eurofresh, Inc., | ||||||
11.50%, 01/15/13 (b) | 775,000 | 763,375 | ||||
Michael Foods, Inc., | ||||||
8.00%, 11/15/13 | 950,000 | 938,125 | ||||
Pierre Foods, Inc., | ||||||
9.88%, 07/15/12 | 825,000 | 843,563 | ||||
Pilgrim’s Pride Corp., | ||||||
9.25%, 11/15/13 | 325,000 | 325,813 | ||||
Reddy Ice Group, | ||||||
9.27%, 11/01/12 (j) | 1,025,000 | 830,250 | ||||
Smithfield Foods, Inc., | ||||||
7.75%, 05/15/13 | 200,000 | 197,000 | ||||
8,962,563 | ||||||
Gaming (6.1%) | ||||||
155 East Tropicana LLC, | ||||||
8.75%, 04/01/12 | 725,000 | 694,188 | ||||
Boyd Gaming Corp., | ||||||
7.75%, 12/15/12 | 475,000 | 481,531 | ||||
Galaxy Entertainment, | ||||||
9.88%, 12/15/12 (b) | 800,000 | 836,000 | ||||
Herbst Gaming, Inc., | ||||||
7.00%, 11/15/14 | 500,000 | 477,500 | ||||
Jacobs Entertainment, | ||||||
9.75%, 06/15/14 (b) | 525,000 | 530,250 | ||||
Kerzner International, | ||||||
6.75%, 10/01/15 | 700,000 | 734,125 |
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Gaming (continued) | ||||||
Magna Entertainment Corp., | ||||||
7.25%, 12/15/09 | $ | 425,000 | $ | 408,000 | ||
Mandalay Resort Group, | ||||||
10.25%, 08/01/07 | 1,150,000 | 1,197,437 | ||||
Mandalay Resort Group, | ||||||
9.50%, 08/01/08 | 250,000 | 265,625 | ||||
MGM Grand, Inc., | ||||||
9.75%, 06/01/07 | 925,000 | 955,062 | ||||
MGM Grand, Inc., | ||||||
6.00%, 10/01/09 | 500,000 | 488,750 | ||||
MGM Grand, Inc., | ||||||
8.38%, 02/01/11 | 700,000 | 721,000 | ||||
MTR Gaming Group, Inc., | ||||||
9.75%, 04/01/10 | 800,000 | 849,000 | ||||
MTR Gaming Group, Inc., | ||||||
9.00%, 06/01/12 (b) | 250,000 | 252,188 | ||||
Park Place Entertainment Corp., | ||||||
9.38%, 02/15/07 | 375,000 | 382,500 | ||||
Park Place Entertainment Corp., | ||||||
8.13%, 05/15/11 | 1,000,000 | 1,058,749 | ||||
Penn National Gaming, Inc., | ||||||
6.75%, 03/01/15 | 925,000 | 867,188 | ||||
San Pasqual Casino, | ||||||
8.00%, 09/15/13 (b) | 600,000 | 601,500 | ||||
Station Casinos, Inc., | ||||||
6.00%, 04/01/12 | 200,000 | 188,250 | ||||
Station Casinos, Inc., | ||||||
6.50%, 02/01/14 | 525,000 | 490,875 | ||||
Tunica-Biloxi Gaming Authority, | ||||||
9.00%, 11/15/15 (b) | 475,000 | 489,250 | ||||
Wynn Las Vegas LLC, | ||||||
6.63%, 12/01/14 | 800,000 | 758,000 | ||||
13,726,968 | ||||||
Healthcare (6.8%) | ||||||
Accellent, Inc., | ||||||
10.50%, 12/01/13 | 600,000 | 616,500 | ||||
AmeriPath, Inc., | ||||||
10.50%, 04/01/13 | 1,300,000 | 1,369,874 | ||||
AMR Holding Co./Emcare H, | ||||||
10.00%, 02/15/15 | 550,000 | 578,875 | ||||
Bio Rad Laboratories, Inc., | ||||||
6.13%, 12/15/14 | 375,000 | 345,938 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Healthcare (continued) | ||||||
CDRV Investors, Inc., | ||||||
10.44%, 01/01/15 (j) | $ | 2,250,000 | $ | 1,529,999 | ||
Concentra Operating Corp., | ||||||
9.50%, 08/15/10 | 625,000 | 650,000 | ||||
CRC Health Corp., | ||||||
10.75%, 02/01/16 (b) | 675,000 | 690,188 | ||||
Fisher Scientific International, Inc., | ||||||
6.13%, 07/01/15 | 1,000,000 | 968,750 | ||||
HCA, Inc., 8.75%, 09/01/10 | 300,000 | 317,780 | ||||
HCA, Inc., 7.88%, 02/01/11 | 575,000 | 590,256 | ||||
HCA, Inc., 6.75%, 07/15/13 | 1,250,000 | 1,199,909 | ||||
HCA, Inc., 6.38%, 01/15/15 | 1,300,000 | 1,211,013 | ||||
HCA, Inc., 7.50%, 11/06/33 | 900,000 | 827,086 | ||||
National Mentor Holdings, | ||||||
11.25%, 07/01/14 (b) | 700,000 | 715,750 | ||||
Omnicare, Inc., | ||||||
6.88%, 12/15/15 | 875,000 | 835,625 | ||||
Psychiatric Solutions, Inc., | ||||||
7.75%, 07/15/15 | 550,000 | 541,063 | ||||
Vanguard Health Holdings, | ||||||
9.00%, 10/01/14 | 550,000 | 551,375 | ||||
Ventas Realty LP, | ||||||
6.63%, 10/15/14 | 875,000 | 853,125 | ||||
Ventas Realty LP, | ||||||
7.13%, 06/01/15 | 325,000 | 326,625 | ||||
VWR International, Inc., | ||||||
8.00%, 04/15/14 | 750,000 | 732,188 | ||||
15,451,919 | ||||||
Industrial—Other (5.8%) | ||||||
ALH Finance LLC/ALH Finance Corp., | ||||||
8.50%, 01/15/13 | 1,250,000 | 1,212,499 | ||||
American Tire Distributor, | ||||||
10.75%, 04/01/13 | 425,000 | 388,875 | ||||
Amsted Industries, Inc., | ||||||
10.25%, 10/15/11 (b) | 425,000 | 456,875 | ||||
Brand Services, Inc., | ||||||
12.00%, 10/15/12 | 1,050,000 | 1,189,125 | ||||
Da-Lite Screen Co. Inc., | ||||||
9.50%, 05/15/11 | 525,000 | 559,125 | ||||
Hawk Corp., | ||||||
8.75%, 11/01/14 | 675,000 | 681,750 | ||||
Interline Brands Inc, | ||||||
8.13%, 06/15/14 | 700,000 | 701,750 |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Industrial—Other (continued) | ||||||
Knowledge Learning Corp., | ||||||
7.75%, 02/01/15 (b) | $ | 1,300,000 | $ | 1,196,000 | ||
Mueller Group, Inc., | ||||||
10.00%, 05/01/12 | 525,000 | 567,000 | ||||
Neenah Corp., | ||||||
11.00%, 09/30/10 (b) | 842,000 | 913,570 | ||||
Norcross Safety Products, | ||||||
9.88%, 08/15/11 | 750,000 | 781,875 | ||||
Panolam Industries International, Inc., | ||||||
10.75%, 10/01/13 (b) | 825,000 | 804,375 | ||||
Rexnord Corp., | ||||||
10.13%, 12/15/12 | 675,000 | 747,455 | ||||
Safety Products Holdings, | ||||||
11.75%, 01/01/12 | 858,110 | 896,725 | ||||
Sensus Metering Systems, | ||||||
8.63%, 12/15/13 | 875,000 | 857,500 | ||||
Superior Essex Communications, | ||||||
9.00%, 04/15/12 | 850,000 | 867,000 | ||||
Valmont Industries, Inc., | ||||||
6.88%, 05/01/14 | 300,000 | 291,000 | ||||
13,112,499 | ||||||
Lodging (1.1%) | ||||||
Host Marriott LP, | ||||||
7.13%, 11/01/13 | 450,000 | 450,563 | ||||
Host Marriott LP, | ||||||
6.38%, 03/15/15 | 450,000 | 425,250 | ||||
Host Marriott LP, | ||||||
6.75%, 06/01/16 (b) | 375,000 | 359,531 | ||||
Royal Caribbean Cruises, | ||||||
8.00%, 05/15/10 | 550,000 | 577,772 | ||||
Royal Caribbean Cruises, | ||||||
7.25%, 06/15/16 | 300,000 | 298,580 | ||||
Starwood Hotels & Resort, | ||||||
7.88%, 05/01/12 | 450,000 | 471,938 | ||||
2,583,634 | ||||||
Media—Cable (2.8%) | ||||||
Cablevision Systems Corp., | ||||||
7.88%, 12/15/07 | 375,000 | 380,625 | ||||
Cablevision Systems Corp., | ||||||
8.13%, 07/15/09 | 875,000 | 894,688 | ||||
CCH I Holdings LLC, | ||||||
9.92%, 04/01/14 | 455,000 | 275,275 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Media—Cable (continued) | ||||||
CCH I Holdings LLC, | ||||||
11.00%, 10/01/15 | $ | 445,000 | $ | 391,600 | ||
Charter Communications, | ||||||
10.25%, 09/15/10 | 1,575,000 | 1,586,813 | ||||
Iesy Repository Gmbh, | ||||||
10.38%, 02/15/15 (b) | 625,000 | 600,000 | ||||
Kabel Deutschland GMBH, | ||||||
10.63%, 07/01/14 (b) | 1,750,000 | 1,854,999 | ||||
Videotron Ltee, | ||||||
6.38%, 12/15/15 | 325,000 | 298,188 | ||||
6,282,188 | ||||||
Media—Non-Cable (11.1%) | ||||||
Advanstar Communications, Inc., | ||||||
10.75%, 08/15/10 | 200,000 | 215,500 | ||||
Advanstar Communications, Inc., | ||||||
12.00%, 02/15/11 | 650,000 | 687,375 | ||||
Advanstar Communications, Inc., | ||||||
8.50%, 10/15/11 (j) | 600,000 | 631,500 | ||||
Affinity Group Holding, | ||||||
10.88%, 02/15/12 | 742,016 | 727,176 | ||||
Affinity Group, Inc., | ||||||
9.00%, 02/15/12 | 425,000 | 425,000 | ||||
Baker & Taylor, Inc., | ||||||
11.50%, 07/01/13 (b) | 700,000 | 703,500 | ||||
CBD Media Holdings, | ||||||
9.25%, 07/15/12 | 1,175,000 | 1,175,000 | ||||
CSC Holdings, Inc., | ||||||
7.25%, 07/15/08 | 325,000 | 327,031 | ||||
Dex Media East LLC, | ||||||
12.13%, 11/15/12 | 325,000 | 366,438 | ||||
Dex Media West LLC, | ||||||
9.88%, 08/15/13 | 1,591,000 | 1,732,192 | ||||
Dex Media, Inc., | ||||||
8.15%, 11/15/13 (j) | 500,000 | 423,750 | ||||
DIRECTV Holdings LLC, | ||||||
8.38%, 03/15/13 | 844,000 | 888,310 | ||||
DIRECTV Holdings LLC, | ||||||
6.38%, 06/15/15 | 400,000 | 371,000 | ||||
Echostar DBS Corp., | ||||||
5.75%, 10/01/08 | 1,250,000 | 1,225,000 | ||||
Houghton Mifflin Co., | ||||||
2.71%, 10/15/13 (j) | 725,000 | 601,750 | ||||
Intelsat Bermuda, | ||||||
11.25%, 06/15/16 (b) | 2,250,000 | 2,317,499 |
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Media—Non-Cable (continued) | ||||||
Intelsat Sub Holdings Co. Ltd., | ||||||
8.63%, 01/15/15 | $ | 575,000 | $ | 579,313 | ||
Lamar Media Corp, | ||||||
6.63%, 08/15/15 | 275,000 | 255,750 | ||||
Lamar Media Corp., | ||||||
7.25%, 01/01/13 | 550,000 | 540,375 | ||||
NBC Acquisition Corp., | ||||||
13.75%; 03/15/13 (j) | 625,000 | 460,938 | ||||
Nebraska Book Co., | ||||||
8.63%, 03/15/12 | 625,000 | 584,375 | ||||
PanAmSat Corp., | ||||||
9.00%, 08/15/14 | 453,000 | 462,060 | ||||
PanAmSat Holding Corp., | ||||||
9.69%, 11/01/14 (j) | 1,875,000 | 1,395,355 | ||||
Primedia, Inc., | ||||||
8.88%, 05/15/11 | 500,000 | 482,500 | ||||
Quebecor Media, Inc., | ||||||
7.75%, 03/15/16 (b) | 300,000 | 295,500 | ||||
R.H. Donnelley Corp., | ||||||
10.88%, 12/15/12 | 575,000 | 633,938 | ||||
R.H. Donnelley Corp., | ||||||
6.88%, 01/15/13 (b) | 750,000 | 693,750 | ||||
R.H. Donnelley Corp., | ||||||
6.88%, 01/15/13 (b) | 400,000 | 370,000 | ||||
R.H. Donnelley Corp., | ||||||
8.88%, 01/15/16 (b) | 775,000 | 785,656 | ||||
Rainbow National Services LLC, | ||||||
10.38%, 09/01/14 (b) | 725,000 | 806,563 | ||||
Readers Digest Association, Inc., | ||||||
6.50%, 03/01/11 | 575,000 | 557,750 | ||||
SGS International, Inc., | ||||||
12.00%, 12/15/13 (b) | 675,000 | 678,375 | ||||
Sirius Satellite Radio, | ||||||
9.63%, 08/01/13 | 500,000 | 471,250 | ||||
WDAC Subsidiary Corp., | ||||||
8.38%, 12/01/14 (b) | 1,250,000 | 1,234,375 | ||||
XM Satellite Radio, Inc., | ||||||
9.75%, 05/01/14 (b) | 1,075,000 | 989,000 | ||||
Ziff Davis Media, Inc., | ||||||
12.00%, 08/12/09 | 45,947 | 24,180 | ||||
25,119,024 | ||||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Metals & Mining (0.8%) | ||||||
Aleris International, Inc., | ||||||
10.38%, 10/15/10 | $ | 850,000 | $ | 922,250 | ||
Novelis, Inc., | ||||||
7.25%, 02/15/15 (b) | 825,000 | 796,125 | ||||
1,718,375 | ||||||
Packaging (2.7%) | ||||||
Ball Corp., | ||||||
6.63%, 03/15/18 | 850,000 | 794,750 | ||||
Berry Plastics Corp., | ||||||
10.75%, 07/15/12 | 950,000 | 1,033,125 | ||||
Covalence Specialty, | ||||||
10.25%, 03/01/16 (b) | 925,000 | 892,625 | ||||
Crown Americas LLC, | ||||||
7.75%, 11/15/15 (b) | 700,000 | 693,000 | ||||
Graham Packaging Co., | ||||||
8.50%, 10/15/12 | 300,000 | 295,500 | ||||
Greif Brothers Corp., | ||||||
8.88%, 08/01/12 | 700,000 | 740,250 | ||||
Owens-Brockway Glass Container, | ||||||
8.25%, 05/15/13 | 150,000 | 151,125 | ||||
Owens-Brockway Glass Container, | ||||||
6.75%, 12/01/14 | 800,000 | 746,000 | ||||
Owens-Illinois, Inc., | ||||||
7.35%, 05/15/08 | 300,000 | 303,750 | ||||
Plastipak Holdings, Inc., | ||||||
8.50%, 12/15/15 (b) | 350,000 | 351,750 | ||||
Russell Stanley Holdings, Inc., | ||||||
9.00%, 11/30/08 (b) (d) (f) (h) (i) | 27,898 | 13,056 | ||||
6,014,931 | ||||||
Paper (2.4%) | ||||||
Abitibi-Consolidated, | ||||||
8.38%, 04/01/15 | 700,000 | 642,250 | ||||
Graphic Packaging International, | ||||||
9.50%, 08/15/13 | 1,150,000 | 1,144,250 | ||||
Jefferson Smurfit Corp., | ||||||
8.25%, 10/01/12 | 490,000 | 461,825 | ||||
Jefferson Smurfit Corp., | ||||||
7.50%, 06/01/13 | 400,000 | 360,000 | ||||
MDP Acquisitions PLC, | ||||||
9.63%, 10/01/12 | 700,000 | 724,500 |
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Paper (continued) | ||||||
Mercer International, Inc., | ||||||
9.25%, 02/15/13 | $ | 800,000 | $ | 716,000 | ||
NewPage Corp., | ||||||
12.00%, 05/01/13 | 850,000 | 884,000 | ||||
Stone Container Corp., | ||||||
9.75%, 02/01/11 | 225,000 | 232,313 | ||||
Tembec Industries, Inc., | ||||||
8.50%, 02/01/11 | 525,000 | 278,250 | ||||
5,443,388 | ||||||
Restaurants (0.7%) | ||||||
Dave & Buster’s, Inc., | ||||||
11.25%, 03/15/14 (b) | 400,000 | 386,000 | ||||
El Pollo Loco, Inc., | ||||||
11.75%, 11/15/13 (b) | 475,000 | 545,063 | ||||
Landry’s Seafood Restaurants, Inc., | ||||||
7.50%, 12/15/14 | 625,000 | 576,562 | ||||
1,507,625 | ||||||
Retailers (1.8%) | ||||||
Autonation, Inc., | ||||||
7.04%, 04/15/13, (b) (e) | 275,000 | 275,000 | ||||
Autonation, Inc., | ||||||
7.00%, 04/15/14 (b) | 250,000 | 247,500 | ||||
Couche-Tard Financing Co., | ||||||
7.50%, 12/15/13 | 1,000,000 | 1,000,000 | ||||
FTD, Inc., | ||||||
7.75%, 02/15/14 | 632,000 | 625,680 | ||||
General Nutrition Center, | ||||||
8.50%, 12/01/10 | 350,000 | 340,375 | ||||
Penney (J.C.) Co. Inc., | ||||||
9.00%, 08/01/12 | 929,000 | 1,066,083 | ||||
U.S. Office Products Co., | ||||||
0.00%, 06/15/08 (c) (d) (g) (h) | 475,000 | 0 | ||||
United Auto Group, Inc., | ||||||
9.63%, 03/15/12 | 575,000 | 603,750 | ||||
4,158,388 | ||||||
Services (1.3%) | ||||||
CB Richard Ellis Services, Inc., | ||||||
9.75%, 05/15/10 | 214,000 | 230,050 | ||||
Education Management LLC, | ||||||
10.25%, 06/01/16 (b) | 950,000 | 950,000 | ||||
Global Cash Access LLC, | ||||||
8.75%, 03/15/12 | 503,000 | 532,551 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Services (continued) | ||||||
Insurance Automotive Auctions, Inc., | ||||||
11.00%, 04/01/13 | $ | 825,000 | $ | 816,750 | ||
IPayment, Inc., | ||||||
9.75%, 05/15/14 (b) | 475,000 | 475,000 | ||||
3,004,351 | ||||||
Supermarkets (0.0%) | ||||||
Jitney-Jungle Stores of America, Inc., | ||||||
0.00%, 09/15/07 (c) (d) (g) (h) | 100,000 | 0 | ||||
Technology (3.8%) | ||||||
Activant Solutions Inc., | ||||||
9.50%, 05/01/16 (b) | 200,000 | 194,500 | ||||
Danka Business Systems, | ||||||
11.00%, 06/15/10 | 425,000 | 354,875 | ||||
Freescale Semiconductor, Inc., | ||||||
7.13%, 07/15/14 | 575,000 | 583,625 | ||||
MagnaChip Semiconductor, | ||||||
8.00%, 12/15/14 | 350,000 | 292,250 | ||||
Seagate Technology HDD Holding, | ||||||
8.00%, 05/15/09 | 350,000 | 360,500 | ||||
SERENA Software, Inc., | ||||||
10.38%, 03/15/16 (b) | 250,000 | 251,875 | ||||
Smart Modular Technologies, Inc., | ||||||
10.49%, 04/01/12, (e) | 405,000 | 430,819 | ||||
Solar Capital Corp., | ||||||
9.13%, 08/15/13 (b) | 1,000,000 | 1,042,500 | ||||
Solar Capital Corp., | ||||||
10.25%, 08/15/15 (b) | 800,000 | 831,000 | ||||
SS&C Technologies, Inc., | ||||||
11.75%, 12/01/13 (b) | 700,000 | 728,000 | ||||
Telex Communications, Inc., | ||||||
11.50%, 10/15/08 | 400,000 | 426,000 | ||||
UGS Corp., 10.00%, 06/01/12 | 1,150,000 | 1,241,999 | ||||
Xerox Corp., 9.75%, 01/15/09 | 650,000 | 697,125 | ||||
Xerox Corp., 7.63%, 06/15/13 | 475,000 | 480,938 | ||||
Xerox Corp., 6.40%, 03/15/16 | 625,000 | 592,969 | ||||
8,508,975 | ||||||
Textile (0.4%) | ||||||
Glenoit Corp., | ||||||
0.00%, 04/15/07 (c) (d) (g) (h) | 125,000 | 0 | ||||
Phillips Van Heusen Corp., | ||||||
8.13%, 05/01/13 | 325,000 | 333,938 |
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Textile (continued) | ||||||
Warnaco Group, Inc., | ||||||
8.88%, 06/15/13 | $ | 575,000 | $ | 586,500 | ||
920,438 | ||||||
Tobacco (0.5%) | ||||||
Reynolds American, Inc., | ||||||
7.75%, 06/01/18 (b) | 1,225,000 | 1,182,125 | ||||
Transportation (1.5%) | ||||||
Hertz Corp. (The), | ||||||
8.88%, 01/01/14 (b) | 625,000 | 643,750 | ||||
Hertz Corp. (The), | ||||||
10.50%, 01/01/16 (b) | 1,075,000 | 1,144,875 | ||||
Holt Group, Inc. (The) | ||||||
0.00%, 01/15/06 (c) (d) (g) (h) | 50,000 | 0 | ||||
Stena AB, 9.63%, 12/01/12 | 825,000 | 880,688 | ||||
Stena AB, 7.50%, 11/01/13 | 575,000 | 560,625 | ||||
Stena AB, 7.00%, 12/01/16 | 250,000 | 231,250 | ||||
3,461,188 | ||||||
Utility—Electric (3.5%) | ||||||
CMS Energy Corp., | ||||||
7.50%, 01/15/09 | 600,000 | 610,500 | ||||
Edison Mission Energy, | ||||||
7.73%, 06/15/09 | 1,200,000 | 1,218,000 | ||||
Edison Mission Energy, | ||||||
7.75%, Series 144A 06/15/16 (b) | 675,000 | 666,563 | ||||
FPL Energy National Wind, | ||||||
6.13%, 03/25/19 (b) | 329,665 | 319,917 | ||||
Nevada Power Co., | ||||||
6.50%, 04/15/12 | 75,000 | 74,974 | ||||
Nevada Power Co., | ||||||
9.00%, 08/15/13 | 909,000 | 988,398 | ||||
Nevada Power Co., | ||||||
5.88%, 01/15/15 | 350,000 | 333,674 | ||||
Nevada Power Co., | ||||||
6.50%, 05/15/18 (b) | 625,000 | 612,514 | ||||
Northwestern Corp., | ||||||
5.88%, 11/01/14 | 200,000 | 196,943 | ||||
NRG Energy, Inc., | ||||||
7.25%, 02/01/14 | 375,000 | 366,563 | ||||
NRG Energy, Inc., | ||||||
7.38%, 02/01/16 | 725,000 | 708,688 | ||||
PSEG Energy Holdings, | ||||||
10.00%, 10/01/09 | 1,125,000 | 1,220,624 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Utility—Electric (continued) | ||||||
Sierra Pacific Resources, | ||||||
6.75%, 08/15/17 | $ | 400,000 | $ | 379,928 | ||
TECO Energy, Inc., | ||||||
6.75%, 05/01/15 | 225,000 | 219,938 | ||||
7,917,224 | ||||||
Utility—Natural Gas (5.8%) | ||||||
Amerigas Partners LP, | ||||||
7.13%, 05/20/16 | 875,000 | 824,688 | ||||
ANR Pipeline Co., | ||||||
8.88%, 03/15/10 | 150,000 | 159,188 | ||||
EL Paso Corp., 6.75%, 05/15/09 | 250,000 | 248,125 | ||||
EL Paso Corp., 7.80%, 08/01/31 | 1,450,000 | 1,415,563 | ||||
EL Paso Production Corp., | ||||||
7.75%, 06/01/13 | 950,000 | 961,875 | ||||
Holly Energy Partners LP, | ||||||
6.25%, 03/01/15 | 1,375,000 | 1,265,000 | ||||
Inergy LP, | ||||||
6.88%, 12/15/14 | 850,000 | 794,750 | ||||
Pacific Energy Partners, | ||||||
7.13%, 06/15/14 | 700,000 | 710,500 | ||||
Pacific Energy Partners, | ||||||
6.25%, 09/15/15 | 150,000 | 146,250 | ||||
Semco Energy, Inc., | ||||||
7.13%, 05/15/08 | 400,000 | 399,145 | ||||
SemGroup LP, | ||||||
8.75%, 11/15/15 (b) | 500,000 | 500,000 | ||||
Southern Star Central Corp., | ||||||
6.75%, 03/01/16 (b) | 175,000 | 168,875 | ||||
Tennessee Gas Pipeline, | ||||||
7.50%, 04/01/17 | 200,000 | 201,126 | ||||
Tennessee Gas Pipeline, | ||||||
8.38%, 06/15/32 | 1,675,000 | 1,799,723 | ||||
Transcontinental Gas Pipeline Corp., | ||||||
8.88%, 07/15/12 | 350,000 | 387,625 | ||||
Transcontinental Gas Pipeline Corp., | ||||||
6.40%, 04/15/16 (b) | 500,000 | 481,250 | ||||
Williams Cos., Inc. (The), | ||||||
7.63%, 07/15/19 | 1,125,000 | 1,147,500 | ||||
Williams Cos., Inc. (The), | ||||||
7.88%, 09/01/21 | 1,425,000 | 1,453,500 | ||||
13,064,683 | ||||||
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Wireless Communications (2.9%) | ||||||
Centennial Cellular Corp., | ||||||
10.74%, 01/01/13, (e) | $ | 325,000 | $ | 333,125 | ||
Centennial Communication, | ||||||
10.00%, 01/01/13 | 600,000 | 597,000 | ||||
New Skies Satellites NV, | ||||||
9.13%, 11/01/12 | 475,000 | 504,688 | ||||
Nextel Communications, | ||||||
7.38%, 08/01/15 | 875,000 | 891,246 | ||||
Rogers Wireless, Inc., | ||||||
7.25%, 12/15/12 | 200,000 | 202,500 | ||||
Rogers Wireless, Inc., | ||||||
8.00%, 12/15/12 | 800,000 | 822,000 | ||||
Rogers Wireless, Inc., | ||||||
6.38%, 03/01/14 | 1,050,000 | 1,005,374 | ||||
Rogers Wireless, Inc., | ||||||
7.50%, 03/15/15 | 200,000 | 203,000 | ||||
Rogers Wireless, Inc., | ||||||
8.45%, 12/15/10, (e) | 425,000 | 439,344 | ||||
U.S. Unwired, Inc., | ||||||
10.00%, 06/15/12 | 650,000 | 724,750 | ||||
Zeus Ltd., | ||||||
9.82%, 02/01/15 (b) (j) | 1,050,000 | 729,750 | ||||
6,452,777 | ||||||
Wireline Communications (3.2%) | ||||||
AT&T Corp., | ||||||
8.00%, 11/15/31 (e) | 1,200,000 | 1,381,756 | ||||
Citizens Communications, | ||||||
6.25%, 01/15/13 | 250,000 | 237,500 | ||||
Citizens Communications, | ||||||
9.00%, 08/15/31 | 550,000 | 559,625 | ||||
Nordic Telephone Company, | ||||||
8.88%, 05/01/16 (b) | 525,000 | 542,063 | ||||
Qwest Corp., | ||||||
8.88%, 03/15/12 | 3,350,000 | 3,550,999 | ||||
Valor Telecommunications, | ||||||
7.75%, 02/15/15 | 650,000 | 674,375 | ||||
Windstream Corp., | ||||||
8.63%, 08/01/16 (b) | 275,000 | 282,563 | ||||
7,228,881 | ||||||
Total Corporate Bonds | 216,272,784 | |||||
Shares or Principal Amount | Value | ||||
PREFERRED STOCKS (0.4%) | |||||
Media—Non-Cable (0.0%) | |||||
Ziff Davis Media, Inc., Series E-1, PIK | 12 | $ | 1,800 | ||
Retailers (0.4%) | |||||
General Nutrition Center, Series A | 725 | 871,813 | |||
Total Preferred Stocks | 873,613 | ||||
WARRANTS (0.1%) | |||||
Chemicals (0.0%) | |||||
General Chemical Industrial Products Series A, expiring 06/01/10 (d) (h) (i) | 83 | 63,214 | |||
General Chemical Industrial Products Series B, expiring 06/01/10 (g) (h) | 61 | 0 | |||
63,214 | |||||
Entertainment (0.0%) | |||||
AMF Bowling Worldwide, Inc., Class B, expiring 03/09/09 (d) (g) (h) | 811 | 0 | |||
Industrial—Other (0.1%) | |||||
ACP Holding Co., expiring 09/13/13 (b) (h) (i) | 96,400 | 192,800 | |||
Media—Non-Cable (0.0%) | |||||
Advanstar Holdings Corp., expiring 10/15/11 (b) (d) (g) (h) | 150 | 0 | |||
XM Satellite Radio, Inc., expiring 03/15/10 (h) | 300 | 2,250 | |||
Ziff Davis Media, Inc., expiring 08/12/12 (d) (g) (h) | 2,200 | 0 | |||
2,250 | |||||
Packaging (0.0%) | |||||
Pliant Corp., expiring 06/01/10 (b) (d) (g) (h) | 275 | 0 | |||
Paper (0.0%) | |||||
MDP Acquisitions, expiring 10/01/13 (b) (h) (i) | 300 | 6,000 | |||
Total Warrants | 264,264 | ||||
11
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CASH EQUIVALENTS (2.5%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $5,684,797), 5.17%, 04/01/42 | $ | 5,682,382 | $ | 5,682,382 | ||
Total Cash Equivalents | 5,682,382 | |||||
Total Investments (Cost $225,907,010) (a) — 99.0% | 223,682,769 | |||||
Other assets in excess of liabilities — 1.0% | 2,407,585 | |||||
NET ASSETS — 100.0% | $ | 226,089,891 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Represents a restricted security acquired and eligible for resale under Rule 144A, which limits the resale to certain qualified buyers. |
(c) | Bond in default. |
(d) | Fair Valued Security. |
(e) | Variable Rate Security. The rate reflected in the Statement of Investments is the rate in effect on June 30, 2006. The maturity date represents the actual maturity date. |
(f) | Security has filed for bankruptcy protection. |
(g) | Security has been deemed illiquid. The pricing committee has deemed the security to have zero value based upon procedures adopted by the Board of Trustees. |
(h) | Denotes a non-income producing security. |
(i) | Security has been deemed illiquid. |
(j) | Step up bonds. The rate reflected in the Statement of Investments is the yield as of June 30, 2006. |
PIK | Paid-In-Kind |
TRAINS | Targeted Return Index Securities Trust |
See notes to financial statements.
12
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $220,224,628) | $ | 218,000,387 | ||
Repurchase agreements, at cost and value | 5,682,382 | |||
Total Investments | 223,682,769 | |||
Cash | 120 | |||
Interest and dividends receivable | 4,466,893 | |||
Receivable for capital shares issued | 302,357 | |||
Receivable for investments sold | 1,152,250 | |||
Prepaid expenses and other assets | 3,102 | |||
Total Assets | 229,607,491 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 123,495 | |||
Payable for investments purchased | 3,218,254 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 130,976 | |||
Fund administration and transfer agent fees | 23,457 | |||
Administrative servicing fees | 9,232 | |||
Other | 12,186 | |||
Total Liabilities | 3,517,600 | |||
Net Assets | $ | 226,089,891 | ||
Represented by: | ||||
Capital | $ | 242,239,873 | ||
Accumulated net investment income (loss) | 372,731 | |||
Accumulated net realized gains (losses) from investments | (14,298,472 | ) | ||
Net unrealized appreciation (depreciation) on investments | (2,224,241 | ) | ||
Net Assets | $ | 226,089,891 | ||
Net Assets: | ||||
Class I Shares | $ | 159,329,614 | ||
Class III Shares | 66,760,277 | |||
Total | $ | 226,089,891 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 20,700,771 | |||
Class III Shares | 8,680,698 | |||
Total | 29,381,469 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 7.70 | ||
Class III Shares | $ | 7.69 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 9,997,433 | ||
Dividend income | 16,451 | |||
Total Income | 10,013,884 | |||
Expenses: | ||||
Investment advisory fees | 820,224 | |||
Fund administration and transfer agent fees | 107,636 | |||
Administrative servicing fees Class I Shares | 102,908 | |||
Administrative servicing fees Class III Shares | 60,655 | |||
Trustee fees | 4,112 | |||
Other | 33,392 | |||
Total expenses before earnings credit | 1,128,927 | |||
Earnings credit (Note 7) | (1,438 | ) | ||
Total Expenses | 1,127,489 | |||
Net Investment Income (Loss) | 8,886,395 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 360,423 | |||
Net change in unrealized appreciation/depreciation on investments | (2,423,287 | ) | ||
Net realized/unrealized gains (losses) on investments | (2,062,864 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 6,823,531 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FEDERATED GVIT HIGH INCOME BOND FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 8,886,395 | $ | 19,271,809 | ||||
Net realized gains (losses) on investment transactions | 360,423 | 1,793,834 | ||||||
Net change in unrealized appreciation/depreciation on investments | (2,423,287 | ) | (15,739,602 | ) | ||||
Change in net assets resulting from operations | 6,823,531 | 5,326,041 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (6,029,752 | ) | (16,626,700 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (2,483,912 | ) | (2,692,367 | )(a) | ||||
Change in net assets from shareholder distributions | (8,513,664 | ) | (19,319,067 | ) | ||||
Change in net assets from capital transactions | (17,389,468 | ) | (43,122,058 | ) | ||||
Change in net assets | (19,079,601 | ) | (57,115,084 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 245,169,492 | 302,284,576 | ||||||
End of period | $ | 226,089,891 | $ | 245,169,492 | ||||
Accumulated net investment income (loss) | $ | 372,731 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 5,955,082 | $ | 40,039,358 | ||||
Dividends reinvested | 6,029,751 | 16,626,700 | ||||||
Cost of shares redeemed | (33,471,127 | ) | (163,884,437 | ) | ||||
(21,486,294 | ) | (107,218,379 | ) | |||||
Class III Capital Transactions: | ||||||||
Proceeds from shares issued | 23,111,546 | 82,510,302 | (a) | |||||
Dividends reinvested | 2,483,912 | 2,692,367 | (a) | |||||
Cost of shares redeemed | (21,498,632 | ) | (21,106,348 | )(a) | ||||
4,096,826 | 64,096,321 | |||||||
Change in net assets from capital transactions | $ | (17,389,468 | ) | $ | (43,122,058 | ) | ||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 754,340 | 4,935,319 | ||||||
Reinvested | 779,187 | 2,114,150 | ||||||
Redeemed | (4,255,702 | ) | (20,486,757 | ) | ||||
(2,722,175 | ) | (13,437,288 | ) | |||||
Class III Share Transactions: | ||||||||
Issued | 2,941,342 | 10,468,265 | (a) | |||||
Reinvested | 321,161 | 345,265 | (a) | |||||
Redeemed | (2,734,011 | ) | (2,661,324 | )(a) | ||||
528,492 | 8,152,206 | |||||||
(a) | For the period from April 28, 2005 (commencement of operations) through December 31, 2005. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Federated GVIT High Income Bond Fund
Investment Activities: | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 7.89 | 0.76 | (0.45 | ) | 0.31 | (0.76 | ) | (0.76 | ) | $ | 7.44 | 4.22% | $ | 114,022 | 0.95% | 9.96% | 1.03% | 9.88% | 31.64% | |||||||||||||||||||
Year Ended December 31, 2002 | $ | 7.44 | 0.61 | (0.38 | ) | 0.23 | (0.61 | ) | (0.61 | ) | $ | 7.06 | 3.23% | $ | 162,733 | 0.97% | 8.82% | 0.97% | 8.82% | 30.59% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.06 | 0.57 | 0.96 | 1.53 | (0.57 | ) | (0.57 | ) | $ | 8.02 | 22.27% | $ | 268,336 | 0.95% | 7.74% | (d | ) | (d | ) | 41.30% | ||||||||||||||||||
Year Ended December 31, 2004 | $ | 8.02 | 0.60 | 0.18 | 0.78 | (0.60 | ) | (0.60 | ) | $ | 8.20 | 10.10% | $ | 302,285 | 0.94% | 7.46% | (d | ) | (d | ) | 61.24% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 8.20 | 0.64 | (0.46 | ) | 0.18 | (0.61 | ) | (0.61 | ) | $ | 7.77 | 2.38% | $ | 181,905 | 0.96% | 7.35% | (d | ) | (d | ) | 37.06% | |||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 7.77 | 0.30 | (0.08 | ) | 0.22 | (0.29 | ) | (0.29 | ) | $ | 7.70 | 2.81% | (e) | $ | 159,330 | 0.92% | (f) | 7.39% | (f) | (d | ) | (d | ) | 19.41% | ||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2005(g) | $ | 7.83 | 0.39 | 0.01 | 0.40 | (0.47 | ) | (0.47 | ) | $ | 7.76 | 5.14% | (e) | $ | 63,264 | 0.95% | (f) | 7.23% | (f) | (d | ) | (d | ) | 37.06% | |||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 7.76 | 0.30 | (0.08 | ) | 0.22 | (0.29 | ) | (0.29 | ) | $ | 7.69 | 2.79% | (e) | $ | 66,760 | 0.97% | (f) | 7.34% | (f) | (d | ) | (d | ) | 19.41% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | There were no fee reductions during the period. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | For the period from April 28, 2005 (commencement of operations) through June 30, 2005. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Federated GVIT High Income Bond Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee,
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 93-2, permanent difference (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||
$ | 225,907,760 | $ | 5,241,708 | $ | (7,466,699 | ) | $ | (2,224,991 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
proportion to the total net assets of the Fund. Expenses specific to a class (such a Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GMF advises. Federated Investment Management Company (the “subadviser”), manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | ||||||
Up to $50 million | 0.80 | % | 0.40 | % | 0.40 | % | |||
Next $200 million | 0.65 | % | 0.40 | % | 0.25 | % | |||
Next $250 million | 0.60 | % | 0.40 | % | 0.20 | % | |||
$500 million or more | 0.55 | % | 0.40 | % | 0.15 | % |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $180,595 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is designed to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $41,502.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $44,820,204 and sales of $59,675,171.
6. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in high yield instruments and are subject to certain additional credit and market risks. The yields of high yield debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading.
7. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the Lehman High Yield Index and the Lipper High Current Yield Funds category median for the one-year period ended September 30, 2005. The Board also considered that the Fund’s performance ranked in the third quartile of the Fund’s Lipper category for the three- and five-year periods. The Board discussed with management the Fund’s performance and decrease in assets. Management explained that the adviser continues to closely monitor the Fund, and that the Fund’s performance had suffered over the past two years because of its quality bias as lower quality bonds outperformed higher quality bonds. The Board directed the Performance Committee to closely monitor the performance of this Fund, particularly in light of the Fund’s recent benchmark change, on October 1, 2005, to the Lehman Corporate High Yield 2% Cap Index.
Next, the Board reviewed the fund’s contractual advisory fee and breakpoints and noted the contractual advisory fee (including, advisory fee) placed the Fund in the fourth quintile of its Lipper-constructed Expense Group. The Board also
22
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
considered that the Fund’s total expenses placed the Fund in the second quintile of its Lipper Expense Group. The Board concluded that the adviser’s profitability was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
23
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000
Conshohocken, PA 19428 1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
28
Table of Contents
GVIT S&P 500 Index Fund
(formerly GVIT Equity 500 Index Fund)
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
12 | Statement of Assets and Liabilities | |
12 | Statement of Operations | |
13 | Statements of Changes in Net Assets | |
14 | Financial Highlights | |
15 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GS&P (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT S&P 500 Index Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
GVIT S&P 500 Index Fund | |||||||||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,025.40 | $ | 1.31 | 0.26% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,023.51 | $ | 1.31 | 0.26% | ||||||
Class ID | Actual | $ | 1,000.00 | $ | 976.60 | $ | 0.93a | 0.19%a | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,007.46 | $ | 0.95b | 0.19%b |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
a | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
b | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT S&P 500 Index Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 87.4% | |
Cash Equivalents | 13.4% | |
Other Investments* | 4.1% | |
Liabilities in excess of other assets** | -4.9% | |
100.0% | ||
Top Industries | ||
Financial Services | 9.1% | |
Oil & Gas | 7.5% | |
Computers | 7.5% | |
Retail | 5.1% | |
Healthcare | 5.0% | |
Banks | 4.8% | |
Telecommunications | 4.5% | |
Insurance | 4.2% | |
Drugs | 3.7% | |
Electrical Equipment | 3.0% | |
Other Assets | 45.6% | |
100.0% | ||
Top Holdings*** | ||
Exxon Mobil Corp. | 2.8% | |
General Electric Co. | 2.6% | |
Citigroup, Inc. | 1.8% | |
Bank of America Corp. | 1.7% | |
Microsoft Corp. | 1.6% | |
Procter & Gamble Co. | 1.4% | |
Johnson & Johnson, Inc. | 1.3% | |
Pfizer, Inc. | 1.3% | |
American Int’l Group, Inc. | 1.2% | |
Altria Group, Inc. | 1.2% | |
Other Assets | 83.1% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (87.4%) | |||||
Aerospace & Defense (1.8%) | |||||
Boeing Co. (The) | 21,962 | $ | 1,798,907 | ||
General Dynamics Corp. | 10,500 | 687,330 | |||
Lockheed Martin Corp. | 9,700 | 695,878 | |||
Northrop Grumman Corp. | 9,962 | 638,166 | |||
Raytheon Co. | 11,400 | 508,098 | |||
Rockwell Collins, Inc. | 4,014 | 224,262 | |||
United Technologies Corp. | 27,700 | 1,756,734 | |||
Xilinx, Inc. | 10,600 | 240,090 | |||
6,549,465 | |||||
Agriculture (0.2%) | |||||
Monsanto Co. | 7,895 | 664,680 | |||
Airlines (0.1%) | |||||
Southwest Airlines Co. | 17,750 | 290,568 | |||
Apparel (0.2%) | |||||
Jones Apparel Group, Inc. | 2,400 | 76,296 | |||
Liz Claiborne, Inc. (c) | 2,500 | 92,650 | |||
Nike, Inc., Class B | 5,600 | 453,600 | |||
V.F. Corp. | 2,100 | 142,632 | |||
765,178 | |||||
Auto Parts & Equipment (0.5%) | |||||
AutoNation, Inc. (b) (c) | 3,683 | 78,964 | |||
AutoZone, Inc. (b) | 1,800 | 158,760 | |||
Genuine Parts Co. | 4,000 | 166,640 | |||
Ingersoll Rand Co. | 9,800 | 419,243 | |||
Johnson Controls, Inc. | 4,900 | 402,878 | |||
Navistar Int’l Corp. (b) | 1,200 | 29,532 | |||
PACCAR, Inc. | 5,025 | 413,960 | |||
Snap-On, Inc. | 1,400 | 56,588 | |||
1,726,565 | |||||
Automobiles (0.4%) | |||||
Ford Motor Co. (c) | 54,632 | 378,600 | |||
General Motors Corp. (c) | 16,252 | 484,147 | |||
Harley-Davidson, Inc. (c) | 8,000 | 439,120 | |||
1,301,867 | |||||
Banks (4.8%) | |||||
AmSouth Bancorp | 8,000 | 211,600 | |||
Bank of America Corp. | 125,193 | 6,021,782 | |||
Bank of New York Co., Inc. | 21,028 | 677,102 | |||
BB&T Corp. | 14,200 | 590,578 | |||
Bear Stearns Cos., Inc. | 3,600 | 504,288 | |||
Commerce Bancorp, Inc. (c) | 5,900 | 210,453 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Banks (continued) | |||||
Compass Bancshares, Inc. (c) | 2,800 | $ | 155,680 | ||
Fifth Third Bancorp | 16,285 | 601,731 | |||
Huntington Bancshares, Inc. | 5,410 | 127,568 | |||
KeyCorp. | 10,100 | 360,368 | |||
M & T Bank Corp. (c) | 1,800 | 212,256 | |||
Mellon Financial Corp. | 10,300 | 354,629 | |||
National City Corp. | 15,900 | 575,421 | |||
Northern Trust Corp. | 4,300 | 237,790 | |||
PNC Bank Corp. | 8,600 | 603,462 | |||
Regions Financial Corp. | 13,660 | 452,419 | |||
Sovereign Bancorp | 8,505 | 172,737 | |||
SunTrust Banks, Inc. | 10,400 | 793,104 | |||
Synovus Financial Corp. | 7,500 | 200,850 | |||
U.S. Bancorp | 48,868 | 1,509,044 | |||
Wachovia Corp. | 44,754 | 2,420,296 | |||
Zions Bancorp | 3,400 | 264,996 | |||
17,258,154 | |||||
Beverages (1.9%) | |||||
Anheuser-Busch Cos., Inc. | 22,043 | 1,004,940 | |||
Brown-Forman Corp., Class B | 1,900 | 136,211 | |||
Coca-Cola Co. | 56,212 | 2,418,240 | |||
Coca-Cola Enterprises, Inc. | 7,200 | 146,664 | |||
Constellation Brands, Inc. (b) (c) | 4,400 | 110,000 | |||
Molson Coors Brewing Co. | 1,200 | 81,456 | |||
Pepsi Bottling Group, Inc. (The) | 3,300 | 106,095 | |||
PepsiCo, Inc. | 45,330 | 2,721,614 | |||
6,725,220 | |||||
Biotechnology (0.3%) | |||||
Applera Corp. | 5,800 | 187,630 | |||
Gilead Sciences, Inc. (b) | 12,100 | 715,836 | |||
Waters Corp. (b) | 2,400 | 106,560 | |||
1,010,026 | |||||
Business Services (2.9%) | |||||
Apollo Group, Inc. (b) (c) | 4,200 | 217,014 | |||
AutoDesk, Inc. (b) | 6,430 | 221,578 | |||
Automatic Data Processing, Inc. | 15,508 | 703,288 | |||
Cintas Corp. | 3,000 | 119,280 | |||
Compuware Corp. (b) | 8,300 | 55,610 |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Business Services (continued) | |||||
Convergys Corp. (b) | 3,500 | $ | 68,250 | ||
Dow Jones & Co., Inc. (c) | 1,200 | 42,012 | |||
eBay, Inc. (b) | 31,000 | 907,990 | |||
Electronic Data Systems Corp. | 13,300 | 319,998 | |||
Equifax, Inc. | 3,100 | 106,454 | |||
Exelon Corp. | 17,724 | 1,007,255 | |||
First Data Corp. | 20,216 | 910,529 | |||
Fiserv, Inc. (b) (c) | 5,450 | 247,212 | |||
Google, Inc. (b) | 5,621 | 2,357,053 | |||
IMS Health, Inc. (c) | 4,253 | 114,193 | |||
Interpublic Group Cos., Inc. (The) (b) | 14,500 | 121,075 | |||
Monster Worldwide, Inc. (b) | 4,000 | 170,640 | |||
Moody’s Corp. | 7,108 | 387,102 | |||
Omnicom Group, Inc. (c) | 5,100 | 454,359 | |||
Paychex, Inc. | 9,850 | 383,953 | |||
Pitney Bowes, Inc. | 5,200 | 214,760 | |||
Robert Half Int’l, Inc. | 3,900 | 163,800 | |||
Sabre Holdings, Inc. | 2,768 | 60,896 | |||
Verisign, Inc. (b) | 7,700 | 178,409 | |||
Yahoo!, Inc. (b) | 33,700 | 1,112,100 | |||
10,644,810 | |||||
Chemicals & Allied Products (1.3%) | |||||
Air Products & Chemicals, Inc. | 6,700 | 428,264 | |||
Dow Chemical Co. | 25,466 | 993,938 | |||
E.I. du Pont de Nemours & Co. | 26,100 | 1,085,760 | |||
Eastman Chemical Co. (c) | 2,800 | 151,200 | |||
Hercules, Inc. (b) (c) | 3,200 | 48,832 | |||
Millipore Corp. (b) | 1,900 | 119,681 | |||
Occidental Petroleum Corp. | 11,400 | 1,169,070 | |||
Praxair, Inc. | 9,600 | 518,400 | |||
Rohm & Haas Co. | 3,300 | 165,396 | |||
Sigma-Aldrich Corp. (c) | 1,500 | 108,960 | |||
4,789,501 | |||||
Computers (7.5%) | |||||
Adobe Systems, Inc. (b) | 17,100 | 519,156 | |||
Affiliated Computer Services, Class A (b) (c) | 3,700 | 190,957 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Computers (continued) | |||||
American Power Conversion Corp. (c) | 3,700 | $ | 72,113 | ||
Apple Computer, Inc. (b) | 23,000 | 1,313,760 | |||
Avaya, Inc. (b) (c) | 9,566 | 109,244 | |||
BMC Software, Inc. (b) | 4,700 | 112,330 | |||
CA, Inc. (c) | 11,600 | 238,380 | |||
Cisco Systems, Inc. (b) | 167,457 | 3,270,435 | |||
Citrix Systems, Inc. (b) | 5,500 | 220,770 | |||
Computer Sciences Corp. (b) | 4,600 | 222,824 | |||
Dell, Inc. (b) | 61,300 | 1,496,333 | |||
EMC Corp. (b) | 67,000 | 734,990 | |||
Gateway, Inc. (b) | 5,700 | 10,830 | |||
Hewlett Packard Co. | 76,500 | 2,423,520 | |||
Int’l Business Machines Corp. | 42,517 | 3,266,156 | |||
Intel Corp. | 159,573 | 3,023,908 | |||
Intuit, Inc. (b) | 5,200 | 314,028 | |||
Lexmark Int’l Group, Inc. (b) | 3,200 | 178,656 | |||
Microsoft Corp. | 240,640 | 5,606,913 | |||
NCR Corp. (b) | 4,100 | 150,224 | |||
Network Appliance, Inc. (b) | 10,800 | 381,240 | |||
Novell, Inc. (b) (c) | 8,100 | 53,703 | |||
NVIDIA Corp. (b) | 10,600 | 225,674 | |||
Oracle Corp. (b) | 106,936 | 1,549,503 | |||
Parametric Technology Corp. (b) | 2,840 | 36,096 | |||
SanDisk Corp. (b) | 5,700 | 290,586 | |||
Sun Microsystems, Inc. (b) | 100,856 | 418,552 | |||
Symantec Corp. (b) | 29,791 | 462,952 | |||
Symbol Technologies, Inc. | 5,600 | 60,424 | |||
Unisys Corp. (b) | 8,400 | 52,752 | |||
27,007,009 | |||||
Conglomerates (0.6%) | |||||
Illinois Tool Works, Inc. | 10,600 | 503,500 | |||
ITT Industries, Inc. | 4,500 | 222,750 | |||
Tyco Int’l Ltd. | 54,856 | 1,508,540 | |||
2,234,790 | |||||
Construction & Building Materials (1.0%) | |||||
Caterpillar, Inc. | 18,000 | 1,340,640 | |||
Centex Corp. | 3,700 | 186,110 | |||
D. R. Horton, Inc. | 8,300 | 197,706 |
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Construction & Building Materials (continued) | |||||
Deere & Co. | 6,800 | $ | 567,732 | ||
Fluor Corp. | 2,700 | 250,911 | |||
KB Home (c) | 2,300 | 105,455 | |||
Lennar Corp., Class A | 4,300 | 190,791 | |||
Masco Corp. (c) | 11,981 | 355,117 | |||
Pulte Corp. | 5,000 | 143,950 | |||
Sherwin Williams Co. | 2,600 | 123,448 | |||
Vulcan Materials Co. (c) | 2,292 | 178,776 | |||
3,640,636 | |||||
Consumer Products (2.5%) | |||||
Alberto Culver Co., Class B | 2,850 | 138,852 | |||
Avery-Dennison Corp. | 2,400 | 139,344 | |||
Avon Products, Inc. | 11,300 | 350,300 | |||
Black & Decker Corp. | 2,500 | 211,150 | |||
Clorox Co. (The) | 4,399 | 268,207 | |||
Colgate-Palmolive Co. | 14,761 | 884,184 | |||
Danaher Corp. | 6,000 | 385,920 | |||
Ecolab, Inc. | 4,000 | 162,320 | |||
Estee Lauder Co., Inc. (The), Class A (c) | 2,600 | 100,542 | |||
Fortune Brands, Inc. | 3,500 | 248,535 | |||
Int’l Flavors & Fragrances, Inc. | 2,000 | 70,480 | |||
Kimberly-Clark Corp. | 13,200 | 814,440 | |||
Leggett & Platt, Inc. (c) | 4,100 | 102,418 | |||
Pall Corp. (c) | 2,800 | 78,400 | |||
Procter & Gamble Co. | 89,999 | 5,003,944 | |||
Whirlpool Corp. (c) | 2,450 | 202,493 | |||
9,161,529 | |||||
Containers (0.1%) | |||||
Ball Corp. (c) | 2,200 | 81,488 | |||
Bemis Co. | 2,300 | 70,426 | |||
Newell Rubbermaid, Inc. | 6,100 | 157,563 | |||
Sealed Air Corp. (c) | 1,900 | 98,952 | |||
408,429 | |||||
Drugs (3.7%) | |||||
Amerisource Bergen Corp. | 6,408 | 268,623 | |||
Barr Parmaceuticals, Inc. (b) | 3,300 | 157,377 | |||
Biogen, Inc. (b) | 9,239 | 428,043 | |||
Eli Lilly & Co. | 31,570 | 1,744,874 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Drugs (continued) | |||||
Express Scripts, Inc., Class A (b) | 4,400 | $ | 315,656 | ||
Forest Laboratories, Inc., Class A (b) | 8,400 | 324,996 | |||
Genzyme Corp. (b) | 7,500 | 457,875 | |||
Medimmune, Inc. (b) | 7,609 | 206,204 | |||
Merck & Co., Inc. | 60,764 | 2,213,633 | |||
Mylan Laboratories, Inc. | 4,800 | 96,000 | |||
Pfizer, Inc. | 200,961 | 4,716,554 | |||
Schering Plough Corp. | 39,300 | 747,879 | |||
Wyeth | 36,900 | 1,638,729 | |||
13,316,443 | |||||
Electrical Equipment (3.0%) | |||||
Cooper Industries Ltd., Class A | 2,115 | 196,526 | |||
Eaton Corp. | 4,600 | 346,840 | |||
Emerson Electric Co. | 10,800 | 905,148 | |||
General Electric Co. | 285,248 | 9,401,774 | |||
Grainger (W.W.), Inc. | 1,700 | 127,891 | |||
10,978,179 | |||||
Electronics (0.9%) | |||||
Agilent Technologies, Inc. (b) | 12,361 | 390,113 | |||
Altera Corp. (b) | 11,200 | 196,560 | |||
Broadcom Corp., Class A (b) | 11,900 | 357,595 | |||
Harman Int’l Industries, Inc. | 1,500 | 128,055 | |||
Molex, Inc. | 3,425 | 114,977 | |||
Radioshack Corp. (c) | 3,000 | 42,000 | |||
Rockwell Int’l Corp. | 5,300 | 381,653 | |||
Sanmina Corp. (b) | 11,500 | 52,900 | |||
Solectron Corp. (b) | 19,500 | 66,690 | |||
Tektronix, Inc. | 2,100 | 61,782 | |||
Teradyne, Inc. (b) (c) | 4,800 | 66,864 | |||
Texas Instruments, Inc. | 41,800 | 1,266,122 | |||
3,125,311 | |||||
Entertainment (0.7%) | |||||
Electronic Arts, Inc. (b) | 8,900 | 383,056 | |||
Int’l Game Technology | 8,700 | 330,078 | |||
Walt Disney Co. (The) | 60,200 | 1,806,000 | |||
2,519,134 | |||||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Financial Services (9.1%) | |||||
AMBAC Financial Group, Inc. | 3,350 | $ | 271,685 | ||
American Express Co. | 33,800 | 1,798,836 | |||
Ameriprise Financial, Inc. | 6,080 | 271,594 | |||
Capital One Financial Corp. | 8,000 | 683,600 | |||
Charles Schwab Corp. | 26,850 | 429,063 | |||
Cit Group, Inc. | 6,000 | 313,740 | |||
Citigroup, Inc. | 136,354 | 6,577,716 | |||
Comerica, Inc. | 5,200 | 270,348 | |||
Countrywide Credit Industries, Inc. | 16,000 | 609,280 | |||
E*TRADE Financial Corp. (b) | 12,600 | 287,532 | |||
Federal Home Loan Mortgage Corp. | 19,600 | 1,117,396 | |||
Federal National Mortgage Association | 25,986 | 1,249,927 | |||
Federated Investors, Inc. | 2,100 | 66,150 | |||
First Horizon National Corp. (c) | 3,000 | 120,600 | |||
Franklin Resources, Inc. | 3,800 | 329,878 | |||
Genworth Financial, Inc., Class A | 11,100 | 386,724 | |||
Golden West Financial Corp. | 6,500 | 482,300 | |||
Goldman Sachs Group, Inc. | 11,900 | 1,790,117 | |||
H & R Block, Inc. (c) | 10,100 | 240,986 | |||
J.P. Morgan Chase & Co. | 95,301 | 4,002,642 | |||
Janus Capital Group, Inc. (c) | 4,800 | 85,920 | |||
Legg Mason, Inc. (c) | 3,900 | 388,128 | |||
Lehman Brothers Holdings, Inc. | 14,734 | 959,920 | |||
Marshall & Ilsley Corp. | 5,400 | 246,996 | |||
Merrill Lynch & Co. | 25,300 | 1,759,868 | |||
Morgan Stanley Dean Witter & Co. | 29,400 | 1,858,374 | |||
North Fork Bancorp, Inc. | 11,600 | 349,972 | |||
SLM Corp. | 10,600 | 560,952 | |||
State Street Corp. | 9,700 | 563,473 | |||
T. Rowe Price Group, Inc. | 6,300 | 238,203 | |||
Washington Mutual, Inc. (c) | 27,178 | 1,238,773 | |||
Wells Fargo Co. | 46,059 | 3,089,638 | |||
32,640,331 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Food & Related (2.4%) | |||||
Altria Group, Inc. | 57,300 | $ | 4,207,538 | ||
Archer-Daniels Midland Co. | 17,237 | 711,543 | |||
Campbell Soup Co. | 6,100 | 226,371 | |||
ConAgra, Inc. | 12,600 | 278,586 | |||
Dean Foods Co. (b) | 4,200 | 156,198 | |||
General Mills, Inc. (c) | 10,500 | 542,430 | |||
H.J. Heinz Co. | 10,100 | 416,322 | |||
Hershey Foods Corp. (c) | 4,800 | 264,336 | |||
Kellogg Co. (c) | 7,400 | 358,382 | |||
McCormick & Co. | 3,200 | 107,360 | |||
Sara Lee Corp. | 22,929 | 367,323 | |||
SYSCO Corp. (c) | 16,900 | 516,464 | |||
Tyson Foods, Inc., Class A (c) | 5,300 | 78,758 | |||
Wrigley (Wm.) Jr. Co., Class A | 5,800 | 263,088 | |||
Wrigley (Wm.) Jr. Co., Class B | 1,025 | 46,433 | |||
8,541,132 | |||||
Healthcare (5.0%) | |||||
Abbott Laboratories | 41,867 | 1,825,821 | |||
Allergan, Inc. | 4,400 | 471,944 | |||
Bausch & Lomb, Inc. | 1,700 | 83,368 | |||
Baxter Int’l, Inc. | 17,100 | 628,596 | |||
Becton Dickinson & Co. | 6,200 | 379,006 | |||
Bristol-Myers Squibb Co. | 54,262 | 1,403,215 | |||
Cardinal Health, Inc. (c) | 11,153 | 717,472 | |||
Coventry Health Care, Inc. (b) | 4,900 | 269,206 | |||
HCA, Inc. | 10,300 | 444,445 | |||
Health Management Associates, Inc., Class A (c) | 5,400 | 106,434 | |||
Humana, Inc. (b) | 4,900 | 263,130 | |||
Johnson & Johnson, Inc. | 81,211 | 4,866,164 | |||
King Pharmaceuticals, Inc. (b) | 5,233 | 88,961 | |||
McKesson HBOC, Inc. | 8,900 | 420,792 | |||
Medco Health Solutions, Inc. (b) | 8,848 | 506,813 | |||
Medtronic, Inc. | 33,900 | 1,590,588 | |||
Quest Diagnostics, Inc. | 4,900 | 293,608 | |||
St. Jude Medical, Inc. (b) | 10,500 | 340,410 | |||
Stryker Corp. | 7,400 | 311,614 | |||
Tenet Healthcare Corp. (b) | 9,800 | 68,404 | |||
Unitedhealth Group, Inc. | 36,944 | 1,654,352 |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Healthcare (continued) | |||||
Watson Pharmaceutical, Inc. (b) (c) | 2,100 | $ | 48,888 | ||
Wellpoint Health Networks, Inc. (b) | 17,000 | 1,237,090 | |||
18,020,321 | |||||
Hotels & Motels (0.5%) | |||||
Cendant Corp. | 26,000 | 423,540 | |||
Harrah’s Entertainment, Inc. | 5,500 | 391,490 | |||
Hilton Hotels Corp. | 8,000 | 226,240 | |||
Marriott Int’l, Inc., Class A (c) | 9,300 | 354,516 | |||
Starwood Hotels & Resorts Worldwide, Inc. | 6,500 | 392,210 | |||
1,787,996 | |||||
Industrial (0.1%) | |||||
Parker Hannifin Corp. | 3,700 | 287,120 | |||
Thermo Electron Corp. (b) (c) | 5,200 | 188,448 | |||
475,568 | |||||
Insurance (4.2%) | |||||
ACE Ltd. | 8,712 | 440,740 | |||
Aetna, Inc. | 15,100 | 602,943 | |||
AFLAC, Inc. | 12,900 | 597,915 | |||
Allstate Corp. (The) | 16,800 | 919,464 | |||
American Int’l Group, Inc. | 71,268 | 4,208,375 | |||
AON Corp. (c) | 8,800 | 306,416 | |||
Chubb Corp. (The) | 11,300 | 563,870 | |||
CIGNA Corp. | 3,500 | 344,785 | |||
Cincinnati Financial Corp. | 3,921 | 184,326 | |||
Hartford Financial Services Group, Inc. | 8,800 | 744,480 | |||
Lincoln National Corp. | 8,477 | 478,442 | |||
Loews Corp. | 10,101 | 358,080 | |||
Marsh & McLennan Cos., Inc. | 14,100 | 379,149 | |||
MBIA, Inc. (c) | 4,350 | 254,693 | |||
MetLife, Inc. | 20,100 | 1,029,321 | |||
MGIC Investment Corp. (c) | 2,900 | 188,500 | |||
Principal Financial Group, Inc. | 6,900 | 383,985 | |||
Progressive Corp. (The) | 20,100 | 516,771 | |||
Prudential Financial, Inc. | 13,000 | 1,010,100 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Insurance (continued) | |||||
SAFECO Corp. | 3,700 | $ | 208,495 | ||
St. Paul Travelers Cos., Inc. (The) | 18,265 | 814,254 | |||
Torchmark Corp. (c) | 2,200 | 133,584 | |||
UnumProvident Corp. (c) | 8,900 | 161,357 | |||
XL Capital Ltd., Class A | 4,400 | 269,720 | |||
15,099,765 | |||||
Leisure Products (0.2%) | |||||
Brunswick Corp. | 2,300 | 76,475 | |||
Carnival Corp. | 12,500 | 521,750 | |||
Hasbro, Inc. | 3,800 | 68,818 | |||
Mattel, Inc. | 9,100 | 150,241 | |||
817,284 | |||||
Manufacturing (1.1%) | |||||
3M Co. | 20,638 | 1,666,931 | |||
American Standard Cos., Inc. | 5,500 | 237,985 | |||
Cummins Engine, Inc. | 1,400 | 171,150 | |||
Dover Corp. | 4,800 | 237,264 | |||
Honeywell Int’l, Inc. | 21,800 | 878,540 | |||
PPG Industries, Inc. | 4,000 | 264,000 | |||
Stanley Works (The) | 1,800 | 84,996 | |||
Textron, Inc. (c) | 3,900 | 359,502 | |||
3,900,368 | |||||
Medical Equipment & Supplies (0.6%) | |||||
Bard (C.R.), Inc. | 3,200 | 234,432 | |||
Biomet, Inc. | 7,651 | 239,400 | |||
Boston Scientific Corp. (b) | 34,467 | 580,424 | |||
Fisher Scientific Int’l, Inc. (b) | 2,900 | 211,845 | |||
Laboratory Corp. of America Holdings (b) (c) | 4,000 | 248,920 | |||
Patterson Cos., Inc. (b) | 4,400 | 153,692 | |||
PerkinElmer, Inc. | 2,800 | 58,520 | |||
Zimmer Holdings, Inc. (b) | 7,226 | 409,859 | |||
2,137,092 | |||||
Medical Services (0.8%) | |||||
Amgen, Inc. (b) | 32,332 | 2,109,016 | |||
Caremark Rx, Inc. | 11,841 | 590,511 | |||
Hospira, Inc. (b) | 3,636 | 156,130 | |||
Manor Care, Inc. (c) | 2,600 | 121,992 | |||
2,977,649 | |||||
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Metals & Mining (0.7%) | |||||
Alcoa, Inc. | 23,040 | $ | 745,574 | ||
CONSOL Energy, Inc. | 5,500 | 256,960 | |||
Freeport-McMoran Copper & Gold, Inc., Class B | 5,600 | 310,296 | |||
Newmont Mining Corp. | 12,858 | 680,574 | |||
Phelps Dodge Corp. | 5,300 | 435,448 | |||
2,428,852 | |||||
Multimedia (2.0%) | |||||
CBS Corp., Class B | 22,564 | 610,356 | |||
Clear Channel Communications, Inc. | 12,800 | 396,160 | |||
Comcast Corp., Class A (b) | 57,948 | 1,897,218 | |||
E.W. Scripps Co., Class A | 1,900 | 81,966 | |||
L-3 Communications Holdings, Inc. | 3,700 | 279,054 | |||
News Corp. | 63,000 | 1,208,340 | |||
Time Warner, Inc. | 119,521 | 2,067,713 | |||
Viacom Inc., Class B (b) | 18,764 | 672,502 | |||
7,213,309 | |||||
Office Equipment & Supplies (0.1%) | |||||
Xerox Corp. (b) (c) | 23,500 | 326,885 | |||
Oil & Gas (7.5%) | |||||
Anadarko Petroleum Corp. | 13,398 | 638,951 | |||
Apache Corp. | 9,598 | 655,064 | |||
Ashland, Inc. | 2,400 | 160,080 | |||
Baker Hughes, Inc. | 9,000 | 736,650 | |||
BJ Services Co. (c) | 9,600 | 357,696 | |||
Chesapeake Energy Corp. (c) | 11,400 | 344,850 | |||
ChevronTexaco Corp. | 60,846 | 3,776,103 | |||
ConocoPhillips | 45,236 | 2,964,315 | |||
Devon Energy Corp. | 11,500 | 694,715 | |||
El Paso Corp. | 19,177 | 287,655 | |||
EOG Resources, Inc. | 7,100 | 492,314 | |||
Exxon Mobil Corp. | 165,954 | 10,181,277 | |||
Hess Corp. | 7,200 | 380,520 | |||
KeySpan Corp. | 3,800 | 153,520 | |||
Kinder Morgan, Inc. | 2,500 | 249,725 | |||
Marathon Oil Corp. (c) | 10,301 | 858,073 | |||
Murphy Oil Corp. | 5,100 | 284,886 | |||
Nabors Industries Ltd. (b) (c) | 9,300 | 314,247 | |||
NICOR, Inc. (c) | 2,100 | 87,150 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Oil & Gas (continued) | |||||
Noble Corp. (c) | 4,200 | $ | 312,564 | ||
People’s Energy Corp. (c) | 1,200 | 43,092 | |||
Sempra Energy | 6,307 | 286,842 | |||
Sunoco, Inc. | 3,900 | 270,231 | |||
Transocean Sedco Forex, Inc. (b) | 9,300 | 746,976 | |||
Valero Energy Corp. | 16,600 | 1,104,232 | |||
Williams Cos., Inc. (The) | 15,400 | 359,744 | |||
XTO Energy, Inc. | 9,366 | 414,633 | |||
27,156,105 | |||||
Oil Equipment & Services (1.2%) | |||||
Dynergy, Inc., Class A (b) | 6,300 | 34,461 | |||
Halliburton Co. | 13,700 | 1,016,677 | |||
Kerr-Mcgee Corp. | 6,332 | 439,124 | |||
National-OilWell, Inc. (b) | 5,300 | 335,596 | |||
Rowan Cos., Inc. | 3,700 | 131,683 | |||
Schlumberger Ltd. | 32,380 | 2,108,262 | |||
Weatherford Int’l Ltd. (b) | 8,900 | 441,618 | |||
4,507,421 | |||||
Paper & Forest Products (0.4%) | |||||
Int’l Paper Co. | 12,421 | 401,198 | |||
Louisiana-Pacific Corp. | 2,500 | 54,750 | |||
MeadWestvaco Corp. (c) | 3,907 | 109,123 | |||
Pactiv Corp. (b) | 3,500 | 86,625 | |||
Plum Creek Timber Co., Inc. | 4,024 | 142,852 | |||
Temple-Inland, Inc. | 3,100 | 132,897 | |||
Weyerhaeuser Co. | 7,400 | 460,650 | |||
1,388,095 | |||||
Photographic Equipment (0.1%) | |||||
Eastman Kodak Co. (c) | 8,800 | 209,264 | |||
Printing & Publishing (0.4%) | |||||
Donnelley (R.R.) & Sons Co. | 4,800 | 153,360 | |||
Gannett Co., Inc. | 7,200 | 402,696 | |||
McGraw-Hill Cos., Inc. (The) | 10,600 | 532,438 | |||
Meredith Corp. (c) | 800 | 39,632 | |||
New York Times Co., Class A (c) | 3,500 | 85,890 | |||
Tribune Co. (c) | 6,964 | 225,843 | |||
1,439,859 | |||||
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Railroads (0.7%) | |||||
Burlington Northern Santa Fe Corp. | 9,600 | $ | 760,800 | ||
CSX Corp. | 6,600 | 464,904 | |||
Norfolk Southern Corp. | 10,700 | 569,454 | |||
Union Pacific Corp. | 7,800 | 725,088 | |||
2,520,246 | |||||
Real Estate Investment Trusts (0.8%) | |||||
Apartment Investment & Management Co. | 2,500 | 108,625 | |||
Archstone-Smith Trust | 5,100 | 259,437 | |||
Boston Properties, Inc. | 2,900 | 262,160 | |||
Equity Office Properties Trust | 11,000 | 401,610 | |||
Equity Residential Property Trust | 7,200 | 322,056 | |||
Kimco Realty Corp. | 4,800 | 175,152 | |||
ProLogis Trust | 6,000 | 312,720 | |||
Public Storage, Inc. (c) | 1,900 | 144,210 | |||
Simon Property Group, Inc. | 5,500 | 456,170 | |||
Vornado Realty Trust (c) | 3,600 | 351,180 | |||
2,793,320 | |||||
Restaurants (0.5%) | |||||
Darden Restaurants, Inc. | 4,250 | 167,450 | |||
McDonald’s Corp. | 33,100 | 1,112,160 | |||
Wendy’s Int’l, Inc. | 3,800 | 221,502 | |||
YUM! Brands, Inc. | 7,900 | 397,133 | |||
1,898,245 | |||||
Retail (5.1%) | |||||
Amazon.com, Inc. (b) (c) | 9,000 | 348,120 | |||
Bed Bath & Beyond, Inc. (b) (c) | 8,500 | 281,945 | |||
Best Buy Co., Inc. (c) | 10,575 | 579,933 | |||
Big Lots, Inc. (b) (c) | 4,400 | 75,152 | |||
Circuit City Stores, Inc. | 4,900 | 133,378 | |||
Coach, Inc. (b) | 11,300 | 337,870 | |||
Costco Wholesale Corp. | 13,600 | 776,968 | |||
CVS Corp. | 22,208 | 681,786 | |||
Dillards, Inc. (c) | 2,200 | 70,070 | |||
Dollar General Corp. | 7,175 | 100,307 | |||
Family Dollar Stores, Inc. | 3,400 | 83,062 | |||
Federated Department Stores, Inc. | 14,722 | 538,825 | |||
Gap, Inc. (The) | 13,500 | 234,900 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Retail (continued) | |||||
Home Depot, Inc. | 56,682 | $ | 2,028,649 | ||
J.C. Penney Co., Inc. | 6,800 | 459,068 | |||
Kohl’s Corp. (b) | 9,800 | 579,376 | |||
Kroger Co. | 18,400 | 402,224 | |||
Limited, Inc. (The) | 8,066 | 206,409 | |||
Lowe’s Cos., Inc. | 20,786 | 1,261,087 | |||
Nordstrom, Inc. | 6,600 | 240,900 | |||
Office Depot, Inc. (b) | 7,100 | 269,800 | |||
Officemax, Inc. (c) | 2,300 | 93,725 | |||
Safeway, Inc. | 13,600 | 353,600 | |||
Sears Holdings Corp. (b) | 2,773 | 429,371 | |||
Staples, Inc. | 21,150 | 514,368 | |||
Starbucks Corp. (b) | 21,900 | 826,944 | |||
Supervalu, Inc. | 4,403 | 135,172 | |||
Target Corp. | 23,116 | 1,129,679 | |||
Tiffany & Co. | 4,600 | 151,892 | |||
TJX Cos., Inc. | 11,300 | 258,318 | |||
Wal-Mart Stores, Inc. | 68,588 | 3,303,883 | |||
Walgreen Co. | 28,500 | 1,277,940 | |||
Whole Foods Market, Inc. (c) | 4,200 | 271,488 | |||
18,436,209 | |||||
Semiconductors (1.0%) | |||||
Advanced Micro Devices, Inc. (b) | 12,500 | 305,250 | |||
Analog Devices, Inc. | 10,100 | 324,614 | |||
Applied Materials, Inc. | 44,800 | 729,344 | |||
Freescale Semiconductor, Inc. (b) | 10,246 | 301,232 | |||
Jabil Circuit, Inc. | 5,700 | 145,920 | |||
KLA-Tencor Corp. | 4,900 | 203,693 | |||
Linear Technology Corp. | 9,400 | 314,806 | |||
LSI Logic Corp. (b) | 8,400 | 75,180 | |||
Maxim Integrated Products, Inc. | 9,600 | 308,256 | |||
Micron Technology, Inc. (b) (c) | 21,300 | 320,778 | |||
National Semiconductor Corp. | 8,300 | 197,955 | |||
Novellus Systems (b) | 4,100 | 101,270 | |||
PMC-Sierra, Inc. (b) (c) | 7,300 | 68,620 | |||
QLogic Corp. (b) | 3,400 | 58,616 | |||
3,455,534 | |||||
9
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GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Steel (0.2%) | |||||
Allegheny Technologies, Inc. | 2,700 | $ | 186,948 | ||
Nucor Corp. | 8,200 | 444,850 | |||
United States Steel Corp. | 3,700 | 259,444 | |||
891,242 | |||||
Telecommunications (4.5%) | |||||
ADC Telecomm, Inc. (b) | 4,157 | 70,087 | |||
ALLTEL Corp. | 11,300 | 721,279 | |||
Andrew Corp. (b) | 3,700 | 32,782 | |||
AT&T, Inc. | 106,649 | 2,974,440 | |||
BellSouth Corp. | 49,600 | 1,795,520 | |||
CenturyTel, Inc. | 4,000 | 148,600 | |||
CIENA Corp. (b) (c) | 19,439 | 93,502 | |||
Citizens Communications Co. | 7,800 | 101,790 | |||
Comverse Technology, Inc. (b) | 6,100 | 120,597 | |||
Corning, Inc. (b) | 41,900 | 1,013,561 | |||
Embarq Corp. (b) | 4,634 | 189,948 | |||
JDS Uniphase Corp. (b) (c) | 50,600 | 128,018 | |||
Juniper Networks, Inc. (b) | 16,900 | 270,231 | |||
Lucent Technologies, Inc. (b) | 114,800 | 277,816 | |||
Motorola, Inc. | 66,600 | 1,341,990 | |||
QUALCOMM, Inc. | 46,000 | 1,843,220 | |||
Qwest Communications Int’l, Inc. (b) | 40,623 | 328,640 | |||
Sprint Corp. | 81,699 | 1,633,163 | |||
Tellabs, Inc. (b) | 13,900 | 185,009 | |||
Univision Communications, Inc. (b) | 5,200 | 174,200 | |||
Verizon Communications, Inc. | 81,102 | 2,716,106 | |||
16,160,499 | |||||
Tire & Rubber (0.0%) | |||||
B.F. Goodrich Co. (The) | 2,800 | 112,812 | |||
Cooper Tire & Rubber Co. (c) | 1,800 | 20,052 | |||
Goodyear Tire & Rubber Co. (b) (c) | 4,200 | 46,620 | |||
179,484 | |||||
Tobacco (0.1%) | |||||
Reynolds American, Inc. (c) | 2,300 | 265,190 | |||
UST, Inc. (c) | 4,900 | 221,431 | |||
486,621 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Trucking (1.0%) | |||||
FedEx Corp. | 8,100 | $ | 946,566 | ||
Ryder System, Inc. (c) | 2,000 | 116,860 | |||
United Parcel Service, Inc., Class B | 29,800 | 2,453,434 | |||
3,516,860 | |||||
Utilities (2.5%) | |||||
AES Corp. (b) | 16,900 | 311,805 | |||
Allegheny Energy, Inc. (b) | 3,600 | 133,452 | |||
Ameren Corp. (c) | 4,900 | 247,450 | |||
American Electric Power Co., Inc. | 11,860 | 406,205 | |||
Centerpoint Energy, Inc. (c) | 6,500 | 81,250 | |||
CMS Energy Corp. (b) (c) | 4,900 | 63,406 | |||
Consolidated Edison, Inc. (c) | 7,600 | 337,744 | |||
Constellation Energy Group, Inc. | 4,300 | 234,436 | |||
Detroit Edison Co. (c) | 3,900 | 158,886 | |||
Dominion Resources, Inc. (c) | 10,000 | 747,900 | |||
Duke Energy Corp. | 32,776 | 962,631 | |||
Edison Int’l | 9,800 | 382,200 | |||
Entergy Corp. | 6,200 | 438,650 | |||
FirstEnergy Corp. | 9,686 | 525,078 | |||
FPL Group, Inc. | 10,200 | 422,076 | |||
Nisource, Inc. (c) | 6,064 | 132,438 | |||
PG & E Corp. | 10,400 | 408,512 | |||
Pinnacle West Capital Corp. | 2,400 | 95,784 | |||
PPL Corp. | 11,600 | 374,680 | |||
Progress Energy, Inc. (c) | 7,526 | 322,640 | |||
Public Service Enterprise Group, Inc. | 6,400 | 423,168 | |||
Southern Co. | 21,500 | 689,075 | |||
TECO Energy, Inc. | 5,100 | 76,194 | |||
TXU Corp. | 13,200 | 789,228 | |||
Xcel Energy, Inc. (c) | 8,880 | 170,318 | |||
8,935,206 | |||||
Waste Management (0.2%) | |||||
Allied Waste Industries, Inc. (b) | 4,700 | 53,392 | |||
Waste Management, Inc. | 16,000 | 574,080 | |||
627,472 | |||||
Total Common Stocks | 315,085,728 | ||||
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GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
CASH EQUIVALENTS (13.4%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $48,203,122) | $ | 48,182,648 | $ | 48,182,648 | ||
Total Cash Equivalents | 48,182,648 | |||||
Shares or Principal Amount | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (4.1%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust Funds — Note 2 (Securities Lending) | $ | 14,777,174 | 14,777,174 | ||||
Total Short Term Securities Held as Collateral for Securities on Loan | $ | 14,777,174 | |||||
Total Investments (Cost $374,792,672) (a) — 104.9% | 378,045,550 | ||||||
Liabilities in excess of other assets — (4.9)% | (17,577,076 | ) | |||||
NET ASSETS — 100.0% | $ | 360,468,474 | |||||
(a) | See notes to financial statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | All or part of the security was on loan as of June 30, 2006. |
At June 30, 2006, the Fund’s open futures contracts were as follows:
Number of Contracts | Long Contracts* | Expiration | Market Value Covered by Contracts | Unrealized Appreciation/ Depreciation | ||||
97 | S&P 500 Emini Futures | 09/15/06 | 31,025,450 | 560,973 |
* | Cash pledged as collateral. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $326,610,024) | $ | 329,862,902 | ||
Repurchase agreements, at cost and value | 48,182,648 | |||
Total investments | 378,045,550 | |||
Cash | 1,385,449 | |||
Cash collateral pledged for futures | 1,779,750 | |||
Interest and dividends receivable | 519,972 | |||
Receivable for capital shares issued | 14,224,858 | |||
Receivable from adviser | 156 | |||
Prepaid expenses and other assets | 3,213 | |||
Total Assets | 395,958,948 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 119,029 | |||
Payable for investments purchased | 20,435,809 | |||
Payable for variation margin on futures contracts | 77,312 | |||
Payable for return of collateral received for securities on loan | 14,777,174 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 34,264 | |||
Fund administration and transfer agent fees | 21,798 | |||
Administrative servicing fees | 8,234 | |||
Other | 16,854 | |||
Total Liabilities | 35,490,474 | |||
Net Assets | $ | 360,468,474 | ||
Represented by: | ||||
Capital | $ | 420,121,891 | ||
Accumulated net investment income (loss) | 101,983 | |||
Accumulated net realized gains (losses) from investment and futures transactions | (63,569,251 | ) | ||
Net unrealized appreciation (depreciation) on investments and futures | 3,813,851 | |||
Net Assets | $ | 360,468,474 | ||
Net Assets: | ||||
Class IV Shares | $ | 255,959,310 | ||
Class ID Shares | 104,509,164 | |||
Total | $ | 360,468,474 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class IV Shares | 28,900,132 | |||
Class ID Shares | 11,800,133 | |||
Total | 40,700,265 | |||
Net asset value and offering price per share:* | ||||
Class IV Shares | $ | 8.86 | ||
Class ID Shares | $ | 8.86 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 324,172 | ||
Dividend income | 2,505,924 | |||
Income from securities lending | 16,066 | |||
Total Income | 2,846,162 | |||
Expenses: | ||||
Investment advisory fees | 278,595 | |||
Fund administration and transfer agent fees | 100,132 | |||
Administrative servicing fees Class IV Shares | 130,520 | |||
Trustee fees | 4,630 | |||
Other | 45,144 | |||
Total expenses before waived or reimbursed expenses | 559,021 | |||
Expenses waived or reimbursed | (199,344 | ) | ||
Earnings credit (Note 5) | (250 | ) | ||
Total Expenses | 359,427 | |||
Net Investment Income (Loss) | 2,486,735 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | (1,100,026 | ) | ||
Net realized gains (losses) on futures | (1,402,522 | ) | ||
Net realized gains (losses) on investment and futures transactions | (2,502,548 | ) | ||
Net change in unrealized appreciation/depreciation on investments and futures | 6,925,733 | |||
Net realized/unrealized gains (losses) on investments and futures | 4,423,185 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 6,909,920 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GVIT S&P 500 INDEX FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 2,486,735 | $ | 4,280,053 | ||||
Net realized gains (losses) on investment and futures transactions | (2,502,548 | ) | (7,066,693 | ) | ||||
Net change in unrealized appreciation/depreciation on investments and futures | 6,925,733 | 14,675,801 | ||||||
Change in net assets resulting from operations | 6,909,920 | 11,889,161 | ||||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (2,079,074 | ) | (4,289,933 | ) | ||||
Distributions to Class ID shareholders from: | ||||||||
Net investment income | (327,199 | )(a) | — | |||||
Change in net assets from shareholder distributions | (2,406,273 | ) | (4,289,933 | ) | ||||
Change in net assets from capital transactions | 90,393,806 | (28,961,641 | ) | |||||
Change in net assets | 94,897,453 | (21,362,413 | ) | |||||
Net Assets: | ||||||||
Beginning of period | 265,571,021 | 286,933,434 | ||||||
End of period | $ | 360,468,474 | $ | 265,571,021 | ||||
Accumulated net investment income (loss) | $ | 101,983 | $ | 21,521 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class IV Shares | ||||||||
Proceeds from shares issued | $ | 5,266,147 | $ | 10,342,944 | ||||
Dividends reinvested | 2,079,084 | 4,289,933 | ||||||
Cost of shares redeemed | (21,784,533 | ) | (43,594,518 | ) | ||||
(14,439,302 | ) | (28,961,641 | ) | |||||
Class ID Shares | ||||||||
Proceeds from shares issued | 104,505,909 | (a) | — | |||||
Dividends reinvested | 327,199 | (a) | — | |||||
104,833,108 | — | |||||||
Change in net assets from capital transactions | $ | 90,393,806 | $ | (28,961,641 | ) | |||
SHARE TRANSACTIONS: | ||||||||
Class IV Shares | ||||||||
Issued | 588,638 | 1,225,443 | ||||||
Reinvested | 233,521 | 508,558 | ||||||
Redeemed | (2,429,640 | ) | (5,172,768 | ) | ||||
(1,607,481 | ) | (3,438,767 | ) | |||||
Class ID Shares | ||||||||
Issued | 11,762,610 | (a) | — | |||||
Reinvested | 37,523 | (a) | — | |||||
11,800,133 | — | |||||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
GVIT S&P 500 Index Fund
Net Asset Value, Beginning of Period | Investment Activities | Distributions | Net Asset | Total | Net Assets at | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||
Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||||||
Class IV Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001 | $ | 9.36 | 0.09 | (1.22 | ) | (1.13 | ) | (0.09 | ) | (0.02 | ) | (0.11 | ) | $ | 8.12 | (12.24% | ) | $ | 324,915 | 0.28% | 1.06% | 0.53% | 0.81% | 6.00% | |||||||||||||||||||
Year Ended December 31, 2002 | $ | 8.12 | 0.10 | (1.89 | ) | (1.79 | ) | (0.09 | ) | — | (0.09 | ) | $ | 6.24 | (22.31% | ) | $ | 235,961 | 0.28% | 1.32% | 0.50% | 1.10% | 19.00% | ||||||||||||||||||||
Year Ended December 31, 2003(c) | $ | 6.24 | 0.11 | 1.63 | 1.74 | (0.13 | ) | — | (0.13 | ) | $ | 7.85 | 28.33% | $ | 281,115 | 0.28% | 1.51% | 0.47% | 1.32% | 2.41% | |||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 7.85 | 0.14 | 0.68 | 0.82 | (0.22 | ) | — | (0.22 | ) | $ | 8.45 | 10.59% | $ | 286,933 | 0.28% | 1.74% | 0.43% | 1.59% | 3.10% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 8.45 | 0.14 | 0.26 | 0.40 | (0.14 | ) | — | (0.14 | ) | $ | 8.71 | 4.75% | $ | 265,571 | 0.28% | 1.58% | 0.47% | 1.40% | 4.29% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 8.71 | 0.15 | 0.07 | 0.22 | (0.07 | ) | — | (0.07 | ) | $ | 8.86 | 2.54% | (d) | $ | 255,959 | 0.26% | (e) | 1.76% | (e) | 0.41% | (e) | 1.62% | (e) | 5.26% | ||||||||||||||||||
Class ID Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(f) | $ | 9.15 | 1.31 | (1.56 | ) | (0.25 | ) | (0.04 | ) | — | (0.04 | ) | $ | 8.86 | (2.77% | )(d) | $ | 104,509 | 0.19% | (e) | 2.14% | (e) | 0.23% | (e) | 2.11% | (e) | 5.26% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The GVIT Equity 500 Index Fund retained the history of Market Street Equity 500 Index Fund and the existing shares of the fund were designated Class IV Shares. |
(d) | Not annualized |
(e) | Annualized |
(f) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
14
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT S&P 500 Index Fund (the “Fund”), (formerly “GVIT Equity 500 Index Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
15
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Commercial Paper | Aegis Finance LLC | $ | 1,493,193 | 5.29 | % | 07/21/06 | ||||
Repurchase Agreement | Bank of America Securities LLC | 13,283,981 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$14,615,082 | $ | 14,777,174 |
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||
$399,323,102 | $ | 61,987,731 | $ | (83,265,283 | ) | $ | (21,277,552 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GMF advises. Fund Asset Management, L.P. (the “subadviser”), manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Prior to May 1, 2006, the Fund’s subadviser was SsgA Funds.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | ||||
Up to $1.5 billion | 0.13 | % | 0.11% | 0.02% | |||
Next $1.5 billion | 0.12 | % | 0.10% | 0.02% | |||
$3 billion or more | 0.11 | % | 0.09% | 0.02% |
Effective May 1, 2006, GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses from exceeding 0.23% for all classes of shares until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of the six months ended June 30, 2006, the cumulative potential reimbursements for the Class IV shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF would be:
Amount Fiscal Year 2003 | Amount Fiscal Year 2004 | Amount Fiscal Year 2005 | Amount Six months ended June 30, 2006 | ||||||
$486,617 | $ | 414,515 | $ | 500,657 | $ | 199,344 |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | |||
Up to $1 billion | 0.15 | % | |
$1 billion up to $3 billion | 0.10 | % | |
$3 billion up to $8 billion | 0.05 | % | |
$8 billion up to $10 billion | 0.04 | % | |
$10 billion up to $12 billion | 0.02 | % | |
$12 billion or more | 0.01 | % |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class II shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $131,856 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $61,698,965 and sales of $14,324,281.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan & Chase Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in custodian fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed the bank’s reduce its fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that the Fund underperformed its benchmark, the S&P 500 Index, over the one-, three- and five-year periods ended September 30, 2005. The Fund outperformed the benchmark on a gross basis. The Board concluded that the underperformance on net basis was understandable given that an index fund, such as the Fund, must take into account its fees and expenses in calculating performance while the index it tracks has no such fees or expenses. The Board also considered that the Fund ranked in the first quartile of the Lipper S&P 500 Index Objective Funds category in each of the one-, three-, and five-year periods.
The Board next reviewed and considered the Fund’s contractual advisory fee (including subadvisory fees) and breakpoints and noted that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed peer group. The Board considered, however, that due to substantial fee waivers and expense reimbursements by the adviser, the actual advisory fee ranked in the first quintile of the Lipper Expense Group. Additionally, the Board noted that the Fund’s
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
total expenses are below the median of the Fund’s Lipper Expense Group. The Board also considered the adviser’s profitability, and concluded that the adviser’s profitability was not excessive.
Finally, the Board considered management’s recommendation to replace the Fund’s current subadviser, SSgA Funds Management (“SSgA”) with Fund Asset Management (“FAM”), the current subadviser to the retail version of this Fund. The Board noted that management was proposing the change for several reasons including: (1) management’s decision to manage the Fund in a manner substantially similar to the retail version of the Fund; (2) FAM’s investment process, risk management, performance and the experienced team of FAM portfolio managers who would be managing the Fund’s assets; (3) and management’s successful negotiation of a reduction in the subadvisory fee that will be paid to FAM which enables management to significantly reduce the Fund’s overall advisory fee.
Specifically, the Board considered that FAM’s contractual subadvisory fee (0.02% - 0.0125%) is considerably lower than SSgA’s fee (0.025% - 0.015%). This enables management to propose a significant reduction in the Fund’s overall advisory fee (from 0.24% - 0.22% to 0.13% - 0.11%) which is a considerably greater amount than the reduction in the subadvisory fee. The Board noted that management seeks to make the Fund an attractive underlying investment in certain “fund-of-funds” arrangements and enables management to conform the price structure of this Fund to that of its retail counterpart, the Gartmore S&P 500 Index Fund.
In addition to its consideration of the reduced subadvisory (and advisory) fees, the Board also considered that FAM will manage the Fund in substantially the same manner as FAM manages the Fund’s retail counterpart. The Board further noted FAM’s demonstrated performance to date in managing the Fund’s retail counterpart.
Having considered management’s recommendation, including the reasons and related information presented, the Board approved: (1) the termination of SSgA; (2) the hiring of FAM as subadviser; (3) the new subadvisory agreement and fees; and (4) the renewal of the advisory agreement at the reduced fee rate proposed, all to become effective on May 1, 2006, the Trust’s annual contract renewal date.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President–Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
28
Table of Contents
Van Kampen GVIT Multi Sector Bond Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
19 | Statement of Assets and Liabilities | |
19 | Statement of Operations | |
20 | Statements of Changes in Net Assets | |
21 | Financial Highlights | |
22 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-VKGMS (8/06)
Table of Contents
Shareholder
Expense Example | Van Kampen GVIT Multi Sector Bond Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid | Annualized Expense Ratio* | ||||||||||
Van Kampen GVIT Multi Sector Bond Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 999.50 | $ | 5.06 | 1.02% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.12 | 1.02% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Van Kampen GVIT Multi Sector Bond Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Corporate Bonds | 44.4% | |
Cash Equivalents | 24.2% | |
Sovereign Bonds | 16.1% | |
Mortgage - Backed Obligations | 11.9% | |
Interest Only Bonds | 5.3% | |
U.S. Government Agencies | 2.9% | |
Warrants | 0.1% | |
Other Investments* | 11.5% | |
Liabilities in excess of other assets** | -16.4% | |
100.0% | ||
Top Holdings*** | ||
U.S. Treasury Notes, 3.50%, 11/15/06 | 6.1% | |
U.S. Treasury Notes, 6.13%, 08/15/29 | 5.2% | |
Federal National Mortgage Association, 7.00%, 12/01/35 | 3.0% | |
Mexican Fixed Rate Bonds, 8.00%, 12/17/15 | 2.4% | |
Bundes Republic of Deutschland, 5.63%, 01/04/28 | 2.3% | |
Federal National Mortgage Association Discount Notes, 5.01%, 07/12/06 | 2.0% | |
U.S. Treasury Notes, 3.13%, 05/15/07 | 2.0% | |
U.S. Treasury Notes, 8.13%, 08/15/19 | 1.9% | |
Federal National Mortgage Association, 7.00%, 06/01/36 | 1.7% | |
Federal Home Loan Bank - Discount Note, 1.71%, 07/05/06 | 1.6% | |
Other Assets | 71.8% | |
100.0% | ||
Top Industries | ||
U.S. Treasury Notes | 17.0% | |
Asset Backed Securities | 15.1% | |
Federal National Mortgage Association | 13.2% | |
Financial Services | 13.1% | |
Oil & Gas | 2.4% | |
Federal National Mortgage Association Discount Notes | 2.0% | |
Federal Home Loan Mortgage Corporation | 1.7% | |
Telecommunications | 1.7% | |
Federal Home Loan Bank - Discount Note | 1.6% | |
Fannie Mae Discount Note | 1.6% | |
Other Assets | 30.6% | |
100.0% | ||
Top Countries | ||
United States | 66.4% | |
Mexico | 4.2% | |
Germany | 2.6% | |
Spain | 1.4% | |
Canada | 1.3% | |
Phillipines | 1.3% | |
Brazil | 1.2% | |
Russia | 1.2% | |
United Kingdom | 1.1% | |
Venezuela | 0.7% | |
Other Assets | 18.6% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited)
Principal Amount | Value | |||||
CORPORATE BONDS (44.4%) | ||||||
Advertising (0.3%) | ||||||
Interpublic Group Co., Inc., 5.40%, 11/15/09 | $ | 280,000 | $ | 256,900 | ||
WPP Finance (UK) Corp., 5.88%, 06/15/14 | 385,000 | 373,053 | ||||
WPP Group, PLC, 6.00%, 06/18/08 (EUR) | 120,000 | 159,403 | ||||
789,356 | ||||||
Aerospace & Defense (0.2%) | ||||||
Northrop Grumman Corp., 4.08%, 11/16/06 | 115,000 | 114,343 | ||||
Systems 2001 Asset Trust, 6.66%, 09/15/13 (c) | 284,021 | 292,463 | ||||
406,806 | ||||||
Asset Backed Securities (10.5%) | ||||||
Aegis Asset Backed Securities Trust, 5.19%, 10/25/35 (e) | 937,159 | 937,317 | ||||
Asset Backed Funding Certificates, 5.16%, 01/25/35 (e) | 61,725 | 61,719 | ||||
Banc of America Funding Corp., 5.43%, 09/20/35 (e) | 583,470 | 586,740 | ||||
Bear Stearns Asset Backed, Inc., 5.30%, 03/25/35 (e) | 981,040 | 981,477 | ||||
Bear Stearns Asset Backed, Inc., 5.20%, 08/25/35 (e) | 519,601 | 519,704 | ||||
Capital Auto Receivables Asset Trust, 5.26%, 04/15/08 (e) | 1,248,403 | 1,248,605 | ||||
Credit Based Asset Servicing and Securities, 5.18%, 08/25/35 (e) | 669,372 | 669,526 | ||||
Credit Based Asset Servicing and Securities, 5.19%, 08/25/35 (e) | 635,430 | 635,573 | ||||
DSLA Mortgage Loan Trust, 5.08%, 03/19/45 (e) | 1,817,887 | 1,817,887 | ||||
First Franklin Mortgage Loan Asset Backed Certificates, 5.18%, 07/25/35 (e) | 757,279 | 757,412 | ||||
Greenpoint Mortgage Funding Trust, 5.40%, 08/25/35 (e) | 1,672,886 | 1,674,012 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Asset Backed Securities (continued) | ||||||
GSAMP Trust, 5.17%, 04/25/35 (e) | $ | 53,006 | $ | 53,008 | ||
GSAMP Trust, 5.17%, 06/25/35 (e) | 198,015 | 198,029 | ||||
GSAMP Trust, 5.20%, 08/01/35 | 795,699 | 795,820 | ||||
Indymac Index Mortgage Loan Trust, 5.33%, 05/25/46 (e) | 1,733,635 | 1,739,458 | ||||
Indymac Index Mortgage Loan Trust, 5.21%, 07/25/46 (e) | 1,725,000 | 1,727,515 | ||||
Master Asset Backed Securities Trust, 5.17%, 03/25/35 (e) | 156,467 | 156,479 | ||||
MBNA Master Credit Card Trust, 5.40%, 09/15/09 | 1,675,000 | 1,677,653 | ||||
Structured Asset Investment Loan Trust, 5.42%, 11/25/33 (e) | 170,615 | 170,803 | ||||
Structured Asset Investment Loan Trust, 5.17%, 06/25/35 (e) | 117,791 | 117,796 | ||||
Structured Asset Investment Loan Trust, 5.18%, 07/25/35 (e) | 649,998 | 650,031 | ||||
Structured Asset Mortgage Investments, Inc, 5.41%, 07/25/36 | 1,300,000 | 1,300,000 | ||||
Structured Asset Mortgage Investments, Inc., 5.35%, 09/25/35 | 2,102,906 | 2,104,220 | ||||
Structured Asset Mortgage Investments, Inc., 5.27%, 02/25/36 (e) | 1,219,148 | 1,221,783 | ||||
Structured Asset Mortgage Investments, Inc., 5.41%, 07/25/36 | 825,000 | 825,000 | ||||
Structured Asset Mortgage Investments, Inc., 5.27%, 04/25/45 (e) | 815,086 | 815,218 | ||||
Structured Asset Securities Corp., 5.16%, 05/25/35 (e) | 462,308 | 462,221 |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Asset Backed Securities (continued) | ||||||
Structured Asset Securities Corp., 5.28%, 06/25/35 (e) | $ | 1,600,000 | $ | 1,600,695 | ||
25,505,701 | ||||||
Automotive (1.3%) | ||||||
Daimler Chrysler NA Holdings, 8.50%, 01/18/31 (g) | 180,000 | 203,810 | ||||
General Motors Corp., 8.38%, 07/05/33 (EUR) | 180,000 | 178,983 | ||||
General Motors Corp., 8.38%, 07/15/33 (g) | 3,090,000 | 2,487,449 | ||||
Sonic Automotive Inc., Series B, 8.63%, 08/15/13 (g) | 445,000 | 440,550 | ||||
3,310,792 | ||||||
Banking (0.9%) | ||||||
Banco ABN AMRO Real SA, 15.86%, 12/13/07 (BRL) (c) | 50,000 | 23,228 | ||||
Bank One Corp., 6.00%, 02/17/09 | 95,000 | 95,705 | ||||
Chase Manhattan Corp., 7.00%, 11/15/09 | 240,000 | 248,780 | ||||
Citibank N.A., 15.00%, 01/30/09 | 275,900 | 298,400 | ||||
Deutsche Bank AG, 5.13%, 01/31/13 (EUR) | 80,000 | 106,399 | ||||
JP Morgan Chase & Co., 5.35%, 03/01/07 | 140,000 | 139,714 | ||||
KFW International Finance, 2.05%, 09/21/09 (JPY) | 94,000,000 | 844,553 | ||||
Marshall & Ilsley Bank, 3.80%, 02/08/08 | 605,000 | 587,620 | ||||
2,344,399 | ||||||
Brewery (0.1%) | ||||||
FBG Finance Ltd., 5.13%, 06/15/15 (c) (g) | 250,000 | 229,035 | ||||
Broadcast Media (0.1%) | ||||||
Salem Communications Holding Corp., 9.00%, 07/01/11 | 184,000 | 192,280 | ||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Business Services (0.1%) | ||||||
Iron Mountain, Inc., 8.63%, 04/01/13 | $ | 195,000 | $ | 195,000 | ||
Iron Mountain, Inc., 7.75%, 01/15/15 | 180,000 | 171,900 | ||||
366,900 | ||||||
Cable (0.6%) | ||||||
Cablevision Systems Corp., 9.62%, 04/01/09 (e) (g) | 290,000 | 307,400 | ||||
CCH I LLC, 11.00%, 10/01/15 | 210,000 | 183,750 | ||||
Comcast Cable Communication, Inc., 6.75%, 01/30/11 | 300,000 | 309,579 | ||||
Echostar DBS Corp., 6.38%, 10/01/11 | 550,000 | 526,625 | ||||
Echostar DBS Corp., 6.63%, 10/01/14 | 70,000 | 65,800 | ||||
General Cable Corp., 9.50%, 11/15/10 | 100,000 | 106,000 | ||||
TCI Communications, Inc., 7.88%, 02/15/26 | 90,000 | 96,913 | ||||
1,596,067 | ||||||
Chemicals & Plastics (0.8%) | ||||||
Equistar Chemical, 10.13%, 09/01/08 | 330,000 | 347,325 | ||||
Huntsman Corp., 10.13%, 07/01/09 | 195,000 | 197,925 | ||||
ICI Wilmington, 4.38%, 12/01/08 | 115,000 | 110,983 | ||||
JohnsonDiversey, Inc., 9.63%, 05/15/12 (g) | 180,000 | 179,100 | ||||
Nalco Co., 7.75%, 11/15/11 (g) | 165,000 | 164,588 | ||||
Westlake Chemicals, 6.63%, 01/15/16 (g) | 1,070,000 | 988,412 | ||||
1,988,333 | ||||||
Cigarettes (0.2%) | ||||||
Reynolds American, Inc., 7.25%, 06/01/13 | 520,000 | 508,300 | ||||
Computers (0.1%) | ||||||
Hewlett-Packard Co., 5.34%, 01/01/49 (e) | 290,000 | 290,009 | ||||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Construction & Building Materials (0.1%) | ||||||
Technical Olympic USA, Inc., 9.00%, 07/01/10 | $ | 100,000 | $ | 97,250 | ||
Technical Olympic USA, Inc., 10.38%, 07/01/12 (g) | 100,000 | 96,000 | ||||
193,250 | ||||||
Consumer Products (0.1%) | ||||||
Clorox Co., 5.44%, 12/14/07 (e) | 210,000 | 210,233 | ||||
Distribution & Wholesale (0.0%) | ||||||
Nebraska Book Co., 8.63%, 03/15/12 | 65,000 | 60,450 | ||||
Diversified (0.0%) | ||||||
Murrin Murrin Holdings, 0.00%, 08/31/07 (f) (g) | 125,000 | 0 | ||||
Tyco International Group SA, 6.13%, 04/04/07 (EUR) | 40,000 | 51,975 | ||||
51,975 | ||||||
Drugs (0.1%) | ||||||
AmerisourceBergen Corp., 5.63%, 09/15/12 (c) | 120,000 | 114,600 | ||||
Warner Chilcott Corp., 8.75%, 02/01/15 (c) | 210,000 | 212,100 | ||||
326,700 | ||||||
Electric (0.3%) | ||||||
Ipalco Enterprises, Inc., 8.38%, 11/14/08 | 465,000 | 477,788 | ||||
Ohio Power Company — IBC, 6.00%, 06/01/16 | 225,000 | 221,870 | ||||
699,658 | ||||||
Entertainment (0.2%) | ||||||
Isle Of Capri Casinos, 7.00%, 03/01/14 | 490,000 | 462,438 | ||||
Environmental Controls (0.2%) | ||||||
Waste Management, Inc., 7.13%, 10/01/07 | 450,000 | 456,334 | ||||
Financial Services (13.1%) | ||||||
AIG SunAmerica Global Finance, 6.30%, 05/10/11 (c) | 395,000 | 403,619 | ||||
Altria Finance Ltd., 5.63%, 06/24/08 (EUR) | 90,000 | 118,359 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Financial Services (continued) | ||||||
American General Finance Corp., 4.63%, 05/15/09 | $ | 95,000 | $ | 92,231 | ||
American Home Mortgage Investment Trust, 5.43%, 04/25/44 (e) | 522,872 | 523,353 | ||||
Ameriquest Mortgage Securities, 5.22%, 07/25/35 (e) | 371,149 | 371,189 | ||||
AXA Financial, Inc., 7.75%, 08/01/10 | 460,000 | 489,514 | ||||
Capital Auto Receivables Asset Trust, 5.28%, 01/15/08 (e) | 912,505 | 912,802 | ||||
Carrington Mortgage Loan Trust, 5.16%, 06/25/35 (e) | 172,785 | 172,785 | ||||
Carrington Mortgage Loan Trust, 5.23%, 09/25/35 | 684,416 | 684,565 | ||||
Carrington Mortgage Loan Trust, 5.20%, 10/25/35 (e) | 931,876 | 932,028 | ||||
Caterpillar Financial Services Corp., 5.26%, 08/20/07 (e) | 220,000 | 220,132 | ||||
Caterpillar Financial Services Corp., 3.63%, 11/15/07 | 75,000 | 73,004 | ||||
CIT Group, Inc., 7.38%, 04/02/07 | 120,000 | 121,495 | ||||
Citigroup Mortgage Loan Trust, Inc., 5.17%, 05/25/35 (e) | 346,835 | 346,865 | ||||
Countrywide Alternative Loan Trust, 5.36%, 10/25/35 (e) | 651,914 | 652,893 | ||||
Countrywide Alternative Loan Trust, 5.53%, 11/20/35 (e) | 1,147,243 | 1,151,386 | ||||
Countrywide Alternative Loan Trust, 5.23%, 05/25/36 (e) | 1,141,247 | 1,141,470 | ||||
Countrywide Alternative Loan Trust, 0.65%, 02/25/37 | 7,675,827 | 419,772 |
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Financial Services (continued) | ||||||
Countrywide Home Loans, Inc., 3.25%, 05/21/08 | $ | 220,000 | $ | 210,493 | ||
Equifirst Mortgage Loan Trust, 5.14%, 04/25/35 (e) | 123,938 | 123,942 | ||||
Farmers Exchange Capital, 7.05%, 07/15/28 (c) | 285,000 | 272,707 | ||||
GE Capital Credit Card Master Note Trust, 5.25%, 06/15/10 (e) | 1,350,000 | 1,350,546 | ||||
General Electric Capital Corp., 4.25%, 12/01/10 | 100,000 | 94,675 | ||||
General Motors Acceptance Corp., 6.88%, 09/15/11 | 1,280,000 | 1,221,325 | ||||
Harborview Mortgage Loan Trust, 5.63%, 09/19/35 (e) | 1,046,507 | 1,053,938 | ||||
Harborview Mortgage Loan Trust, 0.94%, 03/19/37 | 2,982 | 2,237 | ||||
Harborview Mortgage Loan Trust, 5.54%, 07/19/45 (e) | 623,589 | 625,305 | ||||
Household Finance Corp., 6.50%, 05/05/09 (EUR) | 140,000 | 191,062 | ||||
John Hancock Global Funding, 7.90%, 07/02/10 (c) | 155,000 | 168,270 | ||||
JP Morgan Chase & Co., 10.70%, 06/27/07 (c) | 295,000 | 198,211 | ||||
JSG Funding, PLC, 10.13%, 10/01/12 (EUR) | 80,000 | 111,009 | ||||
Mantis Reef, Ltd., 4.69%, 11/14/08 (c) | 425,000 | 411,932 | ||||
MBNA Corp., 5.58%, 05/05/08 (e) | 460,000 | 463,315 | ||||
MBNA Credit Card Master Note Trust, 5.32%, 08/16/10 (e) | 1,750,000 | 1,753,356 | ||||
Merrill Lynch Mortgage Investors, Inc., 5.09%, 04/25/08 (e) | 1,075,609 | 1,075,663 | ||||
Merrill Lynch Mortgage Investors, Inc., 5.28%, 06/25/35 (e) | 288,340 | 288,382 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Financial Services (continued) | ||||||
Merrill Lynch Mortgage Investors, Inc., 5.20%, 07/25/35 | $ | 970,637 | $ | 970,682 | ||
New Century Home Equity Loan Trust, 5.61%, 11/25/34 (e) | 1,250,000 | 1,253,033 | ||||
Novastar Home Equity Loan, 5.20%, 06/25/35 (e) | 301,650 | 301,680 | ||||
Option One Morgage Loan Trust, 5.38%, 11/25/34 (e) | 728,932 | 729,541 | ||||
Park Place Securities, Inc., 5.16%, 06/25/35 (e) | 67,390 | 67,380 | ||||
Residential Accredit Loans, Inc., 5.34%, 02/25/46 (e) | 706,550 | 706,977 | ||||
Residential Accredit Loans, Inc., 5.35%, 02/25/46 (e) | 645,456 | 647,874 | ||||
Residential Capital Corp., 6.38%, 06/30/10 | 460,000 | 453,740 | ||||
Saxon Asset Securities Trust, 5.17%, 10/25/35 (e) | 393,360 | 393,395 | ||||
Terwin Mortgage Trust, 5.20%, 07/25/35 (c) (e) | 364,453 | 364,515 | ||||
Wachovia Morgage Loan Trust, LLC, 5.19%, 10/25/35 (e) | 551,701 | 551,774 | ||||
Washington Mutual, Inc., 5.35%, 04/25/45 | 1,069,349 | 1,070,384 | ||||
Washington Mutual, Inc., 5.18%, 05/25/45 | 975,268 | 974,041 | ||||
Washington Mutual, Inc., 5.61%, 08/25/45 (e) | 677,322 | 679,365 | ||||
Washington Mutual, Inc., 5.34%, 10/25/45 (e) | 1,201,859 | 1,204,356 | ||||
Washington Mutual, Inc., 5.33%, 11/25/45 (e) | 1,021,858 | 1,025,288 | ||||
Washington Mutual, Inc., 5.33%, 12/25/45 (e) | 918,654 | 919,046 | ||||
Washington Mutual, Inc., 4.95%, 01/01/49 (e) | 1,396,817 | 1,409,222 | ||||
32,166,123 | ||||||
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Food Products & Services (0.3%) | ||||||
Conagra Foods, Inc., 7.00%, 10/01/28 | $ | 150,000 | $ | 152,528 | ||
Conagra Foods, Inc., 8.25%, 09/15/30 | 100,000 | 115,236 | ||||
Michael Foods, 8.00%, 11/15/13 (g) | 120,000 | 117,900 | ||||
Pilgrim’s Pride Corp., 9.63%, 09/15/11 | 270,000 | 280,799 | ||||
Pilgrim’s Pride Corp., 9.25%, 11/15/13 (g) | 95,000 | 94,763 | ||||
Smithfield Foods, Inc., 8.00%, 10/15/09 (g) | 90,000 | 90,900 | ||||
852,126 | ||||||
Foreign Banks & Agencies (0.1%) | ||||||
RSHB Capital, 7.18%, 05/16/13 (c) (g) | 280,000 | 277,550 | ||||
Health Care & Health Care Services (0.5%) | ||||||
Columbia HCA Healthcare, 7.69%, 06/15/25 | 370,000 | 349,646 | ||||
Fresenius Medical Care Capital Trust Series IV, 7.88%, 06/15/11 | 95,000 | 95,950 | ||||
HCA, Inc., 7.58%, 09/15/25 | 175,000 | 162,991 | ||||
Health Net, Inc., 9.88%, 04/15/11 | 295,000 | 330,005 | ||||
Tenet Healthcare Corp., 7.38%, 02/01/13 | 310,000 | 282,875 | ||||
1,221,467 | ||||||
Hotels & Casinos (0.5%) | ||||||
Host Marriott LP, 7.13%, 11/01/13 (g) | 80,000 | 79,700 | ||||
Host Marriott LP, 6.38%, 03/15/15 | 235,000 | 220,900 | ||||
Hyatt Equities, LLC, 6.88%, 06/15/07 (c) | 130,000 | 130,772 | ||||
MGM Mirage, Inc., 6.00%, 10/01/09 | 300,000 | 291,750 | ||||
Starwood Hotels & Resorts, 7.38%, 05/01/07 | 150,000 | 150,938 | ||||
Station Casinos, Inc., 6.00%, 04/01/12 | 340,000 | 318,325 | ||||
1,192,385 | ||||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Insurance (1.0%) | ||||||
Farmers Insurance Exchange, 8.63%, 05/01/24 (c) | $ | 250,000 | $ | 277,383 | ||
Marsh & McLennan Cos., Inc., 5.88%, 08/01/33 | 660,000 | 573,218 | ||||
Munich Re Finance BV, 6.75%, 06/21/23 (EUR) | 130,000 | 185,178 | ||||
Specialty Underwriting & Residential Finance, 5.18%, 12/25/35 (e) | 249,511 | 249,549 | ||||
Specialty Underwriting & Residential Finance, 5.44%, 06/25/36 (e) | 866,107 | 866,227 | ||||
St. Paul Travelers, 5.01%, 08/16/07 | 240,000 | 237,260 | ||||
2,388,815 | ||||||
Internet (0.0%) | ||||||
Exodus Communications, Inc., 0.00%, 07/15/10 (f) | 124,552 | 0 | ||||
Rhythms Netconnections, 0.00%, 02/15/10 (f) | 366,692 | 0 | ||||
Machinery, Construction & Mining (0.1%) | ||||||
Manitowoc Co., Inc., 10.50%, 08/01/12 (g) | 214,000 | 232,190 | ||||
Manufacturing (0.3%) | ||||||
Goodman Global Holdings, 8.33%, 06/15/12 (e) | 50,000 | 50,125 | ||||
Interface, Inc., 7.30%, 04/01/08 | 55,000 | 55,275 | ||||
Interface, Inc., 10.38%, 02/01/10 | 60,000 | 65,625 | ||||
Interface, Inc., 9.50%, 02/01/14 (g) | 225,000 | 232,312 | ||||
Koppers, Inc., 9.88%, 10/15/13 | 47,000 | 50,408 | ||||
Levi Strauss & Co., 9.74%, 04/01/12 (e) (g) | 190,000 | 193,325 | ||||
Propex Fabrics, Inc., 10.00%, 12/01/12 | 215,000 | 196,725 | ||||
843,795 | ||||||
Medical (0.2%) | ||||||
Fresenius Medical Cap TR II, 7.88%, 02/01/08 | 350,000 | 355,250 | ||||
Tenet Healthcare Corp., 9.88%, 07/01/14 | 100,000 | 100,000 | ||||
455,250 | ||||||
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Multimedia (0.4%) | ||||||
News America, Inc., 6.40%, 12/15/35 (c) | $ | 770,000 | $ | 712,177 | ||
Viacom, Inc., 6.88%, 04/30/36 (c) | 380,000 | 366,723 | ||||
1,078,900 | ||||||
Oil & Gas (2.4%) | ||||||
Colorado Interstate Gas, 6.80%, 11/15/15 (c) | 150,000 | 144,577 | ||||
Consolidated Natural Gas, 6.25%, 11/01/11 | 330,000 | 333,227 | ||||
Consumers Energy Co., 4.80%, 02/17/09 | 210,000 | 204,215 | ||||
Cooper Industries, Inc., 5.25%, 11/15/12 (c) | 205,000 | 198,240 | ||||
El Paso Production Holdings, 7.75%, 06/01/13 | 265,000 | 266,988 | ||||
Empresa Nacional del Petroleo, 6.75%, 11/15/12 | 180,000 | 185,220 | ||||
Empresa Nacional del Petroleo, 6.75%, 11/15/12 (c) | 230,000 | 237,393 | ||||
Entergy Gulf States, 6.02%, 12/08/08 (c) (e) | 270,000 | 270,232 | ||||
Gazprom Capital, 8.63%, 04/28/34 | 190,000 | 214,700 | ||||
Hanover Equipment Trust, Series A, 8.50%, 09/01/08 (g) | 126,000 | 129,150 | ||||
Hilcorp Energy, 10.50%, 09/01/10 (c) | 153,000 | 164,858 | ||||
Hilcorp Energy, 7.75%, 11/01/15 (c) (g) | 125,000 | 119,375 | ||||
Husky Oil Ltd., 8.90%, 08/15/28 | 525,000 | 552,036 | ||||
Magnum Hunter Resources, 9.60%, 03/15/12 | 29,000 | 30,668 | ||||
National Gas Co., 6.05%, 01/15/36 (c) | 220,000 | 202,518 | ||||
Pemex Project Funding Master Trust, 6.63%, 04/04/10 (EUR) | 250,000 | 340,187 | ||||
Pemex Project Funding Master Trust, 6.63%, 06/15/10 (c) (e) | 570,000 | 581,969 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Oil & Gas (continued) | ||||||
Pemex Project Funding Master Trust, 8.63%, 12/01/23 (c) | $ | 250,000 | $ | 273,500 | ||
Pemex Project Funding Master Trust, 9.50%, 09/15/27 | 30,000 | 35,850 | ||||
Pemex Project Funding Master Trust, 9.50%, 09/15/27 | 110,000 | 131,450 | ||||
Petro Shopping Centre, 9.00%, 02/15/12 | 320,000 | 317,600 | ||||
Petroleos Mexicanos, 9.50%, 09/15/27 (c) | 580,000 | 695,999 | ||||
Pogo Producing Co., 6.88%, 10/01/17 (g) | 210,000 | 194,513 | ||||
Sempra Energy, 4.62%, 05/17/07 | 155,000 | 153,490 | ||||
5,977,955 | ||||||
Packaging & Containers (0.6%) | ||||||
Graham Packaging Co., 8.50%, 10/15/12 (g) | 155,000 | 151,900 | ||||
Graphic Packaging International, 9.50%, 08/15/13 (g) | 165,000 | 163,350 | ||||
Owens-Illinois, Inc., 7.50%, 05/15/10 (g) | 650,000 | 635,375 | ||||
Sealed Air Corp., 5.63%, 07/15/13 (c) | 520,000 | 495,472 | ||||
1,446,097 | ||||||
Paper & Forest Products (0.9%) | ||||||
Abitibi-Consolidated, Inc., 8.85%, 08/01/30 | 315,000 | 266,175 | ||||
Bowater, Inc., 7.95%, 11/15/11 | 920,000 | 874,000 | ||||
P.H. Glatfelter, 7.13%, 05/01/16 (c) (g) | 65,000 | 64,163 | ||||
Pindo Deli Finance BV, 4.68%, 04/28/15 (c) (e) | 171,871 | 128,903 | ||||
Pindo Deli Finance BV, 4.68%, 04/28/18 (c) (e) | 446,898 | 245,794 | ||||
Pindo Deli Finance BV, 7.80%, 04/28/27 (c) | 901,231 | 180,246 | ||||
Tjiwi Kimia Finance BV, 4.68%, 04/28/15 (e) | 238,358 | 181,152 |
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Paper & Forest Products (continued) | ||||||
Tjiwi Kimia International BV, 5.66%, 04/28/15 (c) (e) | $ | 220,290 | $ | 167,420 | ||
Tjiwi Kimia International BV, 4.68%, 04/28/18 (c) (e) | 183,062 | 106,176 | ||||
Tjiwi Kimia International BV, 7.88%, 04/28/27 (c) | 473,111 | 94,622 | ||||
2,308,651 | ||||||
Pipelines (0.7%) | ||||||
Consolidated Natural Gas, 5.00%, 12/01/14 | 230,000 | 211,568 | ||||
Kinder Morgan Energy Partners, L.P., 5.13%, 11/15/14 | 90,000 | 82,163 | ||||
Kinder Morgan Finance, 5.70%, 01/05/16 | 635,000 | 551,353 | ||||
Pacific Energy Partners, 7.13%, 06/15/14 | 150,000 | 151,500 | ||||
Panhandle Eastern Pipelines Series B, 2.75%, 03/15/07 | 85,000 | 83,189 | ||||
Plains All American Pipeline, 6.70%, 05/15/36 (c) | 230,000 | 224,183 | ||||
Texas Eastern Transmission, 7.00%, 07/15/32 | 130,000 | 138,957 | ||||
The Williams Cos., Inc., 7.88%, 09/01/21 (g) | 255,000 | 258,825 | ||||
1,701,738 | ||||||
Printing & Publishing (0.3%) | ||||||
Dex Media West/Finance Series B, 9.88%, 08/15/13 | 75,000 | 81,281 | ||||
Houghton Mifflin Co., 8.25%, 02/01/11 | 80,000 | 81,000 | ||||
Houghton Mifflin Co., 9.88%, 02/01/13 | 130,000 | 134,875 | ||||
Quebecor World Capital Corp., 8.75%, 03/15/16 (c) (g) | 495,000 | 451,687 | ||||
748,843 | ||||||
Real Estate (0.3%) | ||||||
Brascan Corp., 7.13%, 06/15/12 (g) | 250,000 | 263,374 | ||||
World Financial, 6.91%, 09/01/13 (c) | 537,783 | 554,729 | ||||
818,103 | ||||||
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Real Estate Investment Trusts (1.2%) | ||||||
American Home Mortgage Assets, 5.31%, 05/25/46 | $ | 1,746,799 | $ | 1,745,920 | ||
Luminent Mortgage Trust, 5.32%, 04/25/36 (e) | 1,188,193 | 1,191,101 | ||||
2,937,021 | ||||||
Research & Testing Services (0.0%) | ||||||
Geophysique, 7.50%, 05/15/15 | 40,000 | 39,100 | ||||
Retail (0.8%) | ||||||
Bon-Ton Department Stores, Inc., 10.25%, 03/15/14 (c) (g) | 470,000 | 435,925 | ||||
Delhaize America, Inc., 8.13%, 04/15/11 | 215,000 | 226,112 | ||||
Jean Coutu Group PJC, Inc., 7.63%, 08/01/12 | 370,000 | 358,900 | ||||
Limited Brands, 6.95%, 03/01/33 | 150,000 | 143,009 | ||||
Linens ‘N Things, Inc., 10.70%, 01/15/14 (c) (e) (g) | 560,000 | 530,600 | ||||
Rite Aid Corp., 8.13%, 05/01/10 | 55,000 | 55,275 | ||||
Yum! Brands, Inc., 8.88%, 04/15/11 | 165,000 | 183,767 | ||||
1,933,588 | ||||||
Special Purpose Entity (1.1%) | ||||||
Aries Vermogenswaltung, 9.60%, 10/25/14 | 500,000 | 623,850 | ||||
Innophos Investments, 13.17%, 02/15/15 (e) | 288,300 | 288,660 | ||||
Innophos, Inc., 8.88%, 08/15/14 | 1,270,000 | 1,250,950 | ||||
K&F Acquisition, Inc., 7.75%, 11/15/14 (g) | 370,000 | 364,450 | ||||
Medcath Holdings Corp., 9.88%, 07/15/12 (g) | 105,000 | 108,413 | ||||
2,636,323 | ||||||
Telecommunications (1.7%) | ||||||
American Tower Corp., 7.50%, 05/01/12 | 275,000 | 277,750 | ||||
American Tower Corp., 7.13%, 10/15/12 | 100,000 | 99,750 |
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Telecommunications (continued) | ||||||
AT&T Corp., 6.00%, 11/21/06 (EUR) | $ | 100,000 | $ | 129,092 | ||
AT&T Corp., 8.00%, 11/15/31 (e) | 295,000 | 338,689 | ||||
Axtel SA, 11.00%, 12/15/13 | 285,000 | 312,075 | ||||
Corning, Inc., 6.25%, 02/18/10 (EUR) | 60,000 | 80,955 | ||||
Deutsche Telekom, 8.25%, 06/15/30 | 40,000 | 46,182 | ||||
Deutsche Telekom International Finance, 8.13%, 05/29/12 (EUR) | 160,000 | 240,800 | ||||
France Telecom, 8.50%, 03/01/31 | 115,000 | 138,377 | ||||
France Telecom SA, 8.13%, 01/28/33 (EUR) | 90,000 | 150,046 | ||||
Intelsat Bermuda Ltd., 9.61%, 01/15/12 | 190,000 | 191,900 | ||||
Nextlink Communications, Inc., 0.00%, 06/01/09 (f) | 500,000 | 0 | ||||
Nextlink Communications, Inc., 0.00%, 06/01/09 (f) | 350,000 | 0 | ||||
Nordic Tel Co. Hldgs, 8.88%, 05/01/16 (c) | 155,000 | 159,263 | ||||
Nortel Networks Corp., 4.25%, 09/01/08 | 190,000 | 179,075 | ||||
National Cable PLC, 8.75%, 04/15/14 | 75,000 | 74,438 | ||||
Qwest Communications International, 8.86%, 02/15/09 (e) | 225,000 | 229,219 | ||||
Qwest Corp., 5.63%, 11/15/08 | 45,000 | 43,875 | ||||
SBC Communications, Inc., 6.15%, 09/15/34 (g) | 140,000 | 128,485 | ||||
Sprint Capital Corp., 8.38%, 03/15/12 | 150,000 | 165,735 | ||||
Sprint Capital Corp., 8.75%, 03/15/32 | 40,000 | 48,236 | ||||
Telecom Italia Capital, 4.00%, 11/15/08 | 110,000 | 105,522 | ||||
Telecom Italia Capital, 4.00%, 01/15/10 | 195,000 | 182,476 |
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Telecommunications (continued) | ||||||
Ubiquitel Operating Co., 9.88%, 03/01/11 | $ | 220,000 | $ | 239,250 | ||
Verizon New England, 6.50%, 09/15/11 | 10,000 | 10,003 | ||||
Wind Acquisition Financial SA, 10.75%, 12/01/15 (c) (g) | 490,000 | 520,624 | ||||
4,091,817 | ||||||
Telephone Communications (0.1%) | ||||||
Telefonica Europe, 8.25%, 09/15/30 | 135,000 | 152,476 | ||||
Textiles (0.1%) | ||||||
Mohawk Industries, Inc., Series D, 7.20%, 04/15/12 | 125,000 | 128,825 | ||||
Tempur-Pedic, Inc., 10.25%, 08/15/10 | 71,000 | 74,905 | ||||
203,730 | ||||||
Tobacco (0.1%) | ||||||
Reynolds American, Inc., 6.50%, 07/15/10 (c) | 200,000 | 193,500 | ||||
Transportation Services (0.2%) | ||||||
CHC Helicopter Corp., 7.38%, 05/01/14 | 220,000 | 211,200 | ||||
Norfolk Southern Corp., 7.35%, 05/15/07 | 115,000 | 116,517 | ||||
Union Pacific Corp., 6.79%, 11/09/07 | 100,000 | 101,292 | ||||
Union Pacific Corp., 6.63%, 02/01/08 | 180,000 | 182,358 | ||||
611,367 | ||||||
Utilities & Power Producers (1.2%) | ||||||
AES Corp., 9.38%, 09/15/10 | 53,000 | 56,710 | ||||
AES Corp., 7.75%, 03/01/14 (g) | 95,000 | 95,475 | ||||
AES Corp., 9.00%, 05/15/15 (c) (g) | 305,000 | 327,875 | ||||
Arizona Public Service Co., 5.80%, 06/30/14 | 250,000 | 241,656 | ||||
CC Funding Trust I, 6.90%, 02/16/07 | 305,000 | 306,711 |
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
CORPORATE BONDS (continued) | ||||||
Utilities & Power Producers (continued) | ||||||
Cincinnati Gas & Electric Co., 5.70%, 09/15/12 | $ | 380,000 | $ | 372,431 | ||
Detroit Edison Co., 6.13%, 10/01/10 | 200,000 | 201,569 | ||||
Entergy Gulf States, 3.60%, 06/01/08 | 65,000 | 62,097 | ||||
Entergy Gulf States, 5.63%, 12/01/09 (e) | 105,000 | 103,894 | ||||
Foundation PA Coal Co., 7.25%, 08/01/14 (g) | 50,000 | 48,750 | ||||
Monongahela Power Co., 5.00%, 10/01/06 | 170,000 | 169,600 | ||||
MSW Energy Holdings, 7.38%, 09/01/10 | 185,000 | 185,000 | ||||
MSW Energy Holdings, 8.50%, 09/01/10 (c) | 45,000 | 46,350 | ||||
National Grid Transco, PLC, 5.00%, 07/02/18 (EUR) | 110,000 | 139,437 | ||||
NiSource Finance Corp., 5.76%, 11/23/09 (e) | 120,000 | 120,132 | ||||
Pacific Gas & Electric, 6.05%, 03/01/34 | 140,000 | 132,134 | ||||
RWE Finance BV, 5.50%, 10/26/07 (EUR) | 9,000 | 11,788 | ||||
TXU Corp., 4.81%, 11/17/14 | 300,000 | 286,308 | ||||
Wisconsin Electric Power Co., 3.50%, 12/01/07 | 110,000 | 106,801 | ||||
3,014,718 | ||||||
Total Corporate Bonds | 109,512,644 | |||||
SOVEREIGN BONDS (16.1%) | ||||||
ARGENTINA (0.3%) | ||||||
Republic of Argentina, 5.83%, 12/31/33 | 1,400,000 | 527,800 | ||||
Republic of Argentina, 8.28%, 12/31/33 | 47,709 | 42,415 | ||||
Republic of Argentina, 2.15%, 04/10/49 | 390,000 | 156,000 | ||||
726,215 | ||||||
BRAZIL (1.0%) | ||||||
Federal Republic of Brazil, 14.50%, 10/15/09 | 520,000 | 646,880 | ||||
Federal Republic of Brazil, 10.50%, 07/14/14 | 180,000 | 216,720 |
Principal Amount | Value | |||||
SOVEREIGN BONDS (continued) | ||||||
BRAZIL (continued) | ||||||
Federal Republic of Brazil, 8.00%, 01/15/18 | $ | 136,000 | $ | 143,480 | ||
Federal Republic of Brazil, 8.88%, 10/14/19 | 956,000 | 1,064,984 | ||||
Federal Republic of Brazil, 8.88%, 04/15/24 | 470,000 | 520,995 | ||||
2,593,059 | ||||||
BULGARIA (0.1%) | ||||||
Republic of Bulgaria, 8.25%, 01/15/15 | 210,000 | 237,594 | ||||
Republic of Bulgaria, 8.25%, 01/15/15 (c) | 99,000 | 111,573 | ||||
349,167 | ||||||
CANADA (0.3%) | ||||||
Canadian Government, 5.25%, 06/01/12 | 700,000 | 650,335 | ||||
COLUMBIA (0.3%) | ||||||
Republic of Columbia, 9.75%, 04/09/11 | 129,528 | 139,890 | ||||
Republic of Columbia, 8.25%, 12/22/14 | 155,000 | 162,750 | ||||
Republic of Columbia, 11.75%, 02/25/20 | 150,000 | 197,250 | ||||
Republic of Columbia, 8.13%, 05/21/24 | 170,000 | 172,125 | ||||
672,015 | ||||||
ECUADOR (0.2%) | ||||||
Republic of Ecuador, 9.38%, 12/15/15 | 100,000 | 98,500 | ||||
Republic of Ecuador, 9.00%, 08/15/30 | 290,000 | 278,400 | ||||
376,900 | ||||||
GERMANY (2.3%) | ||||||
Bundes Republic of Deutschland, 5.63%, 01/04/28 | 3,820,000 | 5,761,437 | ||||
ITALY (0.1%) | ||||||
Buoni Poliennali Del Tesson, 5.25%, 11/01/29 | 120,000 | 166,326 | ||||
IVORY COAST (0.0%) | ||||||
Ivory Coast, 11.72%, 03/29/18 | 285,000 | 73,388 | ||||
11
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
SOVEREIGN BONDS (continued) | ||||||
JAPAN (0.2%) | ||||||
Japanese Government, 0.80%, 03/20/13 | $ | 50,000,000 | $ | 413,221 | ||
MALAYSIA (0.1%) | ||||||
Malaysia, 8.75%, 06/01/09 | 290,000 | 311,784 | ||||
Malaysia, 7.50%, 07/15/11 | 40,000 | 42,574 | ||||
354,358 | ||||||
MEXICO (4.2%) | ||||||
Mexican Fixed Rate Bonds, 8.00%, 12/17/15 | 6,360,000 | 5,899,535 | ||||
Mexican Fixed Rate Bonds, 10.00%, 12/05/24 | 27,760,000 | 2,559,617 | ||||
United Mexican States, 8.38%, 01/14/11 | 1,360,000 | 1,482,400 | ||||
United Mexican States, 8.13%, 12/30/19 | 260,000 | 293,800 | ||||
United Mexican States, 11.50%, 05/15/26 | 58,000 | 85,550 | ||||
10,320,902 | ||||||
NIGERIA (0.2%) | ||||||
Central Bank Of Nigeria, 6.25%, 11/15/20 | 500,000 | 493,750 | ||||
PANAMA (0.2%) | ||||||
Republic of Panama, 9.63%, 02/08/11 | 90,000 | 99,900 | ||||
Republic of Panama, 7.13%, 01/29/26 | 220,000 | 212,300 | ||||
Republic of Panama, 9.38%, 04/01/29 | 140,000 | 165,200 | ||||
477,400 | ||||||
PERU (0.3%) | ||||||
Republic of Peru, 9.88%, 02/06/15 | 145,000 | 169,650 | ||||
Republic of Peru, 8.38%, 05/03/16 | 120,000 | 129,600 | ||||
Republic of Peru, 8.75%, 11/21/33 | 390,000 | 433,875 | ||||
733,125 | ||||||
PHILIPPINES (1.3%) | ||||||
Republic of Philippines, 9.00%, 02/15/13 | 270,000 | 290,588 |
Principal Amount | Value | |||||
SOVEREIGN BONDS (continued) | ||||||
PHILIPPINES (continued) | ||||||
Republic of Philippines, 8.88%, 03/17/15 | $ | 1,060,000 | $ | 1,147,450 | ||
Republic of Philippines, 10.63%, 03/16/25 | 270,000 | 333,450 | ||||
Republic of Philippines, 9.50%, 02/02/30 | 1,170,000 | 1,339,650 | ||||
3,111,138 | ||||||
QATAR (0.1%) | ||||||
State of Qatar, 9.75%, 06/15/30 | 170,000 | 237,320 | ||||
RUSSIA (1.2%) | ||||||
Russian Federation, 8.25%, 03/31/10 | 391,114 | 406,211 | ||||
Russian Federation, 11.00%, 07/24/18 | 616,000 | 849,156 | ||||
Russian Federation, 12.75%, 06/24/28 | 960,000 | 1,621,152 | ||||
Russian Federation, 5.00%, 03/31/30 | 948 | 1,009 | ||||
2,877,528 | ||||||
SOUTH AFRICA (0.1%) | ||||||
Republic of South Africa, 13.50%, 09/15/15 | 1,035,000 | 188,435 | ||||
SPAIN (1.4%) | ||||||
Bonos Y Oblig Del Estado, 5.15%, 07/30/09 | 2,250,000 | 2,994,852 | ||||
Bonos Y Oblig Del Estado, 6.15%, 01/31/13 | 330,000 | 475,046 | ||||
3,469,898 | ||||||
SWEDEN (0.3%) | ||||||
Swedish Government, 5.00%, 01/28/09 | 4,500,000 | 648,076 | ||||
TUNISIA (0.0%) | ||||||
Banque Cent De Tunisie, 7.38%, 04/25/12 | 110,000 | 114,400 | ||||
TURKEY (0.3%) | ||||||
Republic of Turkey, 11.50%, 01/23/12 | 300,000 | 342,750 | ||||
Republic of Turkey, 11.00%, 01/14/13 | 340,000 | 387,600 | ||||
730,350 | ||||||
12
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
SOVEREIGN BONDS (continued) | ||||||
UNITED KINGDOM (0.9%) | ||||||
United Kingdom Treasury, 7.25%, 12/07/07 | $ | 1,200,000 | $ | 2,294,251 | ||
VENEZUELA (0.7%) | ||||||
Republic of Venezuela, 10.75%, 09/19/13 | 640,000 | 763,520 | ||||
Republic of Venezuela, 8.50%, 10/08/14 | 270,000 | 285,525 | ||||
Republic of Venezuela, 5.75%, 02/26/16 | 90,000 | 79,650 | ||||
Republic of Venezuela, 9.38%, 01/13/34 | 512,000 | 600,320 | ||||
1,729,015 | ||||||
Total Sovereign Bonds | 39,562,009 | |||||
MORTGAGE BACKED OBLIGATIONS (11.9%) | ||||||
Federal Home Loan Mortgage Corporation (0.5%) | ||||||
Gold, Pool # C00712, 6.50%, 02/01/29 | 37,070 | 37,471 | ||||
Gold, Pool # C01104, 8.00%, 12/01/30 | 43,227 | 45,597 | ||||
Gold, Pool # C01132, 8.00%, 01/01/31 | 39,234 | 41,385 | ||||
Gold, Pool # C01150, 8.00%, 02/01/31 | 37,825 | 39,900 | ||||
Gold, Pool # C29808, 8.00%, 08/01/29 | 24,693 | 26,071 | ||||
Gold, Pool # C37329, 8.00%, 03/01/30 | 3,273 | 3,453 | ||||
Gold, Pool # C39060, 8.00%, 06/01/30 | 1,812 | 1,912 | ||||
Gold, Pool # C41333, 7.50%, 08/01/30 | 23,330 | 24,152 | ||||
Gold, Pool # C41531, 8.00%, 08/01/30 | 15,205 | 16,039 | ||||
Gold, Pool # C42327, 8.00%, 09/01/30 | 2,520 | 2,658 | ||||
Gold, Pool # C44964, 7.50%, 11/01/30 | 60,855 | 62,999 | ||||
Gold, Pool # C46763, 8.00%, 01/01/31 | 4,663 | 4,923 | ||||
Gold, Pool # C46946, 8.00%, 01/01/31 | 12,464 | 13,147 | ||||
Gold, Pool # C48997, 8.00%, 03/01/31 | 90,518 | 95,482 |
Principal Amount | Value | |||||
MORTGAGE BACKED OBLIGATIONS (continued) | ||||||
Federal Home Loan Mortgage Corporation (continued) | ||||||
Gold, Pool # C49587, 8.00%, 03/01/31 | $ | 31,220 | $ | 32,918 | ||
Gold, Pool # C50477, 8.00%, 04/01/31 | 35,112 | 37,021 | ||||
Gold, Pool # C53381, 8.00%, 06/01/31 | 5,300 | 5,591 | ||||
Gold, Pool # C53597, 8.00%, 06/01/31 | 153,889 | 162,256 | ||||
Gold, Pool # C53657, 8.00%, 06/01/31 | 14,841 | 15,648 | ||||
Gold, Pool # C60019, 7.50%, 11/01/31 | 10,498 | 10,866 | ||||
Gold, Pool # C67851, 7.50%, 06/01/32 | 204,622 | 211,747 | ||||
Gold, Pool # C69951, 6.50%, 08/01/32 | 59,995 | 60,559 | ||||
Gold, Pool # C90381, 7.50%, 11/01/20 | 1,630 | 1,692 | ||||
Pool # 170271, 12.00%, 08/01/15 | 291,865 | 316,209 | ||||
1,269,696 | ||||||
Federal National Mortgage Association (10.9%) | ||||||
Pool # 251752, 6.50%, 06/01/28 | 146,618 | 148,122 | ||||
Pool # 252009, 6.50%, 07/01/28 | 344,237 | 347,768 | ||||
Pool # 253113, 7.50%, 03/01/30 | 23,736 | 24,618 | ||||
Pool # 253673, 7.50%, 03/01/31 | 36,514 | 37,829 | ||||
Pool # 253674, 8.00%, 03/01/31 | 2,914 | 3,075 | ||||
Pool # 254695, 6.50%, 04/01/33 | 377,005 | 379,837 | ||||
Pool # 256317, 7.00%, 06/01/36 | 4,025,402 | 4,118,155 | ||||
Pool # 323591, 6.50%, 03/01/29 | 246,297 | 248,823 | ||||
Pool # 346286, 6.50%, 05/01/26 | 90,550 | 91,488 | ||||
Pool # 370191, 6.50%, 01/01/27 | 6,111 | 6,174 | ||||
Pool # 415967, 6.50%, 10/01/28 | 131,317 | 132,664 |
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
MORTGAGE BACKED OBLIGATIONS (continued) | ||||||
Federal National Mortgage Association (continued) | ||||||
Pool # 457953, 6.50%, 01/01/29 | $ | 116,620 | $ | 117,817 | ||
Pool # 482616, 6.50%, 02/01/29 | 215,005 | 217,194 | ||||
Pool # 50946, 6.50%, 12/01/23 | 28,875 | 29,135 | ||||
Pool # 511954, 7.50%, 10/01/29 | 8,454 | 8,765 | ||||
Pool # 517874, 7.50%, 02/01/30 | 43,048 | 44,599 | ||||
Pool # 519145, 7.50%, 10/01/29 | 25,284 | 26,214 | ||||
Pool # 523284, 7.50%, 11/01/29 | 3,990 | 4,136 | ||||
Pool # 527589, 7.50%, 01/01/30 | 10,246 | 10,623 | ||||
Pool # 535399, 8.00%, 07/01/30 | 36,930 | 38,974 | ||||
Pool # 535533, 8.00%, 10/01/30 | 134,137 | 141,563 | ||||
Pool # 540017, 8.00%, 05/01/30 | 6,103 | 6,441 | ||||
Pool # 540091, 7.50%, 06/01/30 | 21,766 | 22,551 | ||||
Pool # 545239, 8.00%, 09/01/31 | 51,406 | 54,252 | ||||
Pool # 545551, 8.00%, 04/01/32 | 32,765 | 34,579 | ||||
Pool # 545604, 8.00%, 09/01/31 | 19,896 | 21,022 | ||||
Pool # 545759, 6.50%, 07/01/32 | 223,872 | 225,848 | ||||
Pool # 555533, 6.50%, 04/01/33 | 108,392 | 109,381 | ||||
Pool # 563324, 7.00%, 12/01/30 | 80,453 | 82,307 | ||||
Pool # 564363, 8.00%, 01/01/31 | 3,040 | 3,208 | ||||
Pool # 564993, 7.50%, 03/01/31 | 30,447 | 31,544 | ||||
Pool # 576112, 7.00%, 05/01/31 | 4,612 | 4,725 | ||||
Pool # 577304, 7.50%, 04/01/31 | 8,255 | 8,538 |
Principal Amount | Value | |||||
MORTGAGE BACKED OBLIGATIONS (continued) | ||||||
Federal National Mortgage Association (continued) | ||||||
Pool # 577407, 7.50%, 07/01/31 | $ | 56,177 | $ | 58,106 | ||
Pool # 606566, 7.50%, 10/01/31 | 39,138 | 40,482 | ||||
Pool # 613017, 8.00%, 03/01/31 | 3,740 | 3,951 | ||||
Pool # 630601, 7.00%, 05/01/32 | 261,627 | 268,024 | ||||
Pool # 642656, 7.00%, 07/01/32 | 69,800 | 71,506 | ||||
Pool # 666097, 7.00%, 10/01/32 | 97,178 | 99,554 | ||||
Pool # 741875, 6.50%, 09/01/33 | 38,062 | 38,348 | ||||
Pool # 745114, 7.00%, 12/01/35 | 1,051,160 | 1,075,380 | ||||
Pool # 826194, 7.00%, 07/01/35 | 25,265 | 25,847 | ||||
Pool #826810, 7.00%, 08/01/35 | 728,151 | 745,019 | ||||
Pool # 836067, 7.00%, 09/01/35 | 877,852 | 898,080 | ||||
Pool # 836295, 7.00%, 10/01/35 | 776,787 | 794,686 | ||||
Pool # 837999, 7.00%, 09/01/35 | 537,004 | 549,377 | ||||
Pool # 843922, 7.00%, 11/01/35 | 1,620,273 | 1,657,608 | ||||
Pool # 844517, 7.00%, 12/01/35 | 7,317,729 | 7,486,345 | ||||
Pool # 849245, 7.00%, 01/01/36 | 500,001 | 511,583 | ||||
Pool # 865286, 7.00%, 02/01/36 | 2,999,998 | 3,069,123 | ||||
Pool # 865190, 7.00%, 02/01/36 | 196,849 | 201,409 | ||||
Pool # 868995, 6.16%, 05/01/36 | 2,374,047 | 2,453,429 | ||||
26,829,826 | ||||||
Government National Mortgage Association (0.5%) | ||||||
Pool # 780141, 10.00%, 12/15/20 | 201,253 | 219,379 | ||||
Pool # 780349, 10.00%, 09/15/21 | 245,262 | 267,359 |
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
MORTGAGE BACKED OBLIGATIONS (continued) | ||||||
Government National Mortgage Association (continued) | ||||||
Pool # 780378, 11.00%, 01/15/19 | $ | 228,642 | $ | 249,181 | ||
Pool # 780699, 9.50%, 12/15/17 | 219,314 | 237,537 | ||||
Pool # 780709, 11.00%, 01/15/21 | 273,518 | 297,492 | ||||
1,270,948 | ||||||
Total Mortgage Backed Obligations | 29,370,470 | |||||
INTEREST ONLY BONDS (5.3%) | ||||||
Asset Backed Securities (4.8%) | ||||||
Countrywide Alternative Loan Trust, 5.65%, 11/20/35 | 1,060,432 | 1,063,961 | ||||
Countrywide Alternative Loan Trust, 0.97%, 12/20/35 (c) | 11,765,833 | 305,665 | ||||
Countrywide Alternative Loan Trust, 1.33%, 12/20/35 (c) | 10,399,104 | 522,014 | ||||
Countrywide Alternative Loan Trust, 5.59%, 02/25/36 (e) | 1,786,225 | 1,809,036 | ||||
Countrywide Alternative Loan Trust, 5.35%, 05/25/45 (e) | 1,108,706 | 1,110,591 | ||||
Countrywide Alternative Loan Trust, 5.28%, 07/25/46 (e) | 1,750,000 | 1,750,000 | ||||
Countrywide Alternative Loan Trust, 1.04%, 03/25/46 | 7,797,003 | 379,465 | ||||
Greenpoint Mortgage Funding Trust, 1.21%, 08/25/45 (e) | 5,491,884 | 168,189 | ||||
Greenpoint Mortgage Funding Trust, 1.95%, 10/25/45 (e) | 4,619,314 | 107,543 | ||||
Greenpoint Mortgage Funding Trust, 1.80%, 12/31/49 (e) | 7,210,305 | 223,069 | ||||
Harborview Mortgage Loan Trust, 0.80%, 06/19/35 (e) | 7,962,695 | 175,428 |
Principal Amount | Value | |||||
INTEREST ONLY BONDS (continued) | ||||||
Asset Backed Securities (continued) | ||||||
Harborview Mortgage Loan Trust, 0.77%, 11/19/34 (e) | $ | 14,022,735 | $ | 254,162 | ||
Harborview Mortgage Loan Trust, 1.09%, 05/19/35 (e) | 12,026,934 | 291,277 | ||||
Harborview Mortgage Loan Trust, 1.42%, 03/19/37 (e) | 7,293,725 | 357,848 | ||||
Harborview Mortgage Loan Trust, 5.37%, 07/20/46 (e) | 1,300,000 | 1,300,000 | ||||
Harborview Mortgage Loan Trust, 1.73%, 07/25/46 (e) | 41 | 21 | ||||
Harborview Mortgage Loan Trust, 2.19%, 08/25/46 (e) | 8,050,000 | 347,156 | ||||
Indymac Indx Mortgage Loan Trust, 0.64%, 07/25/35 (e) | 6,444,070 | 199,363 | ||||
Zuni Mortgage Loan Trust, 5.41%, 07/25/36 (e) | 1,400,000 | 1,400,000 | ||||
11,764,788 | ||||||
Federal Home Loan Mortgage Corporation (0.2%) | ||||||
IOETTE, Series 1103, Class N, 1156.50%, 06/15/21 (e) | 15 | 29 | ||||
1.88%, 06/17/27 (e) | 1,839,636 | 50,439 | ||||
6.00%, 04/15/32 (e) | 1,220,110 | 230,988 | ||||
7.00%, 07/15/33 (e) | 525,754 | 131,622 | ||||
413,078 | ||||||
Federal National Mortgage Association (0.3%) | ||||||
6.00%, 08/25/32 (e) | 394,296 | 66,817 | ||||
6.00%, 05/25/33 (e) | 485,355 | 125,277 | ||||
6.50%, 05/25/33 (e) | 451,865 | 113,586 | ||||
6.50%, 05/25/33 (e) | 1,109,089 | 280,310 | ||||
6.00%, 06/25/33 (e) | 507,942 | 121,852 | ||||
6.50%, 06/25/33 (e) | 450,974 | 114,569 | ||||
822,411 | ||||||
Total Interest Only Bonds | 13,000,277 | |||||
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Principal Amount | Value | |||||
U.S. GOVERNMENT AGENCIES (2.9%) | ||||||
Federal Home Loan Mortgage Corporation (1.0%) | ||||||
TBA, 5.50%, 08/01/19 (d) | $ | 2,550,000 | $ | 2,498,204 | ||
Federal National Mortgage Association (1.9%) | ||||||
TBA, 7.00%, 08/16/29 (d) | 3,200,000 | 3,270,000 | ||||
TBA, 6.00%, 07/25/36 (d) | 1,450,000 | 1,498,938 | ||||
4,768,938 | ||||||
Total U.S. Government Agencies | 7,267,142 | |||||
WARRANTS (0.1%) | ||||||
Banking (0.0%) | ||||||
Central Bank of Nigeria, 0.00%, 11/15/20 (b) (f) | 500 | 0 | ||||
Foreign Government (0.1%) | ||||||
Republic of Argentina, 5.83%, 12/15/35 (b) | 4,154,313 | 106,973 | ||||
Republic of Argentina, 8.28%, 12/15/35 (b) | 130,001 | 11,461 | ||||
Republic of Venezuela, 0.00%, 04/15/20 (b) (f) | 1,250 | 0 | ||||
United Mexican States, 0.00%, 09/01/06 (b) | 250 | 15,000 | ||||
133,434 | ||||||
Telecommunications (0.0%) | ||||||
XO Holdings, Inc. (b) | 248 | 1,091 | ||||
XO Holdings, Inc., Series A (b) | 497 | 427 | ||||
XO Holdings, Inc., Series B (b) | 373 | 179 | ||||
XO Holdings, Inc., Series C (b) | 373 | 131 | ||||
1,828 | ||||||
Total Warrants | 135,262 | |||||
CASH EQUIVALENTS (24.2%) | ||||||
Cash Sweeps (0.8%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $1,823,424) | 1,822,649 | 1,822,649 | ||||
Brazil (0.1%) | ||||||
Citigroup, Inc., 1.87%, 05/18/09 | 250,000 | 237,017 | ||||
Principal Amount | Value | ||||||
CASH EQUIVALENTS (continued) | |||||||
Fannie Mae Discount Note (1.6%) | |||||||
1.84% 7/24/06 | $ | 4,000,000 | $ | 3,987,984 | |||
Federal Home Loan Bank—Discount Note (1.6%) | |||||||
1.71%, 07/05/06 (g) | 4,000,000 | 3,998,856 | |||||
Federal National Mortgage Association Discount Notes (2.0%) | |||||||
5.01%, 07/12/06 | 5,000,000 | 4,991,966 | |||||
Turkey (0.2%) | |||||||
Citigroup, Inc., 1.35%, 06/28/07 | 710,000 | 576,747 | |||||
U.S. Treasury Bill (0.3%) | |||||||
3.22%, 07/13/06 | 700,000 | 699,187 | |||||
U.S. Treasury Bonds (0.6%) | |||||||
6.38%, 08/15/27 | 1,300,000 | 1,475,601 | |||||
U.S. Treasury Notes (17.0%) | |||||||
3.50%, 11/15/06 (g) | 15,200,000 | 15,103,222 | |||||
3.13%, 05/15/07 (g) | 5,000,000 | 4,908,205 | |||||
5.75%, 08/15/10 (g) | 1,000,000 | 1,024,570 | |||||
3.88%, 02/15/13 | 2,360,000 | 2,196,827 | |||||
8.13%, 08/15/19 | 3,625,000 | 4,589,308 | |||||
7.63%, 02/15/25 (g) | 1,000,000 | 1,270,000 | |||||
6.13%, 08/15/29 (g) | 11,475,000 | 12,758,766 | |||||
41,850,898 | |||||||
Total Cash Equivalents | 59,640,905 | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (11.5%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | 28,234,936 | 28,234,936 | |||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 28,234,936 | ||||||
Total Investments (Cost $284,540,539) (a) — 116.4% | 286,723,645 | ||||||
Liabilities in excess of other assets — (16.4%) | (40,351,547 | ) | |||||
NET ASSETS — 100.0% | $ | 246,372,098 | |||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
(b) | Denotes a non-income producing security. |
(c) | Represents a restricted security acquired and eligible for resale under Rule 144A, which limits the resale to certain qualified buyers. These securities were deemed liquid pursuant to procedures approved by the Board of Trustees. |
(d) | Mortgage Dollar Rolls |
(e) | Variable Rate security. The rate reflected in the Statement of Investments is the rate reflected in effect on June 30, 2006. The maturity date represents the actual maturity date. |
(f) | Security in default. |
(g) | All or part of the security was on loan as of June 30, 2006. |
(BRL) | Principal amount denominated in Brazilian Real. |
(EUR) | Principal amount denominated in Euro. |
(JPY) | Principal amount denominated in Japanese Yen. |
TBA | To Be Announced |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Short Contract: | ||||||||||||||
Euro | 09/27/06 | $ | (6,563,985 | ) | $ | (6,698,147 | ) | $ | (134,162 | ) | ||||
Japanese Yen | 08/07/06 | (1,011,634 | ) | (966,951 | ) | 44,683 | ||||||||
Swedish Krone | 09/21/06 | (408,831 | ) | (420,001 | ) | (11,170 | ) | |||||||
United States Dollar | 08/07/06 | (20,972,499 | ) | (20,972,499 | ) | 0 | ||||||||
Total Short Contracts | $ | (28,956,949 | ) | $ | (29,057,598 | ) | $ | (100,649 | ) | |||||
Long Contracts: | ||||||||||||||
Japanese Yen | 08/07/06 | $ | 20,972,499 | $ | 20,349,919 | $ | (622,580 | ) | ||||||
United States Dollar | 08/07/06 | 1,011,634 | 1,011,634 | 0 | ||||||||||
United States Dollar | 09/21/06 | 408,831 | 408,831 | 0 | ||||||||||
United States Dollar | 09/27/06 | 6,563,985 | 6,563,985 | 0 | ||||||||||
Total Long Contracts | $ | 28,956,949 | $ | 28,334,369 | $ | (622,580 | ) |
At June 30, 2006, the Fund’s open futures contracts were as follows:
Number of Contracts | Long Contracts | Expiration | Market Value Covered by Securities | Unrealized Appreciation (Depreciation) | ||||||||
564 | U.S.10 yr. Note Future | 09/20/06 | $ | 59,140,688 | $ | (245,570 | ) | |||||
2 | Japanese Gov’t Bond | 09/08/06 | 263,300,000 | 812,400 | ||||||||
$ | 322,440,688 | $ | 566,830 | |||||||||
Number of Contracts | Short Contracts | Expiration | Market Value Covered by Securities | Unrealized Appreciation (Depreciation) | ||||||||
32 | U.S. 5 yr. Note Future | 09/29/06 | $ | (3,309,000 | ) | $ | 11,881 | |||||
100 | U.S. 2 yr. Note Future | 09/29/06 | (20,278,125 | ) | 19,548 | |||||||
25 | U.S. Long Bond | 09/20/06 | (2,666,406 | ) | 2,681 | |||||||
12 | Euro Bond Future | 09/07/06 | (1,383,840 | ) | 5,727 | |||||||
$ | (27,637,371 | ) | $ | 39,837 |
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
The following is a summary of option activity for the period ended June 30, 2006, by the Fund (amount in thousands):
Covered Call Options | Shares Subject To Contract | Premiums | |||||
Balance at beginning of period | 0 | $ | 0 | ||||
Options written | (813 | ) | (9 | ) | |||
Options closed | 262 | 92 | |||||
Options expired | 813 | 9 | |||||
Options exercised | 0 | 0 | |||||
Options outstanding at end of period | 262 | $ | 92 |
At June 30, 2006, the Fund had the following outstanding options:
Written | Option Contracts |
Contracts | Type | Expiration Date | Exercise Price | Number Of Contracts | Value | Unrealized Appreciation (Depreciation) | |||||||||
Brazilian Real Option | Put | September 2006 | 2.287 | 261,740 | $ | 5,986 | $ | (2,782 | ) | ||||||
Euro Option | Put | June 2007 | 94.25 | 333 | 141,525 | 58,234 | |||||||||
Net Unrealized Appreciation On Written Option Contracts | $ | 55,452 |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $282,717,890) | $ | 284,900,996 | ||
Repurchase agreements, at cost and value | 1,822,649 | |||
Total Investments | 286,723,645 | |||
Cash collateral pledged for futures | 310,866 | |||
Put options written, at fair value (premiums received $92,059) | 147,511 | |||
Interest and dividends receivable | 2,828,580 | |||
Receivable for capital shares issued | 321 | |||
Receivable for investments sold | 14,472,600 | |||
Receivable for variation margin on futures contracts | 329,815 | |||
Reclaims receivable | 13,920 | |||
Prepaid expenses and other assets | 3,356 | |||
Total Assets | 304,830,614 | |||
Liabilities: | ||||
Payable to custodian | 4,852,247 | |||
Securities sold short, at value | 11,097,510 | |||
Payable to foreign currencies, at value | 461,243 | |||
Payable for investments purchased | 12,756,710 | |||
Payable for capital shares redeemed | 119,478 | |||
Unrealized depreciation on forward foreign currency contracts | 723,229 | |||
Payable for return of collateral received for securities on loan | 28,234,936 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 150,705 | |||
Fund administration and transfer agent fees | 28,967 | |||
Administrative servicing fees | 19,576 | |||
Other | 13,915 | |||
Total Liabilities | 58,458,516 | |||
Net Assets | $ | 246,372,098 | ||
Represented by: | ||||
Capital | $ | 243,848,041 | ||
Accumulated net investment income (loss) | 1,847,224 | |||
Accumulated net realized gain (losses) from investment, futures, options and foreign currency transactions | (741,792 | ) | ||
Net unrealized appreciation (depreciation) on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | 1,418,625 | |||
Net Assets | $ | 246,372,098 | ||
Net Assets: | ||||
Class I Shares | $ | 246,372,098 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 25,656,517 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 9.60 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 6,376,280 | ||
Income from securities lending | 68,015 | |||
Total Income | 6,444,295 | |||
Expenses: | ||||
Investment advisory fees | 927,426 | |||
Fund administration and transfer agent fees | 117,803 | |||
Administrative servicing fees Class I Shares | 190,103 | |||
Trustee fees | 4,413 | |||
Other | 35,818 | |||
Total expenses before earnings credit | 1,275,563 | |||
Earnings credit (note 5) | (5,410 | ) | ||
Total Expenses | 1,270,153 | |||
Net Investment Income (Loss) | 5,174,142 | |||
REALIZED/UNREALIZED GAINS | ||||
Net realized gains (losses) on investment transactions | (196,466 | ) | ||
Net realized gains (losses) on futures | (696,761 | ) | ||
Net realized gains (losses) on options | 32,167 | |||
Net realized gains (losses) on foreign currency transactions | 330,094 | |||
Net realized gains (losses) on investment, futures, options and foreign currency transactions | (530,966 | ) | ||
Net change in unrealized appreciation/depreciation on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | (4,846,869 | ) | ||
Net realized/unrealized gains (losses) on investments, futures, options and foreign currencies | (5,377,835 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (203,693 | ) | |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
VAN KAMPEN GVIT MULTI SECTOR BOND FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 5,174,142 | $ | 10,812,990 | ||||
Net realized gains (losses) on investment, futures, options and foreign currency transactions | (530,966 | ) | 1,758,010 | |||||
Net change in unrealized appreciation/depreciation on investments, futures, options and translation of assets and liabilities denominated in foreign currencies | (4,846,869 | ) | (7,058,219 | ) | ||||
Change in net assets resulting from operations | (203,693 | ) | 5,512,781 | |||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (3,659,159 | ) | (9,925,208 | ) | ||||
Net realized gains on investments | (554,113 | ) | (1,403,948 | ) | ||||
Change in net assets from shareholder distributions | (4,213,272 | ) | (11,329,156 | ) | ||||
Change in net assets from capital transactions | (8,169,333 | ) | 26,272,319 | |||||
Change in net assets | (12,586,298 | ) | 20,455,944 | |||||
Net Assets: | ||||||||
Beginning of period | 258,958,396 | 238,502,452 | ||||||
End of period | $ | 246,372,098 | $ | 258,958,396 | ||||
Accumulated net investment income (loss) | $ | 1,847,224 | $ | 332,241 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Capital Transactions: | ||||||||
Proceeds from shares issued | $ | 15,472,109 | $ | 50,005,573 | ||||
Dividends reinvested | 4,213,223 | 11,329,161 | ||||||
Cost of shares redeemed | (27,854,665 | ) | (35,062,415 | ) | ||||
$ | (8,169,333 | ) | $ | 26,272,319 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Share Transactions: | ||||||||
Issued | 1,588,178 | 5,033,371 | ||||||
Reinvested | 437,944 | 1,155,803 | ||||||
Redeemed | (2,857,179 | ) | (3,545,087 | ) | ||||
(831,057 | ) | 2,644,087 | ||||||
See notes to financial statements.
20
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Van Kampen GVIT Multi Sector Bond Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(b) | $ | 9.28 | 0.54 | (0.16 | ) | 0.38 | (0.52 | ) | — | (0.52 | ) | $ | 9.14 | 4.19% | $ | 177,324 | 0.90% | 5.99% | 1.04% | 5.85% | 340.77% | ||||||||||||||||||||||
Year Ended December 31, 2002 | $ | 9.14 | 0.42 | 0.22 | 0.64 | (0.50 | ) | — | (0.50 | ) | $ | 9.28 | 7.21% | $ | 209,280 | 1.01% | 4.61% | 1.02% | 4.60% | 385.94% | |||||||||||||||||||||||
Year Ended December 31, 2003 | $ | 9.28 | 0.36 | 0.74 | 1.10 | (0.52 | ) | — | (0.52 | ) | $ | 9.86 | 12.12% | $ | 226,525 | 1.01% | 3.75% | (c | ) | (c | ) | 296.62% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.86 | 0.42 | 0.21 | 0.63 | (0.49 | ) | — | (0.49 | ) | $ | 10.00 | 6.53% | $ | 238,502 | 1.01% | 4.23% | (c | ) | (c | ) | 212.84% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.00 | 0.42 | (0.20 | ) | 0.22 | (0.39 | ) | (0.05 | ) | (0.44 | ) | $ | 9.78 | 2.18% | $ | 258,958 | 1.03% | 4.26% | (c | ) | (c | ) | 157.82% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 9.78 | 0.20 | (0.22 | ) | (0.02 | ) | (0.14 | ) | (0.02 | ) | (0.16 | ) | $ | 9.60 | (0.05% | )(d) | $ | 246,372 | 1.02% | (e) | 4.12% | (e) | (c | ) | (c | ) | 60.54% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(c) | There were no fee reductions during the period. |
(d) | Not annualized. |
(e) | Annualized. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Van Kampen GVIT Multi Sector Bond Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee,
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Such compensation is amortized over the life of the dollar roll and included in investment income on the Statement of Operations. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 1,500,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 2,986,386 | 5.29% | 07/21/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 5,000,000 | 5.41% | 07/03/06 | |||||
Medium Term Note — Floating | Beta Finance Inc. | 300,000 | 5.37% | 07/03/06 | |||||
Medium Term Note — Floating | Macquarie Bank Ltd. | 4,999,541 | 5.30% | 07/21/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 1,999,414 | 5.39% | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 11,449,594 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$ 27,461,085 | $ | 28,234,936 |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||||
$ | 284,647,235 | $ | 6,314,200 | $ | (4,237,790 | ) | $ | 2,076,410 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GMF advises. Morgan Stanley Investment Management, Inc. (the “subadviser”), manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
Up to $200 million | 0.75% | 0.45% | 0.30% | |||||
$200 million or more | 0.70% | 0.45% | 0.25% |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $188,028 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $142,512,687 and sales of $141,409,022.
For the six months ended June 30, 2006, the Fund had purchases of $144,680,768 and sales of $105,529,293 of U.S. Government securities, which are included in the total purchases and sales in the sentence above.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreements) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed the Fund’s composite benchmark (60% Citigroup U.S. Broad Investment-Grade Bond Index, 15% Citigroup U.S. High Yield Market Index, 15% Citigroup World Government Bond Index: Unhedged, and 10% JPMorgan Emerging Markets Bond Index) for the one- and three-year periods while underperforming the benchmark for the five year period end September 30, 2005. During each of these same periods, the Fund ranked in the third quartile of the Lipper General Bond Funds category. The Board discussed with management the Fund’s third quartile performance and noted the changes that had recently been made to the Fund that are intended to improve performance. The Board also considered management’s explanation that this Fund is intended to provide less risk and volatility than similar funds and consequently may underperform those funds.
Next, the Board considered the Fund’s contractual advisory fees and breakpoints which placed the Fund in the fifth quintile of its Lipper-constructed Expense Group, but within the range of contractual advisory fees of other funds in the Lipper Expense Group. The Board considered the Fund’s total expenses which placed the Fund in the fourth quintile of the Lipper Expense Group. The Board also considered, however, that the Fund’s total expenses are only four basis points above the median of the Lipper Expense Group. Finally, the Board reviewed the adviser’s profitability information and concluded that it is not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
29
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
30
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
31
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
32
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the and Length of | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
33
Table of Contents
GVIT Small Cap Value Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
16 | Statement of Assets and Liabilities | |
16 | Statement of Operations | |
17 | Statements of Changes in Net Assets | |
19 | Financial Highlights | |
20 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GSCV (8/06)
Table of Contents
Shareholder
Expense Example | GVIT Small Cap Value Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
GVIT Small Cap Value | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,077.20 | $ | 5.87 | 1.14% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.15 | $ | 5.72 | 1.14% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,075.80 | $ | 7.10 | 1.38% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.96 | $ | 6.93 | 1.38% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,077.30 | $ | 5.72 | 1.11% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.30 | $ | 5.57 | 1.11% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,077.40 | $ | 5.72 | 1.11% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.30 | $ | 5.57 | 1.11% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | GVIT Small Cap Value Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stock | 96.2% | |
Treasury Notes | 0.1% | |
Cash Equivalents | 2.2% | |
Warrants | 0.0% | |
Other assets in excess of liabilities | 1.5% | |
100.0% | ||
Top Holdings* | ||
Todco, Class A | 0.9% | |
Texas Regional Bancshares, Inc. | 0.9% | |
Powerwave Technologies, Inc. | 0.8% | |
Infocrossing, Inc. | 0.8% | |
OMI Corp. | 0.7% | |
Oregon Steel Mills, Inc. | 0.7% | |
Washington Group Int’l, Inc. | 0.7% | |
Ventas, Inc. | 0.7% | |
Sybase, Inc. | 0.7% | |
Cincinnati Bell, Inc. | 0.7% | |
Endo Pharmaceuticals Holdings, Inc. | 0.7% | |
Other Assets | 91.7% | |
100.0% | ||
Top Industries | ||
Banks | 9.6% | |
Real Estate Investment Trusts | 9.0% | |
Oil & Gas | 6.8% | |
Computer Software & Services | 5.6% | |
Utilities | 3.8% | |
Metals | 3.7% | |
Aerospace & Defense | 3.6% | |
Machinery | 3.4% | |
Building | 3.0% | |
Retail | 2.8% | |
Other Assets | 48.7% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (96.2%) | |||||
Advanced Materials & Products (0.2%) | |||||
Ceradyne, Inc. (b) | 28,100 | $ | 1,390,669 | ||
Aerospace & Defense (3.6%) | |||||
AAR Corp. (b) | 60,000 | 1,333,800 | |||
Alliant Techsystems, Inc. (b) | 49,150 | 3,752,603 | |||
Curtiss-Wright Corp. | 27,600 | 852,288 | |||
DRS Technologies, Inc. | 81,850 | 3,990,188 | |||
EDO Corp. | 169,220 | 4,118,814 | |||
Esterline Technologies Corp. (b) | 17,200 | 715,348 | |||
HEICO Corp. | 7,000 | 198,450 | |||
Hexcel Corp. (b) | 81,600 | 1,281,936 | |||
K&F Industries Holdings, Inc. (b) | 189,480 | 3,359,480 | |||
Kaman Corp., Class A | 82,600 | 1,503,320 | |||
Moog, Inc., Class A (b) | 118,375 | 4,050,793 | |||
Orbital Sciences Corp. (b) | 18,700 | 301,818 | |||
Triumph Group, Inc. (b) | 8,800 | 422,400 | |||
25,881,238 | |||||
Agriculture (0.2%) | |||||
Andersons, Inc. (The) | 37,800 | 1,572,858 | |||
Delta & Pine Land Co. | 500 | 14,700 | |||
1,587,558 | |||||
Airlines (0.8%) | |||||
Alaska Air Group, Inc. (b) | 37,700 | 1,486,134 | |||
Continental Airlines, Inc., Class B (b) | 47,900 | 1,427,420 | |||
Enpro Industries, Inc. (b) | 14,600 | 490,560 | |||
ExpressJet Holdings, Inc. (b) | 61,400 | 424,274 | |||
Mesa Air Group, Inc. (b) | 36,700 | 361,495 | |||
Republic Airways Holdings, Inc. (b) | 27,200 | 462,944 | |||
SkyWest, Inc. | 49,400 | 1,225,120 | |||
5,877,947 | |||||
Apparel (0.9%) | |||||
Carter’s, Inc. (b) | 26,000 | 687,180 | |||
Maidenform Brands, Inc. (b) | 1,100 | 13,563 | |||
Oxford Industries, Inc. | 2,300 | 90,643 | |||
Perry Ellis International, Inc. (b) | 41,267 | 1,044,468 | |||
Phillips-Van Heusen Corp. | 101,600 | 3,877,056 | |||
Quiksilver, Inc. (b) | 31,700 | 386,106 | |||
Russell Corp. | 13,000 | 236,080 | |||
6,335,096 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Auto Dealers (0.4%) | |||||
Group 1 Automotive, Inc. | 16,000 | $ | 901,440 | ||
Lithia Motors, Inc., Class A | 61,400 | 1,861,648 | |||
Sonic Automotive, Inc. | 11,500 | 255,070 | |||
United Auto Group, Inc. | 1,100 | 23,485 | |||
3,041,643 | |||||
Auto Parts & Equipment (0.6%) | |||||
Aftermarket Technology Corp. (b) | 22,400 | 556,640 | |||
American Axle & Manufacturing Holdings, Inc. | 12,500 | 213,875 | |||
Arvinmeritor, Inc. | 40,100 | 689,319 | |||
Asbury Automotive Group, Inc. (b) | 58,100 | 1,216,614 | |||
Keystone Automotive Industries, Inc. (b) | 7,200 | 303,984 | |||
Standard Motor Products, Inc. | 15,300 | 127,602 | |||
Tenneco Automotive, Inc. (b) | 44,700 | 1,162,200 | |||
Visteon Corp. (b) | 13,300 | 95,893 | |||
4,366,127 | |||||
Banks (9.6%) | |||||
1st Source Corp. | 4,900 | 165,767 | |||
Amcore Financial, Inc. | 50,900 | 1,491,879 | |||
Americanwest Bancorp | 5,300 | 120,045 | |||
Ameris Bancorp | 12,280 | 284,159 | |||
Associated Banc-Corp. | 12,800 | 403,584 | |||
BancFirst Corp. | 9,000 | 402,750 | |||
Bank of the Ozarks, Inc. | 7,600 | 253,080 | |||
Banner Corp. | 4,600 | 177,284 | |||
Berkshire Hills Bancorp, Inc. | 1,000 | 35,480 | |||
BOK Financial Corp. | 32,100 | 1,594,407 | |||
Cadence Financial Corp. | 85,600 | 1,906,312 | |||
Capital Crossing Bank (b) | 700 | 17,220 | |||
Capitol Bancorp Ltd. | 8,800 | 342,760 | |||
Cardinal Financial Corp. | 5,800 | 67,396 | |||
Cathay General Bancorp | 9,900 | 360,162 | |||
Central Pacific Financial Corp. | 67,100 | 2,596,770 | |||
Chemical Financial Corp. | 13,955 | 427,023 | |||
Chittenden Corp. | 14,000 | 361,900 | |||
City Bank | 3,700 | 172,642 | |||
City Holding Co. | 16,700 | 603,538 | |||
Colonial Bancgroup, Inc. | 113,500 | 2,914,680 | |||
Columbia Banking System, Inc. | 11,630 | 434,729 | |||
Community Bank System, Inc. | 14,400 | 290,448 | |||
Community Trust Bancorp, Inc. | 15,270 | 533,381 |
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Banks (continued) | |||||
Corus Bankshares, Inc. | 106,400 | $ | 2,785,552 | ||
Cullen/Frost Bankers, Inc. | 20,300 | 1,163,190 | |||
Dynamic Materials Corp. | 60,500 | 2,040,665 | |||
East West Bancorp, Inc. | 34,490 | 1,307,516 | |||
Eurobancshares, Inc. (b) | 18,400 | 177,928 | |||
Farmers Capital Bank Corp. | 400 | 13,100 | |||
Financial Institutions, Inc. | 1,400 | 29,204 | |||
First BanCorp. ADR — PR | 48,600 | 451,980 | |||
First Citizens BancShares, Class A | 8,100 | 1,624,050 | |||
First Commonwealth Financial Corp. | 34,400 | 436,880 | |||
First Community Bankshares, Inc. | 200 | 6,598 | |||
First Oak Brook Bank | 4,500 | 166,500 | |||
First Regional Bancorp (b) | 200 | 17,600 | |||
First Republic Bancorp, Inc. | 22,650 | 1,037,370 | |||
First State Bancorp | 77,587 | 1,845,019 | |||
FNB Corp. | 2,900 | 107,300 | |||
Fremont General Corp. | 35,600 | 660,736 | |||
Great Southern Bancorp, Inc. | 7,800 | 238,134 | |||
Greater Bay Bancorp | 28,300 | 813,625 | |||
Greene County Bancshares, Inc. | 2,800 | 86,688 | |||
Hanmi Financial Corp. | 160,750 | 3,124,980 | |||
Heartland Financial USA, Inc. | 5,500 | 146,575 | |||
Heritage Commerce Corp. | 2,700 | 66,933 | |||
Horizon Financial Corp | 4,900 | 134,407 | |||
Iberiabank Corp. | 30,900 | 1,777,986 | |||
Independent Bank Corp. (Mass.) | 27,600 | 896,172 | |||
Independent Bank Corp. (Mich.) | 29,058 | 764,225 | |||
Intervest Bancshares Corp. (b) | 1,200 | 48,600 | |||
Irwin Financial Corp. | 32,400 | 628,236 | |||
Lakeland Financial Corp. | 3,300 | 80,157 | |||
Mainsource Financial Group, Inc. | 5,496 | 95,795 | |||
MB Financial, Inc. | 5,450 | 192,712 | |||
MBT Financial Corp. | 6,600 | 105,600 | |||
Mercantile Bank Corp. | 9,962 | 396,986 | |||
Mid-State Bancshares | 14,300 | 400,400 | |||
Nara Bankcorp, Inc. | 5,200 | 97,500 | |||
National Penn Bancshares, Inc. | 89,470 | 1,776,874 | |||
Old Second Bancorp, Inc. | 3,700 | 114,700 | |||
Oriental Financial Group ADR — PR | 20,100 | 256,476 | |||
Pacific Capital Bancorp | 21,500 | 669,080 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Banks (continued) | |||||
Peoples Bancorp, Inc. | 5,500 | $ | 164,120 | ||
Prosperity Bancshares, Inc. | 12,600 | 414,414 | |||
Provident Bankshares Corp. | 57,400 | 2,088,786 | |||
R & G Financial Corp. ADR — PR | 56,350 | 484,047 | |||
Republic Bancorp, Inc. | 72,271 | 895,438 | |||
Republic Bancorp, Inc., Class A | 5,181 | 106,729 | |||
Royal Bancshares of Pennsylvania, Class A | 5,358 | 130,092 | |||
Santander Bancorp ADR — PR | 2,300 | 56,626 | |||
SCBT Financial Corp. | 4,195 | 149,552 | |||
Security Bank Corp. | 10,500 | 233,835 | |||
Sierra Bancorp | 1,200 | 31,464 | |||
Signature Bank (b) | 130,400 | 4,222,351 | |||
Simmons First National Corp., Class A | 7,600 | 220,476 | |||
Southside Bancshares, Inc. | 6,955 | 155,236 | |||
Southwest Bancorp | 6,500 | 165,750 | |||
Sterling Bancshares, Inc. | 32,000 | 600,000 | |||
Sterling Financial Corp. | 60,512 | 1,325,213 | |||
Summit Bancshares, Inc. | 14,800 | 313,908 | |||
Sun Bancorp, Inc. (b) | 5,754 | 93,445 | |||
Taylor Capital Group, Inc. | 9,700 | 395,857 | |||
Texas Regional Bancshares, Inc. | 164,705 | 6,245,613 | |||
Trico Bancshares | 8,600 | 235,468 | |||
TrustCo Bank Corp. | 36,400 | 401,128 | |||
UMB Financial Corp. | 54,500 | 1,817,030 | |||
Umpqua Holdings Corp. | 32,496 | 833,522 | |||
Union Bankshares Corp. | 25,800 | 1,113,012 | |||
United Bankshares, Inc. | 8,200 | 300,366 | |||
W Holding Co. Inc. ADR — PR | 74,091 | 492,705 | |||
West Coast Bancorp | 42,900 | 1,264,263 | |||
Wilmington Trust Corp. | 34,400 | 1,450,992 | |||
69,142,863 | |||||
Beverages (0.4%) | |||||
Boston Beer Co. Inc., Class A (b) | 89,190 | 2,612,375 | |||
Biotechnology Research & Production (0.1%) | |||||
Infinity Bio-Energy Ltd. | 155,500 | 816,375 | |||
Broadcast Media & Television (0.6%) | |||||
Arbitron, Inc. | 3,400 | 130,322 | |||
Citadel Broadcasting Corp. | 111,590 | 993,151 | |||
Entercom Communications Corp. | 1,000 | 26,160 |
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Broadcast Media & Television (continued) | |||||
Entravision Communications Corp. (b) | 223,300 | $ | 1,913,681 | ||
Lin TV Corp., Class A (b) | 5,400 | 40,770 | |||
Radio One, Inc. (b) | 105,300 | 779,220 | |||
Saga Communications, Inc. (b) | 3,900 | 35,334 | |||
Sinclair Broadcast Group, Inc. | 5,800 | 49,648 | |||
Westwood One, Inc. | 15,800 | 118,500 | |||
4,086,786 | |||||
Building (3.0%) | |||||
Apogee Enterprises, Inc. | 23,100 | 339,570 | |||
Baker (Michael) Corp. (b) | 45,800 | 993,860 | |||
Building Materials Holding Corp. | 35,600 | 992,172 | |||
Genlyte Group, Inc. (b) | 19,800 | 1,434,114 | |||
Granite Construction, Inc. | 55,300 | 2,503,431 | |||
Levitt Corp., Class A | 14,375 | 230,000 | |||
Martin Marietta Materials, Inc. | 5,200 | 473,980 | |||
Modine Manufacturing Co. | 20,400 | 476,544 | |||
Modtech Holdings, Inc. (b) | 272,410 | 1,844,216 | |||
NCI Building Systems, Inc. (b) | 35,500 | 1,887,535 | |||
U.S. Concrete, Inc. (b) | 164,210 | 1,814,521 | |||
Universal Forest Products, Inc. | 32,300 | 2,026,179 | |||
Washington Group International, Inc. | 97,950 | 5,224,652 | |||
Watsco, Inc. | 7,200 | 430,704 | |||
WCI Communities, Inc. (b) | 13,100 | 263,834 | |||
Williams Scotsman International, Inc. (b) | 36,155 | 789,625 | |||
21,724,937 | |||||
Business Services (1.2%) | |||||
CRA International, Inc. (b) | 4,500 | 203,130 | |||
Deluxe Corp. | 54,000 | 943,920 | |||
Fair Issac & Co. Inc. | 108,300 | 3,932,373 | |||
FTD Group, Inc. (b) | 33,200 | 448,200 | |||
IKON Office Solutions, Inc. | 64,500 | 812,700 | |||
infoUSA, Inc. | 4,600 | 47,426 | |||
Marlin Business Services Corp. (b) | 12,200 | 275,232 | |||
Spherion Corp. (b) | 49,000 | 446,880 | |||
StarTek, Inc. | 5,500 | 82,225 | |||
TALX Corp. | 49,250 | 1,077,098 | |||
Viad Corp. | 18,400 | 575,920 | |||
8,845,104 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Casinos & Gambling (0.1%) | |||||
Ameristar Casinos, Inc. | 12,900 | $ | 250,905 | ||
Aztar Corp. (b) | 9,900 | 514,404 | |||
765,309 | |||||
Chemicals (2.0%) | |||||
FMC Corp. | 17,600 | 1,133,264 | |||
Georgia Gulf Corp. | 3,100 | 77,562 | |||
H. B. Fuller Co. | 26,800 | 1,167,676 | |||
Hercules, Inc. (b) | 67,800 | 1,034,628 | |||
Methanex Corp. ADR — CA | 216,350 | 4,582,293 | |||
Minerals Technologies, Inc. | 10,500 | 546,000 | |||
Newmarket Corp. | 18,800 | 922,328 | |||
OM Group, Inc. (b) | 1,400 | 43,190 | |||
PolyOne Corp. (b) | 80,600 | 707,668 | |||
Sensient Technologies Corp. | 20,200 | 422,382 | |||
Terra Industries, Inc. (b) | 1,600 | 10,192 | |||
Tronox, Inc. | 213,950 | 2,817,722 | |||
UAP Holding Corp. | 21,300 | 464,553 | |||
W.R. Grace & Co. (b) | 33,800 | 395,460 | |||
Wellman, Inc. | 32,500 | 131,300 | |||
14,456,218 | |||||
Coal (0.6%) | |||||
Foundation Coal Holdings, Inc. | 43,390 | 2,036,292 | |||
James River Coal Co. (b) | 45,400 | 1,202,646 | |||
KFX, Inc. (b) | 57,620 | 880,434 | |||
4,119,372 | |||||
Commercial Services (0.7%) | |||||
CBIZ, Inc. (b) | 21,900 | 162,279 | |||
Clark, Inc. | 7,200 | 95,040 | |||
Consolidated Graphics, Inc. (b) | 9,700 | 504,982 | |||
DynCorp International, Inc. (b) | 51,600 | 535,608 | |||
Learning Tree International, Inc. (b) | 205,650 | 1,803,551 | |||
LodgeNet Entertainment Corp. (b) | 37,900 | 706,835 | |||
Maximus, Inc. | 3,500 | 81,025 | |||
NCO Group, Inc. (b) | 7,600 | 200,944 | |||
Sourcecorp (b) | 10,100 | 250,379 | |||
TeleTech Holdings, Inc. (b) | 38,400 | 486,144 | |||
Vertrue, Inc. (b) | 3,500 | 150,605 | |||
Volt Information Sciences, Inc. (b) | 5,500 | 256,300 | |||
5,233,692 | |||||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Communications Technology (2.6%) | |||||
3COM Corp. (b) | 124,800 | $ | 638,976 | ||
CIENA Corp. (b) | 470,800 | 2,264,548 | |||
CommScope, Inc. (b) | 23,700 | 744,654 | |||
Digi International, Inc. (b) | 1,900 | 23,807 | |||
Dycom Industries, Inc. (b) | 93,790 | 1,996,789 | |||
Fairpoint Communications, Inc. | 49,900 | 718,560 | |||
Glenayre Technologies, Inc. (b) | 11,400 | 30,096 | |||
Inter-Tel, Inc. | 22,800 | 480,168 | |||
Powerwave Technologies, Inc. (b) | 659,600 | 6,015,552 | |||
RF Micro Devices, Inc. (b) | 448,200 | 2,675,754 | |||
SureWest Communications | 6,400 | 123,648 | |||
Symbol Technologies, Inc. | 92,500 | 998,075 | |||
Valor Communications Group | 178,000 | 2,038,100 | |||
18,748,727 | |||||
Computer Software & Services (5.6%) | |||||
Actuate Corp. (b) | 212,813 | 859,765 | |||
Agilysys, Inc. | 33,700 | 606,600 | |||
Altiris, Inc. (b) | 12,900 | 232,716 | |||
Aspen Technologies, Inc. (b) | 18,400 | 241,408 | |||
Avocent Corp. (b) | 19,700 | 517,125 | |||
Black Box Corp. | 12,500 | 479,125 | |||
Brocade Communications Systems, Inc. (b) | 135,200 | 830,128 | |||
Ciber, Inc. (b) | 39,300 | 258,987 | |||
Corel Corp. ADR — CA (b) | 169,250 | 2,041,155 | |||
Covansys Corp. (b) | 22,700 | 285,339 | |||
CSG Systems International, Inc. (b) | 18,000 | 445,320 | |||
Diebold, Inc. | 47,200 | 1,917,264 | |||
Electronics for Imaging, Inc. (b) | 33,600 | 701,568 | |||
Hutchinson Technology, Inc. (b) | 19,100 | 413,133 | |||
Infocrossing, Inc. (b) | 490,370 | 5,663,773 | |||
Intergraph Corp. (b) | 4,800 | 151,152 | |||
Internet Security Systems, Inc. (b) | 4,100 | 77,285 | |||
Interwoven Software, Inc. (b) | 157,900 | 1,354,782 | |||
iPass, Inc. (b) | 16,300 | 91,280 | |||
JDA Software Group, Inc. (b) | 13,800 | 193,614 | |||
Komag, Inc. (b) | 11,500 | 531,070 | |||
Lawson Software, Inc. (b) | 39,800 | 266,660 | |||
Magma Design Automation, Inc. (b) | 20,400 | 149,940 | |||
ManTech International, Corp. (b) | 9,700 | 299,342 | |||
McDATA Corp., Class A (b) | 107,700 | 439,416 | |||
Mentor Graphics Corp. (b) | 47,800 | 620,444 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Computer Software & Services (continued) | |||||
Neoware, Inc. (b) | 40,000 | $ | 491,600 | ||
NetIQ Corp. (b) | 10,300 | 125,557 | |||
Palm, Inc. (b) | 47,400 | 763,140 | |||
Parametric Technology Corp. (b) | 34,020 | 432,394 | |||
Perot Systems Corp., Class A (b) | 42,500 | 615,400 | |||
Phoenix Technologies Ltd. (b) | 7,300 | 35,113 | |||
Progress Software Corp. (b) | 14,100 | 330,081 | |||
QAD, Inc. | 6,800 | 52,700 | |||
Quantum Corp. (b) | 196,400 | 514,568 | |||
Quest Software, Inc. (b) | 141,300 | 1,983,852 | |||
RadiSys Corp. (b) | 9,700 | 213,012 | |||
RSA Security, Inc. (b) | 7,700 | 209,363 | |||
Sapient Corp. (b) | 366,950 | 1,944,835 | |||
SI International, Inc. (b) | 6,000 | 183,960 | |||
Silicon Storage Technology, Inc. (b) | 143,100 | 580,986 | |||
SPSS, Inc. (b) | 2,900 | 93,206 | |||
Sybase, Inc. (b) | 258,450 | 5,013,930 | |||
Sykes Enterprises, Inc. (b) | 17,900 | 289,264 | |||
Synnex Corp. (b) | 3,100 | 58,776 | |||
THQ, Inc. (b) | 201,900 | 4,361,040 | |||
TIBCO Software, Inc. (b) | 160,050 | 1,128,353 | |||
TTM Technologies, Inc. (b) | 19,600 | 283,612 | |||
Tyler Technologies, Inc. (b) | 20,700 | 231,840 | |||
United Online, Inc. | 37,200 | 446,400 | |||
40,051,373 | |||||
Computers (0.0%) | |||||
Gateway, Inc. (b) | 44,600 | 84,740 | |||
Consulting Services (0.7%) | |||||
Bearingpoint, Inc. (b) | 130,000 | 1,088,100 | |||
Gartner Group, Inc., Class A (b) | 31,200 | 443,040 | |||
LECG Corp. (b) | 116,100 | 2,144,367 | |||
Tetra Technology, Inc. (b) | 2,900 | 51,446 | |||
Watson Wyatt Worldwide, Inc. | 33,200 | 1,166,648 | |||
4,893,601 | |||||
Consumer Products (1.5%) | |||||
Central Garden & Pet Co. (b) | 21,200 | 912,660 | |||
Elizabeth Arden, Inc. (b) | 100,200 | 1,791,576 | |||
Hasbro, Inc. | 100,000 | 1,811,000 | |||
Jarden Corp. (b) | 24,150 | 735,368 | |||
Parlux Fragrances, Inc. (b) | 68,000 | 658,920 | |||
Prestige Brands Holdings, Inc. (b) | 7,900 | 78,763 |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Consumer Products (continued) | |||||
RC2 Corp. (b) | 15,600 | $ | 603,096 | ||
Revlon, Inc. (b) | 1,576,150 | 1,985,949 | |||
Spectrum Brands, Inc. (b) | 600 | 7,752 | |||
Tupperware Corp. | 70,300 | 1,384,207 | |||
Weis Markets, Inc. | 14,000 | 576,800 | |||
Yankee Candle Co. Inc. | 5,800 | 145,058 | |||
10,691,149 | |||||
Containers & Packaging (0.3%) | |||||
Greif, Inc., Class A | 10,800 | 809,568 | |||
Silgan Holdings, Inc. | 39,100 | 1,447,091 | |||
2,256,659 | |||||
Distribution & Wholesale (0.6%) | |||||
Aviall, Inc. (b) | 29,600 | 1,406,592 | |||
Bell Microproducts, Inc. (b) | 83,600 | 453,112 | |||
Brightpoint, Inc. (b) | 17,660 | 238,940 | |||
Directed Electronics, Inc. (b) | 123,650 | 1,622,288 | |||
United Stationers, Inc. (b) | 18,600 | 917,352 | |||
4,638,284 | |||||
Diversified Minerals (0.2%) | |||||
AMCOL International, Corp. | 41,960 | 1,105,646 | |||
Drugs & Pharmaceuticals (1.6%) | |||||
Adams Respiratory Therapeutics, Inc. (b) | 8,000 | 356,960 | |||
Adolor Corp. (b) | 14,000 | 350,140 | |||
Alexion Pharmaceuticals, Inc. (b) | 9,500 | 343,140 | |||
Alpharma, Inc., Class A | 61,400 | 1,476,056 | |||
Atherogenics, Inc. (b) | 9,404 | 122,722 | |||
AVANIR Pharmaceuticals (b) | 39,625 | 271,035 | |||
Biosite, Inc. (b) | 5,300 | 241,998 | |||
Biovail Corp. ADR-CA | 35,000 | 819,350 | |||
Cubist Pharmaceuticals, Inc. (b) | 13,400 | 337,412 | |||
Cypress Bioscience, Inc. (b) | 38,500 | 236,390 | |||
Endo Pharmaceuticals Holdings, Inc. (b) | 151,050 | 4,981,629 | |||
Martek Biosciences Corp. (b) | 1,000 | 28,950 | |||
Myogen, Inc. (b) | 8,100 | 234,900 | |||
Nektar Therapeutics (b) | 14,500 | 265,930 | |||
Nuvelo, Inc. (b) | 7,500 | 124,875 | |||
Perrigo Co. | 19,800 | 318,780 | |||
Progenics Pharmaceuticals (b) | 11,200 | 269,472 | |||
Renovis, Inc. (b) | 9,900 | 151,569 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Drugs & Pharmaceuticals (continued) | |||||
United Therapeutics Corp. (b) | 4,900 | $ | 283,073 | ||
Valeant Pharmaceuticals International | 10,000 | 169,200 | |||
11,383,581 | |||||
Electronics (1.4%) | |||||
Aeroflex, Inc. (b) | 31,800 | 371,106 | |||
Amis Holdings, Inc. (b) | 12,900 | 129,000 | |||
Amphenol Corp., Class A | 11,000 | 615,560 | |||
Applied Micro Circuits Corp. (b) | 90,400 | 246,792 | |||
Ariba, Inc. (b) | 26,300 | 216,449 | |||
Avnet, Inc. (b) | 38,800 | 776,776 | |||
Bel Fuse, Inc., Class B | 23,400 | 767,754 | |||
Belden CDT, Inc. | 38,200 | 1,262,510 | |||
Benchmark Electronics, Inc. (b) | 32,725 | 789,327 | |||
CTS Corp. | 33,100 | 492,859 | |||
Entegris, Inc. (b) | 115,138 | 1,097,265 | |||
Greatbatch, Inc. (b) | 5,000 | 118,000 | |||
Integrated Device Technology, Inc. (b) | 69,400 | 984,092 | |||
Kopin Corp. (b) | 25,800 | 93,138 | |||
Molecular Devices Corp. (b) | 4,900 | 149,744 | |||
Park Electrochemical Corp. | 8,400 | 216,300 | |||
Plexus Corp. (b) | 7,500 | 256,575 | |||
Sypris Solutions, Inc. | 12,200 | 115,290 | |||
Technitrol, Inc. | 7,400 | 171,310 | |||
Teradyne, Inc. (b) | 42,760 | 595,647 | |||
Trident Microsystems, Inc. (b) | 31,000 | 588,380 | |||
10,053,874 | |||||
Engineering (0.1%) | |||||
Emcor Group, Inc. (b) | 9,000 | 438,030 | |||
Financial Services (1.5%) | |||||
Accredited Home Lenders Holding Co. (b) | 13,500 | 645,435 | |||
Advanta Corp., Class B | 21,800 | 783,710 | |||
Aventine Renewable Energy Holdings, Inc. (b) | 51,290 | 1,995,181 | |||
Capital Corp. of the West | 4,160 | 133,120 | |||
CharterMac | 19,600 | 366,716 | |||
CompuCredit Corp. (b) | 8,700 | 334,428 | |||
Dollar Financial Corp. (b) | 15,723 | 283,014 | |||
Doral Financial Corp. ADR — PR | 26,000 | 166,660 | |||
eSPEED, Inc. (b) | 2,800 | 23,324 | |||
Federal Agricultural Mortgage Corp., Class C | 5,100 | 141,270 |
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Financial Services (continued) | |||||
Financial Federal Corp. | 17,900 | $ | 497,799 | ||
FirstCity Financial Corp. (b) | 137,723 | 1,439,205 | |||
Investment Technology Group, Inc. (b) | 17,500 | 890,050 | |||
Medallion Financial Corp. | 600 | 7,776 | |||
United PanAm Financial Corp. (b) | 52,860 | 1,606,944 | |||
World Acceptance Corp. (b) | 35,300 | 1,253,856 | |||
10,568,488 | |||||
Foods (0.7%) | |||||
American Italian Pasta Co. (b) | 15,600 | 133,536 | |||
Chiquita Brands International, Inc. | 45,200 | 622,856 | |||
Corn Products International, Inc. | 16,600 | 507,960 | |||
Flowers Foods, Inc. | 14,550 | 416,712 | |||
Gold Kist, Inc. (b) | 6,500 | 86,905 | |||
J & J Snack Foods Corp. | 10,000 | 330,700 | |||
Nasch-Finch Co. | 6,100 | 129,869 | |||
NBTY, Inc. (b) | 34,900 | 834,459 | |||
Premium Brands, Inc. | 1,200 | 19,476 | |||
Ralcorp Holding, Inc. (b) | 8,800 | 374,264 | |||
Ruddick Corp. | 6,000 | 147,060 | |||
Tootsie Roll Industries | 43,157 | 1,257,163 | |||
4,860,960 | |||||
Funeral Services (0.4%) | |||||
Alderwoods Group, Inc. (b) | 17,800 | 346,388 | |||
Service Corp. International | 243,850 | 1,984,939 | |||
Stewart Enterprises, Inc., Class A | 93,900 | 539,925 | |||
2,871,252 | |||||
Healthcare (2.0%) | |||||
Amedisys, Inc. (b) | 62,700 | 2,376,330 | |||
America Service Group, Inc. (b) | 110,954 | 1,722,006 | |||
AMERIGROUP Corp. (b) | 19,900 | 617,696 | |||
AMN Healthcare Services, Inc. (b) | 1,500 | 30,450 | |||
Apria Healthcare Group, Inc. (b) | 8,300 | 156,870 | |||
Genesis Healthcare Corp. (b) | 600 | 28,422 | |||
Gentiva Health Services, Inc. (b) | 11,700 | 187,551 | |||
Healthspring, Inc. (b) | 7,700 | 144,375 | |||
Healthtronics Surgical Services, Inc. (b) | 15,500 | 118,575 | |||
Kindred Healthcare, Inc. (b) | 19,500 | 507,000 | |||
LCA-Vision, Inc. | 8,300 | 439,153 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Healthcare (continued) | |||||
LifePoint Hospitals, Inc. (b) | 67,650 | $ | 2,173,595 | ||
Magellan Health Services, Inc. (b) | 16,400 | 743,084 | |||
Molina Healthcare, Inc. (b) | 5,600 | 213,080 | |||
Pediatrix Medical Group, Inc. (b) | 17,100 | 774,630 | |||
Res-Care, Inc. (b) | 7,000 | 140,000 | |||
Rural/Metro Corp. (b) | 522,056 | 3,654,392 | |||
Sierra Health Services, Inc. (b) | 13,600 | 612,408 | |||
14,639,617 | |||||
Hotels & Motels (0.3%) | |||||
Felcor Lodging Trust, Inc. | 82,200 | 1,787,028 | |||
Winston Hotels, Inc. | 100 | 1,225 | |||
1,788,253 | |||||
Household Furnishings (0.4%) | |||||
Bassett Furniture Industries, Inc. | 50,900 | 942,159 | |||
Ethan Allen Interiors, Inc. | 18,600 | 679,830 | |||
Furniture Brands International, Inc. | 28,900 | 602,276 | |||
Kimball International, Inc., Class B | 18,700 | 368,577 | |||
2,592,842 | |||||
Identification Systems (0.1%) | |||||
Checkpoint Systems, Inc. (b) | 14,400 | 319,824 | |||
Paxar Corp. (b) | 3,700 | 76,109 | |||
395,933 | |||||
Instruments (0.2%) | |||||
Analogic Corp. | 6,400 | 298,304 | |||
Watts Industries, Inc. | 30,200 | 1,013,210 | |||
1,311,514 | |||||
Insurance (1.2%) | |||||
American Physicians Capital, Inc. (b) | 6,800 | 357,612 | |||
Aspen Insurance Holdings Ltd. | 142,340 | 3,315,099 | |||
Delphi Financial Group, Inc., Class A | 52,575 | 1,911,627 | |||
Endurance Specialty Holdings Ltd. | 27,000 | 864,000 | |||
Harleysville Group, Inc. | 1,700 | 53,924 | |||
Odyssey Re Holdings Corp. | 600 | 15,810 | |||
Ohio Casualty Corp. | 25,200 | 749,196 | |||
Phoenix Companies Inc. | 12,500 | 176,000 | |||
Protective Life Corp. | 14,000 | 652,680 | |||
United Fire & Casualty Corp. | 23,700 | 714,081 | |||
8,810,029 | |||||
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Insurance: Property–Casualty (1.6%) | |||||
Argonaut Group, Inc. (b) | 25,500 | $ | 766,020 | ||
Direct General Corp. | 11,400 | 192,888 | |||
Infinity Property & Casualty Corp. | 13,900 | 569,900 | |||
LandAmerica Financial Group, Inc. | 20,900 | 1,350,140 | |||
Midland Co. | 4,500 | 170,910 | |||
Navigators Group, Inc. (The) (b) | 10,900 | 477,638 | |||
PMA Capital Corp., Class A (b) | 104,000 | 1,071,200 | |||
ProAssurance Corp. (b) | 2,400 | 115,632 | |||
RLI Corp. | 4,400 | 211,992 | |||
Safety Insurance Group, Inc. | 39,300 | 1,868,715 | |||
Selective Insurance Group, Inc. | 19,000 | 1,061,530 | |||
State Auto Financial Corp. | 7,200 | 234,288 | |||
Stewart Information Services Corp. | 25,100 | 911,381 | |||
Zenith National Insurance Co. | 56,380 | 2,236,595 | |||
11,238,829 | |||||
Internet Software & Services (0.1%) | |||||
Redback Networks, Inc. (b) | 13,100 | 240,254 | |||
SonicWALL, Inc. (b) | 27,300 | 245,427 | |||
Stellent, Inc. | 8,600 | 82,130 | |||
Webmethods, Inc. (b) | 34,300 | 338,541 | |||
906,352 | |||||
Investment Banks & Brokers (1.0%) | |||||
Affiliated Managers Group, Inc. (b) | 23,460 | 2,038,439 | |||
Greenhill & Co. Inc. | 1,200 | 72,912 | |||
Knight Capital Group, Inc., Class A (b) | 63,000 | 959,490 | |||
LaBranche & Co. Inc. (b) | 33,400 | 404,474 | |||
Piper Jaffray Cos. (b) | 5,800 | 355,018 | |||
Technology Investment Capital Corp. | 64,490 | 944,779 | |||
Thomas Weisel Partners Group, Inc. (b) | 95,930 | 1,823,629 | |||
TradeStation Group, Inc. (b) | 70,270 | 890,321 | |||
7,489,062 | |||||
Lasers—Systems & Components (0.1%) | |||||
Coherent, Inc. (b) | 7,900 | 266,467 | |||
Electro Scientific Industries, Inc. (b) | 6,500 | 116,935 | |||
383,402 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Leisure (0.5%) | |||||
Great Wolf Resorts, Inc. (b) | 249,772 | $ | 2,999,762 | ||
K2, Inc. (b) | 40,900 | 447,446 | |||
3,447,208 | |||||
Linen Supply & Related Items (0.1%) | |||||
Angelica Corp. | 31,800 | 557,772 | |||
Unifirst Corp. | 10,600 | 365,700 | |||
923,472 | |||||
Machinery (3.4%) | |||||
Actuant Corp. | 98,400 | 4,915,080 | |||
Alamo Group, Inc. | 2,800 | 58,940 | |||
Applied Industrial Technologies, Inc. | 92,350 | 2,245,029 | |||
Astec Industries, Inc. (b) | 28,700 | 979,244 | |||
ASV, Inc. (b) | 15,100 | 347,904 | |||
Cascade Corp. | 10,900 | 431,095 | |||
Flowserve Corp. (b) | 8,300 | 472,270 | |||
Gardner Denver Machinery, Inc. (b) | 21,900 | 843,150 | |||
Gehl Co. (b) | 5,500 | 140,415 | |||
Imation Corp. | 19,900 | 816,895 | |||
JLG Industries, Inc. | 32,100 | 722,250 | |||
Kadant, Inc. (b) | 1,800 | 41,400 | |||
Kennametal, Inc. | 29,200 | 1,817,700 | |||
Kulicke & Soffa Industries, Inc. (b) | 22,000 | 163,020 | |||
Lincoln Electric Holdings, Inc. | 14,200 | 889,630 | |||
Manitowoc Co. | 67,550 | 3,005,975 | |||
NACCO Industries, Inc., Class A | 5,300 | 728,273 | |||
Regal-Beloit Corp. | 30,500 | 1,346,575 | |||
Sauer-Danfoss, Inc. | 9,500 | 241,490 | |||
Tecumseh Products Co. (b) | 7,600 | 145,920 | |||
Tennant Co. | 1,200 | 60,336 | |||
Toro Co. | 87,800 | 4,100,260 | |||
24,512,851 | |||||
Manufacturing (2.1%) | |||||
A.O. Smith Corp. | 20,300 | 941,108 | |||
Acuity Brands, Inc. | 42,100 | 1,638,111 | |||
Ameron International, Corp. | 6,900 | 462,438 | |||
Asyst Technologies, Inc. (b) | 49,300 | 371,229 | |||
Barnes Group, Inc. | 101,200 | 2,018,940 | |||
Chaparral Steel Co. (b) | 13,000 | 936,260 | |||
CLARCOR, Inc. | 28,700 | 854,973 | |||
Griffon Corp. (b) | 18,700 | 488,070 |
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Manufacturing (contined) | |||||
Jacuzzi Brands, Inc. (b) | 14,700 | $ | 129,360 | ||
KEMET Corp. (b) | 17,000 | 156,740 | |||
Knoll, Inc. | 29,190 | 535,928 | |||
Maverick Tube Corp. (b) | 9,700 | 612,943 | |||
Mueller Industries, Inc. | 45,860 | 1,514,756 | |||
Oshkosh Truck Corp. | 20,400 | 969,408 | |||
PGT, Inc. (b) | 53,400 | 843,720 | |||
Quanex Corp. | 56,880 | 2,449,822 | |||
Reddy Ice Holdings, Inc. | 300 | 6,105 | |||
Trinity Industries, Inc. | 11,800 | 476,720 | |||
15,406,631 | |||||
Medical & Dental Instruments & Supplies (0.4%) | |||||
CONMED Corp. (b) | 8,400 | 173,880 | |||
ICU Medical, Inc. (b) | 3,000 | 126,720 | |||
Invacare Corp. | 8,100 | 201,528 | |||
Neurometrix, Inc. (b) | 8,500 | 258,910 | |||
Owens & Minor, Inc. | 31,000 | 886,600 | |||
PSS World Medical, Inc. (b) | 28,800 | 508,320 | |||
STERIS Corp. | 11,400 | 260,604 | |||
Surmodics, Inc. (b) | 1,200 | 43,332 | |||
Viasys Healthcare, Inc. (b) | 6,500 | 166,400 | |||
2,626,294 | |||||
Medical—Biomedical & Genetic (0.8%) | |||||
Bio-Rad Laboratories, Inc., Class A (b) | 26,600 | 1,727,404 | |||
Cambrex Corp. | 153,150 | 3,190,115 | |||
Celera Genomics Group (b) | 10,400 | 134,680 | |||
GTX, Inc. (b) | 14,500 | 131,950 | |||
Human Genome Sciences, Inc. (b) | 6,600 | 70,620 | |||
LifeCell Corp. (b) | 14,300 | 442,156 | |||
5,696,925 | |||||
Medical Information Systems (0.2%) | |||||
Alliance Imaging, Inc. (b) | 20,400 | 130,560 | |||
Computer Programs & Systems, Inc. | 12,600 | 503,496 | |||
PER-SE Technologies, Inc. (b) | 35,300 | 888,854 | |||
1,522,910 | |||||
Metals (3.7%) | |||||
Apex Silver Mines Ltd. (b) | 46,000 | 692,300 | |||
Brush Engineered Materials, Inc. (b) | 98,250 | 2,048,513 | |||
Century Aluminum Co. (b) | 54,800 | 1,955,812 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Metals (continued) | |||||
Circor International, Inc. | 12,000 | $ | 365,880 | ||
Cleveland-Cliffs, Inc. | 44,600 | 3,536,334 | |||
Coeur d’Alene Mines Corp. (b) | 210,000 | 1,010,100 | |||
Commercial Metals Co. | 128,000 | 3,289,600 | |||
NN, Inc. | 25,400 | 313,690 | |||
NS Group, Inc. (b) | 12,900 | 710,532 | |||
Oregon Steel Mills, Inc. (b) | 103,180 | 5,227,098 | |||
Pan American Silver Corp. (b) | 31,000 | 557,690 | |||
Reliance Steel & Aluminum Co. | 6,500 | 539,175 | |||
Ryerson, Inc. | 27,580 | 744,660 | |||
Schnitzer Steel Industries, Inc. | 8,400 | 298,032 | |||
Shaw Group, Inc. (b) | 45,790 | 1,272,962 | |||
Steel Dynamics | 46,000 | 3,024,040 | |||
Valmont Industries, Inc. | 26,000 | 1,208,740 | |||
26,795,158 | |||||
Multimedia (0.7%) | |||||
Carmike Cinemas, Inc. | 7,100 | 149,668 | |||
Cox Radio, Inc. (b) | 9,300 | 134,106 | |||
DTS, Inc. (b) | 137,620 | 2,680,838 | |||
InterVideo, Inc. (b) | 12,800 | 125,056 | |||
Macrovision Corp. (b) | 68,621 | 1,476,724 | |||
Media General, Inc. | 6,400 | 268,096 | |||
4,834,488 | |||||
Music (0.0%) | |||||
Steinway Musical Instruments, Inc. (b) | 12,900 | 316,308 | |||
Networking Products (0.2%) | |||||
Adaptec, Inc. (b) | 50,200 | 217,868 | |||
Anixter International, Inc. | 14,900 | 707,154 | |||
Foundry Networks, Inc. (b) | 20,300 | 216,398 | |||
Hypercom Corp. (b) | 18,100 | 169,235 | |||
Safenet, Inc. (b) | 11,985 | 212,374 | |||
1,523,029 | |||||
Office Equipment & Services (0.3%) | |||||
BioMed Realty Trust, Inc. | 7,200 | 215,568 | |||
Ennis, Inc. | 8,000 | 157,440 | |||
Global Imaging Systems, Inc. (b) | 2,000 | 82,560 | |||
John H. Harland Co. | 31,800 | 1,383,300 | |||
1,838,868 | |||||
Oil & Gas (6.8%) | |||||
Alon USA Energy, Inc. | 7,200 | 226,584 | |||
Bois d’Arc Energy, Inc. (b) | 14,400 | 237,168 |
10
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Oil & Gas (continued) | |||||
Bronco Drilling Co. Inc. (b) | 28,060 | $ | 586,173 | ||
Buckeye Partners LP | 100,050 | 4,211,105 | |||
Cabot Oil & Gas Corp. | 8,300 | 406,700 | |||
Callon Petroleum Corp. (b) | 7,700 | 148,918 | |||
Carbo Ceramics, Inc. | 36,000 | 1,768,680 | |||
Cimarex Energy Co. | 53,285 | 2,291,255 | |||
Comstock Resources, Inc. (b) | 16,900 | 504,634 | |||
Energy Partners Ltd. (b) | 19,100 | 361,945 | |||
Giant Industries, Inc. (b) | 5,800 | 385,990 | |||
Hanover Compressor Co. (b) | 13,830 | 259,727 | |||
Harvest Natural Resources, Inc. (b) | 24,100 | 326,314 | |||
Houston Exploration Co. (b) | 14,400 | 881,136 | |||
Hydril (b) | 12,200 | 957,944 | |||
Laclede Group, Inc. (The) | 6,000 | 206,160 | |||
Lone Star Technologies, Inc. (b) | 9,900 | 534,798 | |||
New Jersey Resources Corp. | 32,800 | 1,534,384 | |||
Northwest Natural Gas Co. | 17,800 | 659,134 | |||
Oceaneering International, Inc. (b) | 4,000 | 183,400 | |||
Oil States International, Inc. (b) | 52,100 | 1,785,988 | |||
OMI Corp. | 241,600 | 5,230,640 | |||
Petrohawk Energy Corp. (b) | 22,500 | 283,500 | |||
Pioneer Drilling Co. (b) | 41,800 | 645,392 | |||
Range Resources Corp. | 25,000 | 679,750 | |||
Remington Oil & Gas Corp. (b) | 4,100 | 180,277 | |||
Rossetta Resources, Inc. (b) | 1,100 | 18,282 | |||
RPC Energy Services, Inc. | 40,225 | 976,663 | |||
SEACOR Holdings, Inc. (b) | 31,050 | 2,549,205 | |||
South Jersey Industries, Inc. | 47,200 | 1,292,808 | |||
St. Mary Land & Exploration Co. | 8,100 | 326,025 | |||
Stone Energy Corp. (b) | 18,900 | 879,795 | |||
Superior Well Services, Inc. (b) | 39,700 | 988,530 | |||
Swift Energy Co. (b) | 18,000 | 772,740 | |||
Todco, Class A | 158,600 | 6,478,809 | |||
Trico Marine Services, Inc. (b) | 4,100 | 139,400 | |||
Union Drilling, Inc. (b) | 4,500 | 66,870 | |||
Unit Corp. (b) | 28,600 | 1,627,054 | |||
Universal Compression Holdings, Inc. (b) | 8,500 | 535,245 | |||
Valero LP | 64,750 | 3,195,413 | |||
Veritas DGC, Inc. (b) | 16,000 | 825,280 | |||
Warren Resources, Inc. (b) | 158,550 | 2,276,778 | |||
Western Refining, Inc. | 2,700 | 58,266 | |||
48,484,859 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Paper & Related Products (0.2%) | |||||
Glatfelter | 17,000 | $ | 269,790 | ||
Rock-Tenn Co. | 30,200 | 481,690 | |||
Schweitzer-Mauduit International, Inc. | 26,300 | 569,395 | |||
1,320,875 | |||||
Plastics (0.2%) | |||||
Myers Industries, Inc. | 59,200 | 1,017,648 | |||
Spartech Corp. | 12,800 | 289,280 | |||
1,306,928 | |||||
Private Corrections (0.1%) | |||||
Geo Group, Inc. (The) (b) | 20,500 | 718,525 | |||
Publishing (0.2%) | |||||
Banta Corp. | 4,500 | 208,485 | |||
Journal Register Co. | 23,300 | 208,768 | |||
Lee Enterprises, Inc. | 9,900 | 266,805 | |||
ProQuest Co. (b) | 12,700 | 156,083 | |||
Scholastic Corp. (b) | 23,700 | 615,489 | |||
Valassis Communications, Inc. (b) | 10,000 | 235,900 | |||
1,691,530 | |||||
Racetracks (0.1%) | |||||
Speedway Motorsports, Inc. | 28,500 | 1,075,590 | |||
Railroads (1.0%) | |||||
Florida East Coast Industries, Inc. | 90,060 | 4,712,839 | |||
Genesee & Wyoming, Inc. (b) | 77,850 | 2,761,340 | |||
7,474,179 | |||||
Real Estate (0.3%) | |||||
HouseValues, Inc. (b) | 11,000 | 76,230 | |||
Realty Income | 20,000 | 438,000 | |||
Sirva, Inc. (b) | 37,500 | 242,625 | |||
Tejon Ranch Co. (b) | 30,600 | 1,259,496 | |||
2,016,351 | |||||
Real Estate Investment Trusts (9.0%) | |||||
American Financial Realty Trust | 114,300 | 1,106,424 | |||
American Home Mortgage Investment Corp. | 64,189 | 2,366,007 | |||
Anthracite Capital, Inc. | 101,000 | 1,228,160 | |||
Ashford Hospitality Trust | 213,720 | 2,697,146 | |||
Boykin Lodging Co. (b) | 10,800 | 117,612 | |||
Capital Trust, Inc., Class A | 9,400 | 334,828 | |||
CarrAmerica Realty Corp. | 9,000 | 400,950 |
11
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Real Estate Investment Trusts (continued) | |||||
Cedarshopping Centers, Inc. | 64,100 | $ | 943,552 | ||
Columbia Equity Trust, Inc. | 7,200 | 110,592 | |||
Deerfield Triarc Capital Corp. | 92,600 | 1,201,948 | |||
Eagle Materials, Inc. | 71,322 | 3,387,795 | |||
Education Realty Trust, Inc. | 14,600 | 243,090 | |||
Entertainment Properties Trust | 25,700 | 1,106,385 | |||
Equity Inns, Inc. | 154,100 | 2,551,896 | |||
Extra Space Storage, Inc. | 9,800 | 159,152 | |||
First Industrial Realty Trust | 34,400 | 1,305,136 | |||
First Potomac Realty Trust | 30,200 | 899,658 | |||
Five Star Quality Care (b) | 132,300 | 1,464,561 | |||
Glenborough Realty Trust, Inc. | 22,300 | 480,342 | |||
Glimcher Realty Trust | 49,400 | 1,225,614 | |||
Government Properties Trust | 31,500 | 298,935 | |||
Healthcare Realty Trust, Inc. | 18,400 | 586,040 | |||
Hersha Hospitality Trust | 120,400 | 1,118,516 | |||
Hospitality Properties Trust | 28,000 | 1,229,760 | |||
Impac Mortgage Holdings | 41,700 | 466,206 | |||
InnKeepers USA Trust | 89,000 | 1,537,920 | |||
Jer Investors Trust, Inc. | 55,200 | 858,360 | |||
Kilroy Realty Corp. | 36,900 | 2,666,025 | |||
KKR Financial Corp. | 46,400 | 965,584 | |||
Lasalle Hotel Properties | 53,600 | 2,481,680 | |||
Lexington Corporate Properties Trust | 143,100 | 3,090,960 | |||
LTC Properties, Inc. | 23,200 | 518,520 | |||
Maguire Properties, Inc. | 14,500 | 509,965 | |||
MFA Mortgage Investments, Inc. | 28,400 | 195,392 | |||
Mid-America Apartment Communities, Inc. | 40,300 | 2,246,725 | |||
National Health Investors, Inc. | 52,300 | 1,406,347 | |||
Nationwide Health Properties, Inc. | 71,100 | 1,600,461 | |||
Novastar Financial, Inc. | 8,300 | 262,363 | |||
Omega Healthcare Investors, Inc. ADR — GR | 126,020 | 1,665,984 | |||
Parkway Properties, Inc. | 12,900 | 586,950 | |||
Pennsylvania Real Estate Investment Trust | 52,400 | 2,115,388 | |||
Post Properties, Inc. | 57,000 | 2,584,380 | |||
Rait Investment Trust | 40,100 | 1,170,920 | |||
Republic Property Trust | 123,900 | 1,224,132 | |||
Saul Centers, Inc. | 25,100 | 1,023,578 | |||
Senior Housing Properties Trust | 53,600 | 959,976 | |||
Spirit Finance Corp. | 6,100 | 68,686 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Real Estate Investment Trusts (continued) | |||||
Sunstone Hotel Investors, Inc. | 51,700 | $ | 1,502,402 | ||
Taubman Centers, Inc. | 26,000 | 1,063,400 | |||
Ventas, Inc. | 152,900 | 5,180,251 | |||
64,516,654 | |||||
Recycling (0.1%) | |||||
Aleris International, Inc. (b) | 20,900 | 958,265 | |||
Rental & Leasing Services & Commercial (0.4%) | |||||
Aaron Rents, Inc. | 32,050 | 861,504 | |||
Dollar Thrifty Automotive Group, Inc. (b) | 23,300 | 1,050,131 | |||
Electro Rent Corp. (b) | 9,100 | 145,782 | |||
Rent-A-Center, Inc. (b) | 7,800 | 193,908 | |||
Rent-Way, Inc. (b) | 34,100 | 251,658 | |||
2,502,983 | |||||
Research & Development (0.1%) | |||||
URS Corp. (b) | 8,700 | 365,400 | |||
Restaurants (0.9%) | |||||
Bob Evans Farms | 1,900 | 57,019 | |||
Domino’s Pizza, Inc. | 7,100 | 175,654 | |||
Jack in the Box, Inc. (b) | 28,200 | 1,105,440 | |||
Landry’s Seafood Restaurants, Inc. | 38,400 | 1,246,080 | |||
Lone Star Steakhouse & Saloon | 108,729 | 2,851,962 | |||
Papa John’s International, Inc. (b) | 14,400 | 478,080 | |||
Ryans Restaurant Group, Inc. (b) | 67,500 | 803,925 | |||
6,718,160 | |||||
Retail (2.8%) | |||||
Big Lots, Inc. (b) | 26,600 | 454,328 | |||
Blockbuster, Inc. (b) | 400 | 1,992 | |||
Bon-Ton Stores, Inc. | 2,700 | 59,076 | |||
Brown Shoe Co. Inc. | 38,300 | 1,305,264 | |||
Build-A-Bear-Workshop, Inc. (b) | 7,200 | 154,872 | |||
Casey’s General Stores, Inc. | 11,700 | 292,617 | |||
Cash America International, Inc. | 48,100 | 1,539,200 | |||
Charlotte Russe Holding, Inc. (b) | 41,900 | 1,003,086 | |||
Charming Shoppes, Inc. (b) | 169,100 | 1,900,684 | |||
Cole (Kenneth) Productions, Inc. | 11,500 | 256,795 | |||
CSK Auto Corp. (b) | 30,000 | 359,100 | |||
Deckers Outdoor Corp. (b) | 4,700 | 181,232 | |||
Dress Barn, Inc. (b) | 14,000 | 354,900 | |||
Finish Line (The), Class A | 36,200 | 428,246 |
12
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Retail (continued) | |||||
Genesco, Inc. (b) | 33,800 | $ | 1,144,806 | ||
Great Atlantic & Pacific Tea Co. Inc. (The) | 8,600 | 195,392 | |||
Inland Real Estate Corp. | 45,800 | 681,504 | |||
Insight Enterprises, Inc. (b) | 12,200 | 232,410 | |||
Movado Group, Inc. | 10,700 | 245,565 | |||
New York & Co. Inc. (b) | 68,400 | 668,268 | |||
Pantry, Inc. (b) | 6,000 | 345,240 | |||
Payless Shoesource, Inc. (b) | 23,300 | 633,061 | |||
Retail Ventures, Inc. (b) | 22,800 | 406,296 | |||
Rex Stores Corp. (b) | 38,330 | 550,036 | |||
Sealy Corp. (b) | 22,300 | 295,921 | |||
Shoe Carnival, Inc. (b) | 6,400 | 152,704 | |||
Skechers U.S.A., Inc. (b) | 25,300 | 609,983 | |||
Smart & Final, Inc. (b) | 22,700 | 382,268 | |||
Spartan Stores, Inc. | 15,100 | 220,913 | |||
Stage Stores, Inc. | 91,115 | 3,006,795 | |||
Systemax, Inc. (b) | 22,400 | 174,720 | |||
Talbots, Inc. | 46,400 | 856,080 | |||
Too, Inc. (b) | 21,100 | 810,029 | |||
Tuesday Morning Corp. | 39,100 | 514,165 | |||
20,417,548 | |||||
Savings & Loans (1.8%) | |||||
Bankunited Financial Corp. | 18,100 | 552,412 | |||
Brookline Bancorp, Inc. | 239,050 | 3,291,718 | |||
Commercial Capital Bancorp | 12,466 | 196,340 | |||
Dime Community Bancshares | 17,150 | 232,726 | |||
Downey Financial Corp. | 2,400 | 162,840 | |||
First Financial Holdings, Inc. | 5,200 | 166,400 | |||
First Niagara Financial Group, Inc. | 73,496 | 1,030,414 | |||
First Place Financial Corp. | 13,300 | 306,033 | |||
FirstFed Financial Corp. (b) | 11,400 | 657,438 | |||
Flagstar Bancorp | 21,400 | 341,544 | |||
Franklin Bank Corp. (b) | 58,800 | 1,187,172 | |||
ITLA Capital Corp. | 5,000 | 262,900 | |||
MAF Bancorp, Inc. | 19,643 | 841,506 | |||
Ocwen Financial Corp. (b) | 21,700 | 275,807 | |||
Partners Trust Financial Group | 39,500 | 450,695 | |||
Sterling Financial Corp. | 62,705 | 1,913,129 | |||
Tierone Corp. | 16,600 | 560,582 | |||
WSFS Financial Corp. | 8,500 | 522,325 | |||
12,951,981 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Semiconductors (2.2%) | |||||
Actel Corp. (b) | 12,400 | $ | 177,940 | ||
Amkor Technology, Inc. (b) | 43,600 | 412,456 | |||
Axcelis Technologies, Inc. (b) | 221,600 | 1,307,440 | |||
Brooks Automation, Inc. (b) | 14,900 | 175,820 | |||
Cirrus Logic, Inc. (b) | 30,200 | 245,828 | |||
Cohu, Inc. | 13,900 | 243,945 | |||
Conexant Systems, Inc. (b) | 585,800 | 1,464,500 | |||
Credence Systems Corp. (b) | 26,200 | 91,700 | |||
Cypress Semiconductor Corp. (b) | 125,830 | 1,829,568 | |||
DSP Group, Inc. (b) | 12,500 | 310,625 | |||
Emulex Corp. (b) | 10,600 | 172,462 | |||
Exar Corp. (b) | 7,100 | 94,217 | |||
Genesis Microchip, Inc. (b) | 7,700 | 89,012 | |||
Integrated Silicon Solution, Inc. (b) | 15,500 | 85,405 | |||
Lattice Semiconductor Corp. (b) | 32,500 | 200,850 | |||
LTX Corp. (b) | 59,500 | 417,095 | |||
Mattson Technology, Inc. (b) | 11,000 | 107,470 | |||
MKS Instruments, Inc. (b) | 23,700 | 476,844 | |||
On Semiconductor Corp. (b) | 34,700 | 204,036 | |||
Optical Communication Products, Inc. (b) | 29,900 | 60,099 | |||
Pericom Semiconductor Corp. (b) | 6,900 | 57,270 | |||
Photronics, Inc. (b) | 17,300 | 256,040 | |||
Rockwood Holdings, Inc. (b) | 22,300 | 513,123 | |||
Silicon Image, Inc. (b) | 424,600 | 4,577,188 | |||
Silicon Laboratories (b) | 22,300 | 783,845 | |||
Skyworks Solutions, Inc. (b) | 29,100 | 160,341 | |||
Standard Microsystems Corp. (b) | 13,300 | 290,339 | |||
TriQuint Semiconductor, Inc. (b) | 141,000 | 628,860 | |||
Vitesse Semiconductor Corp. (b) | 26,100 | 37,584 | |||
Zoran Corp. (b) | 14,900 | 362,666 | |||
15,834,568 | |||||
Telecommunications (1.4%) | |||||
Alaska Communications Systems | 66,700 | 843,755 | |||
Holdings, Inc. | |||||
Arris Group, Inc. (b) | 193,110 | 2,533,603 | |||
AsiaInfo Holdings, Inc. (b) | 6,200 | 26,598 | |||
Broadwing Corp. (b) | 32,680 | 338,238 | |||
C&D Technologies, Inc. | 47,050 | 353,816 | |||
C-COR.net Corp. (b) | 6,000 | 46,320 | |||
Centennial Communications | 20,400 | 106,080 | |||
Ditech Networks, Inc. (b) | 13,900 | 121,208 |
13
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Telecommunications (continued) | |||||
Dobson Communications Corp., Class A (b) | 52,800 | $ | 408,144 | ||
Finisar Corp. (b) | 29,500 | 96,465 | |||
General Communication, Inc. (b) | 20,000 | 246,400 | |||
Level 3 Communications, Inc. (b) | 223,700 | 993,228 | |||
Lightbridge, Inc. (b) | 1,300 | 16,835 | |||
MasTec, Inc. (b) | 25,500 | 336,855 | |||
MRV Communications, Inc. (b) | 16,400 | 51,004 | |||
Newport Corp. (b) | 28,600 | 461,032 | |||
North Pittsburgh Systems, Inc. | 9,700 | 267,332 | |||
Polycom, Inc. (b) | 53,500 | 1,172,720 | |||
Premiere Global Services, Inc. (b) | 124,600 | 940,730 | |||
Sycamore Networks, Inc. (b) | 31,200 | 126,672 | |||
Talk America Holdings, Inc. (b) | 18,500 | 114,515 | |||
Utstarcom, Inc. (b) | 19,900 | 155,021 | |||
9,756,571 | |||||
Tobacco (0.6%) | |||||
Alliance One International, Inc. | 63,700 | 282,828 | |||
Loews Corp. — Carolina Group | 45,900 | 2,357,883 | |||
Universal Corp. | 40,100 | 1,492,522 | |||
4,133,233 | |||||
Toys (0.1%) | |||||
JAKKS Pacific, Inc. (b) | 41,500 | 833,735 | |||
Transportation (1.9%) | |||||
AMERCO (b) | 5,300 | 533,498 | |||
Arkansas Best Corp. | 3,300 | 165,693 | |||
Bristow Group, Inc. (b) | 9,400 | 338,400 | |||
Gatx Corp. | 7,900 | 335,750 | |||
Greenbrier Cos., Inc. | 112,000 | 3,666,880 | |||
Interpool, Inc. | 12,800 | 284,416 | |||
Kirby Corp. (b) | 45,700 | 1,805,150 | |||
Marten Transport Ltd. (b) | 1,300 | 28,262 | |||
Omega Navigation Enterprises, Inc. (b) | 197,930 | 2,854,151 | |||
RailAmerica, Inc. (b) | 35,300 | 369,238 | |||
SCS Transportation, Inc. (b) | 25,000 | 688,250 | |||
U.S. Xpress Enterprises, Inc. (b) | 9,300 | 251,286 | |||
Werner Enterprises, Inc. | 98,500 | 1,996,595 | |||
13,317,569 | |||||
Travel Services (0.0%) | |||||
Navigant International, Inc. (b) | 5,400 | 86,562 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Utilities (3.8%) | |||||
Advanced Energy Industries, Inc. (b) | 13,800 | $ | 182,712 | ||
American States Water Co. | 7,200 | 256,680 | |||
Avista Corp. | 15,600 | 356,148 | |||
Black Hills Corp. | 16,600 | 569,878 | |||
California Water Service Group | 7,100 | 253,754 | |||
CH Energy Group, Inc. | 10,900 | 523,200 | |||
Charter Communications, Inc. (b) | 301,100 | 340,243 | |||
Cincinnati Bell, Inc. (b) | 1,221,950 | 5,009,995 | |||
Cleco Corp. | 30,800 | 716,100 | |||
Commonwealth Telephone Enterprises, Inc. | 6,200 | 205,592 | |||
CT Communications, Inc. | 42,600 | 974,262 | |||
El Paso Electric Co. (b) | 49,000 | 987,840 | |||
Idacorp, Inc. | 39,000 | 1,337,310 | |||
NICOR, Inc. | 24,300 | 1,008,450 | |||
ONEOK, Inc. | 92,600 | 3,152,104 | |||
PNM Resource, Inc. | 16,800 | 419,328 | |||
Quantum Fuel Systems Technology (b) | 4,300 | 14,620 | |||
Sierra Pacific Resources (b) | 139,200 | 1,948,800 | |||
SJW Corp. | 4,300 | 109,435 | |||
Southwest Gas Corp. | 49,900 | 1,563,866 | |||
Time Warner Telecom, Inc. (b) | 45,500 | 675,675 | |||
UIL Holdings Corp. | 3,500 | 197,015 | |||
UniSource Energy Corp. | 58,500 | 1,822,275 | |||
Westar Energy, Inc. | 220,345 | 4,638,262 | |||
27,263,544 | |||||
Waste Disposal (0.2%) | |||||
American Ecology Corp. | 62,230 | 1,649,095 | |||
Waste Services, Inc. (b) | 9,300 | 83,607 | |||
1,732,702 | |||||
Water Treatment Systems (0.2%) | |||||
Nalco Holding Co. (b) | 68,410 | 1,206,068 | |||
Wire & Cable Products (0.2%) | |||||
Encore Wire Corp. (b) | 9,950 | 357,603 | |||
General Cable Corp. (b) | 23,200 | 812,000 | |||
1,169,603 | |||||
Total Common Stocks | 689,783,631 | ||||
14
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
CASH EQUIVALENTS (2.2%) | ||||||
AIM Liquid Assets Portfolio, 4.53% | 16,100,232 | $ | 16,100,232 | |||
Total Cash Equivalents | 16,100,232 | |||||
TREASURY NOTES (0.1%) | ||||||
United States Treasury Note, 2.88%, 11/30/06 | $ | 615,000 | 609,042 | |||
Total Treasury Notes | 609,042 | |||||
Shares or Principal Amount | Value | ||||
WARRANTS (0.0%) | |||||
Biotechnology Research & Production (0.0%) | |||||
Infinity Bio-Energy Ltd. (b) | 311,000 | $ | 149,280 | ||
Total Warrants | 149,280 | ||||
Total Investments (Cost $662,676,748) (a) — 98.5% | 706,642,185 | ||||
Other assets in excess of liabilities — 1.5% | 10,552,379 | ||||
NET ASSETS — 100.0% | $ | 717,194,564 | |||
(a) | See Notes to Financial Statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
ADR | American Depositary Receipt |
CA | Canada |
GR | Greece |
PR | Puerto Rico |
At June 30, 2006 the Fund’s open futures contracts were as follows:
Number of Contracts | Long Contracts* | Expiration | Market Value Covered by Contracts | Unrealized Appreciation/ Depreciation | ||||||
25 | Russell 2000 Future | 09/15/06 | $ | 9,143,750 | $ | 227,256 |
* | Cash pledged as collateral. |
See notes to financial statements.
15
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $646,576,516) | $ | 690,541,953 | |
Repurchase agreements, at cost and value | 16,100,232 | ||
Total Investments | 706,642,185 | ||
Cash | 398,496 | ||
Interest and dividends receivable | 1,035,229 | ||
Receivable for capital shares issued | 3,274,668 | ||
Receivable for investments sold | 30,882,301 | ||
Receivable for variation margin on futures contracts | 131,261 | ||
Prepaid expenses and other assets | 8,969 | ||
Total Assets | 742,373,109 | ||
Liabilities: | |||
Payable for investments purchased | 24,482,230 | ||
Payable for capital shares redeemed | 13,100 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 497,813 | ||
Fund administration and transfer agent fees | 44,037 | ||
Distribution fees | 9,145 | ||
Administrative servicing fees | 91,105 | ||
Other | 41,115 | ||
Total Liabilities | 25,178,545 | ||
Net Assets | $ | 717,194,564 | |
Represented by: | |||
Capital | $ | 631,924,675 | |
Accumulated net investment income (loss) | 1,188,406 | ||
Accumulated net realized gain (losses) from investment and futures transactions | 39,526,610 | ||
Net unrealized appreciation (depreciation) on investments and futures | 44,554,873 | ||
Net Assets | $ | 717,194,564 | |
Net Assets: | |||
Class I Shares | $ | 617,480,609 | |
Class II Shares | 46,120,636 | ||
Class III Shares | 1,590,674 | ||
Class IV Shares | 52,002,645 | ||
Total | $ | 717,194,564 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 50,414,886 | ||
Class II Shares | 3,798,615 | ||
Class III Shares | 129,658 | ||
Class IV Shares | 4,245,341 | ||
Total | 58,588,500 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 12.25 | |
Class II Shares | $ | 12.14 | |
Class III Shares | $ | 12.27 | |
Class IV Shares | $ | 12.25 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 363,920 | ||
Dividend income (net of foreign witholding tax of $299) | 6,102,762 | |||
Total Income | 6,466,682 | |||
Expenses: | ||||
Investment advisory fees | 3,241,805 | |||
Fund administration and transfer agent fees | 269,755 | |||
Distribution fees Class II Shares | 58,525 | |||
Administrative servicing fees Class I Shares | 565,924 | |||
Administrative servicing fees Class II Shares | 38,265 | |||
Administrative servicing fees Class III Shares | 1,180 | |||
Administrative servicing fees Class IV Shares | 38,445 | |||
Trustee fees | 13,039 | |||
Custodian fees | 743,355 | |||
Other | 91,939 | |||
Total expenses before earnings credit | 5,062,232 | |||
Earnings credit (Note 6) | (728,317 | ) | ||
Total Expenses | 4,333,915 | |||
Net Investment Income (Loss) | 2,132,767 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 44,401,977 | |||
Net realized gains (losses) on futures | (242,115 | ) | ||
Net realized gains (losses) on investment and futures transactions | 44,159,862 | |||
Net change in unrealized appreciation/depreciation on investments and futures | 9,666,678 | |||
Net realized/unrealized gains (losses) on investments and futures | 53,826,540 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 55,959,307 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 2,132,767 | $ | 627,104 | ||||
Net realized gains (losses) on investment and futures transactions | 44,159,862 | 84,343,055 | ||||||
Net change in unrealized appreciation/depreciation on investments and futures | 9,666,678 | (65,820,811 | ) | |||||
Change in net assets resulting from operations | 55,959,307 | 19,149,348 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (997,674 | ) | (423,215 | ) | ||||
Net realized gains on investments | (7,236,630 | ) | (74,221,499 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (21,291 | ) | (158 | ) | ||||
Net realized gains on investments | (542,660 | ) | (5,146,029 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (2,858 | ) | (855 | ) | ||||
Net realized gains on investments | (19,278 | ) | (173,428 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (92,420 | ) | (32,994 | ) | ||||
Net realized gain on investment | (611,867 | ) | (6,098,184 | ) | ||||
Change in net assets from shareholder distributions | (9,524,678 | ) | (86,096,362 | ) | ||||
Change in net assets from capital transactions | (61,616,121 | ) | (57,443,650 | ) | ||||
Change in net assets | (15,181,492 | ) | (124,390,664 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 732,376,056 | 856,766,720 | ||||||
End of period | $ | 717,194,564 | $ | 732,376,056 | ||||
Accumulated net investment income (loss) | $ | 1,188,406 | $ | 169,882 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Capital Transactions: | ||||||||
Proceeds from shares issued | $ | 39,626,544 | $ | 37,905,074 | ||||
Dividends reinvested | 8,234,297 | 74,644,664 | ||||||
Cost of shares redeemed | (104,723,284 | ) | (174,572,041 | ) | ||||
(56,862,443 | ) | (62,022,303 | ) | |||||
Class II Capital Transactions: | ||||||||
Proceeds from shares issued | 5,084,948 | 13,795,351 | ||||||
Dividends reinvested | 563,950 | 5,146,184 | ||||||
Cost of shares redeemed | (6,377,151 | ) | (12,873,745 | ) | ||||
(728,253 | ) | 6,067,790 | ||||||
Class III Capital Transactions: | ||||||||
Proceeds from shares issued | 338,315 | 534,641 | ||||||
Dividends reinvested | 22,136 | 174,282 | ||||||
Cost of shares redeemed | (297,505 | ) | (1,150,889 | ) | ||||
62,946 | (441,966 | ) | ||||||
Class IV Capital Transactions: | ||||||||
Proceeds from shares issued | 1,319,031 | 3,596,419 | ||||||
Dividends reinvested | 704,287 | 6,131,174 | ||||||
Cost of shares redeemed | (6,111,689 | ) | (10,774,764 | ) | ||||
(4,088,371 | ) | (1,047,171 | ) | |||||
Change in net assets from capital transactions | $ | (61,616,121 | ) | $ | (57,443,650 | ) | ||
17
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP VALUE FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Share Transactions: | ||||||
Issued | 3,139,614 | 3,037,441 | ||||
Reinvested | 691,352 | 6,387,509 | ||||
Redeemed | (8,414,398 | ) | (14,193,748 | ) | ||
(4,583,432 | ) | (4,768,798 | ) | |||
Class II Share Transactions: | ||||||
Issued | 411,136 | 1,133,868 | ||||
Reinvested | 47,926 | 444,184 | ||||
Redeemed | (517,932 | ) | (1,051,531 | ) | ||
(58,870 | ) | 526,521 | ||||
Class III Share Transactions: | ||||||
Issued | 26,450 | 43,707 | ||||
Reinvested | 1,856 | 14,885 | ||||
Redeemed | (23,787 | ) | (93,976 | ) | ||
4,519 | (35,384 | ) | ||||
Class IV Share Transactions: | ||||||
Issued | 105,958 | 290,845 | ||||
Reinvested | 59,137 | 524,752 | ||||
Redeemed | (492,396 | ) | (878,822 | ) | ||
(327,301 | ) | (63,225 | ) | |||
See notes to financial statements.
18
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
GVIT Small Cap Value Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains (Losses) | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of (Prior to Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 8.70 | — | 2.44 | 2.44 | — | (0.78 | ) | (0.78 | ) | $ | 10.36 | 28.28% | $ | 697,860 | 1.05% | 0.04% | 1.15% | (0.06% | ) | 164.87% | |||||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.36 | — | (2.78 | ) | (2.78 | ) | — | (0.21 | ) | (0.21 | ) | $ | 7.37 | (27.16%) | $ | 467,165 | 1.11% | 0.01% | 1.11% | 0.01% | 127.77% | ||||||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.37 | (0.02 | ) | 4.21 | 4.19 | — | — | — | $ | 11.56 | 56.85% | $ | 715,099 | 1.11% | (0.18% | ) | (k | ) | (k | ) | 126.29% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.56 | (0.01 | ) | 2.01 | 2.00 | — | (h) | (0.94 | ) | (0.94 | ) | $ | 12.62 | 17.30% | $ | 754,412 | 1.11% | (0.09% | ) | (k | ) | (k | ) | 132.11% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.62 | 0.03 | 0.35 | 0.38 | (0.01 | ) | (1.46 | ) | (1.47 | ) | $ | 11.53 | 3.07% | $ | 634,107 | 1.12% | 0.09% | (k | ) | (k | ) | 188.69% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.53 | 0.04 | 0.85 | 0.89 | (0.02 | ) | (0.15 | ) | (0.17 | ) | $ | 12.25 | 7.72% | (i) | $ | 617,512 | 1.14% | (j) | 0.58% | (j) | (k | ) | (k | ) | 64.57% | ||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 10.26 | — | (2.68 | ) | (2.68 | ) | — | (0.21 | ) | (0.21 | ) | $ | 7.37 | (26.46%) | (i) | $ | 1,472 | 1.32% | (j) | 0.13% | (j) | (k | ) | (k | ) | 127.77% | |||||||||||||||||
Year Ended December 31, 2003(e) | $ | 7.37 | (0.04 | ) | 4.20 | 4.16 | — | — | — | $ | 11.53 | 56.45% | $ | 18,446 | 1.36% | (0.41% | ) | (k | ) | (k | ) | 126.29% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.53 | (0.03 | ) | 1.99 | 1.96 | — | (0.94 | ) | (0.94 | ) | $ | 12.55 | 17.00% | $ | 41,804 | 1.36% | (0.30% | ) | (k | ) | (k | ) | 132.11% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.55 | (0.02 | ) | 0.36 | 0.34 | — | (h) | (1.46 | ) | (1.46 | ) | $ | 11.43 | 2.78% | $ | 44,096 | 1.38% | (0.15% | ) | (k | ) | (k | ) | 188.69% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.43 | 0.03 | 0.84 | 0.87 | (0.01 | ) | (0.15 | ) | (0.16 | ) | $ | 12.14 | 7.58% | (i) | $ | 46,123 | 1.38% | (j) | 0.35% | (j) | (k | ) | (k | ) | 64.57% | ||||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(f) | $ | 10.48 | — | (2.89 | ) | (2.89 | ) | — | (0.21 | ) | (0.21 | ) | $ | 7.38 | (27.88%) | (i) | $ | 63 | 1.07% | (j) | 0.60% | (j) | (k | ) | (k | ) | 127.77% | |||||||||||||||||
Year Ended December 31, 2003(e) | $ | 7.38 | (0.01 | ) | 4.20 | 4.19 | — | — | — | $ | 11.57 | 56.78% | $ | 2,568 | 1.11% | (0.13% | ) | (k | ) | (k | ) | 126.29% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.57 | (0.01 | ) | 2.02 | 2.01 | — | (h) | (0.94 | ) | (0.94 | ) | $ | 12.64 | 17.37% | $ | 2,029 | 1.11% | (0.09% | ) | (k | ) | (k | ) | 132.11% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.64 | 0.03 | 0.35 | 0.38 | (0.01 | ) | (1.46 | ) | (1.47 | ) | $ | 11.55 | 3.06% | $ | 1,445 | 1.13% | 0.08% | (k | ) | (k | ) | 188.69% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.55 | 0.04 | 0.85 | 0.89 | (0.02 | ) | (0.15 | ) | (0.17 | ) | $ | 12.27 | 7.73% | (i) | $ | 1,591 | 1.11% | (j) | 0.62% | (j) | (k | ) | (k | ) | 64.57% | ||||||||||||||||||
Class IV Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(g) | $ | 7.49 | (0.01 | ) | 4.08 | 4.07 | — | — | — | $ | 11.56 | 54.34% | (i) | $ | 53,826 | 1.10% | (j) | (0.18% | )(j) | (k | ) | (k | ) | 126.29% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.56 | (0.01 | ) | 2.01 | 2.00 | — | (h) | (0.94 | ) | (0.94 | ) | $ | 12.62 | 17.30% | $ | 58,521 | 1.11% | (0.08% | ) | (k | ) | (k | ) | 132.11% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.62 | 0.03 | 0.35 | 0.38 | (0.01 | ) | (1.46 | ) | (1.47 | ) | $ | 11.53 | 3.07% | $ | 52,727 | 1.12% | 0.10% | (k | ) | (k | ) | 188.69% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.53 | 0.04 | 0.85 | 0.89 | (0.02 | ) | (0.15 | ) | (0.17 | ) | $ | 12.25 | 7.74% | (i) | $ | 52,005 | 1.11% | (j) | 0.61% | (j) | (k | ) | (k | ) | 64.57% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from May 6, 2002 (commencement of operations) through December 31, 2002. |
(e) | Net investment income (loss) is based on average shares outstanding during the period. |
(f) | For the period from May 3, 2002 (commencement of operations) through December 31, 2002. |
(g) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(h) | The amount is less than $0.005. |
(i) | Not annualized. |
(j) | Annualized. |
(k) | There were no fee reductions during the period. |
See notes to financial statements.
19
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT Small Cap Value Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by
20
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(e) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(f) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(g) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(h) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code,
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized | Unrealized | Net Unrealized | |||
$667,405,147 | $87,125,640 | $(47,888,602) | $39,237,038 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(i) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadvisers, for the Fund. The subadvisers listed below manage all or a portion of the Fund’s investments and have the responsibility for making all investment decisions for that portion of the Fund unless otherwise indicated. Below is a list of the subadvisers to the Fund:
Subadvisers* | ||
- J.P. Morgan Investment Management, Inc. - Epoch Investment Partners, Inc. |
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, GMF pays fees to the subadvisers. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadvisers is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
Up to $200 million | 0.90% | 0.40% | 0.50% | |||||
$200 million or more | 0.85% | 0.40% | 0.45% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class I, Class II, and Class III shares of the Fund and 0.20% of Class IV shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $561,821 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $466.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $472,513,742 and sales of $555,344,584.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the Russell 2000 Value Index, for the one-and three-year periods ended September 30, 2005, while underperforming its benchmark for the five-year period. The Board considered that the Fund ranked in the top quartile of the Lipper Small Cap Value Funds category for the three-year period ended September 30, 2005, but had underperformed the median of the category for the one-year period. The Board discussed with management the recent portfolio manager change on the sleeve of the portfolio managed directly by Gartmore and the replacement of one of the Fund’s subadvisers, Dreyfus Corporation with Epoch Investment Partners, Inc. in September 2005.
Next, the Board reviewed and considered the Fund’s contractual advisory fee (including subadvisory fees) and breakpoints and noted the contractual advisory fee placed the Fund in the fourth quintile of its Lipper-constructed Expense Group. The Board also considered that the Fund’s total expenses were slightly above the median for the Fund’s Expense Group. The Board discussed with management the Fund’s fees and expenses in light of the breakpoints in place on this Fund. Finally, the Board considered the adviser’s profitability with respect to its management of this Fund and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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GVIT Small Cap Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
7 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statements of Changes in Net Assets | |
9 | Financial Highlights | |
10 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GSCG (8/06)
Table of Contents
Shareholder
Expense Example | GVIT Small Cap Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
GVIT Small Cap Growth Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,004.40 | $ | 6.11 | 1.23% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.70 | $ | 6.18 | 1.23% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,003.20 | $ | 7.45 | 1.50% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.36 | $ | 7.53 | 1.50% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,004.40 | $ | 6.01 | 1.21% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.80 | $ | 6.07 | 1.21% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | GVIT Small Cap Growth Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stock | 97.1% | |
Cash Equivalents | 2.8% | |
Other Investments* | 11.7% | |
Liabilities in excess of other assets** | -11.6% | |
100.0% | ||
Top Holdings*** | ||
Healthways, Inc. | 2.4% | |
ITT Educational Services, Inc. | 2.3% | |
Focus Media Holding, Ltd. ADR | 2.1% | |
FactSet Research Systems, Inc. | 2.0% | |
Ceradyne, Inc. | 2.0% | |
Kyphon, Inc. | 1.9% | |
Checkfree Corp. | 1.9% | |
Blackbaud, Inc. | 1.7% | |
ASV, Inc. | 1.7% | |
Financial Federal Corp. | 1.6% | |
Other Assets | 80.4% | |
100.0% | ||
Top Industries | ||
Oil & Gas | 6.5% | |
Health Care Services | 5.7% | |
Computer Services, Software & Systems | 5.6% | |
Financial Services | 5.6% | |
Machinery, Equipment, & Supplies | 4.3% | |
Advertising Agencies | 4.0% | |
Internet | 2.9% | |
Transportation | 2.9% | |
Computer Software & Services | 2.8% | |
Casinos & Gambling | 2.7% | |
Other Assets | 57.0% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.1%) | |||||
Advertising Agencies (4.0%) | |||||
aQuantive, Inc. (b) | 76,902 | $ | 1,947,928 | ||
Focus Media Holding, Ltd. ADR (b) | 48,100 | 3,134,196 | |||
ValueClick, Inc. (b) | 65,449 | 1,004,642 | |||
6,086,766 | |||||
Advertising Services (1.8%) | |||||
Getty Images, Inc. (b) (c) | 26,750 | 1,698,893 | |||
Inventiv Health, Inc. (b) | 35,971 | 1,035,245 | |||
2,734,138 | |||||
Auction Houses & Art Dealers (0.6%) | |||||
Sotheby’s Holdings (b) (c) | 31,900 | 837,375 | |||
Auto Parts & Equipment (2.7%) | |||||
Gentex Corp. (c) | 49,100 | 687,400 | |||
LKQ Corp. (b) (c) | 77,394 | 1,470,486 | |||
O’Reilly Automotive, Inc. (b) | 60,700 | 1,893,233 | |||
4,051,119 | |||||
Biotechnology Research & Production (2.5%) | |||||
Adams Respiratory Therapeutics, Inc. (b) | 35,400 | 1,579,548 | |||
Arthrocare Corp. (b) | 31,900 | 1,340,119 | |||
Palomar Medical Technologies, Inc. (b) | 19,000 | 866,970 | |||
3,786,637 | |||||
Business Services (0.2%) | |||||
Optimal Group, Inc. (b) | 27,500 | 371,525 | |||
Casinos & Gambling (2.7%) | |||||
Scientific Games Corp. (b) | 64,400 | 2,293,928 | |||
Shuffle Master, Inc. (b) (c) | 53,800 | 1,763,564 | |||
4,057,492 | |||||
Chemicals (0.5%) | |||||
Zoltek Companies, Inc. (b) | 26,800 | 801,052 | |||
Commercial Information Services (0.6%) | |||||
LECG Corp. (b) | 47,071 | 869,401 | |||
Commercial Services (1.7%) | |||||
CoStar Group, Inc. (b) (c) | 30,800 | 1,842,764 | |||
Vertrue, Inc. (b) (c) | 18,150 | 780,995 | |||
2,623,759 | |||||
Communications Technology (2.0%) | |||||
AudioCodes Ltd. (b) | 2,679 | 29,201 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Communications Technology (continued) | |||||
Essex Corp. (b) | 47,400 | $ | 873,108 | ||
Glenayre Technologies, Inc. (b) | 129,655 | 342,289 | |||
TALX Corp. | 28,396 | 621,021 | |||
Veritas DGC, Inc. (b) | 22,853 | 1,178,758 | |||
3,044,377 | |||||
Computer Services, Software & Systems (5.6%) | |||||
Concur Technologies, Inc. (b) | 60,200 | 931,294 | |||
Dealertrack Holdings, Inc. (b) | 40,300 | 891,033 | |||
Falconstor Software, Inc. (b) | 56,000 | 390,320 | |||
Jupiter Media Corp. (b) | 50,018 | 650,234 | |||
Merge Technologies, Inc. (b) | 7,744 | 95,329 | |||
MRO Software, Inc. (b) | 11,100 | 222,777 | |||
Neoware Systems, Inc. (b) | 32,800 | 403,112 | |||
Online Resources Corp. (b) | 53,770 | 555,982 | |||
Openwave Systems, Inc. (b) | 61,279 | 707,160 | |||
PDF Solutions, Inc. (b) | 27,146 | 336,882 | |||
Redback Networks, Inc. (b) | 37,000 | 678,580 | |||
Retalix Ltd. (b) | 13,700 | 305,647 | |||
RightNow Technologies, Inc. (b) | 33,596 | 560,381 | |||
Vasco Data Security International, Inc. (b) | 88,800 | 741,480 | |||
Zoran Corp. (b) | 44,200 | 1,075,827 | |||
8,546,038 | |||||
Computer Software & Services (2.8%) | |||||
Avid Technology, Inc. (b) (c) | 21,600 | 719,928 | |||
Cerner Corp. (b) (c) | 44,300 | 1,643,973 | |||
EPIQ Systems, Inc. (b) (c) | 44,910 | 747,302 | |||
MicroStrategy, Inc. (b) | 11,300 | 1,101,976 | |||
4,213,179 | |||||
Computer Technology (1.1%) | |||||
Trident Microsystems, Inc. (b) | 88,100 | 1,672,138 | |||
Construction & Engineering (1.1%) | |||||
Chicago Bridge & Iron Co. | 71,200 | 1,719,480 | |||
Consulting Services (0.5%) | |||||
CRA International, Inc. (b) | 17,346 | 782,998 | |||
Consumer Electronics (0.4%) | |||||
Websidestory, Inc. (b) | 56,000 | 683,200 | |||
Cosmetics (0.1%) | |||||
Parlux Fragrances, Inc. (b) | 14,340 | 138,955 | |||
Diversified Financial Services (1.0%) | |||||
Euronet Worldwide, Inc. (b) (c) | 41,147 | 1,578,810 | |||
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Drugs & Pharmaceuticals (0.9%) | |||||
Kos Pharmaceuticals, Inc. (b) | 18,780 | $ | 706,504 | ||
Salix Pharmaceuticals, Inc. (b) | 54,408 | 669,218 | |||
1,375,722 | |||||
E-Commerce & Services (0.9%) | |||||
Ctrip.com International Ltd. ADR | 16,810 | 858,151 | |||
Gmarket, Inc. ADR (b) | 29,700 | 456,489 | |||
1,314,640 | |||||
Education (2.3%) | |||||
ITT Educational Services, Inc. (b) | 52,700 | 3,468,187 | |||
Educational Software (1.3%) | |||||
Blackboard, Inc. (b) (c) | 68,300 | 1,977,968 | |||
Electronics (1.1%) | |||||
Cree, Inc. (b) (c) | 31,250 | 742,500 | |||
Daktronics, Inc. | 21,100 | 609,157 | |||
Directed Electronics, Inc. (b) | 26,300 | 345,056 | |||
1,696,713 | |||||
Electronics & Medical Systems (2.1%) | |||||
Aspect Medical Systems, Inc. (b) | 25,159 | 438,773 | |||
Intralase Corp. (b) (c) | 115,857 | 1,939,446 | |||
Syneron Medical Ltd. (b) | 41,056 | 857,249 | |||
3,235,468 | |||||
Electronics & Semiconductors (1.3%) | |||||
Kanos Communications, Inc. (b) | 29,700 | 451,143 | |||
Supertex, Inc. (b) | 20,300 | 810,782 | |||
Tessera Technologies, Inc. (b) | 26,844 | 738,210 | |||
2,000,135 | |||||
Entertainment Software (0.7%) | |||||
Take-Two Interactive Software, Inc. (b) (c) | 97,790 | 1,042,441 | |||
Financial Services (5.6%) | |||||
Corporate Executive Board Co. (The ) | 19,600 | 1,963,920 | |||
FactSet Research Systems, Inc. | 65,975 | 3,120,617 | |||
Financial Federal Corp. (c) | 90,075 | 2,504,986 | |||
Open Solutions, Inc. (b) | 8,600 | 228,846 | |||
Tradestation Group, Inc. (b) | 55,200 | 699,384 | |||
8,517,753 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Food Distributors (0.6%) | |||||
United Natural Foods, Inc. (b) (c) | 28,800 | $ | 950,976 | ||
Footwear & Related Apparel (1.1%) | |||||
Crocs, Inc. (b) | 23,000 | 578,450 | |||
Iconix Brand Group, Inc. (b) | 36,700 | 599,678 | |||
Steve Madden, Ltd. | 15,000 | 444,300 | |||
1,622,428 | |||||
Hazardous Waste Disposal (0.5%) | |||||
American Ecology Corp. | 27,300 | 723,450 | |||
Health Care Facilities (1.1%) | |||||
LCA-Vision, Inc. | 31,192 | 1,650,369 | |||
Health Care Management Services (0.5%) | |||||
Centene Corp. (b) | 30,227 | 711,241 | |||
Health Care Products (0.5%) | |||||
PSS World Medical, Inc. (b) (c) | 41,500 | 732,475 | |||
Health Care Services (5.7%) | |||||
Adeza Biomedical Corp. (b) | 38,700 | 542,574 | |||
AmSurg Corp. (b) (c) | 76,600 | 1,742,650 | |||
Dendrite International, Inc.(b) (c) | 64,700 | 597,828 | |||
Healthspring, Inc. (b) | 53,600 | 1,005,000 | |||
Healthways, Inc. (b) | 68,623 | 3,612,316 | |||
Nighthawk Radiology Holdings, Inc. (b) | 25,400 | 455,676 | |||
Visicu, Inc. (b) | 40,800 | 720,120 | |||
8,676,164 | |||||
Home Building (0.5%) | |||||
Desarrolladora Homex SA de CV (b) | 25,347 | 831,635 | |||
Hotels & Motels (1.0%) | |||||
Gaylord Entertainment Co. (b) (c) | 35,900 | 1,566,676 | |||
Human Resources (0.6%) | |||||
Kenexa Corp. (b) | 29,600 | 942,760 | |||
Internet (2.9%) | |||||
Checkfree Corp. (b) | 57,606 | 2,854,953 | |||
Loopnet, Inc. (b) | 5,900 | 109,799 | |||
Stamps.com, Inc. (b) (c) | 53,085 | 1,476,825 | |||
4,441,577 | |||||
Jewelry (0.3%) | |||||
Charles & Colvard Ltd. | 38,751 | 408,048 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Machinery, Equipment, & Supplies (4.3%) | |||||
ASV, Inc. (b) (c) | 109,992 | $ | 2,534,216 | ||
Bucyrus International, Inc. Class A | 31,050 | 1,568,025 | |||
Lufkin Industries | 16,600 | 986,538 | |||
Nordson Corp. | 16,300 | 801,634 | |||
TurboChef Technologies, Inc. (b) | 65,843 | 732,174 | |||
6,622,587 | |||||
Medical & Dental Instruments & Supplies (2.7%) | |||||
Abaxis, Inc. (b) | 24,500 | 548,065 | |||
American Science & Engineering, Inc. (b) | 5,750 | 333,040 | |||
Kyphon, Inc. (b) (c) | 76,490 | 2,934,156 | |||
Natus Medical, Inc. (b) | 22,600 | 223,514 | |||
4,038,775 | |||||
Medical Products (1.4%) | |||||
Allscripts Healthcare Solutions, Inc. (b) (c) | 118,600 | 2,081,430 | |||
Medical Products & Services (0.2%) | |||||
Vital Images, Inc. (b) | 14,300 | 353,210 | |||
Metal Forgings & Stampings (0.6%) | |||||
Ladish Company, Inc. (b) | 23,300 | 873,051 | |||
Miscellaneous Materials & Processing (2.0%) | |||||
Ceradyne, Inc. (b) | 62,566 | 3,096,391 | |||
Multi-Line Insurance (0.8%) | |||||
HealthExtras, Inc. (b) | 38,500 | 1,163,470 | |||
Networking Products (0.1%) | |||||
Zhone Technologies, Inc. (b) | 100,900 | 205,836 | |||
Offshore Drilling (0.7%) | |||||
Bronco Drilling Co., Inc. (b) | 49,900 | 1,042,411 | |||
Oil & Gas (6.5%) | |||||
ATP Oil & Gas Corp. (b) | 29,691 | 1,244,944 | |||
Bill Barrett Corp. (b) (c) | 33,600 | 994,896 | |||
Carrizo Oil & Gas, Inc. (b) | 71,605 | 2,241,953 | |||
Exco Resources, Inc. (b) | 44,500 | 507,300 | |||
Hercules Offshore, Inc. (b) | 27,600 | 966,000 | |||
Newfield Exploration Co. (b) | 41,500 | 2,031,010 | |||
Petrohawk Energy Corp. (b) | 84,200 | 1,060,920 | |||
Pioneer Drilling Co. (b) | 50,400 | 778,176 | |||
9,825,199 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Oil Wells Services & Equipment (1.1%) | |||||
Drill-Quip, Inc. (b) | 20,800 | $ | 1,714,752 | ||
Pharmaceuticals (1.9%) | |||||
Aspreva Pharmaceuticals Corp. (b) | 70,900 | 1,924,226 | |||
Sciele Pharma, Inc. (b) | 40,348 | 935,670 | |||
2,859,896 | |||||
Printing (0.2%) | |||||
VistaPrint Ltd. (b) (c) | 12,500 | 334,250 | |||
Resorts & Theme Parks (1.0%) | |||||
Vail Resorts, Inc. (b) (c) | 41,700 | 1,547,070 | |||
Restaurants (0.9%) | |||||
Panera Bread Co., Class A (b) | 21,200 | 1,425,488 | |||
Retail (0.3%) | |||||
Citi Trends, Inc. (b) | 9,700 | 414,093 | |||
Software & Services (1.7%) | |||||
Blackbaud, Inc. | 116,100 | 2,635,470 | |||
Sporting & Recreational Goods (0.9%) | |||||
Zumiez, Inc. (b) | 35,400 | 1,329,978 | |||
Storage (0.5%) | |||||
Mobile Mini, Inc. (b) (c) | 27,300 | 798,798 | |||
Telecommunications (0.8%) | |||||
Anadigics, Inc. (b) | 49,600 | 333,312 | |||
Oplink Communications, Inc. (b) | 47,200 | 864,232 | |||
1,197,544 | |||||
Textile & Apparel (0.6%) | |||||
Volcom, Inc. (b) | 29,600 | 946,904 | |||
Transportation (2.9%) | |||||
J.B. Hunt Transport Services, Inc. | 81,300 | 2,025,183 | |||
Kansas City Southern Industries, Inc. (b) | 87,050 | 2,411,285 | |||
4,436,468 | |||||
Wholesale & International Trade (0.8%) | |||||
Central European Distribution Corp. (b) | 48,850 | 1,229,066 | |||
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Wireless Equipment (0.8%) | ||||||
Carrier Access Corp. (b) | 33,500 | $ | 277,045 | |||
Sierra Wireless, Inc. (b) | 44,300 | 799,172 | ||||
Stratex Networks, Inc. (b) | 49,900 | 169,161 | ||||
1,245,378 | ||||||
Total Common Stocks | 147,902,780 | |||||
CASH EQUIVALENTS (2.8%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages in a joint trading account at 5.17% Dated 06/30/06, due 07/03/06, repurchase price $4,296,832) | $ | 4,295,007 | 4,295,007 | |||
Total Cash Equivalents | 4,295,007 | |||||
Shares or Principal Amount | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (11.7%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | $ | 17,877,903 | $ | 17,877,903 | |||
Total Short-Term Securities Held as Collateral for Securities on Loan | 17,877,903 | ||||||
Total Investments (Cost $137,264,774) (a) — 111.6% | 170,075,690 | ||||||
Liabilities in excess of other assets — (11.6%) | (17,722,891 | ) | |||||
NET ASSETS — 100.0% | $ | 152,352,799 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Represents non-income producing securities. |
(c) | All or part of the security was on loan as of June 30, 2006. |
ADR | American Depository Receipt |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $132,969,767) | $ | 165,780,683 | ||
Repurchase agreements, at cost and value | 4,295,007 | |||
Total Investments | 170,075,690 | |||
Cash | 534 | |||
Interest and dividends receivable | 36,933 | |||
Receivable for capital shares issued | 209,243 | |||
Receivable for investments sold | 1,032,178 | |||
Prepaid expenses and other assets | 28,934 | |||
Total Assets | 171,383,512 | |||
Liabilities: | ||||
Payable for investments purchased | 1,004,104 | |||
Payable for capital shares redeemed | 1,603 | |||
Payable for return of collateral received for securities on loan | 17,877,903 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 116,484 | |||
Fund administration and transfer agent fees | 10,226 | |||
Distribution fees | 4,012 | |||
Administrative servicing fees | 16,362 | |||
Other | 19 | |||
Total Liabilities | 19,030,713 | |||
Net Assets | $ | 152,352,799 | ||
Represented by: | ||||
Capital | $ | 154,130,918 | ||
Accumulated net investment income (loss) | (680,012 | ) | ||
Accumulated net realized gain (losses) from investments | (33,909,023 | ) | ||
Net unrealized appreciation (depreciation) on investments | 32,810,916 | |||
Net Assets | $ | 152,352,799 | ||
Net Assets: | ||||
Class I Shares | $ | 131,793,494 | ||
Class II Shares | 19,774,809 | |||
Class III Shares | 784,496 | |||
Total | $ | 152,352,799 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 8,254,946 | |||
Class II Shares | 1,252,250 | |||
Class III Shares | 49,422 | |||
Total | 9,556,618 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 15.97 | ||
Class II Shares | $ | 15.79 | ||
Class III Shares | $ | 15.87 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 193,754 | ||
Dividend income | 141,599 | |||
Income from securities lending | 25,137 | |||
Total Income | 360,490 | |||
Expenses: | ||||
Investment advisory fees | 781,634 | |||
Fund administration and transfer agent fees | 59,099 | |||
Distribution fees Class II Shares | 25,766 | |||
Administrative servicing fees | 113,523 | |||
Administrative servicing fees | 17,921 | |||
Administrative servicing fees | 605 | |||
Trustee fees | 5,018 | |||
Other | 37,652 | |||
Total expenses before earnings credit | 1,041,218 | |||
Earnings credit (Note 6) | (716 | ) | ||
Total Expenses | 1,040,502 | |||
Net Investment Income (Loss) | (680,012 | ) | ||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 10,547,938 | |||
Net change in unrealized appreciation/depreciation on investments | (8,724,523 | ) | ||
Net realized/unrealized gains (losses) on investments | 1,823,415 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,143,403 | ||
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT SMALL CAP GROWTH FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | (680,012 | ) | $ | (1,336,349 | ) | ||
Net realized gains (losses) on investment transactions | 10,547,938 | 9,880,349 | ||||||
Net change in unrealized appreciation/depreciation on investments | (8,724,523 | ) | 2,054,166 | |||||
Change in net assets resulting from operations | 1,143,403 | 10,598,166 | ||||||
Change in net assets from capital transactions | (10,828,968 | ) | (22,008,335 | ) | ||||
Change in net assets | (9,685,565 | ) | (11,410,169 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 162,038,364 | 173,448,533 | ||||||
End of period | $ | 152,352,799 | $ | 162,038,364 | ||||
Accumulated net investment income (loss) | $ | (680,012 | ) | $ | — | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Capital Transactions: | ||||||||
Proceeds from shares issued | $ | 18,695,617 | $ | 54,670,402 | ||||
Cost of shares redeemed | (29,747,883 | ) | (78,750,506 | ) | ||||
(11,052,266 | ) | (24,080,104 | ) | |||||
Class II Capital Transactions: | ||||||||
Proceeds from shares issued | 4,258,327 | 8,239,519 | ||||||
Cost of shares redeemed | (3,980,916 | ) | (5,935,905 | ) | ||||
277,411 | 2,303,614 | |||||||
Class III Capital Transactions: | ||||||||
Proceeds from shares issued | 200,511 | 255,322 | ||||||
Cost of shares redeemed | (254,624 | ) | (487,167 | ) | ||||
(54,113 | ) | (231,845 | ) | |||||
Change in net assets from capital transactions | $ | (10,828,968 | ) | $ | (22,008,335 | ) | ||
SHARE TRANSACTIONS: | ||||||||
Class I Share Transactions: | ||||||||
Issued | 1,127,469 | 3,701,411 | ||||||
Redeemed | (1,785,890 | ) | (5,428,371 | ) | ||||
(658,421 | ) | (1,726,960 | ) | |||||
Class II Share Transactions: | ||||||||
Issued | 256,618 | 559,291 | ||||||
Redeemed | (244,333 | ) | (409,024 | ) | ||||
12,285 | 150,267 | |||||||
Class III Share Transactions: | ||||||||
Issued | 12,150 | 17,732 | ||||||
Redeemed | (15,422 | ) | (33,167 | ) | ||||
(3,272 | ) | (15,435 | ) | |||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GVIT Small Cap Growth Fund
Investment Activities: | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 16.24 | (0.07 | ) | (1.69 | ) | (1.76 | ) | $ | 14.48 | (10.84 | %) | $ | 143,982 | 1.30 | % | (0.65 | %) | 1.43 | % | (0.78 | %) | 124.61 | % | ||||||||||||
Year Ended December 31, 2002 | $ | 14.48 | (0.11 | ) | (4.71 | ) | (4.82 | ) | $ | 9.66 | (33.29 | %) | $ | 100,308 | 1.35 | % | (1.03 | %) | 1.35 | % | (1.03 | %) | 165.97 | % | ||||||||||||
Year Ended December 31, 2003 | $ | 9.66 | (0.11 | ) | 3.42 | 3.31 | $ | 12.97 | 34.27 | % | $ | 156,978 | 1.34 | % | (1.03 | %) | (h | ) | (h | ) | 121.69 | % | ||||||||||||||
Year Ended December 31, 2004 | $ | 12.97 | (0.12 | ) | 1.86 | 1.74 | $ | 14.71 | 13.42 | % | $ | 156,535 | 1.21 | % | (0.90 | %) | (h | ) | (h | ) | 112.22 | % | ||||||||||||||
Year Ended December 31, 2005 | $ | 14.71 | (0.13 | ) | 1.32 | 1.19 | $ | 15.90 | 8.09 | % | $ | 141,684 | 1.22 | % | (0.83 | %) | (h | ) | (h | ) | 58.28 | % | ||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 15.90 | (0.07 | ) | 0.14 | 0.07 | $ | 15.97 | 0.44 | %(f) | $ | 131,793 | 1.23 | %(g) | (0.79 | %)(g) | (h | ) | (h | ) | 30.51 | % | ||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 13.59 | (0.04 | ) | (3.92 | ) | (3.96 | ) | $ | 9.63 | (29.14 | %)(f) | $ | 1,652 | 1.63 | %(g) | (1.33 | %)(g) | (h | ) | (h | ) | 165.97 | % | ||||||||||||
Year Ended December 31, 2003 | $ | 9.63 | (0.09 | ) | 3.37 | 3.28 | $ | 12.91 | 34.06 | % | $ | 8,842 | 1.59 | % | (1.29 | %) | (h | ) | (h | ) | 121.69 | % | ||||||||||||||
Year Ended December 31, 2004 | $ | 12.91 | (0.12 | ) | 1.82 | 1.70 | $ | 14.61 | 13.17 | % | $ | 15,917 | 1.47 | % | (1.16 | %) | (h | ) | (h | ) | 112.22 | % | ||||||||||||||
Year Ended December 31, 2005 | $ | 14.61 | (0.14 | ) | 1.27 | 1.13 | $ | 15.74 | 7.73 | % | $ | 19,521 | 1.46 | % | (1.08 | %) | (h | ) | (h | ) | 58.28 | % | ||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 15.74 | (0.09 | ) | 0.14 | 0.05 | $ | 15.79 | 0.32 | %(f) | $ | 19,775 | 1.50 | %(g) | (1.06 | %)(g) | (h | ) | (h | ) | 30.51 | % | ||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 10.95 | (0.04 | ) | (1.29 | ) | (1.33 | ) | $ | 9.62 | (12.15 | %)(f) | $ | 17 | 1.27 | %(g) | (0.94 | %)(g) | (h | ) | (h | ) | 165.97 | % | ||||||||||||
Year Ended December 31, 2003 | $ | 9.62 | (0.05 | ) | 3.33 | 3.28 | $ | 12.90 | 34.10 | % | $ | 978 | 1.34 | % | (1.04 | %) | (h | ) | (h | ) | 121.69 | % | ||||||||||||||
Year Ended December 31, 2004 | $ | 12.90 | (0.14 | ) | 1.87 | 1.73 | $ | 14.63 | 13.41 | % | $ | 996 | 1.21 | % | (0.91 | %) | (h | ) | (h | ) | 112.22 | % | ||||||||||||||
Year Ended December 31, 2005 | $ | 14.63 | (0.14 | ) | 1.31 | 1.17 | $ | 15.80 | 8.00 | % | $ | 833 | 1.23 | % | (0.84 | %) | (h | ) | (h | ) | 58.28 | % | ||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 15.80 | (0.07 | ) | 0.14 | 0.07 | $ | 15.87 | 0.44 | %(f) | $ | 784 | 1.21 | %(g) | (0.77 | %)(g) | (h | ) | (h | ) | 30.51 | % |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from March 7, 2002 (commencement of operations) through December 31, 2002. |
(e) | For the period from July 5, 2002 (commencement of operations) through December 31, 2002. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See | notes to financial statements. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT Small Cap Growth Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Bank Note — Floating Rate | Bank of America | $ | 1,500,000 | 5.31 | % | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 1,493,193 | 5.29 | % | 07/21/06 | |||||
Funding Agreement — GIC | GE Life and Annuity | 1,000,000 | 5.28 | % | 07/14/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 9,950,000 | 5.41 | % | 07/03/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 1,000,057 | 5.27 | % | 09/08/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 1,002,099 | 5.39 | % | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 1,932,554 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$17,404,836 | $ | 17,877,903 |
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify to or continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$137,733,838 | $40,816,880 | $(8,475,028) | $32,341,852 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadvisers, for the Fund. The subadvisers listed below manage all or a portion of the Fund’s investments and have the responsibility for making all investment decisions for that portion of the Fund unless otherwise indicated. Below is a list of the subadvisers to the Fund:
Subadvisers | ||
- Waddell & Reed Investment Management Company - Oberweis Asset Management, Inc. |
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.95% based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, GMF pays fees of 0.60% to the subadvisers.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months June 30, 2006, Nationwide Financial Services received $123,323 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $148.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $48,049,188 and sales of $59,315,661.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the Russell 2000 Growth Index, for the one-year period ended September 30, 2005 but had underperformed the benchmark over the three- and five-year periods. The Board noted however, that the Fund ranked in the top quartile of the Lipper Small-Cap Growth Funds category for the one- and three-year periods.
The Board then considered the Fund’s contractual advisory fee (including subadvisory fees) which placed the Fund in the fourth quintile of its Lipper-constructed Expense Group and the Fund’s total expenses which were slightly above the median of its Lipper Expense Group. The Board discussed with management the absence of breakpoints on the Fund’s advisory fee and determined that management’s decision to not provide breakpoints on this capacity-constrained fund was reasonable. The Board determined that although the contractual advisory fee was higher than the median of the Lipper Expense Group, the Fund had delivered good relative performance. Finally, the Board reviewed and considered the adviser’s profitability and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
18
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
19
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
20
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Table of Contents
Gartmore GVIT Worldwide Leaders Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
7 | Financial Highlights | |
8 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GWWL (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Worldwide Leaders Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending 2006 | Expenses Paid | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Worldwide Leaders Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,077.90 | $ | 6.08 | 1.18% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.95 | $ | 5.92 | 1.18% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,077.20 | $ | 6.08 | 1.18% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.95 | $ | 5.92 | 1.18% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Worldwide Leaders Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 99.0% | |
Cash Equivalents | 3.8% | |
Other Investments* | 11.1% | |
Liabilities in excess of other assets** | -13.9% | |
100.0% | ||
Top Holdings*** | ||
AstraZeneca PLC | 5.0% | |
JP Morgan Chase & Co. | 4.6% | |
Fedex Corp. | 4.5% | |
Lloyds TSB Group PLC | 4.3% | |
UniCredito Italiano SPA | 4.2% | |
ConocoPhillips | 4.2% | |
Renault SA | 4.1% | |
CB Richard Ellis Group, Inc | 4.0% | |
General Electric Co. | 4.0% | |
DSG International PLC | 4.0% | |
Other Assets | 57.1% | |
100.0% | ||
Top Industries | ||
Financial Services | 13.3% | |
Real Estate | 9.7% | |
Transportation | 7.9% | |
Oil & Gas | 7.4% | |
Finance | 7.1% | |
Telecommunications | 6.9% | |
Electronics | 5.9% | |
Pharmaceuticals | 5.0% | |
Banking | 4.2% | |
Automotive | 4.1% | |
Other Assets | 28.5% | |
100.0% | ||
Top Countries | ||
United States | 42.1% | |
United Kingdom | 20.3% | |
Japan | 13.8% | |
France | 8.4% | |
Italy | 4.2% | |
Switzerland | 3.9% | |
Finland | 3.0% | |
Germany | 2.1% | |
Australia | 0.8% | |
South Korea | 0.4% | |
Other Assets | 1.0% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT WORLDWIDE LEADERS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (99.0%) | |||||
AUSTRALIA (0.8%) | |||||
Computer Software & Services (0.8%) | |||||
Computershare Ltd. (c) (d) | 63,270 | $ | 368,607 | ||
FINLAND (3.0%) | |||||
Telecommunications (3.0%) | |||||
Nokia Oyj (c) | 72,100 | 1,461,496 | |||
FRANCE (8.4%) | |||||
Automotive (4.1%) | |||||
Renault SA (c) | 18,800 | 2,017,138 | |||
Chemicals (1.1%) | |||||
Arkema (b) (d) | 13,680 | 533,785 | |||
Oil & Gas (3.2%) | |||||
Total SA (c) (d) | 24,000 | 1,576,423 | |||
4,127,346 | |||||
GERMANY (2.1%) | |||||
Machinery (2.1%) | |||||
MAN AG (c) | 14,400 | 1,042,106 | |||
ITALY (4.2%) | |||||
Banking (4.2%) | |||||
UniCredito Italiano SPA (c) | 265,500 | 2,076,260 | |||
JAPAN (13.8%) | |||||
Electronics (3.0%) | |||||
Toshiba Corp. (c) (d) | 227,000 | 1,482,448 | |||
Financial Services (5.2%) | |||||
Mizuho Financial Group, Inc. (c) | 182 | 1,543,786 | |||
Nomura Holdings, Inc. (c) | 52,200 | 980,512 | |||
2,524,298 | |||||
Real Estate (5.6%) | |||||
Mitsui Fudosan Co. Ltd. (c) (d) | 72,000 | 1,565,040 | |||
Sumitomo Realty & Development Co. Ltd. (c) | 49,000 | 1,209,296 | |||
2,774,336 | |||||
6,781,082 | |||||
SOUTH KOREA (0.4%) | |||||
Semiconductors (0.4%) | |||||
Hynix Semiconductor, Inc. (b) | 5,800 | 181,656 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITZERLAND (3.9%) | |||||
Financial Services (3.9%) | |||||
Julius Baer Holding Ltd. (c) (d) | 21,875 | $ | 1,891,329 | ||
UNITED KINGDOM (20.3%) | |||||
Aerospace & Defense (0.0%) | |||||
Rolls-Royce Group PLC, B Shares | 8,285,200 | 15,473 | |||
Financial Services (4.3%) | |||||
Lloyds TSB Group PLC (c) | 217,000 | 2,125,519 | |||
Mining (3.1%) | |||||
Rio Tinto PLC (c) | 28,500 | 1,500,533 | |||
Pharmaceuticals (5.0%) | |||||
AstraZeneca PLC (c) | 41,100 | 2,471,125 | |||
Retail (4.0%) | |||||
DSG International PLC (c) | 554,000 | 1,954,275 | |||
Telecommunications (3.9%) | |||||
Vodafone Group PLC (c) | 892,700 | 1,899,773 | |||
9,966,698 | |||||
UNITED STATES (42.1%) | |||||
Agriculture (3.4%) | |||||
Archer-Daniels-Midland Co. | 40,600 | 1,675,968 | |||
Computers (3.6%) | |||||
Apple Computer, Inc. (b) | 31,100 | 1,776,432 | |||
Diversified Manufacturing (4.0%) | |||||
General Electric Co. | 59,300 | 1,954,528 | |||
Electronics (2.9%) | |||||
Intel Corp. | 75,400 | 1,428,076 | |||
Finance (7.1%) | |||||
JP Morgan Chase & Co. | 53,300 | 2,238,600 | |||
Lazard Ltd. | 30,200 | 1,220,080 | |||
3,458,680 | |||||
Machinery & Equipment (3.1%) | |||||
Caterpillar, Inc. | 20,200 | 1,504,496 | |||
Oil & Gas (4.2%) | |||||
ConocoPhillips | 31,500 | 2,064,195 | |||
Real Estate (4.0%) | |||||
CB Richard Ellis Group, Inc (b) | 78,800 | 1,962,120 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT WORLDWIDE LEADERS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
UNITED STATES (continued) | ||||||
Restaurants (1.9%) | ||||||
McDonald’s Corp. | 27,500 | $ | 924,000 | |||
Transportation (7.9%) | ||||||
Fedex Corp. | 18,700 | 2,185,283 | ||||
Norfolk Southern Corp. | 31,900 | 1,697,718 | ||||
3,883,001 | ||||||
20,631,496 | ||||||
Total Common Stocks | 48,528,076 | |||||
CASH EQUIVALENTS (3.8%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $1,849,767) | $ | 1,848,981 | 1,848,981 | |||
Total Cash Equivalents | 1,848,981 | |||||
Shares or Principal Amount | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (11.1%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Mutual Funds — Note 2 (Securities Lending) | $ | 5,427,355 | $ | 5,427,355 | |||
Total Short-Term Securities Held as Collateral for Securities on Loan | 5,427,355 | ||||||
Total Investments (Cost $52,326,763) (a) — 113.9% | 55,804,412 | ||||||
Liabilities in excess of other assets — (13.9%) | (6,796,087 | ) | |||||
NET ASSETS — 100% | $ | 49,008,325 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Non-income producing securities. |
(c) | Fair Valued Security. |
(d) | All or part of security was on loan as of June 30, 2006. |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation (Depreciation) | ||||||||||
Short Contracts: | ||||||||||||||
Japanese Yen | 07/05/06 | $ | (424,530 | ) | $ | (432,204 | ) | $ | (7,674 | ) | ||||
Euro | 07/03/06 | (467,475 | ) | (476,865 | ) | (9,390 | ) | |||||||
Total Short Contracts: | $ | (892,005 | ) | $ | (909,069 | ) | $ | (17,064 | ) | |||||
Long Contract: | ||||||||||||||
Euro | 07/03/06 | $ | 196,464 | $ | 197,742 | $ | 1,278 | |||||||
Swiss Franc | 07/03/06 | 42,302 | 42,694 | 392 | ||||||||||
British Sterling Pound | 07/03/06 | 113,440 | 115,739 | 2,299 | ||||||||||
British Sterling Pound | 07/03/06 | 209,296 | 211,112 | 1,816 | ||||||||||
Japanese Yen | 07/05/06 | 116,957 | 117,263 | 306 | ||||||||||
Total Long Contracts: | $ | 678,459 | $ | 684,550 | $ | 6,091 |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT WORLDWIDE LEADERS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $50,477,782) | $ | 53,955,431 | ||
Repurchase agreements, at cost and value | 1,848,981 | |||
Total Investments | 55,804,412 | |||
Foreign currencies, at value (cost $6,524) | 6,535 | |||
Interest and dividends receivable | 92,522 | |||
Receivable for capital shares issued | 22,843 | |||
Receivable for investments sold | 1,402,371 | |||
Reclaims receivable | 3,923 | |||
Prepaid expenses and other assets | 625 | |||
Total Assets | 57,333,231 | |||
Liabilities: | ||||
Payable to custodian | 5,670 | |||
Payable for investments purchased | 2,742,859 | |||
Payable for capital shares redeemed | 16,545 | |||
Unrealized depreciation on forward foreign currency contracts | 10,973 | |||
Payable for return of collateral received for securities on loan | 5,427,355 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 110,824 | |||
Fund administration and transfer agent fees | 4,562 | |||
Administrative servicing fees | 3,971 | |||
Other | 2,147 | |||
Total Liabilities | 8,324,906 | |||
Net Assets | $ | 49,008,325 | ||
Represented by: | ||||
Capital | $ | 53,656,414 | ||
Accumulated net investment income (loss) | 160,351 | |||
Accumulated net realized gains (losses) from investment and foreign currency transactions | (8,280,261 | ) | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 3,471,821 | |||
Net Assets | $ | 49,008,325 | ||
Net Assets: | ||||
Class I Shares | $ | 28,256,030 | ||
Class III Shares | 20,752,295 | |||
Total | $ | 49,008,325 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 2,067,617 | |||
Class III Shares | 1,518,994 | |||
Total | 3,586,611 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 13.67 | ||
Class III Shares | $ | 13.66 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 18,463 | ||
Dividend income (net of foreign withholding tax of $55,657) | 642,736 | |||
Income from securities lending | 13,763 | |||
Total Income | 674,962 | |||
Expenses: | ||||
Investment advisory fees | 217,034 | |||
Fund administration and transfer agent fees | 22,751 | |||
Administrative servicing fees | 22,284 | |||
Administrative servicing fees | 14,003 | |||
Trustee fees | 858 | |||
Other | 7,678 | |||
Total expenses before earnings credit | 284,608 | |||
Earnings credit (Note 6) | (107 | ) | ||
Total Expenses | 284,501 | |||
Net Investment Income (Loss) | 390,461 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 3,606,949 | |||
Net realized gains (losses) on foreign currency transactions | 44,483 | |||
Net realized gains (losses) on investment and foreign currency transactions | 3,651,432 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (428,920 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 3,222,512 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,612,973 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT WORLDWIDE LEADERS FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 390,461 | $ | 65,442 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 3,651,432 | 7,595,008 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (428,920 | ) | (796,330 | ) | ||||
Change in net assets resulting from operations | 3,612,973 | 6,864,120 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (129,884 | ) | (270,433 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (91,425 | ) | (79,754 | ) | ||||
Change in net assets from shareholder distributions | (221,309 | ) | (350,187 | ) | ||||
Change in net assets from capital transactions | 244,845 | 2,705,661 | ||||||
Change in net assets | 3,636,509 | 9,219,594 | ||||||
Net Assets: | ||||||||
Beginning of period | 45,371,816 | 36,152,222 | ||||||
End of period | $ | 49,008,325 | $ | 45,371,816 | ||||
Accumulated net investment income (loss) | $ | 160,351 | $ | (8,801 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Capital Transactions: | ||||||||
Proceeds from shares issued | $ | 1,072,221 | $ | 3,652,072 | ||||
Dividends reinvested | 129,884 | 270,433 | ||||||
Cost of shares redeemed | (4,283,574 | ) | (8,105,205 | ) | ||||
(3,081,469 | ) | (4,182,700 | ) | |||||
Class III Capital Transactions: | ||||||||
Proceeds from shares issued | 5,592,594 | 9,013,088 | ||||||
Dividends reinvested | 91,425 | 79,754 | ||||||
Cost of shares redeemed | (2,357,705 | ) | (2,204,481 | ) | ||||
3,326,314 | 6,888,361 | |||||||
Change in net assets from capital transactions | $ | 244,845 | $ | 2,705,661 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Share Transactions: | ||||||||
Issued | 78,801 | 324,392 | ||||||
Reinvested | 9,656 | 25,257 | ||||||
Redeemed | (311,786 | ) | (727,932 | ) | ||||
(223,329 | ) | (378,283 | ) | |||||
Class III Share Transactions: | ||||||||
Issued | 415,235 | 770,878 | ||||||
Reinvested | 6,806 | 7,448 | ||||||
Redeemed | (175,461 | ) | (190,295 | ) | ||||
246,580 | 588,031 | |||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Worldwide Leaders Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Tax Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 11.65 | 0.07 | (2.26 | ) | (2.19 | ) | (0.18 | ) | — | (0.18 | ) | $ | 9.28 | (18.81% | ) | $ | 70,469 | 1.20% | 0.66% | 1.30% | 0.56% | 128.06% | |||||||||||||||||||||
Year Ended December 31, 2002 | $ | 9.28 | (0.04 | ) | (2.29 | ) | (2.33 | ) | (0.08 | ) | (0.02 | ) | (0.10 | ) | $ | 6.85 | (25.39% | ) | $ | 26,467 | 1.32% | 0.29% | 1.32% | 0.29% | 529.97% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 6.85 | 0.01 | 2.46 | 2.47 | — | — | — | $ | 9.32 | 36.06% | $ | 27,624 | 1.32% | 0.30% | (g | ) | (g | ) | 603.34% | ||||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.32 | 0.09 | 1.37 | 1.46 | — | — | — | $ | 10.78 | 15.67% | $ | 28,776 | 1.25% | 0.95% | (g | ) | (g | ) | 452.01% | ||||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.78 | 0.01 | 2.04 | 2.05 | (0.10 | ) | — | (0.10 | ) | $ | 12.73 | 19.34% | $ | 29,173 | 1.29% | 0.18% | (g | ) | (g | ) | 360.00% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.73 | 0.10 | 0.90 | 1.00 | (0.06 | ) | — | (0.06 | ) | $ | 13.67 | 7.79% | (e) | $ | 28,256 | 1.18% | (f) | 1.51% | (f) | (g | ) | (g | ) | 141.44% | |||||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 6.89 | (0.01 | ) | 2.44 | 2.43 | — | — | — | $ | 9.32 | 35.27% | (e) | $ | 5,853 | 1.35% | (f) | (0.31% | )(f) | (g | ) | (g | ) | 603.34% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.32 | 0.09 | 1.37 | 1.46 | — | — | — | $ | 10.78 | 15.67% | $ | 7,376 | 1.25% | 0.94% | (g | ) | (g | ) | 452.01% | ||||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.78 | 0.01 | 2.04 | 2.05 | (0.10 | ) | — | (0.10 | ) | $ | 12.73 | 19.34% | $ | 16,198 | 1.29% | 0.13% | (g | ) | (g | ) | 360.00% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.73 | 0.09 | 0.90 | 0.99 | (0.06 | ) | — | (0.06 | ) | $ | 13.66 | 7.72% | (e) | $ | 20,752 | 1.18% | (f) | 1.56% | (f) | (g | ) | (g | ) | 141.44% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distingguishing amoung the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period May 2, 2003 (commencement of operations) through December 31, 2003. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Worldwide Leaders Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee,
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 300,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 497,731 | 5.29% | 07/21/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 750,000 | 5.41% | 07/03/06 | |||||
Medium Term Note — Floating | Beta Finance Inc. | 100,000 | 5.37% | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 3,779,624 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | |
$5,315,375 | $5,427,355 |
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e.,
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$52,462,054 | $4,273,849 | $(931,491) | $3,342,358 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. | Transactions with Affiliates |
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund. Gartmore Global Partners (the “subadviser”) manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. The subadviser is an affiliate of GMF and GGAMT. Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
Up to $50 million | 0.90% | 0.35% | 0.55% | |||||
$50 million or more | 0.85% | 0.35% | 0.50% |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the MSCI World Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to the Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/-0.02% | |
+/- 2 percentage point | +/-0.04% | |
+/- 3 percentage point | +/-0.06% | |
+/- 4 percentage point | +/-0.08% | |
+/- 5 percentage point | +/-0.10% |
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months June 30, 2006, Nationwide Financial Services received $36,192 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $2,707.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $69,019,000 and sales of $68,899,044.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs if any, would be included in custodian fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub- advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the MSCI World Index, for the one- and three-year periods ended September 30, 2005, while slightly underperforming the benchmark for the five-year period. The Board further considered that the Fund’s performance ranked in the top quartile of the Lipper Global Large-Cap Core Funds category for the one- and three-year periods ended September 30, 2005, and had outperformed the median of this Lipper category by 1,438 basis points for the one year period ended September 30, 2005.
Next, the Board reviewed the Fund’s contractual advisory fee (including the subadvisory fee) and considered this fee placed the Fund in the fifth quintile of the Fund’s Lipper-constructed Expense Group. The Board noted, however, that the Fund implemented a performance-based fee structure on January 1, 2006, and upon such implementation, immediately reduced its base management fee by 10 basis points. The Board considered that total expenses for the Fund placed it above the median of the Lipper Expense Group, and noted that the higher expense ratio was primarily due to distribution costs. Finally, the Board reviewed the adviser’s profitability in light of all of these factors and concluded it was not excessive.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Board approve a new Subadvisory agreement with newly-unaffiliated GGP, in reliance upon the Manager of Managers Exemptive order the Funds have obtained from the SEC to take effect immediately upon the closing of the U.K. Sale to ensure continued provision of Subadvisory services by GGP to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale: (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of affiliated GGP at this time; (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies used by affiliated GGP now; and (3) the Subadvisory fees paid to unaffiliated GGP will be the same as those currently paid to affiliated GGP. At the time the Board selected and approved the adviser to the Fund, Board considered, among other factors, the advisory fee compared to a peer group of funds, the extent to which economies of scale would be realized as the Fund grows, and whether the advisory fee levels reflect these economies of scale for the benefit of Fund shareholders. Since the adviser will pay the sub-adviser from the fees paid by the Fund to the adviser, and since the fees and expenses for the Fund will not change as a result of the change to the sub-adviser, the Board did not further consider these factors. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the continuation of affiliated GGP’s subadvisory agreement with new unaffiliated GGP, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Table of Contents
GVIT Mid Cap Index Fund
(formerly Dreyfus GVIT Mid Cap Index Fund)
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
10 | Statement of Assets and Liabilities | |
10 | Statement of Operations | |
11 | Statements of Changes in Net Assets | |
13 | Financial Highlights | |
14 | Notes to Financial Statements |
Commentary provided by Gartmore Global Investments, investment adviser to Gartmore Variable Insurance Trust. All opinions and estimates included in this report constitute Gartmore Global Investments’ judgment as of the date of this report and are subject to change without notice.
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GMCI (8/06)
Table of Contents
Shareholder
Expense Example | GVIT Mid Cap Index Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual | Expenses |
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical | Example for Comparison Purposes |
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||||
Mid Cap Index Fund | |||||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,040.80 | $ | 2.63 | 0.52% | |||||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.22 | $ | 2.61 | 0.52% | ||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,040.10 | $ | 3.49 | 0.69% | |||||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.38 | $ | 3.46 | 0.69% | ||||||||
Class ID | Actual | $ | 1,000.00 | $ | 957.30 | $ | 0.51 | (a) | 0.31% | (a) | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,023.26 | $ | 1.56 | (b) | 0.31% | (b) |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
a | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
b | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
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Portfolio Summary
June 30, 2006 (Unaudited) | GVIT Mid Cap Index Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stock | 96.7% | |
Cash Equivalents | 3.3% | |
Other Investments* | 24.5% | |
Liabilities in excess of other assets** | -24.5% | |
100.0% | ||
Top Holdings*** | ||
Peabody Energy Corp. | 1.3% | |
Expeditors International of Washington, Inc. | 1.1% | |
Cognizant Technology Solutions Corp. | 0.8% | |
C.H. Robinson Worldwide, Inc. | 0.8% | |
Smith International, Inc. | 0.8% | |
Noble Energy, Inc. | 0.7% | |
Precision Castparts Corp. | 0.7% | |
Microchip Technology, Inc. | 0.6% | |
ENSCO International, Inc. | 0.6% | |
Questar Corp. | 0.6% | |
Other Assets | 92.0% | |
100.0% | ||
Top Industries | ||
Oil & Gas | 7.9% | |
Utilities | 7.5% | |
Retail | 6.8% | |
Health Care | 6.1% | |
Electronics | 6.0% | |
Insurance | 5.7% | |
Computer Software & Services | 5.2% | |
Banks | 4.4% | |
Manufacturing | 3.6% | |
Real Estate Investment Trusts | 3.6% | |
Other Assets | 43.2% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (96.7%) | |||||
Aerospace & Defense (1.0%) | |||||
Alliant Techsystems, Inc. (c) (b) | 20,200 | $ | 1,542,270 | ||
Precision Castparts Corp. | 76,400 | 4,565,664 | |||
Sequa Corp., Class A (c) (b) | 3,500 | 285,250 | |||
6,393,184 | |||||
Airlines (0.4%) | |||||
AirTran Holdings, Inc. (c) (b) | 49,000 | 728,140 | |||
Alaska Air Group, Inc. (c) (b) | 20,800 | 819,936 | |||
JetBlue Airways Corp. (c) (b) | 90,200 | 1,095,028 | |||
2,643,104 | |||||
Amusement & Recreation (0.4%) | |||||
Boyd Gaming Corp. | 23,900 | 964,604 | |||
Callaway Golf Co. (c) | 36,000 | 467,640 | |||
International Speedway Corp. | 19,300 | 894,941 | |||
2,327,185 | |||||
Auto Parts & Equipment (1.1%) | |||||
Advance Auto Parts, Inc. | 60,050 | 1,735,445 | |||
ArvinMeritor, Inc. (c) | 40,825 | 701,782 | |||
Bandag, Inc. (c) | 6,400 | 234,176 | |||
BorgWarner Automotive, Inc. | 31,300 | 2,037,630 | |||
Gentex Corp. (c) | 84,700 | 1,185,800 | |||
Lear Corp. (c) | 36,800 | 817,328 | |||
Modine Manufacturing Co. | 18,400 | 429,824 | |||
7,141,985 | |||||
Automotive (0.5%) | |||||
Adesa, Inc. | 49,100 | 1,091,984 | |||
Carmax, Inc. (b) | 60,400 | 2,141,784 | |||
3,233,768 | |||||
Banks (4.4%) | |||||
Associated Banc Corp. | 74,515 | 2,349,458 | |||
Astoria Financial Corp. | 47,350 | 1,441,808 | |||
Cathay Bancorp, Inc. (c) | 27,500 | 1,000,450 | |||
City National Corp. | 24,400 | 1,588,196 | |||
Colonial Bancgroup, Inc. | 89,700 | 2,303,496 | |||
Cullen Frost Bankers, Inc. | 26,000 | 1,489,800 | |||
First Niagara Financial Group, Inc. | 67,400 | 944,948 | |||
FirstMerit Corp. (c) | 43,700 | 915,078 | |||
Greater Bay Bancorp (c) | 27,600 | 793,500 | |||
IndyMac Bancorp, Inc. (c) | 38,100 | 1,746,885 | |||
Mercantile Bankshare Corp. | 67,450 | 2,405,941 | |||
New York Community Bancorp, Inc. (c) | 145,488 | 2,402,007 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Banks (continued) | |||||
SVB Financial Group (c) (b) | 21,500 | $ | 977,390 | ||
TCF Financial Corp. | 62,100 | 1,642,545 | |||
Texas Regional Bancshares, Inc., Class A (c) | 24,920 | 944,966 | |||
Washington Federal, Inc. (c) | 47,689 | 1,105,908 | |||
Webster Financial Corp. | 29,100 | 1,380,504 | |||
West America Bancorp (c) | 19,100 | 935,327 | |||
Wilmington Trust Corp. | 37,200 | 1,569,096 | |||
27,937,303 | |||||
Biotechnology (1.3%) | |||||
Millenium Pharmaceuticals, Inc. (b) | 181,587 | 1,810,422 | |||
PDL Biopharma, Inc. (c) (b) | 63,700 | 1,172,717 | |||
Pharmaceutical Product Development, Inc. | 55,700 | 1,956,184 | |||
Valeant Pharmaceuticals International | 50,700 | 857,844 | |||
Vertex Pharmaceuticals, Inc. (c) (b) | 60,900 | 2,235,639 | |||
8,032,806 | |||||
Broadcasting (0.2%) | |||||
Emmis Communications Corp. (b) | 20,200 | 315,928 | |||
Entercom Communications Corp. | 21,200 | 554,592 | |||
Westwood One, Inc. | 35,000 | 262,500 | |||
1,133,020 | |||||
Building & Construction (0.1%) | |||||
M.D.C. Holdings, Inc. | 19,300 | 1,002,249 | |||
Business Services (3.0%) | |||||
Acxiom Corp. (c) | 42,300 | 1,057,500 | |||
Catalina Marketing Corp. (c) | 22,900 | 651,734 | |||
Ceridian Corp. (b) | 80,500 | 1,967,420 | |||
CheckFree Corp. (b) | 52,400 | 2,596,944 | |||
ChoicePoint, Inc. (b) | 48,433 | 2,023,046 | |||
Corporate Executive Board Co. (The) | 23,100 | 2,314,620 | |||
CSG Systems International, Inc. (c) (b) | 26,600 | 658,084 | |||
Fair Issac Corp. | 38,100 | 1,383,411 | |||
Gartner Group, Inc. (c) (b) | 32,000 | 454,400 | |||
Harte-Hanks, Inc. | 31,150 | 798,686 | |||
Kelly Services, Inc. (c) | 10,500 | 285,285 | |||
Korn Ferry International (c) (b) | 23,200 | 454,488 | |||
Manpower, Inc. | 50,200 | 3,242,920 |
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Business Services (continued) | |||||
MPS Group, Inc. (c) (b) | 55,400 | $ | 834,324 | ||
Navigant Consulting, Inc. (c) (b) | 27,600 | 625,140 | |||
19,348,002 | |||||
Chemicals (2.5%) | |||||
Airgas, Inc. (c) | 36,900 | 1,374,525 | |||
Albemarle Corp. (c) | 20,900 | 1,000,692 | |||
Cabot Corp. | 36,900 | 1,273,788 | |||
Chemtura Corp. | 131,400 | 1,227,276 | |||
Cytec Industries, Inc. | 21,900 | 1,175,154 | |||
Ferro Corp. (c) | 26,900 | 429,324 | |||
FMC Corp. | 23,100 | 1,487,409 | |||
Lubrizol Corp. | 37,400 | 1,490,390 | |||
Lyondell Chemical Co. | 113,900 | 2,580,974 | |||
Minerals Technologies, Inc. | 12,500 | 650,000 | |||
Olin Corp. | 39,500 | 708,235 | |||
RPM, Inc. (c) | 64,800 | 1,166,400 | |||
Valspar Corp. (c) | 55,700 | 1,471,037 | |||
16,035,204 | |||||
Communication Equipment (1.7%) | |||||
Adtran, Inc. (c) | 40,500 | 908,415 | |||
Cincinnati Bell, Inc. (c) (b) | 134,900 | 553,090 | |||
CommScope, Inc. (c) (b) | 31,500 | 989,730 | |||
Harris Corp. | 75,700 | 3,142,307 | |||
Plantronics, Inc. (c) | 25,800 | 573,018 | |||
Polycom, Inc. (b) | 47,600 | 1,043,392 | |||
Powerwave Technologies, Inc. (c) (b) | 67,100 | 611,952 | |||
Telephone & Data Systems, Inc. | 56,200 | 2,326,680 | |||
Utstarcom, Inc. (c) (b) | 57,600 | 448,704 | |||
10,597,288 | |||||
Computer Hardware (0.5%) | |||||
National Instruments Corp. (c) | 30,350 | 831,590 | |||
Western Digital Corp. (b) | 122,500 | 2,426,725 | |||
3,258,315 | |||||
Computer Software & Services (5.2%) | |||||
3COM Corp. (b) | 214,000 | 1,095,680 | |||
Activision, Inc. (b) | 160,400 | 1,825,352 | |||
Advent Software, Inc. (b) | 8,800 | 317,416 | |||
Avocent Corp. (b) | 29,000 | 761,250 | |||
Cadence Design Systems, Inc. (b) | 159,300 | 2,731,995 | |||
CDW Corp. (c) | 36,100 | 1,972,865 | |||
Cognizant Technology Solutions Corp. (b) | 79,800 | 5,376,126 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Computer Software & Services (continued) | |||||
DST Systems, Inc. (b) | 34,500 | $ | 2,052,750 | ||
F5 Networks, Inc. (b) | 23,500 | 1,256,780 | |||
Gamestop Corp.(c) (b) | 34,500 | 1,449,000 | |||
GTECH Holdings Corp. | 69,900 | 2,431,122 | |||
Henry (Jack) & Associates, Inc. | 45,200 | 888,632 | |||
Ingram Micro, Inc. (b) | 63,500 | 1,151,255 | |||
Macrovision Corp. (b) | 28,100 | 604,712 | |||
McAfee, Inc. (b) | 91,100 | 2,210,997 | |||
McData Corp. (c) (b) | 83,800 | 341,904 | |||
Mentor Graphics Corp. (c) (b) | 43,400 | 563,332 | |||
Palm, Inc. (b) | 53,000 | 853,300 | |||
RSA Security, Inc. (c) (b) | 44,400 | 1,207,236 | |||
SRA International, Inc., Class A (c) (b) | 20,500 | 545,915 | |||
Sybase, Inc. (c) (b) | 49,900 | 968,060 | |||
Synopsys, Inc. (b) | 78,800 | 1,479,076 | |||
Transaction Systems Architects, Inc. (b) | 20,400 | 850,476 | |||
Wind River Systems, Inc. (c) (b) | 41,000 | 364,900 | |||
33,300,131 | |||||
Construction (2.1%) | |||||
Beazer Homes USA, Inc. (c) | 23,500 | 1,077,945 | |||
Dycom Industries, Inc. (c) (b) | 22,100 | 470,509 | |||
Florida Rock Industries, Inc. | 27,700 | 1,375,859 | |||
Granite Construction, Inc. (c) | 18,050 | 817,124 | |||
Hovnanian Enterprises, Inc. (b) | 21,000 | 631,680 | |||
Jacobs Engineering Group, Inc. (b) | 32,300 | 2,572,372 | |||
Martin Marietta Materials, Inc. | 26,400 | 2,406,360 | |||
Ryland Group, Inc. (The) | 26,500 | 1,154,605 | |||
Thor Industries, Inc. (c) | 20,400 | 988,380 | |||
Toll Brothers, Inc. (b) | 64,400 | 1,646,708 | |||
13,141,542 | |||||
Consumer & Commercial Services (2.2%) | |||||
Alliance Data Systems Corp. (b) | 38,800 | 2,282,216 | |||
Career Education Corp. (b) | 55,500 | 1,658,895 | |||
Corinthian Colleges, Inc. (c) (b) | 47,100 | 676,356 | |||
Deluxe Corp. (c) | 27,500 | 480,700 | |||
DeVry, Inc. (c) (b) | 32,100 | 705,237 | |||
Dun & Bradstreet Corp. (b) | 38,300 | 2,668,744 | |||
MoneyGram International, Inc. | 46,800 | 1,588,860 | |||
Quanta Services, Inc. (c) (b) | 64,600 | 1,119,518 | |||
Rent-A-Center, Inc. (c) (b) | 37,900 | 942,194 | |||
Rollins, Inc. | 16,200 | 318,168 |
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Consumer & Commercial Services (continued) | |||||
Sotheby’s Holdings, Inc. (c) (b) | 25,100 | $ | 658,875 | ||
United Rentals, Inc. (c) (b) | 37,200 | 1,189,656 | |||
14,289,419 | |||||
Consumer Products (1.5%) | |||||
Blyth Industries, Inc. (c) | 14,500 | 267,670 | |||
Church & Dwight, Inc. | 35,350 | 1,287,447 | |||
Energizer Holdings, Inc. (b) | 35,800 | 2,096,806 | |||
Furniture Brands International, Inc. (c) | 29,800 | 621,032 | |||
Lancaster Colony Corp. (c) | 13,700 | 540,739 | |||
Mohawk Industries Co. (b) | 29,300 | 2,061,255 | |||
Scotts Miracle-Gro Co. (The) | 27,000 | 1,142,640 | |||
Timberland Co., Class A (b) | 30,100 | 785,610 | |||
Tupperware Corp. | 33,500 | 659,615 | |||
9,462,814 | |||||
Containers Packaging (0.4%) | |||||
Packaging Corp. of America (c) | 32,900 | 724,458 | |||
Sonoco Products Co. (c) | 54,100 | 1,712,265 | |||
2,436,723 | |||||
Data Processing (0.3%) | |||||
Fidelity National Information Services, Inc. | 51,300 | 1,816,020 | |||
Electronics (6.0%) | |||||
Amphenol Corp., Class A | 50,500 | 2,825,980 | |||
Arrow Electronics, Inc. (b) | 66,900 | 2,154,180 | |||
Atmel Corp. (c) (b) | 233,000 | 1,293,150 | |||
Avnet, Inc. (b) | 80,100 | 1,603,602 | |||
Cabot Microelectronics Corp. (c) (b) | 13,282 | 402,577 | |||
Credence Systems Corp. (c) (b) | 54,700 | 191,450 | |||
Cree, Inc. (c) (b) | 41,800 | 993,168 | |||
Cypress Semiconductor Corp. (c) (b) | 81,800 | 1,189,372 | |||
DRS Technologies | 23,900 | 1,165,125 | |||
Hubbell, Inc. | 33,200 | 1,581,980 | |||
Imation Corp. | 20,900 | 857,945 | |||
Integrated Device Technology, Inc. (b) | 109,730 | 1,555,971 | |||
International Rectifier Corp. (b) | 41,500 | 1,621,820 | |||
Intersil Corp. (c) | 82,400 | 1,915,800 | |||
Kemet Corp. (c) (b) | 47,500 | 437,950 | |||
Lam Research Corp. (b) | 79,300 | 3,696,966 | |||
Lattice Semiconductor Corp. (c) (b) | 62,200 | 384,396 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Electronics (continued) | |||||
MDU Resources Group, Inc. | 65,700 | $ | 2,405,277 | ||
Micrel, Inc. (c) (b) | 34,900 | 349,349 | |||
Microchip Technology, Inc. | 120,900 | 4,056,195 | |||
Mine Safety Appliances Co. (c) | 14,400 | 578,880 | |||
Newport Corp. (b) | 21,900 | 353,028 | |||
Plexus Corp. (c) (b) | 26,900 | 920,249 | |||
RF Micro Devices, Inc. (c) (b) | 113,400 | 676,998 | |||
SPX Corp. | 34,800 | 1,947,060 | |||
Thomas & Betts Corp. (b) | 29,500 | 1,513,350 | |||
TriQuint Semiconductor, Inc. (b) | 76,691 | 342,042 | |||
Vishay Intertechnology, Inc. (b) | 101,050 | 1,589,517 | |||
38,603,377 | |||||
Financial Services (2.8%) | |||||
AmeriCredit Corp. (b) | 72,200 | 2,015,824 | |||
Bank of Hawaii Corp. | 28,700 | 1,423,520 | |||
BISYS Group, Inc. (The) (b) | 66,200 | 906,940 | |||
Eaton Vance Corp. (c) | 70,800 | 1,767,168 | |||
Edwards (A.G.), Inc. | 43,800 | 2,423,016 | |||
Investors Financial Services Corp. | 35,800 | 1,607,420 | |||
Jefferies Group, Inc. (c) | 55,200 | 1,635,576 | |||
PMI Group, Inc. (c) | 51,900 | 2,313,702 | |||
Raymond James Financial, Inc. | 47,625 | 1,441,609 | |||
SEI Investments Co. | 34,800 | 1,701,024 | |||
Waddell & Reed Financial, Inc. (c) | 48,000 | 986,880 | |||
18,222,679 | |||||
Food & Beverage (1.3%) | |||||
Hormel Foods Corp. | 40,000 | 1,485,600 | |||
J.M. Smucker Co. | 34,267 | 1,531,735 | |||
OSI Restaurant Parnters, Inc. | 38,800 | 1,342,480 | |||
PepsiAmericas, Inc. | 33,400 | 738,474 | |||
Sensient Technologies Corp. (c) | 25,800 | 539,478 | |||
Smithfield Foods, Inc. (b) | 57,600 | 1,660,608 | |||
Tootsie Roll Industries, Inc. (c) | 14,080 | 410,150 | |||
Universal Corp. (c) | 15,600 | 580,632 | |||
8,289,157 | |||||
Gaming & Leisure (0.2%) | |||||
Scientific Games Corp. (b) | 35,800 | 1,275,196 | |||
Healthcare (6.1%) | |||||
Apria Healthcare Group, Inc. (c) (b) | 23,200 | 438,480 | |||
Beckman Coulter, Inc. | 36,700 | 2,038,685 | |||
Cephalon, Inc. (b) | 34,900 | 2,097,490 |
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Healthcare (continued) | |||||
Community Health Systems, Inc. (b) | 53,400 | $ | 1,962,450 | ||
Covance, Inc. (b) | 36,800 | 2,252,896 | |||
Cytyc Corp. (b) | 63,200 | 1,602,752 | |||
Dentsply International, Inc. | 45,600 | 2,763,360 | |||
Edwards Lifesciences Corp. (b) | 32,500 | 1,476,475 | |||
Health Net, Inc. (b) | 66,100 | 2,985,737 | |||
Henry Schein, Inc. (c) (b) | 48,400 | 2,261,732 | |||
LifePoint Hospitals, Inc. (b) | 33,800 | 1,085,994 | |||
Lincare Holdings, Inc. (b) | 55,400 | 2,096,336 | |||
Omnicare, Inc. | 69,000 | 3,271,980 | |||
Par Pharmaceutical Cos., Inc. (c) (b) | 18,800 | 347,048 | |||
Perrigo Co. (c) | 45,400 | 730,940 | |||
Sepracor, Inc. (b) | 61,900 | 3,536,966 | |||
Steris Corp. (c) | 39,800 | 909,828 | |||
Triad Hospitals, Inc. (b) | 50,008 | 1,979,317 | |||
Universal Health Services, Inc. (c) | 31,900 | 1,603,294 | |||
Varian Medical Systems, Inc. (b) | 75,100 | 3,555,985 | |||
38,997,745 | |||||
Insurance (5.7%) | |||||
American Financial Group, Inc. | 25,700 | 1,102,530 | |||
AmerUs Group Co. (c) | 21,200 | 1,241,260 | |||
Arthur J. Gallagher & Co. (c) | 57,100 | 1,446,914 | |||
Brown & Brown, Inc. (c) | 60,900 | 1,779,498 | |||
Everest Re Group Ltd. | 36,600 | 3,168,462 | |||
Fidelity National Financial, Inc. | 99,983 | 3,894,337 | |||
First American Financial Corp. | 56,000 | 2,367,120 | |||
Hanover Insurance Group Inc. | 29,000 | 1,376,340 | |||
HCC Insurance Holdings, Inc. | 60,850 | 1,791,424 | |||
Horace Mann Educators Corp. (c) | 23,500 | 398,325 | |||
Leucadia National Corp. (c) | 90,100 | 2,630,019 | |||
Mercury General Corp. (c) | 19,500 | 1,099,215 | |||
Ohio Casualty Corp. (c) | 34,700 | 1,031,631 | |||
Old Republic International Corp. | 129,537 | 2,768,206 | |||
Protective Life Corp. | 38,200 | 1,780,884 | |||
Radian Group, Inc. (c) | 46,400 | 2,866,592 | |||
Stancorp Financial Group, Inc. | 30,000 | 1,527,300 | |||
Unitrin, Inc. (c) | 24,800 | 1,081,032 | |||
W.R. Berkley Corp. | 95,350 | 3,254,296 | |||
36,605,385 | |||||
Machinery (1.0%) | |||||
AGCO Corp. (c) (b) | 52,700 | 1,387,064 | |||
Graco, Inc. | 37,550 | 1,726,549 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Machinery (continued) | |||||
Lincoln Electric Holdings, Inc. | 25,000 | $ | 1,566,250 | ||
Tecumseh Products Co. (c) (b) | 10,000 | 192,000 | |||
Zebra Technologies Corp., Class A (b) | 38,500 | 1,315,160 | |||
6,187,023 | |||||
Manufacturing (3.6%) | �� | ||||
Ametek, Inc. | 38,700 | 1,833,606 | |||
Brink’s Co. (The) | 28,200 | 1,590,762 | |||
Carlisle Cos., Inc. | 16,500 | 1,308,450 | |||
Crane Co. | 27,700 | 1,152,320 | |||
Diebold, Inc. | 39,500 | 1,604,490 | |||
Donaldson Co., Inc. (c) | 37,500 | 1,270,125 | |||
Federal Signal Corp. (c) | 26,400 | 399,696 | |||
Flowserve Corp. (c) (b) | 30,800 | 1,752,520 | |||
Harsco Corp. | 22,900 | 1,785,284 | |||
Hillenbrand Industry, Inc. | 33,600 | 1,629,600 | |||
Nordson Corp. (c) | 18,300 | 899,994 | |||
Pentair, Inc. | 55,600 | 1,900,964 | |||
Roper Industries, Inc. | 47,700 | 2,229,975 | |||
Teleflex, Inc. (c) | 23,900 | 1,291,078 | |||
Trinity Industries, Inc. (c) | 41,300 | 1,668,520 | |||
Varian, Inc. (b) | 17,000 | 705,670 | |||
23,023,054 | |||||
Medical Products (1.3%) | |||||
Advanced Medical Optics, Inc. (b) | 39,786 | 2,017,150 | |||
Affymetrix, Inc. (c) (b) | 36,900 | 944,640 | |||
Gen-Probe, Inc. (b) | 28,200 | 1,522,236 | |||
Intuitive Surgical, Inc. (c) (b) | 20,900 | 2,465,573 | |||
Techne Corp. (c) (b) | 21,500 | 1,094,780 | |||
8,044,379 | |||||
Medical Services (0.8%) | |||||
Charles River Laboratories International, Inc. (b) | 41,900 | 1,541,920 | |||
Invitrogen Corp. (b) | 30,800 | 2,034,956 | |||
Martek Biosciences Corp. (c) (b) | 19,400 | 561,630 | |||
Medicis pharmaceutical Corp. | 32,300 | 775,200 | |||
4,913,706 | |||||
Metals (1.0%) | |||||
Commercial Metals Co. | 66,300 | 1,703,910 | |||
Kennametal, Inc. | 23,400 | 1,456,650 | |||
MSC Industrial Direct Co., Class A (c) | 29,700 | 1,412,829 |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Metals (continued) | |||||
Timken Co. (The) | 46,000 | $ | 1,541,460 | ||
6,114,849 | |||||
Mining (2.4%) | |||||
Arch Coal, Inc. (c) | 80,600 | 3,415,022 | |||
Joy Global, Inc. | 69,700 | 3,630,673 | |||
Peabody Energy Corp. | 149,200 | 8,317,900 | |||
15,363,595 | |||||
Office Equipment & Supplies (0.5%) | |||||
Herman Miller, Inc. | 37,200 | 958,644 | |||
HNI Corp. | 28,400 | 1,287,940 | |||
Reynolds & Reynolds Co. | 31,600 | 969,172 | |||
3,215,756 | |||||
Oil & Gas (7.9%) | |||||
Cameron International Corp. (b) | 66,400 | 3,171,928 | |||
Denbury Resources, Inc. (c) (b) | 65,400 | 2,071,218 | |||
ENSCO International, Inc. | 86,700 | 3,989,934 | |||
FMC Technologies, Inc. (c) (b) | 39,421 | 2,659,341 | |||
Forest Oil Corp. (c) (b) | 32,800 | 1,087,648 | |||
Grant Prideco, Inc. (b) | 73,800 | 3,302,550 | |||
Hanover Compressor Co. (c) (b) | 52,623 | 988,260 | |||
Helmerich & Payne, Inc. | 28,600 | 1,723,436 | |||
Newfield Exploration Co. (b) | 72,500 | 3,548,150 | |||
Noble Energy, Inc. | 99,800 | 4,676,628 | |||
Patterson-UTI Energy, Inc. | 94,800 | 2,683,788 | |||
Pioneer Natural Resources Co. | 74,200 | 3,443,622 | |||
Plains Exploration & Production Co. (b) | 43,600 | 1,767,544 | |||
Pogo Producing Co. (c) | 33,900 | 1,562,790 | |||
Pride International, Inc. (b) | 91,300 | 2,851,299 | |||
Quicksilver Resources, Inc. (c) (b) | 39,300 | 1,446,633 | |||
Smith International, Inc. | 114,500 | 5,091,814 | |||
Southwestern Energy Co. (b) | 94,500 | 2,944,620 | |||
Tidewater, Inc. (c) | 35,200 | 1,731,840 | |||
50,743,043 | |||||
Paper & Forest Products (0.7%) | |||||
Bowater, Inc. | 33,400 | 759,850 | |||
Glatfelter (c) | 24,200 | 384,054 | |||
Longview Fibre Co. (c) | 28,000 | 534,520 | |||
Potlatch Corp. | 22,898 | 864,400 | |||
Rayonier, Inc. | 44,877 | 1,701,287 | |||
4,244,111 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Publishing & Printing (1.2%) | |||||
American Greetings Corp., Class A (c) | 34,800 | $ | 731,148 | ||
Banta Corp. (c) | 13,300 | 616,189 | |||
Belo Corp., Class A | 50,000 | 780,000 | |||
Lee Enterprises, Inc. (c) | 25,100 | 676,445 | |||
Media General, Inc. (c) | 13,200 | 552,948 | |||
Reader’s Digest Association (c) | 53,100 | 741,276 | |||
Scholastic Corp. (c) (b) | 19,700 | 511,609 | |||
Valassis Communications, Inc. (c) (b) | 26,100 | 615,699 | |||
Washington Post Co. | 3,170 | 2,472,632 | |||
7,697,946 | |||||
Real Estate Investment Trusts (3.6%) | |||||
AMB Property Corp. | 48,300 | 2,441,565 | |||
Developers Diversified Realty Corp. | 61,800 | 3,224,724 | |||
Highwood Properties, Inc. | 32,500 | 1,175,850 | |||
Hospitality Properties Trust | 39,400 | 1,730,448 | |||
Liberty Property Trust | 48,800 | 2,156,960 | |||
Macerich Co. (The) | 40,500 | 2,843,100 | |||
Mack-Cali Realty Corp. | 36,600 | 1,680,672 | |||
New Plan Excel Realty Trust (c) | 57,200 | 1,412,268 | |||
Regency Centers Corp. | 39,700 | 2,467,355 | |||
United Dominion Realty Trust, Inc. | 78,100 | 2,187,581 | |||
Weingarten Realty Investors | 44,000 | 1,684,320 | |||
23,004,843 | |||||
Restaurants (0.9%) | |||||
Applebee’s International, Inc. | 40,750 | 783,215 | |||
Bob Evans Farms, Inc. (c) | 19,500 | 585,195 | |||
Brinker International, Inc. | 48,800 | 1,771,440 | |||
CBRL Group, Inc. | 9,700 | 329,024 | |||
Cheesecake Factory, Inc. (The) (c) (b) | 46,650 | 1,257,218 | |||
Ruby Tuesday, Inc. (c) | 31,800 | 776,238 | |||
5,502,330 | |||||
Retail (6.8%) | |||||
99 Cents Only Stores (c) (b) | 26,300 | 275,098 | |||
Abercrombie & Fitch Co. | 50,300 | 2,788,129 | |||
Aeropostale, Inc. (b) | 32,000 | 924,480 | |||
American Eagle Outfitters Ltd. (c) | 75,500 | 2,570,020 | |||
Anntaylor Stores Corp. (b) | 42,300 | 1,834,974 | |||
Barnes & Noble, Inc. | 31,100 | 1,135,150 | |||
BJ’s Wholesale Club, Inc. (b) | 37,100 | 1,051,785 | |||
Borders Group, Inc. | 36,600 | 675,636 |
7
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GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Retail (continued) | |||||
Chico’s FAS, Inc. (c) (b) | 102,600 | $ | 2,768,148 | ||
Claire’s Stores, Inc. | 56,800 | 1,448,968 | |||
Copart, Inc. (b) | 38,100 | 935,736 | |||
Dollar Tree Stores, Inc. (b) | 60,850 | 1,612,525 | |||
Fastenal Co. (c) | 71,200 | 2,868,648 | |||
Foot Locker, Inc. | 87,200 | 2,135,528 | |||
Michael’s Stores, Inc. | 74,500 | 3,072,380 | |||
O’Reilly Automotive, Inc. (c) (b) | 62,200 | �� | 1,940,018 | ||
Pacific Sunwear of California, Inc. (b) | 42,400 | 760,232 | |||
Payless ShoeSource, Inc. (b) | 37,600 | 1,021,592 | |||
PETsMART, Inc. | 76,900 | 1,968,640 | |||
Pier 1 Imports, Inc. (c) | 47,600 | 332,248 | |||
Polo Ralph Lauren Corp. | 35,500 | 1,948,950 | |||
Regis Corp. | 24,900 | 886,689 | |||
Ross Stores, Inc. | 79,200 | 2,221,560 | |||
Ruddick Corp. (c) | 18,900 | 463,239 | |||
Saks, Inc. (c) | 80,100 | 1,295,217 | |||
Tech Data Corp. (b) | 32,800 | 1,256,568 | |||
Urban Outfitters, Inc. (b) | 60,400 | 1,056,396 | |||
Williams Sonoma, Inc. | 66,300 | 2,257,515 | |||
43,506,069 | |||||
Schools (0.4%) | |||||
ITT Educational Services, Inc. (b) | 20,500 | 1,349,105 | |||
Laureate Education, Inc. (c) (b) | 27,800 | 1,185,114 | |||
2,534,219 | |||||
Semiconductors (1.0%) | |||||
Fairchild Semiconductor International, Inc. (b) | 66,600 | 1,210,122 | |||
MEMC Electronic Materials, Inc. (b) | 93,100 | 3,491,250 | |||
Semtech Corp. (c) (b) | 39,900 | 576,555 | |||
Silicon Laboratories, Inc. (b) | 27,100 | 952,565 | |||
6,230,492 | |||||
Shipping Transportation (1.8%) | |||||
Alexander & Baldwin, Inc. | 24,200 | 1,071,334 | |||
C.H. Robinson Worldwide, Inc. | 97,900 | 5,218,070 | |||
GATX Corp. (c) | 30,100 | 1,279,250 | |||
Overseas Shipholding Group, Inc. | 17,600 | 1,041,040 | |||
Swift Transportation Co., Inc. (c) (b) | 31,500 | 1,000,440 | |||
Werner Enterprises, Inc. (c) | 28,450 | 576,682 | |||
YRC Worldwide, Inc. (b) | 33,400 | 1,406,474 | |||
11,593,290 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
Steel (0.6%) | |||||
Reliance Steel & Aluminum Co. | 18,400 | $ | 1,526,280 | ||
Steel Dynamics, Inc. (c) | 25,100 | 1,650,074 | |||
Worthington Industries, Inc. | 39,200 | 821,240 | |||
3,997,594 | |||||
Transportation (1.9%) | |||||
Con-Way, Inc. | 27,500 | 1,593,075 | |||
Expeditors International of Washington, Inc. | 121,200 | 6,788,412 | |||
J.B. Hunt Transport Services, Inc. | 67,600 | 1,683,916 | |||
Oshkosh Truck Corp. | 40,300 | 1,915,056 | |||
11,980,459 | |||||
Utilities (7.5%) | |||||
AGL Resources, Inc. | 42,600 | 1,623,912 | |||
Alliant Energy Corp. | 68,200 | 2,339,260 | |||
Aqua America, Inc. (c) | 70,500 | 1,606,695 | |||
Aquila, Inc. (b) | 204,700 | 861,787 | |||
Black Hills Corp. (c) | 20,600 | 707,198 | |||
DPL, Inc. (c) | 70,900 | 1,900,120 | |||
Duquesne Light Holdings, Inc. (c) | 48,200 | 792,408 | |||
Energy East Corp. | 80,900 | 1,935,937 | |||
Equitable Resources, Inc. | 69,900 | 2,341,650 | |||
Great Plains Energy, Inc. (c) | 47,200 | 1,314,992 | |||
Hawaiian Electric Industries, Inc. (c) | 44,400 | 1,239,204 | |||
Idacorp, Inc. (c) | 26,000 | 891,540 | |||
National Fuel Gas Co. | 49,200 | 1,728,888 | |||
Northeast Utilities | 84,100 | 1,738,347 | |||
NSTAR | 58,500 | 1,673,100 | |||
Oklahoma Gas & Electric Co. | 53,100 | 1,860,093 | |||
Oneok, Inc. | 64,200 | 2,185,368 | |||
Pepco Holdings, Inc. | 104,538 | 2,465,006 | |||
PNM, Inc. | 37,650 | 939,744 | |||
Puget Energy, Inc. | 63,300 | 1,359,684 | |||
Questar Corp. | 49,000 | 3,944,009 | |||
Scana Corp. | 63,400 | 2,445,972 | |||
Sierra Pacific Resources (b) | 110,000 | 1,540,000 | |||
Vectren Corp. | 41,700 | 1,136,325 | |||
Westar Energy, Inc. | 47,600 | 1,001,980 | |||
Western Gas Resources, Inc. | 32,100 | 1,921,185 | |||
WGL Holdings, Inc. (c) | 26,700 | 772,965 | |||
Wisconsin Energy Corp. | 64,100 | 2,583,230 | |||
WPS Resources Corp. | 22,700 | 1,125,920 | |||
47,976,519 | |||||
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Veterinary Services (0.2%) | ||||||
VCA Antech, Inc. (c) (b) | 45,300 | $ | 1,446,429 | |||
Waste Disposal (0.7%) | ||||||
Republic Services, Inc. | 69,400 | 2,799,596 | ||||
Stericycle, Inc. (b) | 25,800 | 1,679,580 | ||||
4,479,176 | ||||||
Total Common Stocks | 617,322,483 | |||||
CASH EQUIVALENTS (3.3%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $21,216,981) | $ | 21,207,969 | 21,207,969 | |||
Total Cash Equivalents | 21,207,969 | |||||
Shares or Principal Amount | Value | ||||||
SHORT TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES LENDING (24.5%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | $ | 156,526,995 | $ | 156,526,995 | |||
Total Short Term Securities Held as Collateral for Securities Lending | 156,526,995 | ||||||
Total Investments (Cost $675,953,710) (a) — 124.5% | 795,057,447 | ||||||
Liabilities in excess of other assets — (24.5%) | (156,257,476 | ) | |||||
NET ASSETS — 100.0% | $ | 638,799,971 | |||||
(a) | See Notes to Financial Statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | All of part of the security was on loan as of June 30, 2006. |
At June 30, 2006, the Fund’s open futures contracts were as follows:
Number of Contracts | Long Contract | Expiration | Market Value Covered by Contracts | Unrealized Appreciation at 06/30/06 | ||||||
51 | S&P Emini Mid 400 Future | 09/15/06 | $ | 19,675,800 | $ | 505,369 |
See notes to financial statements.
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $654,745,741) | $ | 773,849,478 | |
Repurchase agreements, at cost and value | 21,207,969 | ||
Total Investments | 795,057,447 | ||
Cash | 13,719,723 | ||
Cash collateral pledged for futures | 837,000 | ||
Interest and dividends receivable | 698,084 | ||
Receivable for capital shares issued | 2,075,740 | ||
Receivable for variation margin on futures contracts | 114,050 | ||
Prepaid expenses and other assets | 3,697 | ||
Total Assets | 812,505,741 | ||
Liabilities: | |||
Payable to adviser | 1,056 | ||
Payable for investments purchased | 16,931,411 | ||
Payable for capital shares redeemed | 32,295 | ||
Payable for return of collateral received for securities on loan | 156,526,995 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 80,478 | ||
Fund administration and transfer agent fees | 41,989 | ||
Distribution fees | 4,575 | ||
Administrative servicing fees | 44,184 | ||
Other | 42,787 | ||
Total Liabilities | 173,705,770 | ||
Net Assets | $ | 638,799,971 | |
Represented by: | |||
Capital | $ | 514,778,573 | |
Accumulated net investment income (loss) | 215,911 | ||
Accumulated net realized gain (losses) from investment and futures transactions | 4,196,381 | ||
Net unrealized appreciation (depreciation) on investments and futures | 119,609,106 | ||
Net Assets | $ | 638,799,971 | |
Net Assets: | |||
Class I Shares | $ | 568,611,805 | |
Class II Shares | 22,476,904 | ||
Class ID Shares | 47,711,262 | ||
Total | $ | 638,799,971 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 32,112,780 | ||
Class II Shares | 1,273,762 | ||
Class ID Shares | 2,694,870 | ||
Total | 36,081,412 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 17.71 | |
Class II Shares | $ | 17.65 | |
Class ID Shares | $ | 17.70 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 272,076 | ||
Dividend income | 4,497,051 | |||
Income from securities lending | 529,926 | |||
Total Income | 5,299,053 | |||
Expenses: | ||||
Investment advisory fees | 827,969 | |||
Fund administration and transfer agent fees | 216,270 | |||
Distribution fees Class II Shares | 28,853 | |||
Administrative servicing fees | 451,341 | |||
Administrative servicing fees | 8,633 | |||
Trustee fees | 9,214 | |||
Other | 74,362 | |||
Total expenses before earnings credit | 1,616,642 | |||
Earnings credit (Note 5) | (1,625 | ) | ||
Total Expenses | 1,615,017 | |||
Net Investment Income (Loss) | 3,684,036 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 17,706,288 | |||
Net realized gains (losses) on futures | (743,331 | ) | ||
Net realized gains (losses) on investment and futures transactions | 16,962,957 | |||
Net change in unrealized appreciation/depreciation on investments and futures | 3,566,424 | |||
Net realized/unrealized gains (losses) on investments and futures | 20,529,381 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 24,213,417 | ||
See notes to financial statements.
10
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GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 3,684,036 | $ | 5,165,605 | ||||
Net realized gains (losses) on investment and futures transactions | 16,962,957 | 38,479,997 | ||||||
Net change in unrealized appreciation /depreciation on investments and futures | 3,566,424 | 19,342,831 | ||||||
Change in net assets resulting from operations | 24,213,417 | 62,988,433 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (3,242,916 | ) | (5,598,423 | ) | ||||
Net realized gains on investments | (7,900,961 | ) | (33,105,906 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (108,173 | ) | (165,938 | ) | ||||
Net realized gains on investments | (314,967 | ) | (1,232,085 | ) | ||||
Distributions to Class ID shareholders from: | ||||||||
Net investment income | (117,036 | )(a) | — | |||||
Net realized gains on investments | (431,978 | )(a) | — | |||||
Change in net assets from shareholder distributions | (12,116,031 | ) | (40,102,352 | ) | ||||
Change in net assets from capital transactions | 28,851,587 | 27,123,873 | ||||||
Change in net assets | 40,948,973 | 50,009,954 | ||||||
Net Assets: | ||||||||
Beginning of period | 597,850,998 | 547,841,044 | ||||||
End of period | $ | 638,799,971 | $ | 597,850,998 | ||||
Accumulated net investment income (loss) | $ | 215,911 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Capital Transactions: | ||||||||
Proceeds from shares issued | $ | 40,727,300 | $ | 79,176,649 | ||||
Dividends reinvested | 11,143,852 | 38,704,273 | ||||||
Cost of shares redeemed | (71,748,769 | ) | (96,085,488 | ) | ||||
(19,877,617 | ) | 21,795,434 | ||||||
Class II Capital Transactions: | ||||||||
Proceeds from shares issued | 6,049,180 | 10,439,484 | ||||||
Dividends reinvested | 423,139 | 1,398,020 | ||||||
Cost of shares redeemed | (5,860,099 | ) | (6,509,065 | ) | ||||
612,220 | 5,328,439 | |||||||
Class ID Capital Transactions: | ||||||||
Proceeds from shares issued | 47,567,972 | (a) | — | |||||
Dividends reinvested | 549,012 | (a) | — | |||||
Cost of shares redeemed | — | (a) | — | |||||
48,116,984 | — | |||||||
Change in net assets from capital transactions | $ | 28,851,587 | $ | 27,123,873 | ||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
11
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT MID CAP INDEX FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Share Transactions: | ||||||
Issued | 2,214,971 | 4,629,046 | ||||
Reinvested | 641,083 | 2,232,632 | ||||
Redeemed | (3,940,419 | ) | (5,715,331 | ) | ||
(1,084,365 | ) | 1,146,347 | ||||
Class II Share Transactions: | ||||||
Issued | 328,326 | 616,497 | ||||
Reinvested | 24,455 | 80,859 | ||||
Redeemed | (322,276 | ) | (381,900 | ) | ||
30,505 | 315,456 | |||||
Class ID Share Transactions: | ||||||
Issued | 2,663,043 | (a) | — | |||
Reinvested | 31,827 | (a) | — | |||
2,694,870 | — | |||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
12
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GVIT Mid Cap Index Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains (Losses) | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 13.55 | 0.07 | (0.25 | ) | (0.18 | ) | (0.07 | ) | (0.13 | ) | (0.20 | ) | $ | 13.17 | (1.30% | ) | $ | 257,623 | 0.65% | 0.53% | 0.78% | 0.40% | 28.43% | |||||||||||||||||||
Year Ended December 31, 2002 | $ | 13.17 | 0.04 | (2.05 | ) | (2.01 | ) | (0.04 | ) | (0.10 | ) | (0.14 | ) | $ | 11.02 | (15.30% | ) | $ | 285,970 | 0.74% | 0.37% | 0.75% | 0.36% | 27.32% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 11.02 | 0.06 | 3.75 | 3.81 | (0.06 | ) | (e | ) | (0.06 | ) | $ | 14.77 | 34.65% | $ | 432,589 | 0.74% | 0.49% | (h | ) | (h | ) | 11.58% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 14.77 | 0.09 | 2.23 | 2.32 | (0.08 | ) | (0.40 | ) | (0.48 | ) | $ | 16.61 | 15.73% | $ | 532,474 | 0.60% | 0.62% | (h | ) | (h | ) | 15.90% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 16.61 | 0.16 | 1.82 | 1.98 | (0.18 | ) | (1.05 | ) | (1.23 | ) | $ | 17.36 | 12.10% | $ | 576,339 | 0.55% | 0.93% | (h | ) | (h | ) | 19.32% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 17.36 | 0.11 | 0.59 | 0.70 | (0.10 | ) | (0.25 | ) | (0.35 | ) | $ | 17.71 | 4.08% | (f) | $ | 568,612 | 0.52% | (g) | 1.19% | (g) | (h | ) | (h | ) | 7.25% | |||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 13.64 | 0.02 | (2.53 | ) | (2.51 | ) | (0.03 | ) | (0.10 | ) | (0.13 | ) | $ | 11.00 | (18.44% | )(f) | $ | 1,232 | 0.96% | (g) | 0.25% | (g) | (h | ) | (h | ) | 27.32% | |||||||||||||||
Year Ended December 31, 2003 | $ | 11.00 | 0.03 | 3.74 | 3.77 | (0.04 | ) | (e | ) | (0.04 | ) | $ | 14.73 | 34.30% | $ | 8,049 | 0.98% | 0.27% | (h | ) | (h | ) | 11.58% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 14.73 | 0.07 | 2.22 | 2.29 | (0.06 | ) | (0.40 | ) | (0.46 | ) | $ | 16.56 | 15.50% | $ | 15,367 | 0.78% | 0.45% | (h | ) | (h | ) | 15.90% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 16.56 | 0.13 | 1.81 | 1.94 | (0.15 | ) | (1.05 | ) | (1.20 | ) | $ | 17.30 | 11.90% | $ | 21,512 | 0.72% | 0.76% | (h | ) | (h | ) | 19.32% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 17.30 | 0.10 | 0.59 | 0.69 | (0.09 | ) | (0.25 | ) | (0.34 | ) | $ | 17.65 | 4.01% | (f) | $ | 22,477 | 0.69% | (g) | 1.03% | (g) | (h | ) | (h | ) | 7.25% | |||||||||||||||||
Class ID Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(i) | $ | 18.88 | 0.07 | (0.93 | ) | (0.86 | ) | (0.07 | ) | (0.25 | ) | (0.32 | ) | $ | 17.70 | (4.52% | )(f) | $ | 47,711 | 0.31% | (g) | 2.15% | (g) | (h | ) | (h | ) | 7.25% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from May 6, 2002 (commencement of operations) through December 31, 2002. |
(e) | The amount is less than $0.005. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
(i) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
13
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Unaudited)
June 30, 2006
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”), Great West Life & Annuity Insurance Company and First Great West Life & Annuity Insurance Company have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT Mid Cap Index Fund (the “Fund”), (formerly “Dreyfus GVIT Mid Cap Index Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. Dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee,
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June 30, 2006
are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(e) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
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June 30, 2006
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(f) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(g) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend up to 33 1/3% of the Fund’s total assets pursuant to agreements, requiring that the borrower deliver cash or securities as collateral with respect to each new loan of U.S. securities equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan of non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned, and thereafter requiring the borrower to mark-to-market the collateral on a daily basis and requiring the borrower to make up any shortfall of collateral. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. Collateral is marked-to-market daily to provide a level of collateral at least equal to the market value of securities loaned. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by
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the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in the judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | U.S. Bank N.A. | $ | 24,995,194 | 5.10% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 13,936,467 | 5.29% | 07/21/06 | |||||
Funding Agreement — GIC | GE Life and Annuity | 3,500,000 | 5.28% | 07/14/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 15,000,000 | 5.38% | 07/03/06 | |||||
Medium Term Note — Floating | Alliance and Leister PLC | 2,500,000 | 5.13% | 07/10/06 | |||||
Medium Term Note — Floating | Allstate Life Global Funding | 2,000,000 | 5.33% | 07/27/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 10,500,599 | 5.27% | 09/08/06 | |||||
Medium Term Note — Floating | ISLANDSBANKI HF Corp. | 5,000,000 | 5.34% | 07/24/06 | |||||
Medium Term Note — Floating | Macquarie Bank Ltd. | 14,998,624 | 5.30% | 07/21/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 1,999,414 | 5.39% | 07/03/06 | |||||
Medium Term Note — Floating | West Corp Federal Credit Union | 1,000,000 | 5.19% | 07/14/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 61,096,697 | 5.32% | 07/03/06 |
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | |
$154,730,127 | $156,526,995 |
(j) | Distributions to Shareholders |
Dividends from net investment income, if any, are declared and paid quarterly. Distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of each Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||||
$ | 688,975,202 | $ | 156,294,589 | $ | (50,212,344 | ) | $ | 106,082,245 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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June 30, 2006
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. For the Equity Funds, the method for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. | Transactions with Affiliates |
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of Fund Asset Management L.P., the Fund’s subadviser (the “subadviser”). The subadviser manages the Fund’s investments and has responsibility for making all investment decisions for the Fund. Prior to May 1, 2006, the Fund’s subadvisor was the Dreyfus Corporation.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
$0 up to $1.5 billion | 0.22% | 0.145% | 0.075% | |||||
$1.5 billion up to $3 billion | 0.21% | 0.150% | 0.060% | |||||
$3 billion and more | 0.20% | 0.150% | 0.050% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
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June 30, 2006
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of Class II shares of the Fund. These fees are based on an annual rate not to exceed 0.25% of the average daily net assets of the Class II shares of the Fund.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”) and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $448,407 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $55,418,271 and sales of $44,487,177.
For the six months ended June 30, 2006, the Fund had purchases of $494,275 of U.S. Government securities, which are included in the total purchases and sales in the sentence above.
5. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs are included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information (Unaudited)
June 30, 2006
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that, as is anticipated with index funds, the GVIT Mid Cap Index Fund underperformed its benchmark index, the S&P Midcap 400 Index, by 60 basis points for the one-year period. The Board considered that the Fund’s return was in line with the benchmark on a gross return basis. The Fund ranked in the second quartile of the Lipper Mid-Cap Core Funds category for the one year period ended September 30, 2005, beating the category median return by 5 basis points. The Board further considered that over the three-year period, the Fund ranked in the third quartile of its Lipper category and underperformed the category median by 9 basis points, while for the five-year period the Fund ranked in the third quartile and underperformed the category median by 37 basis points.
The Board also considered the Funds contractual advisory fee (including the subadvisory fee) and breakpoints place the Fund in the third quintile of its Lipper-constructed Expense Group and the Fund’s total expenses are at the median of its Expense Group. Finally, the Board reviewed and considered the adviser’s profitability with respect to this Fund and concluded that it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other or Nominee2 | ||||
Charles E. Allen4
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association—College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
4 | Mr. Allen owns a 51% interest in Graimark Realty Advisors Inc., a 67% owner of G/W Jefferson-St Jean LLC (“Jefferson-St”), a real estate development company. Until July 28, 2004, Jefferson-St had a construction loan, guaranteed by Mr. Allen, in the principal amount of $12.5 million (“Construction Loan”), from Bank One, NA, obtained in August, 2002. On July 1, 2004, Bank One Corporation merged with and into J.P. Morgan Chase & Co. (the “Merger”). Bank One Corporation was the parent company of Bank One, NA. J.P. Morgan Chase & Co. is the parent company of J.P. Morgan Investment Management, Inc., subadviser to two of the Funds of the Trust. On July 28, 2004, the Construction Loan was refinanced with an unaffiliated permanent lender. Neither Mr. Allen, nor the Trust’s management, believes that the Construction Loan, secured well in advance of the Merger, and refinanced within 28 days following the completion of the Merger, should result in Mr. Allen having a material business relationship with an investment adviser (or subadviser) or controlling person of an investment adviser (or subadviser) of the Trust. |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
23
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
24
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
25
Table of Contents
Gartmore GVIT Global Technology and Communications Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
7 | Financial Highlights | |
8 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGTC (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Global Technology and Communications Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Global Technology and Communications Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 950.60 | $ | 5.66 | 1.17% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.00 | $ | 5.87 | 1.17% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 950.50 | $ | 6.82 | 1.41% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.81 | $ | 7.08 | 1.41% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 951.00 | $ | 5.51 | 1.14% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.15 | $ | 5.72 | 1.14% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 950.50 | $ | 6.00 | 1.24% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.65 | $ | 6.23 | 1.24% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Global Technology and Communications Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 97.3% | |
Cash Equivalents | 5.9% | |
Other Investments* | 20.2% | |
Liabilities in excess of other assets** | -23.4% | |
100.0% | ||
Top Holdings*** | ||
Cisco Systems, Inc. | 5.5% | |
Intel Corp. | 4.6% | |
Google, Inc., Class A | 4.1% | |
International Business Machines Corp. | 3.8% | |
Yahoo, Inc. | 2.8% | |
Hewlett Packard Co. | 2.8% | |
Cognizant Technology Solutions Corp. | 2.7% | |
Integrated Device Technology, Inc. | 2.6% | |
Cypress Semiconductor Corp. | 2.5% | |
WebEx Communications, Inc. | 2.0% | |
Other Assets | 66.6% | |
100.0% | ||
Top Industries | ||
Semiconductors | 15.5% | |
Telecommunication Equipment | 14.3% | |
Computer Hardware | 12.1% | |
Computer Software | 10.8% | |
Electronic Components | 9.8% | |
E-Commerce & Services | 9.5% | |
Computer Services | 8.9% | |
Wireless Equipment | 3.7% | |
Telecommunication Services | 3.5% | |
Internet Security | 2.9% | |
Other Assets | 9.0% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.3%) | |||||
Commercial Services (1.4%) | |||||
Alliance Data Systems Corp. (b) | 7,900 | $ | 464,678 | ||
Computer Hardware (12.1%) | |||||
Apple Computer, Inc. (b) | 7,900 | 451,248 | |||
Dell, Inc. (b) | 17,000 | 414,970 | |||
Emulex Corp. (b) | 9,600 | 156,192 | |||
Hewlett Packard Co. | 28,300 | 896,544 | |||
International Business Machines Corp. | 15,700 | 1,206,074 | |||
Mobility Electronics, Inc. (b) (c) | 35,900 | 260,634 | |||
Rackable Systems, Inc. (b) (c) | 8,900 | 351,461 | |||
Sigma Designs, Inc. (b) (c) | 14,800 | 139,564 | |||
3,876,687 | |||||
Computer Services (8.9%) | |||||
Citrix Systems, Inc. (b) | 13,000 | 521,820 | |||
Cognet Communications Group, Inc. (b) | 18,900 | 177,093 | |||
Cognizant Technology Solutions Corp. (b) | 12,900 | 869,073 | |||
Satyam Computer Services Ltd. ADR IN | 10,400 | 344,656 | |||
The BISYS Group, Inc. (b) | 21,800 | 298,660 | |||
WebEx Communications, Inc. (b) (c) | 18,500 | 657,490 | |||
2,868,792 | |||||
Computer Software (10.8%) | |||||
Cognos, Inc. ADR CA (b) | 5,300 | 150,785 | |||
Electronic Arts, Inc. (b) | 10,700 | 460,528 | |||
Hyperion Solutions Corp. (b) | 23,000 | 634,800 | |||
Informatica Corp. (b) (c) | 44,500 | 585,620 | |||
Mercury Interactive Corp. (b) | 10,300 | 360,191 | |||
Neoware, Inc. (b) (c) | 17,000 | 208,930 | |||
Oracle Corp. (b) | 22,500 | 326,025 | |||
Rightnow Technologies, Inc. (b) (c) | 27,000 | 450,360 | |||
Tibco Software, Inc. (b) | 44,300 | 312,315 | |||
3,489,554 | |||||
Consulting Services (1.3%) | |||||
Answerthink, Inc. (b) | 104,500 | 421,135 | |||
E-Commerce & Services (9.5%) | |||||
eBay, Inc. (b) | 15,300 | 448,137 | |||
Google, Inc., Class A (b) | 3,150 | 1,320,890 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
E-Commerce & Services (continued) | |||||
WebSideStory, Inc. (b) (c) | 30,000 | $ | 366,000 | ||
Yahoo, Inc. (b) | 27,400 | 904,200 | |||
3,039,227 | |||||
Electronic Components (9.8%) | |||||
Intel Corp. | 77,200 | 1,462,940 | |||
International DisplayWorks, Inc. (b) (c) | 88,900 | 462,280 | |||
International Game Technologies | 12,800 | 485,632 | |||
LSI Logic Corp. (b) | 48,200 | 431,390 | |||
Micron Technology, Inc. (b) | 19,900 | 299,694 | |||
3,141,936 | |||||
Internet Banking (1.0%) | |||||
CheckFree Corp. (b) | 6,300 | 312,228 | |||
Internet Security (2.9%) | |||||
Symantec Corp. (b) | 38,900 | 604,506 | |||
Vasco Data Security International, Inc. (b) (c) | 39,200 | 327,320 | |||
931,826 | |||||
Marketing Services (0.9%) | |||||
24/7 Real Media, Inc. (b) | 32,300 | 283,594 | |||
Multimedia (1.0%) | |||||
Time Warner, Inc. | 19,200 | 332,160 | |||
Semiconductors (15.5%) | |||||
Anadigics, Inc. (b) | 47,500 | 319,200 | |||
ATI Technologies, Inc. (b) | 19,700 | 287,620 | |||
Chartered Semiconductor ADR SG (b) (c) | 35,500 | 308,850 | |||
Conexant Systems, Inc. (b) | 159,200 | 398,000 | |||
Cypress Semiconductor Corp. (b) | 55,000 | 799,700 | |||
Integrated Device Technology, Inc. (b) | 58,500 | 829,530 | |||
Kemet Corp. (b) (c) | 16,300 | 150,286 | |||
LTX Corp. (b) | 65,500 | 459,155 | |||
M-Systems Flash Disk Pioneers Ltd. (b) (c) | 15,600 | 462,228 | |||
Novellus Systems, Inc. (b) | 13,700 | 338,390 | |||
Teradyne, Inc. (b) | 11,000 | 153,230 | |||
Texas Instruments, Inc. | 15,800 | 478,582 | |||
4,984,771 | |||||
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Telecommunication Equipment (14.3%) | ||||||
Arris Group, Inc. (b) | 36,300 | $ | 476,256 | |||
CIENA Corp. (b) | 76,800 | 369,408 | ||||
Cisco Systems, Inc. (b) | 90,700 | 1,771,371 | ||||
Comtech Telecommunications Corp. (b) (c) | 11,500 | 336,605 | ||||
Comverse Technology, Inc. (b) | 15,500 | 306,435 | ||||
Finisar Corp. (b) (c) | 76,700 | 250,809 | ||||
Nortel Networks Corp. (b) (c) | 145,800 | 326,592 | ||||
Polycom, Inc. (b) | 21,800 | 477,856 | ||||
Tekelec (b) (c) | 23,000 | 284,050 | ||||
4,599,382 | ||||||
Telecommunication Services (3.5%) | ||||||
Amdocs Ltd. (b) | 12,900 | 472,140 | ||||
Neustar, Inc. (b) | 14,600 | 492,750 | ||||
Vonage Holdings Corp. (b) (c) | 19,990 | 171,714 | ||||
1,136,604 | ||||||
Wholesale Distribution (0.7%) | ||||||
Directed Electronics, Inc. (b) (c) | 17,500 | 229,600 | ||||
Wireless Equipment (3.7%) | ||||||
Motorola, Inc. | 30,600 | 616,590 | ||||
Qualcomm, Inc. | 14,100 | 564,987 | ||||
1,181,577 | ||||||
Total Common Stocks | 31,293,751 | |||||
CASH EQUIVALENTS (5.9%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $1,885,992) | $ | 1,885,191 | 1,885,191 | |||
Total Cash Equivalents | 1,885,191 | |||||
Shares or Principal Amount | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (20.2%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Mutual Funds — note 2 (Securities Lending) | $ | 6,494,468 | $ | 6,494,468 | |||
Total Short-Term Securities Held as Collateral for Securities on Loan | 6,494,468 | ||||||
Total Investments (Cost $40,340,493) (a) — 123.4% | 39,673,410 | ||||||
Liabilities in excess of other assets — (23.4%) | (7,527,360 | ) | |||||
NET ASSETS — 100.0% | $ | 32,146,050 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Non-income producing securities. |
(c) | All or part of security was on loan as of June 30, 2006. |
ADR | American Depository Receipt |
CA | Canada |
IN | India |
SG | Singapore |
See notes to financial statements.
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $38,455,302) | $ | 37,788,219 | ||
Repurchase agreements, at cost and value | 1,885,191 | |||
Total Investments | 39,673,410 | |||
Foreign currencies, at value (cost $897,762) | 926,597 | |||
Receivable for capital shares issued | 7,093 | |||
Interest and dividends receivable | 16,745 | |||
Receivable for investments sold | 1,400,968 | |||
Prepaid expenses and other assets | 589 | |||
Total Assets | 42,025,402 | |||
Liabilities: | ||||
Payable for investments purchased | 3,268,595 | |||
Payable for capital shares redeemed | 17,924 | |||
Payable for return of collateral received for securities on loan | 6,494,468 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 78,185 | |||
Fund administration and transfer agent fees | 1,769 | |||
Distribution fees | 1,022 | |||
Administrative servicing fees | 3,717 | |||
Other | 13,672 | |||
Total Liabilities | 9,879,352 | |||
Net Assets | $ | 32,146,050 | ||
Represented by: | ||||
Capital | $ | 43,888,418 | ||
Accumulated net investment income (loss) | (85,359 | ) | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | (11,018,761 | ) | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | (638,248 | ) | ||
Net Assets | $ | 32,146,050 | ||
Net Assets: | ||||
Class I Shares | $ | 12,335,886 | ||
Class II Shares | 1,335,885 | |||
Class III Shares | 14,858,330 | |||
Class VI Shares | 3,615,949 | |||
Total | $ | 32,146,050 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 3,368,982 | |||
Class II Shares | 366,490 | |||
Class III Shares | 4,026,075 | |||
Class VI Shares | 989,594 | |||
Total | 8,751,141 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 3.66 | ||
Class II Shares | $ | 3.65 | ||
Class III Shares | $ | 3.69 | ||
Class VI Shares | $ | 3.65 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 33,852 | ||
Dividend income | 69,893 | |||
Income from securities lending | 29,196 | |||
Total Income | 132,941 | |||
Expenses: | ||||
Investment advisory fees | 163,735 | |||
Fund administration and transfer agent fees | 14,141 | |||
Distribution fees Class II Shares | 1,916 | |||
Distribution fees Class VI Shares | 5,029 | |||
Administrative servicing fees Class I Shares | 12,918 | |||
Administrative servicing fees Class II Shares | 1,273 | |||
Administrative servicing fees Class III Shares | 13,095 | |||
Trustee fees | 676 | |||
Other | 5,675 | |||
Total expenses before earnings credit | 218,458 | |||
Earnings credit (Note 6) | (158 | ) | ||
Total Expenses | 218,300 | |||
Net Investment Income (Loss) | (85,359 | ) | ||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 225,986 | |||
Net realized gains (losses) on foreign currency transactions | 13 | |||
Net realized gains (losses) on investment and foreign currency transactions | 225,999 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (1,750,697 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | (1,524,698 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,610,057 | ) | |
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL TECHNOLOGY AND COMMUNICATIONS FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | (85,359 | ) | $ | (232,966 | ) | ||
Net realized gains (losses) on investment and foreign currency transactions | 225,999 | 1,136,947 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (1,750,697 | ) | (2,337,769 | ) | ||||
Change in net assets resulting from operations | (1,610,057 | ) | (1,433,788 | ) | ||||
Change in net assets from capital transactions | (4,363,715 | ) | (8,347,945 | ) | ||||
Change in net assets | (5,973,772 | ) | (9,781,733 | ) | ||||
Net Assets: | ||||||||
Beginning of period | 38,119,822 | 47,901,555 | ||||||
End of period | $ | 32,146,050 | $ | 38,119,822 | ||||
Accumulated net investment income (loss) | $ | (85,359 | ) | $ | — | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 2,366,275 | $ | 6,848,192 | ||||
Cost of shares redeemed | (4,422,307 | ) | (11,375,754 | ) | ||||
(2,056,032 | ) | (4,527,562 | ) | |||||
Class II Shares | ||||||||
Proceeds from shares issued | 1,089 | 1,207 | ||||||
Cost of shares redeemed | (171,647 | ) | (729,698 | ) | ||||
(170,558 | ) | (728,491 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 3,175,229 | 7,558,094 | ||||||
Cost of shares redeemed | (5,580,008 | ) | (11,494,153 | ) | ||||
(2,404,779 | ) | (3,936,059 | ) | |||||
Class VI Shares | ||||||||
Proceeds from shares issued | 1,789,304 | 2,152,609 | ||||||
Cost of shares redeemed | (1,521,650 | ) | (1,308,442 | ) | ||||
267,654 | 844,167 | |||||||
Change net assets from capital transactions | $ | (4,363,715 | ) | $ | (8,347,945 | ) | ||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 582,038 | 1,935,433 | ||||||
Redeemed | (1,112,689 | ) | (3,239,381 | ) | ||||
(530,651 | ) | (1,303,948 | ) | |||||
Class II Shares | ||||||||
Issued | — | 220 | ||||||
Redeemed | (44,114 | ) | (212,413 | ) | ||||
(44,114 | ) | (212,193 | ) | |||||
Class III Shares | ||||||||
Issued | 790,656 | 2,078,810 | ||||||
Redeemed | (1,399,111 | ) | (3,250,224 | ) | ||||
(608,455 | ) | (1,171,414 | ) | |||||
Class VI Shares | ||||||||
Issued | 448,742 | 602,908 | ||||||
Redeemed | (385,468 | ) | (372,541 | ) | ||||
63,274 | 230,367 | |||||||
See notes to financial statements.
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Global Technology and Communications Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Return of Capital | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 7.35 | (0.03 | ) | (3.11 | ) | (3.14 | ) | — | — | $ | 4.21 | (42.72% | ) | $ | 15,585 | 1.35% | (0.88% | ) | 2.02% | (1.55% | ) | 894.05% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 4.21 | (0.03 | ) | (1.77 | ) | (1.80 | ) | (0.02 | ) | (0.02 | ) | $ | 2.39 | (42.78% | ) | $ | 7,791 | 1.34% | (0.65% | ) | 1.39% | (0.70% | ) | 879.28% | ||||||||||||||||
Year Ended December 31, 2003 | $ | 2.39 | (0.03 | ) | 1.35 | 1.32 | — | — | $ | 3.71 | 55.23% | $ | 15,960 | 1.24% | (0.94% | ) | (h | ) | (h) | 1045.37% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 3.71 | (0.02 | ) | 0.18 | 0.16 | — | — | $ | 3.87 | 4.31% | $ | 20,144 | 1.30% | (0.69% | ) | (h | ) | (h) | 728.29% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 3.87 | (0.02 | ) | — | (0.02 | ) | — | — | $ | 3.85 | (0.52% | ) | $ | 15,010 | 1.28% | (0.63% | ) | (h | ) | (h) | 571.34% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 3.85 | (0.01 | ) | (0.18 | ) | (0.19 | ) | — | — | $ | 3.66 | (4.94% | )(f) | $ | 12,336 | 1.17% | (g) | (0.46% | )(g) | (h | ) | (h) | 152.20% | |||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 2.45 | (0.01 | ) | 1.28 | 1.27 | — | — | $ | 3.72 | 51.84% | (f) | $ | 2,128 | 1.49% | (g) | (1.27% | )(g) | (h | ) | (h) | 1045.37% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 3.72 | (0.05 | ) | 0.20 | 0.15 | — | — | $ | 3.87 | 4.03% | $ | 2,409 | 1.53% | (0.98% | ) | (h | ) | (h) | 728.29% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 3.87 | (0.04 | ) | 0.01 | (0.03 | ) | — | — | $ | 3.84 | (0.78% | ) | $ | 1,575 | 1.53% | (0.89% | ) | (h | ) | (h) | 571.34% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 3.84 | (0.01 | ) | (0.18 | ) | (0.19 | ) | — | — | $ | 3.65 | (4.95% | )(f) | $ | 1,336 | 1.41% | (g) | (0.69% | )(g) | (h | ) | (h) | 152.20% | |||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 3.29 | (0.01 | ) | (0.85 | ) | (0.86 | ) | (0.02 | ) | (0.02 | ) | $ | 2.41 | (26.14% | )(f) | $ | 5,822 | 1.37% | (g) | (3.49% | )(g) | 1.79% | (g) | (3.91% | )(g) | 879.28% | ||||||||||||||
Year Ended December 31, 2003 | $ | 2.41 | (0.02 | ) | 1.35 | 1.33 | — | — | $ | 3.74 | 55.19% | $ | 33,398 | 1.25% | (1.00% | ) | (h | ) | (h) | 1045.37% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 3.74 | (0.04 | ) | 0.20 | 0.16 | — | — | $ | 3.90 | 4.28% | $ | 22,656 | 1.28% | (0.73% | ) | (h | ) | (h) | 728.29% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 3.90 | (0.02 | ) | — | (0.02 | ) | — | — | $ | 3.88 | (0.51% | ) | $ | 17,975 | 1.29% | (0.64% | ) | (h | ) | (h) | 571.34% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 3.88 | (0.01 | ) | (0.18 | ) | (0.19 | ) | — | — | $ | 3.69 | (4.90% | )(f) | $ | 14,858 | 1.14% | (g) | (0.42% | )(g) | (h | ) | (h) | 152.20% | |||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(i) | $ | 3.59 | (0.01 | ) | 0.29 | 0.28 | — | — | $ | 3.87 | 7.80% | (f) | $ | 2,693 | 1.46% | (g) | (0.44% | )(g) | (h | ) | (h) | 728.29% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 3.87 | (0.02 | ) | (0.01 | ) | (0.03 | ) | — | — | $ | 3.84 | (0.78% | ) | $ | 3,559 | 1.39% | (0.73% | ) | (h | ) | (h) | 571.34% | ||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 3.84 | (0.01 | ) | (0.18 | ) | (0.19 | ) | — | — | $ | 3.65 | (4.95% | )(f) | $ | 3,616 | 1.24% | (g) | (0.52% | )(g) | (h | ) | (h) | 152.20% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from March 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | For the period from May 2, 2002 (commencement of operations) through December 31, 2002. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
(i) | For the period from April 28, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Global Technology and Communications Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 400,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 497,731 | 5.29% | 07/21/06 | |||||
Funding Agreement — GIC | GE Life and Annuity | 400,000 | 5.28% | 07/14/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 500,000 | 5.41% | 07/03/06 | |||||
Medium Term Note — Floating | Beta Finance Inc. | 1,250,000 | 5.37% | 07/03/06 | |||||
Medium Term Note — Floating | Unicredito Italiano Bank (IRE) PLC | 800,000 | 5.16% | 07/10/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 2,646,737 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$6,432,975 | $ | 6,494,468 |
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||||
$ | 41,285,256 | $ | 1,337,872 | $ | (2,949,718 | ) | $ | (1,611,846 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
$0 up to $500 million | 0.88% | |
$500 million up to $2 billion | 0.83% | |
$2 billion and more | 0.78% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the Goldman Sachs Technology Composite Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.23% for all classes until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, there were no cumulative potential reimbursements for all classes of shares of the Fund.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II and Class VI shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II and Class VI shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $24,861 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III and Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III and Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III and Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is designed to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III and Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $26,009.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $54,434,447 and sales of $57,995,632.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the Goldman Sachs Technology Index Composite, for the one-, three-, and five-year periods ended September 30, 2005 and ranked in the bottom half of the Fund’s Lipper peer group for all periods. The Board discussed with management the disappointing performance of the Fund. The Board considered that Chip Zhu had become the sole portfolio manager of the Fund on January 4, 2005 and, after the first weeks of transitioning the Fund’s portfolio, the Fund had shown improved performance, and had outperformed its benchmark.
Next the Board reviewed the Fund’s contractual advisory fee and break points and considered that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed peer group. The Fund’s total expenses placed the Fund above the median of its Lipper Expense Group. The Board also considered, however, that the Fund had implemented a performance-based fee structure effective January 1, 2006 and reduced the base management fee by 10 basis points as of that date. Finally, the Board considered the adviser’s profitability with respect to this Fund and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov. |
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Table of Contents
Gartmore GVIT Global Health Sciences Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGHS (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Global Health Sciences Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual | Expenses |
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical | Example for Comparison Purposes |
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Global Health Sciences Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 953.60 | $ | 5.76 | 1.19% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.90 | $ | 5.97 | 1.19% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 952.30 | $ | 6.92 | 1.43% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.71 | $ | 7.18 | 1.43% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 953.70 | $ | 5.76 | 1.19% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.90 | $ | 5.97 | 1.19% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 951.60 | $ | 6.82 | 1.41% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.81 | $ | 7.08 | 1.41% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Global Health Sciences Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 93.9% | |
Cash Equivalents | 6.2% | |
Other Investments* | 10.1% | |
Liabilities in excess of other assets** | -10.2% | |
100.0% | ||
Top Holdings*** | ||
Johnson & Johnson | 8.1% | |
Wyeth | 6.2% | |
Abbott Laboratories | 5.9% | |
Merck & Co., Inc. | 5.5% | |
Pfizer, Inc. | 5.3% | |
Medtronic, Inc. | 4.8% | |
Cardinal Health, Inc. | 4.5% | |
UnitedHealth Group, Inc. | 4.3% | |
Roche Holding AG – CH | 3.9% | |
Gilead Sciences, Inc. | 3.4% | |
Other Assets | 48.1% | |
100.0% | ||
Top Industries | ||
Drugs | 37.9% | |
Medical Products | 24.4% | |
Medical Products & Services | 10.3% | |
Therapeutics | 5.8% | |
Medical Services | 5.0% | |
Insurance | 4.3% | |
Optical Supplies | 2.4% | |
Health Care Services | 1.8% | |
Human Resources | 1.3% | |
Drug Delivery Systems | 0.7% | |
Other Assets | 6.1% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (93.9%) | |||||
Drug Delivery Systems (0.7%) | |||||
Conor Medsystems, Inc. (b) (c) | 15,449 | $ | 426,238 | ||
Drugs (37.9%) | |||||
Abbott Laboratories | 78,170 | 3,408,993 | |||
Allergan, Inc. | 6,038 | 647,636 | |||
AstraZeneca PLC ADR—UK | 14,750 | 882,345 | |||
Merck & Co., Inc. | 86,756 | 3,160,521 | |||
Novartis AG ADR—CH | 30,560 | 1,647,795 | |||
Pfizer, Inc. | 130,442 | 3,061,474 | |||
Roche Holding AG—CH | 13,781 | 2,274,689 | |||
Sanofi-Aventis ADR—UK | 36,285 | 1,767,080 | |||
Schering-Plough Corp. | 74,158 | 1,411,227 | |||
Wyeth | 80,555 | 3,577,447 | |||
21,839,207 | |||||
Health Care Services (1.8%) | |||||
AMN Healthcare Services, Inc. (b) | 16,966 | 344,410 | |||
WebMD Health Corp., Class A (b) (c) | 14,426 | 682,350 | |||
1,026,760 | |||||
Human Resources (1.3%) | |||||
Cross Country Healthcare, Inc. (b) (c) | 41,208 | 749,574 | |||
Insurance (4.3%) | |||||
UnitedHealth Group, Inc. | 55,429 | 2,482,111 | |||
Medical Products (24.4%) | |||||
Applera Corp.—Celera Genomics Group (b) | 11,220 | 145,299 | |||
Bard (C.R.), Inc. | 23,608 | 1,729,522 | |||
Baxter International, Inc. | 40,170 | 1,476,649 | |||
Bristol—Myers Squibb Co. | 65,084 | 1,683,072 | |||
Illumina Inc (b) | 19,930 | 591,124 | |||
Johnson & Johnson | 77,598 | 4,649,672 | |||
Medtronic, Inc. | 58,837 | 2,760,632 | |||
Northstar Neuroscience, Inc. (b) (c) | 42,468 | 440,818 | |||
NxStage Medical, Inc. (b) (c) | 41,126 | 359,030 | |||
Spectranetics Corp. (b) (c) | 23,723 | 254,311 | |||
14,090,129 | |||||
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Medical Products & Services (10.3%) | ||||||
Cardinal Health, Inc. | 39,916 | $ | 2,567,797 | |||
Covance, Inc. (b) | 15,459 | 946,400 | ||||
DJ Orthopedics, Inc. (b) (c) | 7,295 | 268,675 | ||||
Gentiva Health Services, Inc. (b) | 35,540 | 569,706 | ||||
OSI Pharmaceuticals, Inc. (b) (c) | 18,290 | 602,838 | ||||
Pharmaceutical Product Development, Inc. | 27,560 | 967,907 | ||||
5,923,323 | ||||||
Medical Services (5.0%) | ||||||
Manor Care, Inc. | 39,562 | 1,856,249 | ||||
McKesson Corp. | 15,155 | 716,528 | ||||
Sun Healthcare Group, Inc. (b) (c) | 34,297 | 298,041 | ||||
2,870,818 | ||||||
Optical Supplies (2.4%) | ||||||
Alcon, Inc. | 13,848 | 1,364,720 | ||||
Therapeutics (5.8%) | ||||||
Genentech, Inc. (b) | 17,073 | 1,396,571 | ||||
Gilead Sciences, Inc. (b) | 32,928 | 1,948,021 | ||||
3,344,592 | ||||||
Total Common Stocks | 54,117,472 | |||||
CASH EQUIVALENTS (6.2%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $3,551,860) | $ | 3,550,351 | 3,550,351 | |||
Total Cash Equivalents | 3,550,351 | |||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (10.1%) | ||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | $ | 5,849,530 | 5,849,530 | |||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
Total Short-Term Securities Held as Collateral for Securities on Loan | $ | 5,849,530 | ||||
Total Investments (Cost $63,499,051) (a) — 110.2% | 63,517,353 | |||||
Liabilities in excess of other assets — (10.2%) | (5,860,744 | ) | ||||
NET ASSETS — 100.0% | $ | 57,656,609 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation ) of securities. |
(b) | Non-income producing securities. |
(c) | All of part of the security was on loan as of June 30, 2006. |
ADR | American Depository Receipt |
CH | Switzerland |
UK | United Kingdom |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $59,948,700) | $ | 59,967,002 | ||
Repurchase agreements, at cost and value | 3,550,351 | |||
Total Investments | 63,517,353 | |||
Cash | 2,320,769 | |||
Interest and dividends receivable | 79,240 | |||
Receivable for capital shares issued | 3,533 | |||
Prepaid expenses and other assets | 2,558 | |||
Total Assets | 65,923,453 | |||
Liabilities: | ||||
Payable for investments purchased | 2,162,349 | |||
Payable for capital shares redeemed | 101,606 | |||
Payable for return of collateral received for securities on loan | 5,849,530 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 138,233 | |||
Fund administration and transfer agent fees | 3,865 | |||
Distribution fees | 2,671 | |||
Administrative servicing fees | 8,511 | |||
Other | 79 | |||
Total Liabilities | 8,266,844 | |||
Net Assets | $ | 57,656,609 | ||
Represented by: | ||||
Capital | $ | 58,489,503 | ||
Accumulated net investment income (loss) | 59,238 | |||
Accumulated net realized gains (losses) from investment and foreign currency transactions | (910,434 | ) | ||
Net unrealized appreciation (depreciation) on investments | 18,302 | |||
Net Assets | $ | 57,656,609 | ||
Net Assets: | ||||
Class I Shares | $ | 6,530,449 | ||
Class II Shares | 2,309,954 | |||
Class III Shares | 38,186,368 | |||
Class VI Shares | 10,629,838 | |||
Total | $ | 57,656,609 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 662,519 | |||
Class II Shares | 236,260 | |||
Class III Shares | 3,866,607 | |||
Class VI Shares | 1,079,728 | |||
Total | 5,845,114 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 9.86 | ||
Class II Shares | $ | 9.78 | ||
Class III Shares | $ | 9.88 | ||
Class VI Shares | $ | 9.84 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 46,372 | ||
Dividend income | 362,755 | |||
Income from securities lending | 48,407 | |||
Total Income | 457,534 | |||
Expenses: | ||||
Investment advisory fees | 288,334 | |||
Fund administration and transfer agent fees | 23,328 | |||
Distribution fees Class II Shares | 3,099 | |||
Distribution fees Class VI Shares | 13,540 | |||
Administrative servicing fees Class I Shares | 6,375 | |||
Administrative servicing fees Class II Shares | 2,085 | |||
Administrative servicing fees Class III Shares | 39,234 | |||
Administrative servicing fees Class VI Shares | 8,165 | |||
Trustee fees | 1,144 | |||
Other | 11,375 | |||
Total expenses before earnings credit | 396,679 | |||
Earnings credt (Note 6) | (413 | ) | ||
Total Expenses | 396,266 | |||
Net Investment Income (Loss) | 61,268 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 408,597 | |||
Net realized gains (losses) on foreign currency transactions | (135,736 | ) | ||
Net realized gains (losses) on investment and foreign currency transactions | 272,861 | |||
Net change in unrealized appreciation/depreciation on investments | (3,359,246 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | (3,086,385 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (3,025,117 | ) | |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 61,268 | $ | (171,456 | ) | |||
Net realized gains (losses) on investment and foreign currency transactions | 272,861 | 5,720,024 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (3,359,246 | ) | (361,551 | ) | ||||
Change in net assets resulting from operations | (3,025,117 | ) | 5,187,017 | |||||
Distributions to Class I shareholders from: | ||||||||
Net realized gains on investments | — | (914,527 | ) | |||||
Distributions to Class II shareholders from: | ||||||||
Net realized gains on investments | — | (290,661 | ) | |||||
Distributions to Class III shareholders from: | ||||||||
Net realized gains on investments | — | (5,019,544 | ) | |||||
Distributions to Class VI shareholders from: | ||||||||
Net realized gain on investment | — | (1,070,723 | ) | |||||
Change in net assets from shareholder distributions | — | (7,295,455 | ) | |||||
Change in net assets from capital transactions | (5,093,348 | ) | 12,061,047 | |||||
Change in net assets | (8,118,465 | ) | 9,952,609 | |||||
Net Assets: | ||||||||
Beginning of period | 65,775,074 | 55,822,465 | ||||||
End of period | $ | 57,656,609 | $ | 65,775,074 | ||||
Accumulated net investment income (loss) | $ | 59,238 | $ | (2,030 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 932,802 | $ | 6,678,056 | ||||
Dividends reinvested | — | 914,527 | ||||||
Cost of shares redeemed | (1,832,907 | ) | (7,596,357 | ) | ||||
(900,105 | ) | (3,774 | ) | |||||
Class II Shares | ||||||||
Proceeds from shares issued | 616 | 2,206 | ||||||
Dividends reinvested | — | 290,661 | ||||||
Cost of shares redeemed | (139,938 | ) | (860,694 | ) | ||||
(139,322 | ) | (567,827 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 4,809,816 | 17,975,705 | ||||||
Dividends reinvested | — | 5,019,540 | ||||||
Cost of shares redeemed | (9,781,465 | ) | (16,113,669 | ) | ||||
(4,971,649 | ) | 6,881,576 | ||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 3,004,386 | 6,539,874 | ||||||
Dividends reinvested | — | 1,070,723 | ||||||
Cost of shares redeemed | (2,086,658 | ) | (1,859,525 | ) | ||||
917,728 | 5,751,072 | |||||||
Change net assets from capital transactions | $ | (5,093,348 | ) | $ | 12,061,047 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL HEALTH SCIENCES FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 89,760 | 615,138 | ||||
Reinvested | — | 87,155 | ||||
Redeemed | (176,298 | ) | (692,995 | ) | ||
(86,538 | ) | 9,298 | ||||
Class II Shares | ||||||
Issued | — | 137 | ||||
Reinvested | — | 27,908 | ||||
Redeemed | (13,663 | ) | (79,268 | ) | ||
(13,663 | ) | (51,223 | ) | |||
Class III Shares | ||||||
Issued | 454,362 | 1,641,409 | ||||
Reinvested | — | 478,035 | ||||
Redeemed | (946,762 | ) | (1,469,052 | ) | ||
(492,400 | ) | 650,392 | ||||
Class VI Shares | ||||||
Issued | 287,577 | 593,542 | ||||
Reinvested | — | 102,298 | ||||
Redeemed | (203,097 | ) | (165,802 | ) | ||
84,480 | 530,038 | |||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Global Health Sciences Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets (a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets (a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 27, 2001(c)(d) | $ | 9.83 | (0.03 | ) | — | 0.39 | 0.36 | (0.02 | ) | — | (0.02 | ) | $ | 10.17 | 3.67% | (g) | $ | 2,549 | 1.24% | (h) | (0.32% | )(h) | 5.51% | (h) | (4.59% | )(h) | 892.96% | |||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 9.51 | (0.02 | ) | 0.01 | (1.31 | ) | (1.32 | ) | — | — | — | $ | 8.19 | (13.88% | )(g) | $ | 370 | 1.22% | (h) | (0.25% | )(h) | (i | ) | (i | ) | 764.93% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.19 | (0.02 | ) | 0.01 | 3.01 | 3.00 | — | (1.23 | ) | (1.23 | ) | $ | 9.96 | 36.69% | $ | 4,434 | 1.24% | (0.36% | ) | (i | ) | (i | ) | 542.89% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.96 | (0.03 | ) | 0.01 | 0.80 | 0.78 | — | (0.05 | ) | (0.05 | ) | $ | 10.69 | 7.86% | $ | 7,910 | 1.26% | (0.28% | ) | (i | ) | (i | ) | 424.94% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.69 | (0.03 | ) | — | 0.92 | 0.89 | — | (1.24 | ) | (1.24 | ) | $ | 10.34 | 8.44% | $ | 7,747 | 1.26% | (0.22% | ) | (i | ) | (i | ) | 366.90% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.34 | 0.01 | — | (0.49 | ) | (0.48 | ) | — | — | — | $ | 9.86 | (4.64% | )(g) | $ | 6,530 | 1.19% | (h) | 0.23% | (h) | (i | ) | (i | ) | 155.06% | ||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(f) | $ | 8.72 | (0.01 | ) | 0.01 | 2.46 | 2.46 | — | (1.23 | ) | (1.23 | ) | $ | 9.95 | 28.27% | (g) | $ | 2,232 | 1.49% | (h) | (0.59% | )(h) | (i | ) | (i | ) | 542.89% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.95 | (0.06 | ) | 0.01 | 0.80 | 0.75 | — | (0.05 | ) | (0.05 | ) | $ | 10.65 | 7.56% | $ | 3,208 | 1.50% | (0.54% | ) | (i | ) | (i | ) | 424.94% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.65 | (0.05 | ) | — | 0.91 | 0.86 | — | (1.24 | ) | (1.24 | ) | $ | 10.27 | 8.19% | $ | 2,567 | 1.51% | (0.47% | ) | (i | ) | (i | ) | 366.90% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.27 | — | — | (0.49 | ) | (0.49 | ) | — | — | — | $ | 9.78 | (4.77% | )(g) | $ | 2,310 | 1.43% | (h) | 0.00% | (h) | (i | ) | (i | ) | 155.06% | ||||||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(d) | $ | 10.17 | — | — | (0.03 | ) | (0.03 | ) | — | — | — | $ | 10.14 | (0.30% | )(g) | $ | 2,540 | 1.35% | (h) | (1.13% | )(h) | 1.35% | (h) | (1.13% | )(h) | 892.96% | ||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.14 | (0.03 | ) | 0.01 | (1.92 | ) | (1.94 | ) | — | — | — | $ | 8.20 | 19.13% | $ | 11,652 | 1.23% | (0.37% | ) | 1.24% | (0.38% | ) | 764.93% | ||||||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.20 | (0.03 | ) | 0.01 | 3.03 | 3.01 | — | (1.23 | ) | (1.23 | ) | $ | 9.98 | 36.77% | $ | 27,026 | 1.22% | (0.39% | ) | (i | ) | (i | ) | 542.89% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.98 | (0.03 | ) | 0.01 | 0.80 | 0.78 | — | (0.05 | ) | (0.05 | ) | $ | 10.71 | 7.84% | $ | 39,723 | 1.26% | (0.29% | ) | (i | ) | (i | ) | 424.94% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.71 | (0.02 | ) | — | 0.91 | 0.89 | — | (1.24 | ) | (1.24 | ) | $ | 10.36 | 8.42% | $ | 45,169 | 1.25% | (0.24% | ) | (i | ) | (i | ) | 366.90% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.36 | 0.01 | — | (0.49 | ) | (0.48 | ) | — | — | — | $ | 9.88 | (4.63% | )(g) | $ | 38,186 | 1.19% | (h) | 0.23% | (h) | (i | ) | (i | ) | 155.06% | ||||||||||||||||||||
Class VI Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(j) | $ | 10.70 | (0.02 | ) | 0.01 | 0.02 | 0.01 | — | — | — | $ | 10.71 | 0.09% | (g) | $ | 4,981 | 1.35% | (h) | (0.36% | )(h) | (i | ) | (i | ) | 424.94% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.71 | (0.03 | ) | — | 0.90 | 0.87 | — | (1.24 | ) | (1.24 | ) | $ | 10.34 | 8.23% | $ | 10,292 | 1.42% | (0.43% | ) | (i | ) | (i | ) | 366.90% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.34 | — | — | (0.50 | ) | (0.50 | ) | — | — | — | $ | 9.84 | (4.84% | )(g) | $ | 10,630 | 1.41% | (h) | 0.04% | (h) | (i | ) | (i | ) | 155.06% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | Class I shares were exchanged into Class III shares effective December 28, 2001. |
(e) | For the period from May 6, 2002 (recommencement of sales to the public) through December 31, 2002. |
(f) | For the period from March 28, 2003 (commencement of operations) through December 31, 2003. |
(g) | Not annualized. |
(h) | Annualized. |
(i) | There were no fee reductions during the period. |
(j) | For the period from April 28, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Global Health Sciences Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
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June 30, 2006 (Unaudited)
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Commercial Paper | Aegis Finance LLC | $ | 497,731 | 5.29% | 07/21/06 | ||||
Master Note — Floating | CDC Financial Product Inc. | 1,000,000 | 5.41% | 07/03/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 1,000,000 | 5.38% | 07/03/06 | |||||
Medium Term Note — Floating | Beta Finance Inc. | 2,500,000 | 5.37% | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 851,799 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$5,843,244 | $ | 5,849,530 |
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||
$64,194,992 | $ | 1,900,225 | $ | (2,577,864 | ) | $ | (677,639 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
$0 up to $500 million | 0.90% | |
$500 million up to $2 billion | 0.85% | |
$2 billion and more | 0.80% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the Goldman Sachs Healthcare Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/-1 percentage point | +/-0.02% | |
+/-2 percentage point | +/-0.04% | |
+/-3 percentage point | +/-0.06% | |
+/-4 percentage point | +/-0.08% | |
+/-5 percentage point | +/-0.10% |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II and Class VI shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II and Class VI shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $48,208 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III and Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III and Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
separate account held the Class III and Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is designed to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III and Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $14,253.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $96,836,835 and sales of $105,197,120.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to approve the investment advisory agreements for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that for the one- and three- year periods ending September 30, 2005, the Fund outperformed its benchmark, the Goldman Sachs Healthcare Index by 54 basis points and 399 basis points, respectively. The Board then discussed with management the Fund’s performance and distribution. Management explained that this is a very volatile sector in which to manage money and, in management’s view, the portfolio manager has made the appropriate defensive moves during this time period.
Next, the Board considered that the contractual advisory fee (including the subadvisory fee) and breakpoints for this Fund placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group and the Fund’s total expenses were 14 basis points above the median for the Lipper Expense Group. The Board noted, however, that the Fund had implemented a performance-based fee structure effective January 1, 2006, and, the base management fee was reduced by 10 basis points immediately upon implementation. Finally, the Board considered that the adviser had reported a loss for investment management services to this Fund during the twelve-month period ended September 30, 2005.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3 c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Nationwide Leaders Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GNL (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Nationwide Leaders Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule of Shareholder Expenses
Expense Analysis of a $1,000 Investment
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Nationwide Leaders Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,048.90 | $ | 5.69 | 1.12% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.25 | $ | 5.62 | 1.12% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,049.70 | $ | 5.49 | 1.08% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.44 | $ | 5.42 | 1.08% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Nationwide Leaders Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 99.6% | |
Cash Equivalents | 0.4% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Top Holdings* | ||
Sherwin-Williams Co. (The) | 6.9% | |
3M Co. | 6.5% | |
Phelps Dodge Corp. | 6.0% | |
Northern Trust Corp. | 5.5% | |
Abbott Laboratories | 4.8% | |
TJX Companies, Inc. | 4.8% | |
Burlington Northern Santa Fe Corp. | 4.7% | |
Alcoa, Inc. | 4.6% | |
Barclays PLC - ADR - GB | 4.6% | |
Franklin Resources, Inc. | 4.5% | |
Other Assets | 47.1% | |
100.0% | ||
Top Industries | ||
Metals | 14.2% | |
Electronics | 9.3% | |
Financial Services | 8.4% | |
Banking | 7.9% | |
Healthcare | 7.7% | |
Coating & Paint | 6.9% | |
Banks | 5.5% | |
Apparel & Accessories | 4.8% | |
Transportation Services | 4.7% | |
Retail | 4.3% | |
Other Assets | 26.3% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE LEADERS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (99.6%) | |||||
Airlines (2.7%) | |||||
U.S. Airways Group Inc. (b) | 12,400 | $ | 626,696 | ||
Apparel & Accessories (4.8%) | |||||
TJX Companies, Inc. | 48,300 | 1,104,138 | |||
Banking (7.9%) | |||||
Barclays PLC — ADR — GB | 23,100 | 1,057,518 | |||
New York Community Bancorp, Inc. | 45,200 | 746,252 | |||
1,803,770 | |||||
Banks (5.5%) | |||||
Northern Trust Corp. | 22,800 | 1,260,840 | |||
Beer, Wine, & Distilled Beverages (3.3%) | |||||
Brown-Forman Corp. | 10,600 | 759,914 | |||
Coating & Paint (6.9%) | |||||
Sherwin-Williams Co. (The) | 33,100 | 1,571,588 | |||
Computer Software & Services (2.5%) | |||||
Microsoft Corp. | 24,500 | 570,850 | |||
Electric & Electronic Equipment (4.0%) | |||||
Hubbell, Inc. | 19,020 | 906,303 | |||
Electronics (9.3%) | |||||
3M Co. | 18,600 | 1,502,322 | |||
Amphenol Corp., Class A | 11,400 | 637,944 | |||
2,140,266 | |||||
Energy (2.1%) | |||||
Valero Energy | 7,400 | 492,248 | |||
Financial Services (8.4%) | |||||
Franklin Resources, Inc. | 11,900 | 1,033,039 | |||
Morgan Stanley | 14,300 | 903,903 | |||
1,936,942 | |||||
Healthcare (7.7%) | |||||
Abbott Laboratories | 25,500 | 1,112,055 | |||
UnitedHealth Group, Inc. | 14,900 | 667,222 | |||
1,779,277 | |||||
Machinery (3.0%) | |||||
Deere & Co. | 8,200 | 684,618 | |||
Metals (14.2%) | |||||
Alcan, Inc. | 17,400 | 816,756 | |||
Alcoa, Inc. | 32,800 | 1,061,408 | |||
Phelps Dodge Corp. | 16,800 | 1,380,288 | |||
3,258,452 | |||||
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
Railroads (3.6%) | ||||||
Norfolk Southern Corp. | 15,700 | $ | 835,554 | |||
Retail (4.3%) | ||||||
Federated Department Stores, Inc. | 27,100 | 991,860 | ||||
Semiconductors (2.0%) | ||||||
Texas Instruments, Inc. | 14,800 | 448,292 | ||||
Tobacco (2.7%) | ||||||
Altria Group, Inc. | 8,500 | 624,155 | ||||
Transportation Services (4.7%) | ||||||
Burlington Northern Santa Fe Corp. | 13,710 | 1,086,518 | ||||
Total Common Stocks | 22,882,281 | |||||
CASH EQUIVALENTS (0.4%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $81,714) | 81,679 | 81,679 | ||||
Total Cash Equivalents | 81,679 | |||||
Total Investments (Cost $22,977,805) (a) — 100.0% | 22,963,960 | |||||
Liabilities in excess of other assets — 0.0% | (5,096 | ) | ||||
NET ASSETS — 100.0% | $ | 22,958,864 | ||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
ADR | American Depository Receipt |
GB | United Kingdom |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE LEADERS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $22,896,126) | $ | 22,882,281 | ||
Repurchase agreements, at cost and value | 81,679 | |||
Total Investments | 22,963,960 | |||
Interest and dividends receivable | 27,896 | |||
Receivable for capital shares issued | 2,985 | |||
Receivable for investments sold | 1,134,802 | |||
Prepaid expenses and other assets | 298 | |||
Total Assets | 24,129,941 | |||
Liabilities: | ||||
Payable for investments purchased | 1,121,811 | |||
Payable for capital shares redeemed | 183 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 45,097 | |||
Fund administration and transfer agent fees | 1,282 | |||
Administrative servicing fees | 741 | |||
Other | 1,963 | |||
Total Liabilities | 1,171,077 | |||
Net Assets | $ | 22,958,864 | ||
Represented by: | ||||
Capital | $ | 21,663,644 | ||
Accumulated net investment income (loss) | 21,624 | |||
Accumulated net realized gains (losses) from investment transactions | 1,287,441 | |||
Net unrealized appreciation (depreciation) on investments | (13,845 | ) | ||
Net Assets | $ | 22,958,864 | ||
Net Assets: | ||||
Class I Shares | $ | 1,961,985 | ||
Class III Shares | 20,996,879 | |||
Total | $ | 22,958,864 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 146,484 | |||
Class III Shares | 1,564,901 | |||
Total | 1,711,385 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 13.39 | ||
Class III Shares | $ | 13.42 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 24,916 | ||
Dividend income | 294,038 | |||
Total Income | 318,954 | |||
Expenses: | ||||
Investment advisory fees | 88,741 | |||
Fund administration and transfer agent fees | 8,713 | |||
Administrative servicing fees Class I Shares | 1,276 | |||
Administrative servicing fees Class III Shares | 13,726 | |||
Trustee fees | 383 | |||
Other | 6,950 | |||
Total expenses before earnings credit | 119,789 | |||
Earnings credit (Note 6) | (50 | ) | ||
Total Expenses | 119,739 | |||
Net Investment Income (Loss) | 199,215 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 1,358,883 | |||
Net change in unrealized appreciation/depreciation on investments | (440,522 | ) | ||
Net realized/unrealized gains (losses) on investments | 918,361 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 1,117,576 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT NATIONWIDE LEADERS FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 199,215 | $ | 228,367 | ||||
Net realized gains (losses) on investment transactions | 1,358,883 | 2,248,197 | ||||||
Net change in unrealized appreciation/depreciation on investments | (440,522 | ) | (404,371 | ) | ||||
Change in net assets resulting from operations | 1,117,576 | 2,072,193 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (12,346 | ) | (17,905 | ) | ||||
Net realized gains on investments | (3,800 | ) | (225,335 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (165,245 | ) | (229,432 | ) | ||||
Net realized gains on investments | (39,502 | ) | (2,871,236 | ) | ||||
Change in net assets from shareholder distributions | (220,893 | ) | (3,343,908 | ) | ||||
Change in net assets from capital transactions | 294,509 | 12,495,504 | ||||||
Change in net assets | 1,191,192 | 11,223,789 | ||||||
Net Assets: | ||||||||
Beginning of period | 21,767,672 | 10,543,883 | ||||||
End of period | $ | 22,958,864 | $ | 21,767,672 | ||||
Accumulated net investment income (loss) | $ | 21,624 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 914,355 | $ | 2,014,916 | ||||
Dividends reinvested | 16,146 | 243,240 | ||||||
Cost of shares redeemed | (541,096 | ) | (1,583,396 | ) | ||||
389,405 | 674,760 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 3,365,099 | 13,944,314 | ||||||
Dividends reinvested | 204,747 | 3,100,665 | ||||||
Cost of shares redeemed | (3,664,742 | ) | (5,224,235 | ) | ||||
(94,896 | ) | 11,820,744 | ||||||
Change net assets from capital transactions | $ | 294,509 | $ | 12,495,504 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 69,419 | 144,264 | ||||||
Reinvested | 1,219 | 18,632 | ||||||
Redeemed | (40,248 | ) | (114,057 | ) | ||||
30,390 | 48,839 | |||||||
Class III Shares | ||||||||
Issued | 252,573 | 1,010,443 | ||||||
Reinvested | 15,387 | 237,418 | ||||||
Redeemed | (273,598 | ) | (374,328 | ) | ||||
(5,638 | ) | 873,533 | ||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Nationwide Leaders Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(c) | $ | 11.20 | 0.03 | 0.02 | (1.75 | ) | (1.70 | ) | (0.06 | ) | — | (0.06 | ) | $ | 9.44 | (15.17% | )(e) | $ | 247 | 1.12% | (f) | 1.03% | (f) | (g | ) | (g | ) | 105.28% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 9.44 | 0.01 | 0.01 | 2.37 | 2.39 | (0.02 | ) | — | (0.02 | ) | $ | 11.81 | 25.38% | $ | 530 | 1.14% | 0.05% | (g | ) | (g | ) | 244.94% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.81 | 0.06 | 0.01 | 2.15 | 2.22 | (0.05 | ) | (0.20 | ) | (0.25 | ) | $ | 13.78 | 18.79% | $ | 927 | 1.19% | 0.55% | (g | ) | (g | ) | 259.37% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 13.78 | 0.15 | — | 1.21 | 1.36 | (0.17 | ) | (2.08 | ) | (2.25 | ) | $ | 12.89 | 10.31% | $ | 1,496 | 1.16% | 1.18% | (g | ) | (g | ) | 483.17% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.89 | 0.09 | — | 0.54 | 0.63 | (0.10 | ) | (0.03 | ) | (0.13 | ) | $ | 13.39 | 4.89% | (e) | $ | 1,962 | 1.12% | (f) | 1.52% | (f) | (g | ) | (g | ) | 252.47% | ||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(d) | $ | 10.00 | — | — | 0.08 | 0.08 | — | — | — | $ | 10.08 | 0.80% | (e) | $ | 1,008 | 1.25% | (f) | (0.16% | )(f) | 20.55% | (f) | (19.46% | )(f) | 0.00% | |||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.08 | 0.04 | 0.02 | (0.64 | ) | (0.58 | ) | (0.06 | ) | — | (0.06 | ) | $ | 9.44 | (5.78% | ) | $ | 8,463 | 1.15% | 0.80% | 1.16% | 0.79% | 105.28% | |||||||||||||||||||||
Year Ended December 31, 2003 | $ | 9.44 | 0.01 | 0.01 | 2.39 | 2.41 | (0.02 | ) | — | (0.02 | ) | $ | 11.83 | 25.59% | $ | 8,801 | 1.13% | 0.16% | (g | ) | (g | ) | 244.94% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.83 | 0.06 | 0.01 | 2.15 | 2.22 | (0.05 | ) | (0.20 | ) | (0.25 | ) | $ | 13.80 | 18.77% | $ | 9,617 | 1.17% | 0.48% | (g | ) | (g | ) | 259.37% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 13.80 | 0.16 | — | 1.20 | 1.36 | (0.17 | ) | (2.08 | ) | (2.25 | ) | $ | 12.91 | 10.30% | $ | 20,271 | 1.16% | 1.26% | (g | ) | (g | ) | 483.17% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.91 | 0.10 | — | 0.54 | 0.64 | (0.10 | ) | (0.03 | ) | (0.13 | ) | $ | 13.42 | 4.97% | (e) | $ | 20,997 | 1.08% | (f) | 1.62% | (f) | (g | ) | (g | ) | 252.47% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | For the period from May 9, 2002 (recommencement of operations) through December 31, 2002. |
(d) | For the period from December 18, 2001 (commencement of operations) through December 31, 2001. Registration of shares effective with the Securities and Exchange Commission on December 31, 2001. On the effective date, the net asset value was $10.08 per share. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Nationwide Leaders Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(d) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,”
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(e) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(f) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(g) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(h) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(i) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(j) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||||||
$ | 23,167,977 | $ | 307,150 | $ | (511,167 | ) | $ | (204,017 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(k) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative service fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on the Fund’s average daily net assets and the following schedule:
Fee Schedule | Fees | |
Up to $500 million | 0.80% | |
$500 million up to $2 billion | 0.70% | |
$2 billion or more | 0.65% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the S&P 500 Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/-1 percentage point | +/-0.02% | |
+/-2 percentage point | +/-0.04% | |
+/-3 percentage point | +/-0.06% | |
+/-4 percentage point | +/-0.08% | |
+/-5 percentage point | +/-0.10% |
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.15% for all classes until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, depending on the fund (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, there were no cumulative potential reimbursements for all classes of shares of the Fund.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $15,444 in Administrative Services Fees from the Fund.
As of June 30, 2006, the adviser or affiliates of the advisers directly held 7% of the shares outstanding of the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading in Class III shares. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $119.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $55,845,680 and sales of $54,380,707.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the S&P 500 Index, for the one- and three-year period ended September 30, 2005 by 1,053 and 183 basis points, respectively. The Board also considered that the Fund ranked in the top quartile of its Lipper Multi-Cap Core Funds category for the one-year period and ranked in the second quartile for the three-year period. Moreover, the Board considered that the Fund outperformed the median of its Lipper category by 833 basis points for the one-year period.
The Board then reviewed the Fund’s contractual advisory fee and breakpoints and noted that the contractual advisory fee placed the Fund in the fourth quintile of its Lipper-constructed Expense Group, while the Fund’s total expenses placed it in the fourth quintile of its Lipper Expense Group. The Board noted, however, that the Fund’s base advisory fee was reduced by 10 basis points upon implementation of a performance-based fee structure on January 1, 2006. The Board then discussed with management the Fund’s relatively high expense ratio. Management explained this was partly a function of the Fund’s low asset level and partly a function of the higher advisory fee management charges for this concentrated Fund. Management proposed to implement an expense cap of 115 basis points and the Board concluded this was reasonable. Finally the Board considered the adviser’s profitability on this Fund, and determined that it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreement for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken,
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken,
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken,
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Emerging Markets Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
7 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statements of Changes in Net Assets | |
10 | Financial Highlights | |
11 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GEM (8/06)
Table of Contents
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Shareholder
Expense Example | Gartmore GVIT Emerging Markets Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Emerging Markets Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,074.30 | $ | 6.69 | 1.30% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.35 | $ | 6.53 | 1.30% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,072.50 | $ | 7.96 | 1.55% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.11 | $ | 7.78 | 1.55% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,073.50 | $ | 6.68 | 1.30% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.35 | $ | 6.53 | 1.30% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,073.80 | $ | 7.20 | 1.40% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.86 | $ | 7.03 | 1.40% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Emerging Markets Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 90.5% | |
Participation Notes | 5.5% | |
Cash Equivalents | 2.1% | |
Rights | 0.0% | |
Other Investments* | 3.5% | |
Liabilities in excess of other assets** | -1.6% | |
100.0% | ||
Top Holdings*** | ||
Hana Financial Group, Inc. | 2.9% | |
Gazprom ADR | 2.6% | |
Companhia Vale do Rio Doce, Class A | 2.5% | |
Petroleo Brasileiro SA ADR | 2.3% | |
Lojas Renner SA | 2.0% | |
Bharti Airtel Ltd. | 2.0% | |
Samsung Electronics | 1.9% | |
America Movil SA de CV ADR | 1.8% | |
Samsung Electronics Co., Ltd. GDR | 1.7% | |
Petroleo Brasileiro SA ADR | 1.6% | |
Other Assets | 78.7% | |
100.0% | ||
Top Industries | ||
Oil & Gas | 14.3% | |
Banking | 11.1% | |
Telecommunications | 8.4% | |
Electronics | 7.5% | |
Retail | 5.7% | |
Financial Services | 5.4% | |
Steel | 4.6% | |
Metals & Mining | 3.8% | |
Building Materials | 2.8% | |
Mining | 2.7% | |
Other Assets | 33.7% | |
100.0% | ||
Top Countries | ||
Korea | 16.7% | |
Brazil | 15.1% | |
Taiwan | 11.6% | |
South Africa | 8.7% | |
Hong Kong | 7.2% | |
Russia | 6.4% | |
Mexico | 6.2% | |
India | 5.6% | |
China | 3.0% | |
Malaysia | 2.9% | |
Other Assets | 16.6% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | ||||
COMMON STOCKS (90.5%) | |||||
ARGENTINA (1.4%) | |||||
Steel (1.4%) | |||||
Ternium SA ADR (b) | 149,400 | $ | 3,610,998 | ||
BRAZIL (15.1%) | |||||
Banking (1.9%) | |||||
Banco Bradesco SA | 82,200 | 2,564,667 | |||
Unibanco GDR | 33,500 | 2,224,065 | |||
4,788,732 | |||||
Brewery (1.0%) | |||||
Ambev Cia Bebid PREF | 6,474,000 | 2,671,079 | |||
2,671,079 | |||||
Insurance (0.7%) | |||||
Porto Seguro SA | 108,100 | 1,847,949 | |||
Metals & Mining (2.5%) | |||||
Companhia Vale do Rio Doce, Class A | 324,172 | 6,605,057 | |||
Oil & Gas (3.9%) | |||||
Petroleo Brasileiro SA ADR | 74,719 | 5,965,565 | |||
Petroleo Brasileiro SA ADR | 48,000 | 4,286,880 | |||
10,252,445 | |||||
Residential (1.0%) | |||||
Rossi Residencial SA | 266,800 | 2,526,982 | |||
Retail (2.0%) | |||||
Lojas Renner SA | 96,500 | 5,127,287 | |||
Steel (1.4%) | |||||
Usinas Siderurgicas de Minais Gerais SA | 102,800 | 3,688,052 | |||
Telecommunications (0.7%) | |||||
Tele Norte Leste Participacoes SA ADR | 136,600 | 1,741,650 | |||
39,249,233 | |||||
CZECH REPUBLIC (1.7%) | |||||
Television (1.7%) | |||||
Central European Media Enterprises Ltd. (b) | 67,200 | 4,246,368 | |||
CHINA (3.0%) | |||||
Building Products (0.9%) | |||||
Anhui Conch Cement Co. Ltd. (c) (d) | 1,448,000 | 2,367,333 | |||
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
CHINA (continued) | |||||
Oil & Gas (2.1%) | |||||
CNOOC Ltd . (c) | 3,200,000 | $ | 2,570,543 | ||
PetroChina Co. Ltd. (c) | 2,734,000 | 2,950,844 | |||
5,521,387 | |||||
7,888,720 | |||||
HONG KONG (7.2%) | |||||
Auto Parts & Equipment (1.1%) | |||||
Dongfeng Motor Corp. (b) (c) (d) | 6,198,000 | 2,902,752 | |||
Diversified Operations (1.3%) | |||||
China Resources Enterprise Ltd. (c) (d) | 1,696,000 | 3,466,386 | |||
Insurance (0.9%) | |||||
China Life Insurance Co. Ltd. (c) | 1,500,000 | 2,376,229 | |||
Oil & Gas (1.3%) | |||||
China Petroleum & Chemical Corp. (c) | 6,020,000 | 3,451,831 | |||
Shipping (1.3%) | |||||
Cosco Pacific Ltd. (c) (d) | 1,462,000 | 3,237,973 | |||
Telecommunications (1.3%) | |||||
China Mobile (Hong Kong) Ltd. (c) (d) | 584,000 | 3,339,786 | |||
18,774,957 | |||||
HUNGARY (0.4%) | |||||
Oil & Gas (0.4%) | |||||
MOL Magyar Olaj-es Gazipari Rt. (c) | 11,300 | 1,162,484 | |||
INDIA (0.1%) | |||||
Beverages (0.1%) | |||||
McDowell & Co. Ltd. GDR (b) (c) | 72,900 | 338,256 | |||
INDONESIA (1.4%) | |||||
Banking (1.4%) | |||||
PT Bank International Indonesia TBK (c) | 180,961,600 | 3,618,777 | |||
ISREAL (1.1%) | |||||
Banking (1.1%) | |||||
Bank Leumi Le-Israel (c) | 768,400 | 2,798,332 | |||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
KAZAKAHSTAN (0.7%) | |||||
Mining (0.7%) | |||||
Kazakhgold Group Ltd. GDR (b) (d) | 90,200 | $ | 1,817,530 | ||
KOREA (16.7%) | |||||
Banking (2.7%) | |||||
Industrial Bank of Korea (c) | 186,100 | 3,130,897 | |||
Kookmin Bank ADR | 45,900 | 3,812,454 | |||
6,943,351 | |||||
Construction (1.1%) | |||||
Hanjin Heavy Industries & Construction Co. Ltd. (c) | 30,400 | 814,394 | |||
Hyundai Development Co. (c) | 48,600 | 2,101,474 | |||
2,915,868 | |||||
Electronics (3.8%) | |||||
KH Vatec Co. Ltd. (b) (c) | 42,487 | 702,062 | |||
Samsung Electronics (c) | 7,827 | 4,969,694 | |||
Samsung Electronics Co. Ltd. GDR | 17,712 | 4,299,588 | |||
9,971,344 | |||||
Financial Services (2.9%) | |||||
Hana Financial Group, Inc. (c) | 163,989 | 7,695,423 | |||
Investment Company (0.5%) | |||||
Macquarie Korea Infrastructure GDR (b) | 172,900 | 1,217,597 | |||
Lighting Products (0.9%) | |||||
Kumho Electric, Inc. (c) | 51,523 | 2,323,672 | |||
Metals (0.9%) | |||||
Korea Zinc Co. Ltd. (c) | 30,300 | 2,376,014 | |||
Oil & Gas (1.6%) | |||||
SK Corp. (c) | 64,570 | 4,153,508 | |||
Retail (1.2%) | |||||
Lotte Shopping Co. Ltd. (b) | 171,206 | 3,283,731 | |||
Tobacco (1.1%) | |||||
KT&G Corp. (c) | 47,888 | 2,796,706 | |||
43,677,214 | |||||
LEBANON (1.4%) | |||||
Telecommunications (1.4%) | |||||
Investcom LLC GDR (b) (d) | 192,500 | 3,692,150 | |||
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
MALAYSIA (2.9%) | |||||
Agriculture (1.5%) | |||||
IOI Corporation Berhad (c) | 1,015,300 | $ | 3,956,239 | ||
Foreign Banking (1.4%) | |||||
Bumiputra Commerce (c) | 2,250,800 | 3,641,441 | |||
7,597,680 | |||||
MEXICO (6.2%) | |||||
Building Materials (1.4%) | |||||
Cemex SA ADR | 64,000 | 3,646,080 | |||
Financial Services (1.2%) | |||||
Grupo Financiero Banorte SA de CV | 1,294,876 | 3,004,565 | |||
Retail (1.1%) | |||||
Wal-Mart de Mexico SA de CV | 1,067,460 | 2,985,441 | |||
Steel (0.7%) | |||||
Industrias CH SA (b) | 721,000 | 1,832,000 | |||
Telecommunications (1.8%) | |||||
America Movil SA de CV ADR | 144,351 | 4,801,114 | |||
16,269,200 | |||||
PERU (1.3%) | |||||
Metals & Mining (1.3%) | |||||
Compania de Minas Buenaventura S.A.U. ADR | 120,800 | 3,295,424 | |||
RUSSIA (6.4%) | |||||
Automobile Manufacturers (0.8%) | |||||
JSC Severstal-Avto (c) | 103,906 | 1,985,918 | |||
Oil & Gas (2.6%) | |||||
Gazprom ADR (c) | 160,549 | 6,751,128 | |||
Retail (0.7%) | |||||
Pyaterochka Holding NV GDR (b) (d) | 116,238 | 1,929,551 | |||
Steel (1.1%) | |||||
Mechel Steel Group OAO ADR | 132,300 | 2,962,197 | |||
Telecommunications (0.0%) | |||||
Mobile TeleSystems | 2,550 | 75,072 | |||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
Utilities (1.2%) | |||||
RAO Unified Energy System GDR | 43,400 | $ | 3,033,660 | ||
16,737,526 | |||||
SOUTH AFRICA (8.7%) | |||||
Banking (1.6%) | |||||
Absa Group Ltd. (c) | 306,165 | 4,273,556 | |||
Brewery (1.0%) | |||||
SABMiller PLC (c) | 138,300 | 2,489,473 | |||
Diversified Operations (1.1%) | |||||
Barloworld Ltd. (c) | 166,157 | 2,806,457 | |||
Mining (1.1%) | |||||
Harmony Gold Mining Co. Ltd. (b) (c) | 184,537 | 2,985,225 | |||
Oil & Gas (1.6%) | |||||
Sasol Ltd. (c) | 106,631 | 4,102,770 | |||
Retail (0.7%) | |||||
Truworths International Ltd. (c) | 581,900 | 1,747,758 | |||
Telecommunications (1.6%) | |||||
MTN Group Ltd. (c) | 581,076 | 4,282,534 | |||
22,687,773 | |||||
TAIWAN (11.6%) | |||||
Banking (0.7%) | |||||
TA Chong Bank Ltd. (b) (c) | 6,572,748 | 1,789,747 | |||
Building Products (1.0%) | |||||
Taiwan Cement Corp. (c) | 3,431,300 | 2,527,103 | |||
Chemicals (0.8%) | |||||
Taiwan Fertilizer Co. Ltd. (c) | 1,317,000 | 2,191,289 | |||
Circuit Boards (0.8%) | |||||
Unimicron Technology Corp. (c) | 1,600,000 | 2,084,780 | |||
Computers (1.3%) | |||||
Asustek Computer, Inc. (c) | 1,023,000 | 2,513,037 | |||
Hon Hai Precision Industry Co. Ltd. (c) | 138,000 | 853,251 | |||
3,366,288 | |||||
Electronics (3.7%) | |||||
Au Optronics Corp. (c) | 1,734,310 | 2,459,341 |
Shares | Value | ||||
COMMON STOCKS (continued) | |||||
TAIWAN (continued) | |||||
Electronics (continued) | |||||
Delta Electronics, Inc. (c) | 1,387,450 | $ | 3,940,245 | ||
MediaTek, Inc. (c) | 342,000 | 3,170,168 | |||
9,569,754 | |||||
Financial Services (1.4%) | |||||
Shin Kong Financial Holding Co. Ltd. (c) | 3,320,000 | 3,657,010 | |||
Semiconductors (1.4%) | |||||
Vanguard International Semiconductor Corp. (c) | 5,289,000 | 3,565,725 | |||
Telecommunications (0.5%) | |||||
Inventec Appliance Corp. (b) (c) | 389,000 | 1,476,461 | |||
30,228,157 | |||||
THAILAND (2.4%) | |||||
Banking (0.7%) | |||||
Phatra Securities Public Co. Ltd. (c) | 1,538,000 | 1,767,865 | |||
Mining (0.9%) | |||||
Banpu Public Co. Ltd. | 657,400 | 2,228,738 | |||
Oil & Gas (0.8%) | |||||
Thai Oil Public Co. Ltd. | 1,270,500 | 2,126,514 | |||
6,123,117 | |||||
TURKEY (0.8%) | |||||
Banking (0.8%) | |||||
Denizbank AS (b) (c) | 30,061 | 265,351 | |||
Turkiye Vakiflar Bankasi | 425,547 | 1,667,757 | |||
1,933,108 | |||||
Total Common Stocks | 235,747,004 | ||||
PARTICIPATION NOTES (5.5%) | |||||
INDIA (5.5%) | |||||
Automotive (0.8%) | |||||
Tata Motors Ltd. 0.00%, 09/14/07 (c) | 118,000 | 2,037,860 | |||
Banking (0.2%) | |||||
ICICI Bank Ltd. 0.00%, 05/10/10 (c) | 60,379 | 640,017 | |||
Building Materials (1.4%) | |||||
India Cements Ltd. 0.00%, 01/06/11 (b) (c) | 1,050,097 | 3,580,831 | |||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares | Value | ||||
PARTICIPATION NOTES (continued) | |||||
INDIA (continued) | |||||
Petrochemicals (1.1%) | |||||
Reliance Industries Ltd. 0.00%, 03/09/09 (c) | 125,903 | 2,899,546 | |||
Telecommunication Services (2.0%) | |||||
Bharti Airtel Ltd. 0.00%, 04/27/07 (c) | 628,177 | $ | 5,049,240 | ||
Total Participation Notes | 14,207,494 | ||||
RIGHTS (0.0%) | |||||
Brewery (0.0%) | |||||
Cia De Bebidas PREF (e) | 2,963 | 0 | |||
Total Rights | 0 | ||||
CASH EQUIVALENTS (2.1%) | |||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $5,392,592) | 5,390,301 | 5,390,301 | |||
Total Cash Equivalents | 5,390,301 | ||||
Shares | Value | |||||
SHORT TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (3.5%) | ||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | 9,158,798 | $ | 9,158,798 | |||
Total Short Term Securities Held as Collateral for Securities on Loan | 9,158,798 | |||||
Total Investments (Cost $251,845,404) (a) — 101.6% | 264,503,597 | |||||
Liabilities in excess of other assets — (1.6%) | (4,191,728 | ) | ||||
NET ASSETS — 100.0% | $ | 260,311,869 | ||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair Valued Security. |
(d) | All of part of the security was on loan as of June 30, 2006. |
(e) | Security has been deemed illiquid. The pricing committee has deemed the security to have zero value based upon procedures adopted by the Board of Trustees. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Long Contracts: | ||||||||||||||
Hong Kong Dollar | 07/03/06 | $ | 1,059,352 | $ | 1,059,832 | $ | 480 | |||||||
Hong Kong Dollar | 07/03/06 | 1,291,247 | 1,291,633 | 386 | ||||||||||
Total Long Contracts | $ | 2,350,599 | $ | 2,351,465 | $ | 866 | ||||||||
Short Contracts: | ||||||||||||||
Turkish Lira | 07/03/06 | $ | (481,358 | ) | $ | (478,035 | ) | $ | 3,323 | |||||
South African Rand | 07/03/06 | (219,752 | ) | (222,683 | ) | (2,931 | ) | |||||||
South African Rand | 07/05/06 | (438,433 | ) | (447,374 | ) | (8,941 | ) | |||||||
South African Rand | 07/06/06 | (383,514 | ) | (383,240 | ) | 274 | ||||||||
Total Short Contracts | $ | (1,523,057 | ) | $ | (1,531,332 | ) | $ | (8,275 | ) |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $246,455,103) | $ | 259,113,296 | |
Repurchase agreements, at cost and value | 5,390,301 | ||
Total Investments | 264,503,597 | ||
Cash | 281,661 | ||
Foreign currencies, at value (cost $2,021,408) | 2,040,498 | ||
Interest and dividends receivable | 590,809 | ||
Receivable for capital shares issued | 996,214 | ||
Receivable for investments sold | 5,685,377 | ||
Reclaims receivable | 2,562 | ||
Prepaid expenses and other assets | 3,553 | ||
Total Assets | 274,104,271 | ||
Liabilities: | |||
Payable for investments purchased | 3,608,805 | ||
Payable for capital shares redeemed | 171,476 | ||
Unrealized depreciation on forward foreign currency contracts | 7,409 | ||
Payable for return of collateral received for securities on loan | 9,158,798 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 791,656 | ||
Fund administration and transfer agent fees | 19,785 | ||
Distribution fees | 11,274 | ||
Administrative servicing fees | 7,655 | ||
Other | 15,544 | ||
Total Liabilities | 13,792,402 | ||
Net Assets | $ | 260,311,869 | |
Represented by: | |||
Capital | $ | 208,829,786 | |
Accumulated net investment income (loss) | 612,636 | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 38,179,214 | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 12,690,233 | ||
Net Assets | $ | 260,311,869 | |
Net Assets: | |||
Class I Shares | $ | 36,211,227 | |
Class II Shares | 7,660,135 | ||
Class III Shares | 168,371,329 | ||
Class VI Shares | 48,069,178 | ||
Total | $ | 260,311,869 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 2,624,127 | ||
Class II Shares | 557,844 | ||
Class III Shares | 12,208,198 | ||
Class VI Shares | 3,486,008 | ||
Total | 18,876,177 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 13.80 | |
Class II Shares | $ | 13.73 | |
Class III Shares | $ | 13.79 | |
Class VI Shares | $ | 13.79 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 115,786 | ||
Dividend income (net of foreign withholding tax of $183,641) | 3,687,669 | |||
Income from securities lending | 58,891 | |||
Total Income | 3,862,346 | |||
Expenses: | ||||
Investment advisory fees | 1,506,669 | |||
Fund administration and transfer agent fees | 104,892 | |||
Distribution fees Class II Shares | 10,716 | |||
Distribution fees Class VI Shares | 61,522 | |||
Administrative servicing fees | 28,309 | |||
Administrative servicing fees | 6,304 | |||
Administrative servicing fees | 138,135 | |||
Trustee fees | 5,071 | |||
Other | 26,204 | |||
Total expenses before earnings credit | 1,887,822 | |||
Earnings credit (Note 7) | (38 | ) | ||
Total Expenses | 1,887,784 | |||
Net Investment Income (Loss) | 1,974,562 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 38,559,086 | |||
Net realized gains (losses) on foreign currency transactions | (210,496 | ) | ||
Net realized gains (losses) on investment and foreign currency transactions | 38,348,590 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (26,145,317 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 12,203,273 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 14,177,835 | ||
See notes to financial statements.
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 1,974,562 | $ | 1,150,654 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 38,348,590 | 18,889,983 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (26,145,317 | ) | 23,959,697 | |||||
Change in net assets resulting from operations | 14,177,835 | 44,000,334 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (189,254 | ) | (149,021 | ) | ||||
Net realized gains on investments | (439,001 | ) | (2,473,842 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (30,315 | ) | (32,376 | ) | ||||
Net realized gains on investments | (94,779 | ) | (689,216 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (913,779 | ) | (550,229 | ) | ||||
Net realized gains on investments | (2,057,003 | ) | (11,874,439 | ) | ||||
Distributions to Class VI shareholders from: | ||||||||
Net investment income | (218,883 | ) | (111,644 | ) | ||||
Net realized gain on investment | (584,008 | ) | (2,814,109 | ) | ||||
Change in net assets from shareholder distributions | (4,527,022 | ) | (18,694,876 | ) | ||||
Change in net assets from capital transactions | 24,682,345 | 96,510,130 | ||||||
Change in net assets | 34,333,158 | 121,815,588 | ||||||
Net Assets: | ||||||||
Beginning of period | 225,978,711 | 104,163,123 | ||||||
End of period | $ | 260,311,869 | $ | 225,978,711 | ||||
Accumulated net investment income (loss) | $ | 612,636 | $ | (9,695 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 17,344,960 | $ | 21,867,808 | ||||
Dividends reinvested | 628,254 | 2,622,858 | ||||||
Cost of shares redeemed | (14,029,166 | ) | (18,427,851 | ) | ||||
3,944,048 | 6,062,815 | |||||||
Class II Shares | ||||||||
Proceeds from shares issued | 2,897 | 43,903 | ||||||
Dividends reinvested | 125,093 | 721,590 | ||||||
Cost of shares redeemed | (1,086,049 | ) | (2,266,981 | ) | ||||
(958,059 | ) | (1,501,488 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 51,010,735 | 75,081,047 | ||||||
Dividends reinvested | 2,970,775 | 12,424,647 | ||||||
Cost of shares redeemed | (43,819,991 | ) | (19,307,911 | ) | ||||
10,161,519 | 68,197,783 | |||||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT EMERGING MARKETS FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
Class VI Shares | ||||||||
Proceeds from shares issued | $ | 23,815,899 | $ | 25,803,740 | ||||
Dividends reinvested | 802,889 | 2,925,748 | ||||||
Cost of shares redeemed | (13,083,951 | ) | (4,978,468 | ) | ||||
11,534,837 | 23,751,020 | |||||||
Change in net assets from capital transactions | $ | 24,682,345 | $ | 96,510,130 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 1,187,075 | 1,823,654 | ||||||
Reinvested | 47,356 | 205,203 | ||||||
Redeemed | (925,445 | ) | (1,586,213 | ) | ||||
308,986 | 442,644 | |||||||
Class II Shares | ||||||||
Issued | 44 | 3,314 | ||||||
Reinvested | 9,505 | 56,852 | ||||||
Redeemed | (76,963 | ) | (193,108 | ) | ||||
(67,414 | ) | (132,942 | ) | |||||
Class III Shares | ||||||||
Issued | 3,455,736 | 6,072,330 | ||||||
Reinvested | 223,921 | 966,301 | ||||||
Redeemed | (3,060,128 | ) | (1,625,529 | ) | ||||
619,529 | 5,413,102 | |||||||
Class VI Shares | ||||||||
Issued | 1,603,308 | 2,116,971 | ||||||
Reinvested | 60,625 | 227,218 | ||||||
Redeemed | (931,543 | ) | (409,016 | ) | ||||
732,390 | 1,935,173 | |||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Emerging Markets Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of (Prior to | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 7.51 | 0.06 | — | (0.45 | ) | (0.39 | ) | (0.04 | ) | — | (0.04 | ) | $ | 7.08 | (5.18% | ) | $ | 15,974 | 1.70% | 0.57% | 2.39% | (0.12% | ) | 140.18% | ||||||||||||||||||||
Year Ended December 31, 2002 | $ | 7.08 | 0.05 | 0.01 | (1.14 | ) | (1.08 | ) | (0.01 | ) | — | (0.01 | ) | $ | 5.99 | (15.23% | ) | $ | 10,005 | 1.43% | 0.63% | (h | ) | (h | ) | 219.84% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 5.99 | 0.09 | 0.01 | 3.80 | 3.90 | (0.05 | ) | — | (0.05 | ) | $ | 9.84 | 65.26% | $ | 16,993 | 1.39% | 1.17% | (h | ) | (h | ) | 133.49% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.84 | 0.13 | 0.01 | 1.89 | 2.03 | (0.11 | ) | (0.93 | ) | (1.04 | ) | $ | 10.83 | 20.74% | $ | 20,280 | 1.47% | 1.08% | (h | ) | (h | ) | 151.18% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.83 | 0.10 | — | 3.38 | 3.48 | (0.07 | ) | (1.16 | ) | (1.23 | ) | $ | 13.08 | 32.64% | $ | 30,292 | 1.46% | 0.89% | (h | ) | (h | ) | 132.22% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 13.08 | 0.10 | — | 0.86 | 0.96 | (0.07 | ) | (0.17 | ) | (0.24 | ) | $ | 13.80 | 7.43% | (f) | $ | 36,211 | 1.30% | (g) | 1.38% | (g) | (h | ) | (h | ) | 73.60% | ||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 7.71 | 0.01 | 0.01 | (1.73 | ) | (1.71 | ) | (0.01 | ) | (0.01 | ) | $ | 5.99 | (22.23% | )(f) | $ | 454 | 1.71% | (g) | 0.44% | (g) | (h | ) | (h | ) | 219.84% | ||||||||||||||||||
Year Ended December 31, 2003 | $ | 5.99 | 0.04 | 0.01 | 3.81 | 3.86 | �� | (0.03 | ) | — | (0.03 | ) | $ | 9.82 | 64.66% | $ | 6,360 | 1.66% | 0.35% | (h | ) | (h | ) | 133.49% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.82 | 0.11 | 0.01 | 1.87 | 1.99 | (0.09 | ) | (0.93 | ) | (1.02 | ) | $ | 10.79 | 20.44% | $ | 8,178 | 1.72% | 0.87% | (h | ) | (h | ) | 151.18% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.79 | 0.07 | — | 3.37 | 3.44 | (0.05 | ) | (1.16 | ) | (1.21 | ) | $ | 13.02 | 32.33% | $ | 8,141 | 1.71% | 0.61% | (h | ) | (h | ) | 132.22% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 13.02 | 0.08 | — | 0.85 | 0.93 | (0.05 | ) | (0.17 | ) | (0.22 | ) | $ | 13.73 | 7.25% | (f) | $ | 7,660 | 1.55% | (g) | 1.15% | (g) | (h | ) | (h | ) | 73.60% | ||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(e) | $ | 7.90 | 0.01 | 0.01 | (1.91 | ) | (1.89 | ) | (0.02 | ) | — | (0.02 | ) | $ | 5.99 | (23.99% | )(f) | $ | 11,435 | 1.39% | (g) | 0.61% | (g) | (h | ) | (h | ) | 219.84% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 5.99 | 0.06 | 0.01 | 3.82 | 3.89 | (0.04 | ) | — | (0.04 | ) | $ | 9.84 | 65.22% | $ | 46,902 | 1.42% | 0.89% | (h | ) | (h | ) | 133.49% | ||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.84 | 0.12 | 0.01 | 1.90 | 2.03 | (0.11 | ) | (0.93 | ) | (1.04 | ) | $ | 10.83 | 20.76% | $ | 66,844 | 1.48% | 1.08% | (h | ) | (h | ) | 151.18% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.83 | 0.08 | — | 3.40 | 3.48 | (0.07 | ) | (1.16 | ) | (1.23 | ) | $ | 13.08 | 32.65% | $ | 151,546 | 1.45% | 0.75% | (h | ) | (h | ) | 132.22% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 13.08 | 0.10 | — | 0.85 | 0.95 | (0.07 | ) | (0.17 | ) | (0.24 | ) | $ | 13.79 | 7.35% | (f) | $ | 168,371 | 1.30% | (g) | 1.41% | (g) | (h | ) | (h | ) | 73.60% | ||||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(i) | $ | 10.11 | 0.05 | 0.01 | 1.62 | 1.68 | (0.10 | ) | (0.86 | ) | (0.96 | ) | $ | 10.83 | 16.70% | (f) | $ | 8,862 | 1.68% | (g) | 0.97% | (g) | (h | ) | (h | ) | 151.18% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.83 | 0.07 | — | 3.40 | 3.47 | (0.07 | ) | (1.16 | ) | (1.23 | ) | $ | 13.07 | 32.49% | $ | 36,000 | 1.55% | 0.59% | (h | ) | (h | ) | 132.22% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 13.07 | 0.09 | — | 0.86 | 0.95 | (0.06 | ) | (0.17 | ) | (0.23 | ) | $ | 13.79 | 7.38% | (f) | $ | 48,069 | 1.40% | (g) | 1.30% | (g) | (h | ) | (h | ) | 73.60% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from March 4, 2002 (commencement of operations) through December 31, 2002. |
(e) | For the period from May 2, 2002 (commencement of operations) through December 31, 2002. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
(i) | For the period from April 28, 2004 (commencement of operations) December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Emerging Markets Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Bank Note — Floating Rate | Bankof America | $ | 300,000 | 5.31 | % | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 995,462 | 5.29 | % | 07/21/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 250,000 | 5.41 | % | 07/03/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 1,000,000 | 5.38 | % | 07/03/06 | |||||
Medium Term Note — Floating | Unicredito Italiano Bank (IRE) PLC | 1,100,000 | 5.16 | % | 07/10/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 5,513,336 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$8,919,233 | $ | 9,158,798 |
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants (“AICPA”) Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation | |||
$252,371,728 | $26,082,008 | $(13,950,139) | $12,131,869 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Global Asset Management Trust (“GGAMT”) manages the investment of the assets and supervises the daily business affairs of the Fund. GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GGAMT provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GGAMT advises. Gartmore Global Partners (the “subadviser”), an affiliate of GGAMT, manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays the Fund’s adviser an investment advisory fee based on the Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, the adviser pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GGAMT and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
Up to $500 million | 1.05% | 0.525% | 0.525% | |||||
Next $1.5 billion | 1.00% | 0.500% | 0.500% | |||||
Next $2 billion or more | 0.95% | 0.475% | 0.475% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the MSCI Emerging Markets Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
GGAMT and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.40% for all classes until at least May 1, 2007.
GGAMT may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GGAMT, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GGAMT is not permitted.
As of the six months ended June 30, 2006, there were no cumulative potential reimbursements for all classes of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GGAMT.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II and Class VI shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II and Class VI shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $178,425 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III and Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III and Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III and Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is designed to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III and Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $77,854.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $225,280,174 and sales of $201,868,470.
6. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging market instruments that are subject to certain additional credit and market risks. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
7. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the MSCI Emerging Markets Index, for the one-, three-, and five-year periods ended September 30, 2005. The Board also considered that the Fund ranked in the top quartile of the Lipper Emerging Markets Funds category for the three-year period, and had underperformed the median of the category by 274 basis points for the one-year period. The Board discussed with management the Fund’s performance history, noting that the Fund had been under close review for the past year. The Board considered management’s efforts to reduce the Fund’s performance volatility and management’s ongoing internal discussions with respect to adding personnel to the management team for the Fund. The Board also noted that the Fund’s absolute performance has been good. The Board directed the Performance Committee to continue to closely monitor the performance of the Fund.
Next, the Board reviewed and considered the Fund’s contractual advisory fee (including the subadvisory fee) and breakpoints and noted the contractual advisory fee placed the Fund in the third quintile of the Fund’s Lipper-constructed Expense Group.
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Supplemental Information (Continued)
June 30, 2006 (Unaudited)
The Board also considered that the Fund’s total expenses placed the Fund below the median for the Fund’s Lipper Expense Group. Moreover, the Board noted that, effective January 1, 2006, the Fund implemented a performance-based fee structure, which resulted in a 10 basis point reduction in the base management fee immediately upon implementation of the new fee structure.
Additionally, the Board noted that Gartmore manages a single institutional account in a similar style to that of the Fund of which Gartmore receives a lower management fee. Gartmore explained that the reason for this is that Gartmore serves as a subadvisor on this Fund and therefore has no management responsibilities beyond pure asset management. The Board considered the fee structure and the additional services and responsibilities for serving as investment adviser to the Fund. Finally, the Board reviewed the adviser’s profitability with respect to managing the Fund and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Board approve a new Subadvisory agreement with newly-unaffiliated GGP, in reliance upon the Manager of Managers Exemptive order the Funds have obtained from the SEC to take effect immediately upon the closing of the U.K. Sale to ensure continued provision of Subadvisory services by GGP to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale: (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of affiliated GGP at this time; (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies used by affiliated GGP now; and (3) the Subadvisory fees paid to unaffiliated GGP will be the same as those currently paid to affiliated GGP. At the time the Board selected and approved the adviser to the Fund, Board considered, among other factors, the advisory fee compared to a peer group of funds, the extent to which economies of scale would be realized as the Fund grows, and whether the advisory fee levels reflect these economies of scale for the benefit of Fund shareholders. Since the adviser will pay the sub-adviser from the fees paid by the Fund to the adviser, and since the fees and expenses for the Fund will not change as a result of the change to the sub-adviser, the Board did not further consider these factors. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the continuation of affiliated GGP’s subadvisory agreement with new unaffiliated GGP, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT International Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
6 | Statement of Operations | |
7 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIG (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT International Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT International Growth Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,102.70 | $ | 6.26 | 1.20% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.85 | $ | 6.02 | 1.20% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,102.80 | $ | 6.05 | 1.16% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.05 | $ | 5.82 | 1.16% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT International Growth Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 96.0% | |
Cash Equivalents | 4.3% | |
Liabilities in excess of other assets | -0.3% | |
100.0% | ||
Top Holdings* | ||
Lloyds TSB Group PLC | 2.2% | |
Canon, Inc. | 2.1% | |
Societe Generale | 2.1% | |
Mizuho Financial Group, Inc. | 2.1% | |
Puma AG | 2.0% | |
Pennon Group PLC | 2.0% | |
UniCredito Italiano SPA | 2.0% | |
Suncor Energy, Inc. | 2.0% | |
Suzuki Motor Corp. | 2.0% | |
Rolls-Royce Group PLC | 2.0% | |
Other Assets | �� | 79.5% |
100.0% | ||
Top Industries | ||
Financial Services | 11.1% | |
Banking | 10.6% | |
Oil & Gas | 8.8% | |
Mining | 5.6% | |
Automotive | 4.8% | |
Pharmaceuticals | 4.6% | |
Electronics | 3.9% | |
Retail | 3.1% | |
Insurance | 3.1% | |
Metals | 2.8% | |
Other Assets | 41.6% | |
100.0% | ||
Top Countries | ||
United Kingdom | 26.5% | |
Japan | 22.1% | |
France | 10.8% | |
Germany | 6.7% | |
Canada | 6.5% | |
Italy | 4.3% | |
Norway | 3.3% | |
South Korea | 2.5% | |
Australia | 1.9% | |
Argentina | 1.8% | |
Other Assets | 13.6% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (96.0%) | |||||
ARGENTINA (1.8%) | |||||
Steel (1.8%) | |||||
Tenaris SA (c) | 60,410 | $ | 1,212,427 | ||
AUSTRALIA (1.9%) | |||||
Pharmaceuticals (1.9%) | |||||
CSL Ltd. (c) | 32,080 | 1,278,968 | |||
BRAZIL (0.5%) | |||||
Banking (0.5%) | |||||
Banco Bradesco SA ADR | 10,900 | 338,881 | |||
CANADA (6.5%) | |||||
Aluminum (1.6%) | |||||
Alcan, Inc. | 22,650 | 1,063,191 | |||
Mining (2.9%) | |||||
Hudbay Minerals, Inc. (b) | 82,100 | 1,044,642 | |||
Inco Ltd. | 14,719 | 969,982 | |||
2,014,624 | |||||
Oil & Gas (2.0%) | |||||
Suncor Energy, Inc. | 16,891 | 1,367,323 | |||
4,445,138 | |||||
FINLAND (0.9%) | |||||
Telecommunications (0.9%) | |||||
Nokia Oyj (c) | 31,700 | 642,572 | |||
FRANCE (10.8%) | |||||
Banking (3.3%) | |||||
BNP Paribas SA (c) | 8,440 | 806,976 | |||
Societe Generale (c) | 9,800 | 1,438,731 | |||
2,245,707 | |||||
Diversified Operations (1.7%) | |||||
LVMH Moet Hennessy SA (c) | 11,393 | 1,129,104 | |||
Engineering (1.4%) | |||||
Alstom SA (b) (c) | 10,410 | 951,463 | |||
Food Products & Services (1.5%) | |||||
Groupe Danone (c) | 8,340 | 1,058,912 | |||
Oil & Gas (1.9%) | |||||
Total SA (c) | 19,400 | 1,274,275 | |||
Utilities (1.0%) | |||||
Suez SA (c) | 16,880 | 700,912 | |||
7,360,373 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
GERMANY (6.7%) | |||||
Automotive (1.0%) | |||||
Bayerische Motoren Werke AG (c) | 13,300 | $ | 663,189 | ||
Consumer Goods (2.0%) | |||||
Puma AG (c) | 3,660 | 1,421,922 | |||
Electric (1.0%) | |||||
E.ON AG (c) | 5,800 | 666,490 | |||
Machinery (1.7%) | |||||
MAN AG (c) | 16,500 | 1,194,080 | |||
Pharmaceuticals (1.0%) | |||||
Merck KGAA (b) (c) | 7,200 | 654,418 | |||
4,600,099 | |||||
IRELAND (1.7%) | |||||
Beverages (1.7%) | |||||
C&C Group PLC (c) | 136,900 | 1,187,942 | |||
ITALY (4.3%) | |||||
Banking (4.3%) | |||||
Capitalia SpA (c) | 118,400 | 969,718 | |||
Mediobanca SpA (c) | 31,750 | 621,019 | |||
UniCredito Italiano SpA (c) | 175,450 | 1,372,053 | |||
2,962,790 | |||||
JAPAN (22.1%) | |||||
Automotive (3.8%) | |||||
Suzuki Motor Corp. (c) | 61,200 | 1,324,593 | |||
Toyota Motor Corp. (c) | 23,300 | 1,217,971 | |||
2,542,564 | |||||
Chemicals (1.2%) | |||||
Shin-Etsu Chemical Co. Ltd. (c) | 15,500 | 843,202 | |||
Electronics (2.1%) | |||||
Canon, Inc. (c) | 29,400 | 1,441,125 | |||
Financial Services (8.2%) | |||||
Credit Saison Co. Ltd. (c) | 26,300 | 1,246,339 | |||
Mitsubishi UFJ Financial Group, Inc. (c) | 87 | 1,219,774 | |||
Mizuho Financial Group, Inc. (c) | 162 | 1,374,139 | |||
Orix Corp. (c) | 2,680 | 654,066 | |||
Sumitomo Mitsui Financial Group, Inc. (c) | 100 | 1,059,168 | |||
5,553,486 | |||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Real Estate (1.8%) | |||||
Mitsui Fudosan Co. Ltd. (c) | 55,000 | $ | 1,195,516 | ||
Retail (1.6%) | |||||
Citizen Watch Co. Ltd. (c) | 122,600 | 1,109,648 | |||
Textile Products (1.9%) | |||||
Toray Industries, Inc. (c) | 150,000 | 1,301,981 | |||
Tobacco (1.5%) | |||||
Japan Tobacco, Inc. (c) | 287 | 1,048,305 | |||
15,035,827 | |||||
MEXICO (0.7%) | |||||
Financial Services (0.7%) | |||||
Grupo Financiero Banorte SA de CV | 214,900 | 498,643 | |||
NORWAY (3.3%) | |||||
Oil & Gas (3.3%) | |||||
Norsk Hydro ASA (c) | 42,600 | 1,130,336 | |||
Statoil ASA (c) | 40,450 | 1,153,550 | |||
2,283,886 | |||||
SOUTH AFRICA (1.6%) | |||||
Oil & Gas (1.6%) | |||||
Sasol Ltd. (c) | 28,100 | 1,081,185 | |||
SOUTH KOREA (2.5%) | |||||
Banking (0.7%) | |||||
Kookmin Bank ADR | 5,750 | 477,595 | |||
Electronics (1.8%) | |||||
Hynix Semiconductor, Inc. (b) (c) | 18,220 | 589,105 | |||
Samsung Electronics Co. Ltd. GDR (c) | 2,040 | 641,580 | |||
1,230,685 | |||||
1,708,280 | |||||
SPAIN (1.2%) | |||||
Telecommunications (1.2%) | |||||
Telefonica SA (c) | 48,400 | 804,443 | |||
SWEDEN (1.6%) | |||||
Metal Processors & Fabrication (1.6%) | |||||
Assa Abloy AB, Class B (c) | 63,100 | 1,061,515 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITZERLAND (1.4%) | |||||
Engineering (1.4%) | |||||
ABB Ltd. (c) | 74,700 | $ | 970,184 | ||
UNITED KINGDOM (26.5%) | |||||
Aerospace & Defense (2.0%) | |||||
Rolls-Royce Group PLC (c) | 173,170 | 1,324,314 | |||
Rolls-Royce Group PLC, B Shares | 10,734,176 | 20,046 | |||
1,344,360 | |||||
Apparel Manufacturers (1.4%) | |||||
Burberry Group PLC (c) | 130,100 | 1,033,311 | |||
Banking (1.5%) | |||||
Barclays PLC (c) | 87,400 | 990,684 | |||
Building & Construction (1.2%) | |||||
CRH PLC (c) | 24,900 | 811,190 | |||
Electricity—Generation (1.3%) | |||||
Scottish Power PLC (c) | 81,400 | 876,756 | |||
Financial Services (2.2%) | |||||
Lloyds TSB Group PLC (c) | 154,170 | 1,510,098 | |||
Insurance (3.1%) | |||||
Legal & General Group PLC (c) | 378,150 | 894,976 | |||
Prudential PLC (c) | 107,200 | 1,212,079 | |||
2,107,055 | |||||
Metals (2.9%) | |||||
Corus Group PLC (c) | 153,816 | 1,294,860 | |||
Vedanta Resources PLC (c) | 26,740 | 678,110 | |||
1,972,970 | |||||
Mining (2.7%) | |||||
Antofagasta PLC (c) | 151,500 | 1,172,776 | |||
Xstrata PLC (c) | 17,800 | 677,435 | |||
1,850,211 | |||||
Pharmaceuticals (1.7%) | |||||
AstraZeneca PLC (c) | 19,250 | 1,157,400 | |||
Retail (1.5%) | |||||
DSG International PLC (c) | 289,600 | 1,021,585 | |||
Transportation (1.2%) | |||||
British Airways PLC (b) (c) | 131,530 | 833,149 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL GROWTH FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||||
COMMON STOCKS (continued) | |||||||
UNITED KINGDOM (continued) | |||||||
Utilities (1.8%) | |||||||
International Power PLC (c) | 235,910 | $ | 1,238,902 | ||||
Water & Sewerage Services (2.0%) | |||||||
Pennon Group PLC (c) | 55,739 | 1,373,863 | |||||
18,121,534 | |||||||
Total Common Stocks | 65,594,687 | ||||||
CASH EQUIVALENTS (4.3%) | |||||||
Investments in repurchase agreements | $ | 2,958,060 | 2,958,060 | ||||
(Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $2,959,317) | |||||||
Total Cash Equivalents | 2,958,060 | ||||||
Total Investments (Cost $64,535,863) (a) — 100.3% | 68,552,747 | ||||||
Liabilities in excess of other assets — (0.3%) | (203,910 | ) | |||||
NET ASSETS — 100.0% | $ | 68,348,837 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair Valued Security. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Short Contracts: | ||||||||||||||
Japanese Yen | 07/03/06 | $ | (288,976 | ) | $ | (293,960 | ) | $ | (4,984 | ) | ||||
Swiss Franc | 07/03/06 | (612,952 | ) | (625,914 | ) | (12,962 | ) | |||||||
Total Short Contracts | $ | (901,928 | ) | $ | (919,874 | ) | $ | (17,946 | ) | |||||
Long Contracts: | ||||||||||||||
Euro | 07/03/06 | $ | 815,121 | $ | 831,494 | $ | 16,373 | |||||||
British Sterling Pound | 07/03/06 | 822,538 | 838,046 | 15,508 | ||||||||||
Total Long Contracts | $ | 1,637,659 | $ | 1,669,540 | $ | 31,881 |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $61,577,803) | $ | 65,594,687 | ||
Repurchase agreements, at cost and value | 2,958,060 | |||
Total Investments | 68,552,747 | |||
Foreign currencies, at value (cost $161,181) | 159,667 | |||
Interest and dividends receivable | 40,684 | |||
Receivable for capital shares issued | 144,553 | |||
Receivable for investments sold | 2,697,566 | |||
Unrealized appreciation on forward foreign currency contracts | 13,935 | |||
Receivable for variation margin on futures contracts | 580 | |||
Reclaims receivable | 18,084 | |||
Prepaid expenses and other assets | 1,424 | |||
Total Assets | 71,629,240 | |||
Liabilities: | ||||
Payable to custodian | 14,208 | |||
Payable for investments purchased | 3,060,538 | |||
Payable for capital chares redeemed | 38,869 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 157,157 | |||
Fund administration and transfer agent fees | 6,261 | |||
Administrative servicing fees | 2,991 | |||
Other | 379 | |||
Total Liabilities | 3,280,403 | |||
Net Assets | $ | 68,348,837 | ||
Represented by: | ||||
Capital | $ | 58,127,815 | ||
Accumulated net investment income (loss) | (382,918 | ) | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 6,584,649 | |||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 4,019,291 | |||
Net Assets | $ | 68,348,837 | ||
Net Assets: | ||||
Class I Shares | $ | 10,532,999 | ||
Class III Shares | 57,815,838 | |||
Total | $ | 68,348,837 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 1,052,036 | |||
Class III Shares | 5,769,348 | |||
Total | 6,821,384 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 10.01 | ||
Class III Shares | $ | 10.02 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 19,445 | ||
Dividend income (net of foreign withholding tax of $66,123) | 781,227 | |||
Income from securities lending | 12,397 | |||
Total Income | 813,069 | |||
Expenses: | ||||
Investment advisory fees | 285,539 | |||
Fund administration and transfer agent fees | 29,086 | |||
Administrative servicing fees | 7,095 | |||
Administrative servicing fees | 38,958 | |||
Trustee fees | 1,080 | |||
Other | 8,114 | |||
Total expenses before earnings credit | 369,872 | |||
Earnings credt (Note 6) | (19 | ) | ||
Total Expenses | 369,853 | |||
Net Investment Income (Loss) | 443,216 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 6,641,111 | |||
Net realized gains (losses) on foreign currency transactions | 6,290 | |||
Net realized gains (losses) on investment and foreign currency transactions | 6,647,401 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (2,768,866 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 3,878,535 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,321,751 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL GROWTH FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 443,216 | $ | 144,160 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 6,647,401 | 2,395,838 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (2,768,866 | ) | 4,984,509 | |||||
Change in net assets resulting from operations | 4,321,751 | 7,524,507 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (95,996 | ) | (47,136 | ) | ||||
Net realized gains on investments | (20,316 | ) | (14,114 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (663,102 | ) | (198,962 | ) | ||||
Net realized gains on investments | (139,839 | ) | (83,756 | ) | ||||
Change in net assets from shareholder distributions | (919,253 | ) | (343,968 | ) | ||||
Change in net assets from capital transactions | 20,997,711 | 21,098,128 | ||||||
Change in net assets | 24,400,209 | 28,278,667 | ||||||
Net Assets: | ||||||||
Beginning of period | 43,948,628 | 15,669,961 | ||||||
End of period | $ | 68,348,837 | $ | 43,948,628 | ||||
Accumulated net investment income (loss) | $ | (382,918 | ) | $ | (67,036 | ) | ||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 6,778,573 | $ | 4,142,481 | ||||
Dividends reinvested | 116,310 | 61,250 | ||||||
Cost of shares redeemed | (3,274,737 | ) | (2,694,730 | ) | ||||
3,620,146 | 1,509,001 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 27,303,067 | 23,658,363 | ||||||
Dividends reinvested | 802,936 | 282,717 | ||||||
Cost of shares redeemed | (10,728,438 | ) | (4,351,953 | ) | ||||
17,377,565 | 19,589,127 | |||||||
Change in net assets from capital transactions | $ | 20,997,711 | $ | 21,098,128 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 685,011 | 522,043 | ||||||
Reinvested | 11,875 | 7,530 | ||||||
Redeemed | (329,223 | ) | (354,599 | ) | ||||
367,663 | 174,974 | |||||||
Class III Shares | ||||||||
Issued | 2,714,331 | 2,939,595 | ||||||
Reinvested | 81,924 | 33,696 | ||||||
Redeemed | (1,111,138 | ) | (566,719 | ) | ||||
1,685,117 | 2,406,572 | |||||||
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT International Growth Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average | Portfolio Turnover(b) | |||||||||||||||||||||||||||||||
Class I Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001(c) | $ | 8.62 | 0.01 | — | (2.47 | ) | (2.46 | ) | (0.02 | ) | (0.02 | ) | $ | 6.14 | (28.65% | ) | $ | 9,448 | 1.58% | 0.05% | 2.69% | (1.06% | ) | 245.96% | ||||||||||||||||||||||
Year Ended December 31, 2002 | $ | 6.14 | 0.01 | 0.01 | (1.50 | ) | (1.48 | ) | — | — | — | $ | 4.66 | (24.10% | ) | $ | 6,859 | 1.29% | 0.53% | 1.33% | 0.49% | 257.38% | ||||||||||||||||||||||||
Year Ended December 31, 2003 | $ | 4.66 | 0.07 | — | 1.59 | 1.66 | — | — | — | $ | 6.32 | 35.62% | $ | 3,678 | 1.25% | 0.83% | (g | ) | (g | ) | 331.02% | |||||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 6.32 | 0.07 | — | 0.83 | 0.90 | (0.06 | ) | — | (0.06 | ) | $ | 7.16 | 14.19% | $ | 3,647 | 1.33% | 0.98% | (g | ) | (g | ) | 262.03% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 7.16 | 0.07 | — | 2.08 | 2.15 | (0.08 | ) | (0.02 | ) | (0.10 | ) | $ | 9.21 | 30.21% | $ | 6,302 | 1.34% | 0.94% | (g | ) | (g | ) | 215.52% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 9.21 | 0.08 | — | 0.86 | 0.94 | (0.12 | ) | (0.02 | ) | (0.14 | ) | $ | 10.01 | 10.27% | (e) | $ | 10,533 | 1.20% | (f) | 1.27% | (f) | (g | ) | (g | ) | 100.59% | |||||||||||||||||||
Class III Shares | ||||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(d) | $ | 5.95 | (0.01 | ) | 0.01 | (1.28 | ) | (1.28 | ) | — | — | — | $ | 4.67 | (21.51% | )(e) | $ | 2,232 | 1.32% | (f) | 0.08% | (f) | (g | ) | (g | ) | 257.38% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 4.67 | 0.02 | — | 1.63 | 1.65 | — | — | — | $ | 6.32 | 35.33% | $ | 6,912 | 1.33% | 0.24% | (g | ) | (g | ) | 331.02% | |||||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 6.32 | 0.05 | — | 0.86 | 0.91 | (0.06 | ) | — | (0.06 | ) | $ | 7.17 | 14.35% | $ | 12,023 | 1.35% | 0.98% | (g | ) | (g | ) | 262.03% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 7.17 | 0.06 | — | 2.09 | 2.15 | (0.08 | ) | (0.02 | ) | (0.10 | ) | $ | 9.22 | 30.17% | $ | 37,647 | 1.33% | 0.54% | (g | ) | (g | ) | 215.52% | ||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 9.22 | 0.07 | — | 0.87 | 0.94 | (0.12 | ) | (0.02 | ) | (0.14 | ) | $ | 10.02 | 10.28% | (e) | $ | 57,816 | 1.16% | (f) | 1.41% | (f) | (g | ) | (g | ) | 100.59% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | The existing shares of the Fund were designated Class I shares as of May 1, 2001. |
(d) | For the period from May 2, 2002 (commencement of operations) through December 31, 2002. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT International Growth Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with
the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized | Unrealized | Net Unrealized | |||
$65,191,100 | $5,739,355 | $(2,377,708) | $3,361,647 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Global Asset Management Trust (“GGAMT”) manages the investment of the assets and supervises the daily business affairs of the Fund. GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GGAMT provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GGAMT advises. Gartmore Global Partners (the “subadviser”), an affiliate of GGAMT, manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays GGAMT an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GGAMT pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GGAMT and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | ||||||
Up to $500 million | 0.90 | % | 0.450 | % | 0.450 | % | |||
$500 million up to $2 billion | 0.85 | % | 0.425 | % | 0.425 | % | |||
$2 billion or more | 0.80 | % | 0.400 | % | 0.400 | % |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the MSCI All Country World ex U.S. Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
GGAMT and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.25% for all classes until at least May 1, 2007.
GGAMT may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GGAMT, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GGAMT is not permitted.
As of the six months ended June 30, 2006, there were no cumulative potential reimbursements for all classes of the Fund.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $47,740 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is designed to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $27,263.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $80,715,712 and sales of $62,551,947.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the MSCI All Country World ex U.S. Index, for the one-year period ended September 30, 2005 while underperforming the benchmark for the three- and five-year periods. The Board also considered that the Fund ranked in the top quartile of the Lipper International Multi-Cap Core Funds category for the one- and three-year periods and outperformed the median of this Lipper category by 896 basis points over the one-year period. The Board then discussed with management the challenges to asset growth for the Fund despite its good performance. Management explained that Fund had just reached the five year mark for its Morningstar rating and the level of volatility in its performance had affected this Morningstar rating. Therefore, management had been working with the portfolio manager in seeking to reduce the Fund’s volatility.
Next, the Board reviewed the Fund’s contractual advisory fee and breakpoints and considered that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group. The Fund’s total expenses placed the Fund below the median of the Lipper Expense Group. Moreover, the Board considered that the Fund had implemented a
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Supplemental Information (Continued)
June 30, 2006 (Unaudited)
performance-based fee structure effective January 1, 2006 and reduced the base management fee by 10 basis points on that date. Finally, the Board reviewed the adviser’s profitability in light of all of these factors and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Board approve a new Subadvisory agreement with newly-unaffiliated GGP, in reliance upon the Manager of Managers Exemptive order the Funds have obtained from the SEC to take effect immediately upon the closing of the U.K. Sale to ensure continued provision of Subadvisory services by GGP to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale: (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of affiliated GGP at this time; (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies used by affiliated GGP now; and (3) the Subadvisory fees paid to unaffiliated GGP will be the same as those currently paid to affiliated GGP. At the time the Board selected and approved the adviser to the Fund, Board considered, among other factors, the advisory fee compared to a peer group of funds, the extent to which economies of scale would be realized as the Fund grows, and whether the advisory fee levels reflect these economies of scale for the benefit of Fund shareholders. Since the adviser will pay the sub-adviser from the fees paid by the Fund to the adviser, and since the fees and expenses for the Fund will not change as a result of the change to the sub-adviser, the Board did not further consider these factors. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the continuation of affiliated GGP’s subadvisory agreement with new unaffiliated GGP, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
17
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
18
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
19
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
20
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
21
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
22
Table of Contents
GVIT International Value Fund
(formerly Dreyfus GVIT International Value Fund)
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
8 | Statement of Assets and Liabilities | |
8 | Statement of Operations | |
9 | Statements of Changes in Net Assets | |
11 | Financial Highlights | |
12 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIV (8/06)
Table of Contents
Shareholder
Expense Example | GVIT International Value Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
GVIT International Value Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,094.90 | $ | 5.25 | 1.01% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.07 | 1.01% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,093.90 | $ | 6.54 | 1.26% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.33 | 1.26% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,095.80 | $ | 5.25 | 1.01% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.07 | 1.01% | ||||||
Class IV | Actual | $ | 1,000.00 | $ | 1,095.60 | $ | 5.25 | 1.01% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.07 | 1.01% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,094.30 | $ | 6.54 | 1.26% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.55 | $ | 6.33 | 1.26% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | GVIT International Value Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 95.1% | |
Cash Equivalents | 2.8% | |
Other Investments* | 14.3% | |
Liabilities in excess of other assets** | -12.2 % | |
100.0% | ||
Top Holdings*** | ||
GlaxoSmithKline PLC | 1.9% | |
Nestle SA | 1.6% | |
Deutsche Post AG | 1.6% | |
Total SA | 1.6% | |
Royal Bank of Scotland Group PLC | 1.6% | |
France Telecom SA | 1.5% | |
Siemens AG | 1.5% | |
Fuji Photo Film Co. Ltd. | 1.5% | |
Nippon Express Co. Ltd. | 1.5% | |
Sumitomo Mitsui Financial Group, Inc. | 1.5% | |
Other Assets | 84.2% | |
100.0% | ||
Top Industries | ||
Banking | 20.7% | |
Oil & Gas | 9.0% | |
Food & Beverages | 6.5% | |
Telecommunications | 6.3% | |
Insurance | 4.4% | |
Pharmaceuticals | 4.0% | |
Transportation | 3.1% | |
Electronics | 3.0% | |
Chemicals | 2.5% | |
Financial Services | 2.3% | |
Other Assets | 38.2% | |
100.0% | ||
Top Countries | ||
Japan | 25.9% | |
United Kingdom | 19.1% | |
France | 10.0% | |
Germany | 8.9% | |
Switzerland | 6.8% | |
Netherlands | 4.4% | |
Italy | 4.2% | |
Australia | 2.8% | |
Singapore | 2.4% | |
Spain | 2.4% | |
Other Assets | 13.1% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (95.1%) | |||||
AUSTRALIA (2.8%) | |||||
Airlines (0.1%) | |||||
Qantas Airways Ltd. (d) | 115,500 | $ | 253,794 | ||
Banking (0.7%) | |||||
National Australia Bank Ltd. (d) | 81,488 | 2,119,758 | |||
Containers (0.7%) | |||||
Amcor Ltd. (d) | 426,434 | 2,114,197 | |||
Food & Beverage (0.4%) | |||||
Coca-Cola Amatil Ltd. (d) | 227,740 | 1,199,207 | |||
Gambling (0.6%) | |||||
Tabcorp Holdings Ltd. (d) (c) | 158,110 | 1,784,274 | |||
Insurance (0.3%) | |||||
Insurance Australia Group, Ltd. (d) | 181,020 | 719,144 | |||
8,190,374 | |||||
BRAZIL (0.6%) | |||||
Oil & Gas (0.6%) | |||||
Petroleo Brasileiro SA ADR | 19,530 | 1,744,224 | |||
FINLAND (1.2%) | |||||
Paper Products (0.9%) | |||||
M-Real Oyj B Shares (d) | 190,230 | 941,220 | |||
UPM-Kymmene Oyj (d) | 79,719 | 1,712,774 | |||
2,653,994 | |||||
Telecommunications (0.3%) | |||||
Nokia Oyj (d) | 34,300 | 695,275 | |||
Nokia Oyj ADR | 3,786 | 76,704 | |||
771,979 | |||||
3,425,973 | |||||
FRANCE (10.0%) | |||||
Audio & Video Products (0.5%) | |||||
Thomson (b) (d) (c) | 89,470 | 1,478,280 | |||
Auto Parts & Equipment (1.5%) | |||||
PSA Peugeot Citroen (d) (c) | 28,290 | 1,756,788 | |||
Valeo SA (d) (c) | 71,141 | 2,531,809 | |||
4,288,597 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Banking (1.9%) | |||||
Banque Nationale de Paris SA (d) (c) | 28,840 | $ | 2,757,486 | ||
Credit Agricole SA (d) | 68,800 | 2,610,660 | |||
5,368,146 | |||||
Building Products (0.3%) | |||||
Lafarge SA (d) (c) | 6,880 | 862,273 | |||
Food & Beverage (1.0%) | |||||
Carrefour SA (d) (c) | 51,010 | 2,987,320 | |||
Medical (1.1%) | |||||
Sanofi-Synthelabo SA (d) (c) | 33,080 | 3,222,629 | |||
Multimedia (0.3%) | |||||
Lagardere SCA (d) | 12,020 | 885,913 | |||
Oil & Gas (1.9%) | |||||
Total SA (d) | 70,320 | 4,618,918 | |||
TotalFinaElf SA ADR | 11,082 | 726,093 | |||
5,345,011 | |||||
Telecommunications (1.5%) | |||||
France Telecom SA (d) (c) | 208,170 | 4,441,220 | |||
28,879,389 | |||||
GERMANY (8.9%) | |||||
Airlines (0.0%) | |||||
Deutsche Lufthansa AG (d) | 6,182 | 113,859 | |||
Automotive (0.4%) | |||||
Volkswagen AG (d) | 16,370 | 1,145,080 | |||
Banking (1.0%) | |||||
Deutsche Bank AG (d) | 25,485 | 2,862,457 | |||
Distribution & Wholesale (0.1%) | |||||
Medion AG (d) (c) | 15,200 | 195,692 | |||
Diversified (1.5%) | |||||
Siemens AG (d) | 50,720 | 4,406,732 | |||
Electric & Gas (0.5%) | |||||
E.On AG (d) | 13,247 | 1,522,241 | |||
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
GERMANY (continued) | |||||
Insurance (1.5%) | |||||
Allianz AG (d) | 11,590 | $ | 1,823,654 | ||
Hannover Rueckversicherung AG (b) (d) (c) | 72,260 | 2,525,971 | |||
4,349,625 | |||||
Retail (0.6%) | |||||
Metro Ag (d) | 30,420 | 1,723,061 | |||
Semiconductors (0.9%) | |||||
Infineon Technologies AG (b) (d) | 221,850 | 2,465,687 | |||
Telecommunications (0.8%) | |||||
Deutsche Telecom AG (d) | 149,120 | 2,393,005 | |||
Transportation (1.6%) | |||||
Deutsche Post AG (d) | 173,900 | 4,670,229 | |||
25,847,668 | |||||
GREECE (0.6%) | |||||
Electric Utility (0.6%) | |||||
Public Power Corp. (d) | 71,820 | 1,698,865 | |||
HONG KONG (0.9%) | |||||
Banking (0.7%) | |||||
Bank of East Asia Ltd. (d) | 252,409 | 1,039,737 | |||
BOC Hong Kong Holdings Ltd. (d) | 498,000 | 975,049 | |||
2,014,786 | |||||
Diversified Operations (0.2%) | |||||
Citic Pacific Ltd. (d) (c) | 194,400 | 573,609 | |||
2,588,395 | |||||
IRELAND (1.3%) | |||||
Banking (1.3%) | |||||
Bank of Ireland (d) | 218,855 | 3,889,913 | |||
ITALY (4.2%) | |||||
Banking (1.1%) | |||||
UniCredito Italiano SPA (d) | 410,170 | 3,207,607 | |||
Electric Utility (0.4%) | |||||
Enel SPA (d) (c) | 134,770 | 1,159,304 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
ITALY (continued) | |||||
Insurance (0.6%) | |||||
Unipol SPA (d) (c) | 550,980 | $ | 1,773,468 | ||
Oil & Gas (1.3%) | |||||
Eni SPA (d) | 109,760 | 3,223,608 | |||
Saras SPA (b) | 88,500 | 567,047 | |||
3,790,655 | |||||
Television (0.8%) | |||||
Mediaset SPA (d) | 194,990 | 2,297,049 | |||
12,228,083 | |||||
JAPAN (25.9%) | |||||
Advertising (1.1%) | |||||
Dentsu, Inc. (d) (c) | 1,112 | 3,077,652 | |||
Appliances (0.5%) | |||||
Rinnai Corp. (d) (c) | 55,000 | 1,459,540 | |||
Automotive (1.2%) | |||||
Hino Motors Ltd. (d) (c) | 447,300 | 2,604,505 | |||
Toyoda Gosei (d) (c) | 48,500 | 974,623 | |||
3,579,128 | |||||
Banking (3.9%) | |||||
Mitsubishi Tokyo Financial Group, Inc. (d) | 191 | 2,677,894 | |||
Mitsui Trust Holdings, Inc. (d) | 45,500 | 545,149 | |||
Shinsei Bank Ltd. (d) | 345,000 | 2,186,917 | |||
Sumitomo Mitsui Financial Group, Inc. (d) | 382 | 4,046,021 | |||
The 77 Bank Ltd. (d) (c) | 222,700 | 1,547,578 | |||
11,003,559 | |||||
Building & Construction (1.5%) | |||||
JS Group Corp. (d) | 84,400 | 1,774,629 | |||
Sekisui House Ltd. (d) | 192,900 | 2,647,544 | |||
4,422,173 | |||||
Chemicals (0.9%) | |||||
Sekisui Chemical Co. Ltd. (d) (c) | 300,100 | 2,593,240 | |||
Computers (0.7%) | |||||
TDK Corp. (d) | 26,500 | 2,009,619 | |||
Cosmetics & Toiletries (1.0%) | |||||
Kao Corp. (d) | 111,200 | 2,911,229 | |||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Drugstores (0.5%) | |||||
Matsumotokiyoshi Co. Ltd. (d) (c) | 61,637 | $ | 1,564,494 | ||
Electronic Components (0.7%) | |||||
Mabuchi Motor Co. Ltd. (d) (c) | 25,600 | 1,530,415 | |||
Minebea Co. Ltd. (d) | 113,300 | 617,957 | |||
2,148,372 | |||||
Electronics (2.1%) | |||||
Funai Electric Co. Ltd. (d) (c) | 21,300 | 2,064,919 | |||
Rohm Co. Ltd. (d) | 45,800 | 4,099,515 | |||
6,164,434 | |||||
Finance (0.2%) | |||||
Orix Corp. (d) | 1,810 | 441,739 | |||
Financial Services (2.3%) | |||||
Aiful Corp. (d) | 44,616 | 2,380,614 | |||
Shohkoh Fund & Co. Ltd. (d) (c) | 5,216 | 1,188,220 | |||
Takefuji Corp. (d) | 50,780 | 3,027,276 | |||
6,596,110 | |||||
Food (0.4%) | |||||
Ajinomoto Co., Inc. (d) | 98,800 | 1,095,325 | |||
Office Automation & Equipment (1.6%) | |||||
Canon, Inc. (d) (c) | 40,812 | 2,000,517 | |||
Ricoh Co. Ltd. (d) | 133,500 | 2,619,305 | |||
4,619,822 | |||||
Oil Comp-Integrated (1.1%) | |||||
Nissan Motor Co. Ltd. (d) | 289,400 | 3,160,708 | |||
Paper & Pulp (0.4%) | |||||
Nippon Paper Group, Inc. (d) (c) | 277 | 1,132,974 | |||
Pharmaceuticals (0.8%) | |||||
Astellas Pharma, Inc. (d) | 59,100 | 2,172,882 | |||
Photographic Products (1.5%) | |||||
Fuji Photo Film Co. Ltd. (d) | 128,300 | 4,307,922 | |||
Retail (1.0%) | |||||
Aeon Co. Ltd. (d) | 128,900 | 2,832,349 | |||
Telecommunications (0.6%) | |||||
KDDI Corp. (d) | 280 | 1,723,521 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Textile Products (0.4%) | |||||
Kuraray Co. Ltd. (d) (c) | 109,100 | $ | 1,221,395 | ||
Transportation (1.5%) | |||||
Nippon Express Co. Ltd. (d) (c) | 777,700 | 4,208,563 | |||
74,446,750 | |||||
KOREA (1.2%) | |||||
Telecommunications (0.8%) | |||||
KT Corp. SP ADR | 61,400 | 1,317,030 | |||
SK Telecom Co. Ltd. ADR | 49,070 | 1,149,219 | |||
2,466,249 | |||||
Utilities (0.4%) | |||||
Korea Electric Power Corp. ADR | 58,900 | 1,116,744 | |||
3,582,993 | |||||
MEXICO (1.0%) | |||||
Food & Beverage (0.5%) | |||||
Coca-Cola Femsa SA de CV ADR | 45,300 | 1,337,256 | |||
Telecommunications (0.5%) | |||||
Telefonos de Mexico SA de CV ADR | 76,252 | 1,588,329 | |||
2,925,585 | |||||
NETHERLANDS (4.4%) | |||||
Banking (1.8%) | |||||
ABN AMRO Holding NV (d) | 97,206 | 2,661,769 | |||
Fortis NV (d) | 75,320 | 2,568,142 | |||
5,229,911 | |||||
Electronics (0.9%) | |||||
Koninklijke (Royal) Philips Electronics NV (d) | 83,450 | 2,599,419 | |||
Koninklijke (Royal) Philips Electronics NV ADR | 5,950 | 185,283 | |||
2,784,702 | |||||
Food & Beverage (0.8%) | |||||
Heineken NV (d) | 54,451 | 2,306,848 | |||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NETHERLANDS (continued) | |||||
Insurance (0.8%) | |||||
Aegon NV (d) | 131,559 | $ | 2,245,615 | ||
Printing & Publishing (0.1%) | |||||
Wolters Kluwer NV (d) | 7,180 | 169,476 | |||
12,736,552 | |||||
SINGAPORE (2.4%) | |||||
Banking (2.4%) | |||||
DBS Group Holdings Ltd. (d) | 356,640 | 4,075,725 | |||
United Overseas Bank Ltd. (d) | 295,200 | 2,907,218 | |||
6,982,943 | |||||
SOUTH AFRICA (0.4%) | |||||
Banking (0.4%) | |||||
Nedcor Ltd. (d) | 65,799 | 1,035,008 | |||
SPAIN (2.4%) | |||||
Banking (0.5%) | |||||
Banco Santander Central Hispano SA (d) | 106,212 | 1,551,834 | |||
Gas & Electric Utility (0.6%) | |||||
Gas Natural SGD, SA (d) (c) | 55,550 | 1,696,226 | |||
Oil & Gas (1.2%) | |||||
Repsol YPF SA | 81,860 | 2,344,032 | |||
Repsol YPF SA ADR | 39,870 | 1,118,752 | |||
3,462,784 | |||||
Power Conversion & Supply Equipment (0.1%) | |||||
Gamesa Corporacion Tecnologica, SA (d) (c) | 8,960 | 191,749 | |||
6,902,593 | |||||
SWEDEN (0.5%) | |||||
Paper & Related Products (0.5%) | |||||
Svenska Cellusoa AB (d) | 33,850 | 1,398,001 | |||
SWITZERLAND (6.8%) | |||||
Banking (1.1%) | |||||
United Bank of Switzerland AG (d) | 29,340 | 3,212,628 | |||
Chemicals (1.6%) | |||||
Ciba Specialty Chemicals AG (d) | 58,648 | 3,270,421 | |||
Clariant AG (d) | 84,570 | 1,197,703 | |||
4,468,124 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITZERLAND (continued) | |||||
Food & Beverage (1.6%) | |||||
Nestle SA (d) (c) | 15,103 | $ | 4,736,306 | ||
Insurance (1.2%) | |||||
Swiss Re (d) (c) | 50,077 | 3,494,836 | |||
Pharmaceuticals (1.3%) | |||||
Novartis AG (d) (c) | 67,740 | 3,656,737 | |||
19,568,631 | |||||
TAIWAN (0.5%) | |||||
Semiconductor Components (0.5%) | |||||
United Microelectronics Corp. ADR | 502,834 | 1,563,814 | |||
UNITED KINGDOM (19.1%) | |||||
Aerospace (0.8%) | |||||
Smiths Industries PLC (d) | 135,700 | 2,233,456 | |||
Auto Parts & Equipment (0.4%) | |||||
GKN PLC (d) | 205,740 | 1,036,769 | |||
Banking (3.9%) | |||||
Barclays PLC (d) | 105,891 | 1,200,281 | |||
HBOS PLC (d) | 147,520 | 2,559,793 | |||
HSBC Holdings PLC (d) | 174,231 | 3,065,295 | |||
Royal Bank of Scotland Group PLC (d) | 137,091 | 4,499,528 | |||
11,324,897 | |||||
Business Services (0.6%) | |||||
Rentokil Initial PLC (d) | 591,720 | 1,705,338 | |||
Construction Materials (0.2%) | |||||
Travis Perkins PLC (d) | 16,080 | 449,368 | |||
Food & Beverage (2.2%) | |||||
Cadbury Schweppes PLC (d) | 7,800 | 75,104 | |||
Diageo PLC (d) | 78,263 | 1,314,384 | |||
Sainsbury (J) PLC (d) | 194,102 | 1,198,620 | |||
Unilever PLC (d) | 169,007 | 3,794,289 | |||
6,382,397 | |||||
Mining (1.2%) | |||||
Anglo American PLC (d) | 84,061 | 3,429,129 | |||
Oil & Gas (4.0%) | |||||
BP PLC (d) | 350,501 | 4,063,531 | |||
Centrica PLC (d) | 545,130 | 2,870,237 | |||
Royal Dutch Shell PLC (d) | 16,060 | 539,723 |
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
UNITED KINGDOM (continued) | ||||||
Oil & Gas (Continued) | ||||||
Royal Dutch Shell PLC — A Shares (d) (c) | 126,272 | $ | 4,242,214 | |||
11,715,705 | ||||||
Pharmaceuticals (1.9%) | ||||||
GlaxoSmithKline PLC (d) | 193,144 | 5,389,513 | ||||
Publishing (1.5%) | ||||||
Reed International PLC (d) | 256,530 | 2,585,540 | ||||
Trinity Mirror PLC (d) | 192,680 | 1,736,619 | ||||
4,322,159 | ||||||
Retail (0.6%) | ||||||
Boots Group PLC (d) | 59,650 | 847,841 | ||||
Debenhams PLC (b) | 306,210 | 1,064,428 | ||||
1,912,269 | ||||||
Telecommunications (1.8%) | ||||||
BT Group PLC (d) | 255,665 | 1,129,411 | ||||
Vodafone Group PLC (d) | 1,944,440 | 4,138,001 | ||||
5,267,412 | ||||||
55,168,412 | ||||||
Total Common Stocks | 274,804,166 | |||||
CASH EQUIVALENTS (2.8%) | ||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $8,033,316) | $ | 8,029,904 | 8,029,904 | |||
Total Cash Equivalents | 8,029,904 | |||||
Shares or Principal Amount | Value | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (4.3%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust — Note 2 (Securities Lending) | $ | 41,300,939 | $ | 41,300,939 | |||
Total Short-Term Securities Held as Collateral for Securities on Loan | 41,300,939 | ||||||
Total Investments (Cost $297,300,073) (a) — 112.2% | 324,135,009 | ||||||
Liabilities in excess of other assets — (12.2)% | (35,271,157 | ) | |||||
NET ASSETS — 100.0% | $ | 288,863,852 | |||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Represents non-income producing securities. |
(c) | All or part of the security was on loan as of June 30, 2006. |
(d) | Fair Value Security. |
ADR | American Depository Receipt |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||||
Short Contract: | ||||||||||||||
Hong Kong Dollar | 07/03/06 | $ | (137,642 | ) | $ | (137,694 | ) | $ | (52 | ) | ||||
Total Short Contracts | $ | (137,642 | ) | $ | (137,694 | ) | $ | (52 | ) | |||||
Long Contracts: | ||||||||||||||
Australian Dollar | 07/03/06 | $ | 122,887 | $ | 122,695 | $ | (192 | ) | ||||||
Japanese Yen | 07/03/06 | 245,866 | 249,637 | 3,771 | ||||||||||
Total Long Contracts | $ | 368,753 | $ | 372,332 | $ | 3,579 |
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INTERNATIONAL VALUE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $289,270,169) | $ | 316,105,105 | ||
Repurchase agreements, at cost and value | 8,029,904 | |||
Total Investments | 324,135,009 | |||
Foreign currencies, at value (cost $4,995,744) | 5,039,667 | |||
Interest and dividends receivable | 514,314 | |||
Receivable for capital shares issued | 327,481 | |||
Receivable for investments sold | 1,696,188 | |||
Unrealized appreciation on forward foreign currency contracts | 3,527 | |||
Reclaims receivable | 203,150 | |||
Prepaid expenses and other assets | 3,047 | |||
Total Assets | 331,922,383 | |||
Liabilities: | ||||
Payable for investments purchased | 1,330,344 | |||
Payable for capital shares redeemed | 181,556 | |||
Payable for return of collateral received for securities on loan | 41,300,939 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 173,290 | |||
Fund administration and transfer agent fees | 22,186 | |||
Distribution fees | 15,793 | |||
Administrative servicing fees | 32,745 | |||
Other | 1,678 | |||
Total Liabilities | 43,058,531 | |||
Net Assets | $ | 288,863,852 | ||
Represented by: | ||||
Capital | $ | 254,389,027 | ||
Accumulated net investment income (loss) | (530,014 | ) | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 8,118,071 | |||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 26,886,768 | |||
Net Assets | $ | 288,863,852 | ||
Net Assets: | ||||
Class I Shares | $ | 4,064,811 | ||
Class II Shares | 2,786,595 | |||
Class III Shares | 136,156,485 | |||
Class IV Shares | 66,902,824 | |||
Class VI Shares | 78,953,137 | |||
Total | $ | 288,863,852 | ||
Shares outstanding (unlimited number of | ||||
Class I Shares | 244,276 | |||
Class II Shares | 168,131 | |||
Class III Shares | 8,204,596 | |||
Class IV Shares | 4,021,067 | |||
Class VI Shares | 4,762,926 | |||
Total | 17,400,996 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 16.64 | ||
Class II Shares | $ | 16.57 | ||
Class III Shares | $ | 16.60 | ||
Class IV Shares | $ | 16.64 | ||
Class VI Shares | $ | 16.58 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 170,349 | ||
Dividend income (net of foreign withholding tax of $330,778) | 5,239,778 | |||
Income from securities lending | 181,379 | |||
Total Income | 5,591,506 | |||
Expenses: | ||||
Investment advisory fees | 989,782 | |||
Fund administration and transfer agent fees | 104,918 | |||
Distribution fees Class II Shares | 3,535 | |||
Distribution fees Class VI Shares | 73,573 | |||
Administrative servicing fees Class I Shares | 3,194 | |||
Administrative servicing fees Class II Shares | 2,125 | |||
Administrative servicing fees Class III Shares | 98,213 | |||
Administrative servicing fees Class IV Shares | 50,247 | |||
Administrative servicing fees Class VI Shares | 44,555 | |||
Trustee fees | 4,376 | |||
Other | 37,540 | |||
Total expenses before earnings credit | 1,412,058 | |||
Earnings credit (Note 7) | (338 | ) | ||
Total Expenses | 1,411,720 | |||
Net Investment Income (Loss) | 4,179,786 | |||
REALIZED/UNREALIZED GAINS | ||||
Net realized gains (losses) on investment transactions | 16,143,880 | |||
Net realized gains (losses) on foreign currency transactions | 285,841 | |||
Net realized gains (losses) on investment and foreign currency transactions | 16,429,721 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | 1,329,788 | |||
Net realized/unrealized gains (losses) on investments and foreign currencies | 17,759,509 | |||
CHANGE IN NET ASSETS RESULTING | $ | 21,939,295 | ||
See notes to financial statements.
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 4,179,786 | $ | 3,251,170 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 16,429,721 | 20,214,592 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | 1,329,788 | 1,142,033 | ||||||
Change in net assets resulting from operations | 21,939,295 | 24,607,795 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (72,460 | ) | (74,676 | ) | ||||
Net realized gains on investments | (266,274 | ) | (217,911 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (45,734 | ) | (34,685 | ) | ||||
Net realized gains on investments | (183,372 | ) | (101,702 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (2,331,664 | ) | (1,417,497 | ) | ||||
Net realized gains on investments | (8,950,356 | ) | (3,745,271 | ) | ||||
Distributions to Class IV shareholders from: | ||||||||
Net investment income | (1,177,842 | ) | (818,783 | ) | ||||
Net realized gain on investment | (4,384,367 | ) | (2,306,987 | ) | ||||
Distributions to Class VI shareholders from: | ||||||||
Net investment income | (1,187,644 | ) | (397,391 | ) | ||||
Net realized gain on investment | (5,073,827 | ) | (1,258,216 | ) | ||||
Change in net assets from shareholder distributions | (23,673,540 | ) | (10,373,119 | ) | ||||
Change in net assets from capital transactions | 57,732,229 | 52,903,938 | ||||||
Change in net assets | 55,997,984 | 67,138,614 | ||||||
Net Assets: | ||||||||
Beginning of period | 232,865,868 | 165,727,254 | ||||||
End of period | $ | 288,863,852 | $ | 232,865,868 | ||||
Accumulated net investment income (loss) | $ | (530,014 | ) | $ | 105,544 | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 2,454 | $ | 2,480,848 | ||||
Dividends reinvested | 338,734 | 292,587 | ||||||
Cost of shares redeemed | (685,762 | ) | (4,897,928 | ) | ||||
(344,574 | ) | (2,124,493 | ) | |||||
Class II Shares | ||||||||
Proceeds from shares issued | 567 | 108,851 | ||||||
Dividends reinvested | 229,107 | 136,387 | ||||||
Cost of shares redeemed | (319,158 | ) | (946,022 | ) | ||||
(89,484 | ) | (700,784 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 23,687,391 | 57,578,590 | ||||||
Dividends reinvested | 11,282,013 | 5,162,763 | ||||||
Cost of shares redeemed | (14,585,097 | ) | (22,850,548 | ) | ||||
20,384,307 | 39,890,805 | |||||||
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL VALUE FUND
Statements of Changes in Net Assets (continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
Class IV Shares | ||||||||
Proceeds from shares issued | $ | 421,278 | $ | 1,068,265 | ||||
Dividends reinvested | 5,562,361 | 3,125,766 | ||||||
Cost of shares redeemed | (6,314,369 | ) | (15,750,152 | ) | ||||
(330,730 | ) | (11,556,121 | ) | |||||
Class VI Shares | ||||||||
Proceeds from shares issued | 36,058,767 | 34,500,352 | ||||||
Dividends reinvested | 6,261,467 | 1,655,605 | ||||||
Cost of shares redeemed | (4,207,524 | ) | (8,761,426 | ) | ||||
38,112,710 | 27,394,531 | |||||||
Change in net assets from capital transactions | $ | 57,732,229 | $ | 52,903,938 | ||||
SHARE TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Issued | 93 | 159,617 | ||||||
Reinvested | 20,914 | 19,711 | ||||||
Redeemed | (38,714 | ) | (318,142 | ) | ||||
(17,707 | ) | (138,814 | ) | |||||
Class II Shares | ||||||||
Issued | — | 6,814 | ||||||
Reinvested | 14,209 | 9,203 | ||||||
Redeemed | (18,528 | ) | (60,296 | ) | ||||
(4,319 | ) | (44,279 | ) | |||||
Class III Shares | ||||||||
Issued | 1,323,395 | 3,716,743 | ||||||
Reinvested | 698,886 | 347,890 | ||||||
Redeemed | (831,505 | ) | (1,491,197 | ) | ||||
1,190,776 | 2,573,436 | |||||||
Class IV Shares | ||||||||
Issued | 22,970 | 68,171 | ||||||
Reinvested | 343,555 | 210,303 | ||||||
Redeemed | (357,566 | ) | (1,012,262 | ) | ||||
8,959 | (733,788 | ) | ||||||
Class VI Shares | ||||||||
Issued | 2,023,147 | 2,211,094 | ||||||
Reinvested | 389,031 | 111,747 | ||||||
Redeemed | (241,010 | ) | (573,999 | ) | ||||
2,171,168 | 1,748,842 | |||||||
See notes to financial statements.
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
GVIT International Value Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net (Loss) to | Portfolio Turnover(a) | ||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(b) | $ | 9.25 | 0.02 | 0.09 | 3.90 | 4.01 | — | — | — | $ | 13.26 | 45.08% | (d) | $ | 542 | 1.20% | (e) | 0.56% | (e) | 91.20% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 13.26 | 0.18 | 0.01 | 2.46 | 2.65 | (0.33 | ) | — | (0.33 | ) | $ | 15.58 | 20.29% | $ | 6,247 | 0.86% | 1.33% | 42.68% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 15.58 | 0.35 | — | 1.43 | 1.78 | (0.21 | ) | (0.55 | ) | (0.76 | ) | $ | 16.60 | 12.09% | $ | 4,349 | 0.91% | 1.92% | 48.94% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 16.60 | 0.28 | — | 1.25 | 1.53 | (0.31 | ) | (1.18 | ) | (1.49 | ) | $ | 16.64 | 9.49% | (d) | $ | 4,065 | 1.01% | (e) | 3.09% | (e) | 25.87% | ||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(b) | $ | 9.25 | 0.01 | 0.09 | 3.87 | 3.97 | — | — | — | $ | 13.22 | 44.64% | (d) | $ | 1,523 | 1.45% | (e) | 0.20% | (e) | 91.20% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 13.22 | 0.14 | 0.01 | 2.46 | 2.61 | (0.30 | ) | — | (0.30 | ) | $ | 15.53 | 20.00% | $ | 3,368 | 1.10% | 1.69% | 42.68% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 15.53 | 0.23 | — | 1.51 | 1.74 | (0.18 | ) | (0.55 | ) | (0.73 | ) | $ | 16.54 | 11.79% | $ | 2,852 | 1.17% | 1.40% | 48.94% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 16.54 | 0.26 | — | 1.24 | 1.50 | (0.29 | ) | (1.18 | ) | (1.47 | ) | $ | 16.57 | 9.39% | (d) | $ | 2,787 | 1.26% | (e) | 2.87% | (e) | 25.87% | ||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(b) | $ | 9.25 | 0.05 | 0.09 | 3.84 | 3.98 | — | — | — | $ | 13.23 | 44.75% | (d) | $ | 9,620 | 1.13% | (e) | 1.30% | (e) | 91.20% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 13.23 | 0.18 | 0.01 | 2.45 | 2.64 | (0.33 | ) | — | (0.33 | ) | $ | 15.54 | 20.26% | $ | 69,043 | 0.86% | 1.42% | 42.68% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 15.54 | 0.24 | — | 1.54 | 1.78 | (0.21 | ) | (0.55 | ) | (0.76 | ) | $ | 16.56 | 12.05% | $ | 116,151 | 0.93% | 1.64% | 48.94% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 16.56 | 0.28 | — | 1.25 | 1.53 | (0.31 | ) | (1.18 | ) | (1.49 | ) | $ | 16.60 | 9.58% | (d) | $ | 136,156 | 1.01% | (e) | 3.22% | (e) | 25.87% | ||||||||||||||||
Class IV Shares(c) | |||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001 | $ | 14.14 | 0.12 | — | (1.67 | ) | (1.55 | ) | (0.17 | ) | (1.22 | ) | (1.39 | ) | $ | 11.20 | (12.20% | ) | $ | 68,746 | 1.08% | 1.04% | 36.00% | ||||||||||||||||
Year Ended December 31, 2002 | $ | 11.20 | 0.18 | — | (1.41 | ) | (1.23 | ) | (0.12 | ) | — | (0.12 | ) | $ | 9.85 | (11.10% | ) | $ | 59,335 | 1.00% | 1.63% | 35.00% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 9.85 | 0.18 | 0.09 | 3.41 | 3.68 | (0.27 | ) | — | (0.27 | ) | $ | 13.26 | 38.52% | $ | 77,347 | 1.12% | 1.62% | 91.20% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 13.26 | 0.22 | 0.01 | 2.39 | 2.62 | (0.31 | ) | — | (0.31 | ) | $ | 15.57 | 20.04% | $ | 73,953 | 1.00% | 1.56% | 42.68% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 15.57 | 0.25 | — | 1.52 | 1.77 | (0.19 | ) | (0.55 | ) | (0.74 | ) | $ | 16.60 | 11.97% | $ | 66,597 | 1.03% | 1.56% | 48.94% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 16.60 | 0.28 | — | 1.25 | 1.53 | (0.31 | ) | (1.18 | ) | (1.49 | ) | $ | 16.64 | 9.56% | (d) | $ | 66,903 | 1.01% | (e) | 3.13% | (e) | 25.87% | ||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(f) | $ | 13.63 | 0.13 | 0.01 | 1.95 | 2.09 | (0.17 | ) | — | (0.17 | ) | $ | 15.55 | 15.45% | (d) | $ | 13,117 | 1.11% | (e) | 0.63% | (e) | 42.68% | |||||||||||||||||
Year Ended December 31, 2005 | $ | 15.55 | 0.20 | — | 1.55 | 1.75 | (0.19 | ) | (0.55 | ) | (0.74 | ) | $ | 16.56 | 11.80% | $ | 42,916 | 1.19% | 1.41% | 48.94% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 16.56 | 0.25 | — | 1.26 | 1.51 | (0.31 | ) | (1.18 | ) | (1.49 | ) | $ | 16.58 | 9.43% | (d) | $ | 78,953 | 1.26% | (e) | 3.12% | (e) | 25.87% |
(a) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(b) | For the period from April 28, 2003 (commencement of operations) through December 31, 2003. |
(c) | The GVIT International Value Fund retained the history of the Market Street International Fund and the existing shares of the Fund were designated Class IV shares. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | For the period from April 28, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT International Value Fund (the “Fund”), (formerly “Dreyfus GVIT International Value Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | ||||||
Bank Note — Floating Rate | Bank of America | $ | 2,500,000 | 5.31 | % | 07/03/06 | ||||
Bank Note — Floating Rate | U.S. Bank N.A. | 1,999,616 | 5.10 | % | 07/03/06 | |||||
Commercial Paper | Aegis Finance LLC | 4,977,310 | 5.29 | % | 07/21/06 | |||||
Funding Agreement — GIC | GE Life and Annuity | 1,000,000 | 5.28 | % | 07/14/06 | |||||
Master Note — Floating | CDC Financial Product Inc. | 1,000,000 | 5.41 | % | 07/03/06 | |||||
Master Note — Floating | Citigroup Global Markets Inc. | 10,500,000 | 5.38 | % | 07/03/06 | |||||
Medium Term Note — Floating | Beta Finance Inc. | 4,000,000 | 5.37 | % | 07/03/06 | |||||
Medium Term Note — Floating | Dorada Finance Inc. | 2,500,000 | 5.37 | % | 07/03/06 | |||||
Medium Term Note — Floating | General Electric Capital Corp. | 3,000,171 | 5.27 | % | 09/08/06 | |||||
Medium Term Note — Floating | ISLANDSBANKI HF Corp. | 1,000,000 | 5.34 | % | 07/24/06 | |||||
Medium Term Note — Floating | Tango Finance Corp. | 997,316 | 5.39 | % | 07/03/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 7,826,527 | 5.32 | % | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following value on loan:
Value of Loaned Securities | Value of Collateral | ||
$39,656,767 | $ | 41,300,939 |
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$299,107,227 | $32,983,348 | $(7,955,566) | $25,027,782 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the The Boston Company (“TBC”), an affiliate of the Dreyfus Corporation, the Fund’s subadviser (the “subadviser”). The subadviser manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GMF pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||
Up to $500 million | 0.75% | 0.375% | 0.375% | |||
$500 million up to $2 billion | 0.70% | 0.400% | 0.300% | |||
$2 billion or more | 0.65% | 0.350% | 0.300% |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares and Class VI shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares and Class VI shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $198,173 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III and Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III or Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III or Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III or Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $54,587.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $97,961,789 and sales of $65,955,620.
6. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging market instruments that are subject to certain additional credit and market risks. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
7. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credits) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund underperformed its benchmark, the MSCI EAFE Index for the one-year period ended September 30, 2005 and ranked in the fourth quartile of the Lipper International Value Funds category for the one-year period. The Board noted that the Fund ranked in the third quartile of the Lipper International Value Funds category for the three-year period, and in the second quartile for the five-year period. The Board discussed with management the Fund’s disappointing performance. Management explained that the Fund’s underweighting in Japanese securities had been the primary reason for the most recent underperformance.
Next the Board discussed with the Fund’s CCO and management, the compliance oversight questions raised in connection with Dreyfus’ recent implementation of a “dual employee” arrangement with its affiliated company, TBC, whereby portfolio management employees of TBC provide portfolio management services to the Fund on behalf of Dreyfus. The Board considered that although Dreyfus and TBC are affiliated companies, under certain circumstances their management structures, supervisory chains of command and internal resources may be distinct. Therefore, the Board concluded that it
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
would be in the best interests of the Fund and its shareholders to terminate the subadvisory agreement with Dreyfus and hire TBC directly as the Fund’s subadviser, effective on May 1, 2006, as permitted under the Fund’s exemptive order (which permits the Fund’s investment adviser to hire and fire unaffiliated subadvisers with Board approval). However, management noted that they had been meeting regularly with the portfolio management team, will continue to monitor the performance of the Fund, and may make recommendations to the Board in the future.
Next, the Board reviewed the Fund’s contractual advisory fee (including the subadvisory fee) and breakpoints and considered that the contractual advisory fee placed the Fund in the first quintile of the Fund’s Lipper-constructed Expense Group. Moreover, the Board considered that the Fund’s total expenses were the lowest in its Lipper Expense Group. Finally, the Board considered the adviser’s profitability in light of all of these factors and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Investor Destinations Aggressive Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIDA (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Investor Destinations Aggressive Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period*2 | Annualized Expense Ratio*2 | |||||||||||
GVIT Investor Destinations Aggressive Fund | ||||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,051.70 | $ | 2.85 | 0.56% | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,052.60 | $ | 2.85 | 0.56% | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 184/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
2 | Expenses are based on the direct expenses of the Fund and do not include the effect of the underlying Funds’ expenses, which are disclosed in the Fee and Expense table and described more fully in a footnote to that table in your Fund prospectus. |
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Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Investor Destinations Aggressive Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Mutual Funds | 100.0% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Top Holdings | ||
Gartmore S&P 500 Index Fund, Institutional Class | 29.4% | |
Gartmore International Index Fund, Institutional Class | 28.8% | |
Gartmore Mid Cap Market Index Fund, Institutional Class | 14.6% | |
Gartmore Small Cap Index Fund, Institutional Class | 10.0% | |
JP Morgan Equity Index Fund | 9.9% | |
Gartmore Bond Index Fund, Institutional Class | 5.0% | |
GVIT International Index Fund, ID Class | 1.2% | |
GVIT S&P 500 Index Fund, ID Class | 0.7% | |
GVIT Mid Cap Index Fund, ID Class | 0.4% | |
100.0% | ||
Asset Allocation Detail | ||
Equity Funds | 95.0% | |
Fixed Income Funds | 5.0% | |
100.0% | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS AGGRESSIVE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | |||||
MUTUAL FUNDS (100.0%) | ||||||
Equity Funds (95.0%) | ||||||
GVIT International Index Fund, ID Class (b) | 803,042 | $ | 7,669,049 | |||
GVIT Mid Cap Index Fund, ID Class (b) | 140,155 | 2,480,744 | ||||
GVIT S&P 500 Index Fund, ID Class (b) | 517,493 | 4,584,988 | ||||
Gartmore International Index Fund, Institutional Class (b) | 18,821,021 | 185,763,474 | ||||
Gartmore Mid Cap Market Index Fund, Institutional Class (b) | 6,135,125 | 94,235,517 | ||||
Gartmore S&P 500 Index Fund, Institutional Class (b) | 17,421,400 | 189,370,614 | ||||
Gartmore Small Cap Index Fund, Institutional Class (b) | 5,013,803 | 64,477,507 | ||||
JP Morgan Equity Index Fund | 2,212,956 | 63,954,428 | ||||
612,536,321 | ||||||
Fixed Income Funds (5.0%) | ||||||
Gartmore Bond Index Fund, Institutional Class (b) | 3,074,948 | 32,348,453 | ||||
Total Mutual Funds | 644,884,774 | |||||
Total Investments (Cost $579,924,773) (a) — 100.0% | 644,884,774 | |||||
Liabilities in excess of other assets — (0.0%) | (238,003 | ) | ||||
NET ASSETS — 100.0% | $ | 644,646,771 | ||||
(a) | See notes to financial Statements for unrealized appreciation (depreciation) of securities. |
(b) | Investment in affiliate. |
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GARTMORE GVIT INVESTOR DESTINATIONS AGGRESSIVE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments in affiliated securities, at value (cost $521,694,396) | $ | 580,930,346 | |
Investments, at value (cost $58,230,377) | 63,954,428 | ||
Total Investments | 644,884,774 | ||
Interest and dividends receivable | 389,296 | ||
Receivable for capital shares issued | 25,727 | ||
Receivable for investments sold | 3,024,672 | ||
Prepaid expenses and other assets | 7,708 | ||
Total Assets | 648,332,177 | ||
Liabilities: | |||
Payable for investments purchased | 1,963,795 | ||
Payable for capital shares redeemed | 1,475,899 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 67,356 | ||
Distribution fees | 129,532 | ||
Administrative servicing fees | 24,405 | ||
Other | 24,419 | ||
Total Liabilities | 3,685,406 | ||
Net Assets | $ | 644,646,771 | |
Represented by: | |||
Capital | $ | 570,710,170 | |
Accumulated net investment income (loss) | 28,331 | ||
Accumulated net realized gains (losses) from investment transactions | 8,948,269 | ||
Net unrealized appreciation (depreciation) on investments | 64,960,001 | ||
Net Assets | $ | 644,646,771 | |
Net Assets: | |||
Class II Shares | $ | 637,591,610 | |
Class VI Shares | 7,055,161 | ||
Total | $ | 644,646,771 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class II Shares | 51,793,694 | ||
Class VI Shares | 574,233 | ||
Total | 52,367,927 | ||
Net asset value and offering price per share:* | |||
Class II Shares | $ | 12.31 | |
Class VI Shares | $ | 12.29 |
* | Not subject to a front-end sales charge. |
Statement of Operations
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Dividend income from affiliates | $ | 5,212,852 | ||
Dividend income | 773,929 | |||
Total Income | 5,986,781 | |||
Expenses: | ||||
Investment advisory fees | 409,050 | |||
Distribution Fees Class II | 776,971 | |||
Distribution Fees Class VI | 9,672 | |||
Administrative servicing fees | 455,496 | |||
Administrative servicing fees Class VI Shares | 5,894 | |||
Trustee fees | 11,159 | |||
Other | 84,059 | |||
Total expenses before earnings credit | 1,752,301 | |||
Earnings credit (Note 6) | (283 | ) | ||
Total Expenses | 1,752,018 | |||
Net Investment Income (Loss) | 4,234,763 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Realized gains (losses) on investment transactions with affiliates | 8,961,976 | |||
Realized gains distributions from underlying funds | 14,894 | |||
Net realized gains (losses) on investment transactions | 8,976,870 | |||
Net change in unrealized appreciation/depreciation on investments | 17,084,260 | |||
Net realized/unrealized gains (losses) on investments | 26,061,130 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 30,295,893 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS AGGRESSIVE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 4,234,763 | $ | 9,513,712 | ||||
Net realized gains (losses) on investment transactions | 8,976,870 | 15,706,802 | ||||||
Net change in unrealized appreciation/depreciation on investments | 17,084,260 | 16,185,898 | ||||||
Change in net assets resulting from operations | 30,295,893 | 41,406,412 | ||||||
Distributions to Class II Shareholders from: | ||||||||
Net investment income | (4,456,823 | ) | (9,274,904 | ) | ||||
Net realized gains on investments | (9,376,448 | ) | (10,008,234 | ) | ||||
Distributions to Class VI Shareholders from: | ||||||||
Net investment income | (66,047 | ) | (81,895 | ) | ||||
Net realized gains on investments | (110,753 | ) | (90,264 | ) | ||||
Change in net assets from shareholder distributions | (14,010,071 | ) | (19,455,297 | ) | ||||
Change in net assets from capital transactions | 43,214,554 | 230,657,745 | ||||||
Change in net assets | 59,500,376 | 252,608,860 | ||||||
Net Assets: | ||||||||
Beginning of period | 585,146,395 | 332,537,535 | ||||||
End of period | $ | 644,646,771 | $ | 585,146,395 | ||||
Accumulated net investment income (loss) | $ | 28,331 | $ | 316,438 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 49,946,451 | $ | 229,501,873 | ||||
Dividends reinvested | 13,833,259 | 19,283,086 | ||||||
Cost of shares redeemed | (19,993,297 | ) | (24,858,434 | ) | ||||
43,786,413 | 223,926,525 | |||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 3,352,052 | 6,924,731 | ||||||
Dividends reinvested | 176,800 | 172,159 | ||||||
Cost of shares redeemed | (4,100,711 | ) | (365,670 | ) | ||||
(571,859 | ) | 6,731,220 | ||||||
Change in net assets from capital transactions | $ | 43,214,554 | $ | 230,657,745 | ||||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 3,972,163 | 19,960,163 | ||||||
Reinvested | 1,143,665 | 1,646,096 | ||||||
Redeemed | (1,595,299 | ) | (2,158,836 | ) | ||||
3,520,529 | 19,447,423 | |||||||
Class VI Shares | ||||||||
Issued | 270,331 | 588,182 | ||||||
Reinvested | 14,597 | 14,467 | ||||||
Redeemed | (321,459 | ) | (30,125 | ) | ||||
(36,531 | ) | 572,524 | ||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Investor Destinations Aggressive Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(c) | $ | 10.00 | 0.02 | 0.11 | 0.13 | (0.02 | ) | — | (0.02 | ) | $ | 10.11 | 1.31% | (e) | $ | 506 | 0.61% | (f) | 4.36% | (f) | 24.83% | (f) | (19.86% | )(f) | 10.90% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.11 | 0.09 | (1.96 | ) | (1.87 | ) | (0.09 | ) | — | (0.09 | ) | $ | 8.15 | (18.50% | ) | $ | 19,493 | 0.56% | 1.41% | (g | ) | (g | ) | 111.74% | ||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.15 | 0.12 | 2.46 | 2.58 | (0.12 | ) | (0.12 | ) | (0.24 | ) | $ | 10.49 | 31.87% | $ | 94,500 | 0.55% | 1.60% | (g | ) | (g | ) | 49.13% | ||||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 10.49 | 0.17 | 1.28 | 1.45 | (0.17 | ) | (0.25 | ) | (0.42 | ) | $ | 11.52 | 14.03% | $ | 332,097 | 0.56% | 2.13% | (g | ) | (g | ) | 18.26% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.52 | 0.22 | 0.68 | 0.90 | (0.22 | ) | (0.23 | ) | (0.45 | ) | $ | 11.97 | 7.93% | $ | 577,843 | 0.56% | 2.04% | (g | ) | (g | ) | 9.12% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.97 | 0.09 | 0.52 | 0.61 | (0.09 | ) | (0.18 | ) | (0.27 | ) | $ | 12.31 | 5.17% | (e) | $ | 637,592 | 0.56% | (f) | 1.42% | (f) | (g | ) | (g | ) | 5.81% | |||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(h) | $ | 10.52 | 0.17 | 1.15 | 1.32 | (0.17 | ) | (0.15 | ) | (0.32 | ) | $ | 11.52 | 12.58% | (e) | $ | 440 | 0.41% | (f) | 3.59% | (f) | (g | ) | (g | ) | 18.26% | |||||||||||||||||
Year Ended December 31, 2005 | $ | 11.52 | 0.23 | 0.68 | 0.91 | (0.24 | ) | (0.23 | ) | (0.47 | ) | $ | 11.96 | 7.95% | $ | 7,303 | 0.51% | 3.82% | (g | ) | (g | ) | 9.12% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.96 | 0.10 | 0.51 | 0.61 | (0.10 | ) | (0.18 | ) | (0.28 | ) | $ | 12.29 | 5.26% | (e) | $ | 7,055 | 0.56% | (f) | 1.47% | (f) | (g | ) | (g | ) | 5.81% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from December 12, 2001 (commencement of operations) through December 31, 2001. |
(d) | On April 30, 2004, the existing share Class of the Fund was renamed Class II Shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
(h) | For the period from April 30, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Investor Destinations Aggressive Fund (the “Fund”).
The Fund is constructed as a “fund of funds,” which means that the Fund pursues its investment objective by allocating the Fund’s investments primarily among other affiliated mutual funds (the “Underlying Funds”). The Underlying Funds typically invest, either directly or indirectly, in stocks, bonds, and other securities.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Shares of the Underlying Funds in which the Trust’s Fund invests are valued at their respective net asset values as reported by the Underlying Funds. The securities in the Underlying Funds generally are valued as of the close of business of the regular session of trading on the New York Stock Exchange (usually at 4 p.m. Eastern time). The Underlying Funds generally value securities and assets at current market value.
The following policies, (b) through (i), represent the accounting policies applicable to the Underlying Funds.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||
$579,994,699 | $ | 66,573,383 | $ | (1,683,308 | ) | $ | 64,890,075 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.13% based on the Fund’s average daily net assets.
Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Funds for expenses associated with the distribution of the shares of the Funds. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of each class of shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $472,291 in Administrative Services Fees from the Fund.
Because the Fund invests primarily in other affiliated funds, the Fund is a shareholder of those Underlying Funds. The Underlying Funds do not charge the Fund any sales charge for buying or selling shares. However, the Fund indirectly pays a portion of the operating expenses, including management fees of the Underlying Funds and short-term investments the Fund holds. These expenses are deducted from the Underlying Funds before their share prices are calculated and are in addition to the fees and expenses of the Fund. Actual indirect expenses vary depending on how the Fund’s assets are spread among the underlying investments.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $1,224.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $70,495,320 and sales of $36,819,213.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its composite benchmark by 528 basis points for the one-year period ended September 30, 2005, and by 304 basis points for the three-year period. The Board noted however, that the Fund ranked in the third quartile of the Lipper Global Multi-Cap Core Funds category for the one-year period and in the second quartile for the three-year period. The Board and management discussed the comparability of the Fund to other funds in its Lipper peer group, and noted that certain of the funds in the peer group are actively-managed products.
Next, the board reviewed the contractual advisory fee for the Fund which placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group. Moreover, the Board considered that the Fund’s total expenses placed the Fund above the median of its Lipper Expense Group by 32 basis points. The Board discussed with management the reasons for this expense disparity. Management explained that the Fund share class used in the Lipper report was a share class with distribution expenses (Rule 12b-1 and administrative services fees) which are not found in most of the Fund’s peers in the
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Lipper reports either because Lipper had selected a share class without a Rule 12b-1 fee, or the actively managed underlying funds had higher fees and distribution expenses may have been paid by the advisers of these other funds from profits. Without these fees, the Fund’s expenses are at the median of the Lipper Expense group. The Board was satisfied with management’s explanation of the expense disparity.
As the Fund is a “fund-of-funds” that invests its assets in one or more underlying funds (as well as a Nationwide insurance contract) the Fund bears its proportionate share of the operating expenses (including advisory fees) of each underlying fund in which the Fund invest. Therefore, as shareholders of the Fund, you indirectly bear a proportionate share of these underlying fund expenses. The Board considered whether the Fund’s payment of its proportionate share of the advisory fees of the underlying funds are for advisory services that are “in addition to” those advisory and subadvisory services your Fund receives from its adviser and subadviser, Fund Asset Management (“FAM”). The Board considered management’s reports that there was no layering of fees and noted the additional services management provides to the Fund that are in addition to the advisory services that are provided to the underlying funds. Finally, the Board considered the adviser’s profitability in connection with managing this Fund and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
18
Table of Contents
Gartmore GVIT Investor Destinations Moderately Aggressive Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIDMA (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Investor Destinations Moderately Aggressive Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period*2 | Annualized Expense Ratio*2 | ||||||||||
GVIT Investor Destinations Moderately Conservative Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,041.80 | $ | 2.84 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,041.70 | $ | 2.83 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 184/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
2 | Expenses are based on the direct expenses of the Fund and do not include the effect of the underlying Funds’ expenses, which are disclosed in the Fee and Expense table and described more fully in a footnote to that table in your Fund prospectus. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Investor Destinations Moderately Aggressive Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Mutual Funds | 97.4% | |
Fixed Contract | 2.6% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Top Holdings | ||
Gartmore International Index Fund, Institutional Class | 24.5% | |
Gartmore S&P 500 Index Fund, Institutional Class | 23.4% | |
Gartmore Bond Index Fund, Institutional Class | 15.0% | |
Gartmore Mid Cap Market Index Fund, Institutional Class | 13.7% | |
JP Morgan Equity Index Fund | 9.1% | |
Gartmore Small Cap Index Fund, Institutional Class | 5.0% | |
Nationwide Fixed Contract, 3.50% | 2.6% | |
GVIT S&P 500 Index Fund, ID Class | 2.5% | |
Gartmore Enhanced Income Fund, Institutional Class | 2.4% | |
GVIT Mid Cap Index Fund, ID Class | 1.3% | |
Other Assets | 0.5% | |
100.0% | ||
Asset Allocation Detail | ||
Equity Funds | 80.0% | |
Fixed Income Funds | 17.4% | |
Fixed Contract | 2.6% | |
100.0% | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY AGGRESSIVE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | |||
MUTUAL FUNDS (97.4%) | ||||
Equity Funds (80.0%) | ||||
GVIT International Index Fund, ID Class (b) | 803,042 | $ 7,669,049 | ||
GVIT Mid Cap Index Fund, ID Class (b) | 1,061,096 | 18,781,403 | ||
GVIT S&P 500 Index Fund, ID Class (b) | 4,221,093 | 37,398,883 | ||
Gartmore International Index Fund, Institutional Class (b) | 36,986,570 | 365,057,448 | ||
Gartmore Mid Cap Market Index Fund, Institutional Class (b) | 13,336,881 | 204,854,496 | ||
Gartmore S&P 500 Index Fund, Institutional Class (b) | 32,074,411 | 348,648,844 | ||
Gartmore Small Cap Index Fund, Institutional Class (b) | 5,796,680 | 74,545,300 | ||
JP Morgan Equity Index Fund | 4,697,902 | 135,769,370 | ||
1,192,724,793 | ||||
Fixed Income Funds (17.4%) | ||||
Gartmore Bond Index Fund, Institutional Class (b) | 21,328,971 | 224,380,770 | ||
Gartmore Enhanced Income Fund, Institutional Class (b) | 3,948,436 | 35,891,284 | ||
260,272,054 | ||||
Total Mutual Funds | 1,452,996,847 | |||
Principal Amount | Value | ||||||
FIXED CONTRACT (2.6%) | |||||||
Nationwide Fixed Contract, 3.50% (b) (c) | $ | 38,772,060 | $ | 38,772,060 | |||
Total Fixed Contract | 38,772,060 | ||||||
Total Investments (Cost $1,369,316,645) (a) — 100.0% | 1,491,768,907 | ||||||
Liabilities in excess of other assets — (0.0%) | (590,331 | ) | |||||
NET ASSETS — 100.0% | $ | 1,491,178,576 | |||||
(a) | See Notes to Financial Statements for unrealized appreciation (depreciation) of securities. |
(b) | Investment in affiliate. |
(c) | The Nationwide Fixed Contract rate changes quarterly. The security is restricted and as the affiliated counterparty is required by contract to redeem within five days upon request, it has been deemed liquid pursuant to procedures approved by the Board of Trustees. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY AGGRESSIVE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments in affiliates, at value | $ | 1,355,999,538 | |
Investments, at value (cost $122,081,290) | 135,769,369 | ||
Total Investments | 1,491,768,907 | ||
Interest and dividends receivable | 1,460,404 | ||
Receivable for capital shares issued | 4,305,008 | ||
Receivable for investments sold | 3,332,522 | ||
Prepaid expenses and other assets | 15,911 | ||
Total Assets | 1,500,882,752 | ||
Liabilities: | |||
Payable for investments purchased | 9,091,054 | ||
Payable for capital shares redeemed | 2,949 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 153,682 | ||
Distribution fees | 295,546 | ||
Administrative servicing fees | 102,701 | ||
Other | 58,244 | ||
Total Liabilities | 9,704,176 | ||
Net Assets | $ | 1,491,178,576 | |
Represented by: | |||
Capital | $ | 1,354,244,044 | |
Accumulated net investment income (loss) | 200,704 | ||
Accumulated net realized gains (losses) from investment transactions | 14,281,566 | ||
Net unrealized appreciation (depreciation) on investments | 122,452,262 | ||
Net Assets | $ | 1,491,178,576 | |
Net Assets: | |||
Class II Shares | $ | 1,483,167,844 | |
Class VI Shares | 8,010,732 | ||
Total | $ | 1,491,178,576 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class II Shares | 122,860,693 | ||
Class VI Shares | 665,162 | ||
Total | 123,525,855 | ||
Net asset value and offering price per share:* | |||
Class II Shares | $ | 12.07 | |
Class VI Shares | $ | 12.04 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income from affiliates | $ | 505,577 | ||
Dividend income from affiliates | 13,281,821 | |||
Dividend income | 1,616,932 | |||
Total Income | 15,404,330 | |||
Expenses: | ||||
Investment advisory fees | 878,385 | |||
Distribution Fees Class II | 1,678,861 | |||
Distribution Fees Class VI | 10,358 | |||
Administrative servicing fees | 988,506 | |||
Administrative servicing fees | 6,252 | |||
Trustee fees | 23,273 | |||
Other | 172,978 | |||
Total expenses before earnings credit | 3,758,613 | |||
Earnings credit (Note 6) | (2 | ) | ||
Total Expenses | 3,758,611 | |||
Net Investment Income (Loss) | 11,645,719 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Realized gains (losses) on investment transactions with affiliates | 14,759,877 | |||
Realized gains distributions from underlying funds | 171,031 | |||
Net realized gains (losses) on investment transactions | 14,930,908 | |||
Net change in unrealized appreciation/depreciation on investments | 23,671,282 | |||
Net realized/unrealized gains (losses) on investments | 38,602,190 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 50,247,909 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY AGGRESSIVE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 11,645,719 | $ | 21,730,107 | ||||
Net realized gains (losses) on investment transactions | 14,930,908 | 32,358,584 | ||||||
Net change in unrealized appreciation/depreciation on investments | 23,671,282 | 21,712,416 | ||||||
Change in net assets resulting from operations | 50,247,909 | 75,801,107 | ||||||
Distributions to Class II Shareholders from | ||||||||
Net investment income | (12,160,847 | ) | (21,230,457 | ) | ||||
Net realized gains on investments | (18,562,857 | ) | (22,011,477 | ) | ||||
Distributions to Class VI Shareholders from: | ||||||||
Net investment income | (75,425 | ) | (122,729 | ) | ||||
Net realized gains on investments | (101,698 | ) | (124,368 | ) | ||||
Change in net assets from shareholder distributions | (30,900,827 | ) | (43,489,031 | ) | ||||
Change in net assets from capital transactions | 262,158,302 | 440,365,885 | ||||||
Change in net assets | 281,505,384 | 472,677,961 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,209,673,192 | 736,995,231 | ||||||
End of period | $ | 1,491,178,576 | $ | 1,209,673,192 | ||||
Accumulated net investment income (loss) | $ | 200,704 | $ | 791,257 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 258,098,928 | $ | 435,840,304 | ||||
Dividends reinvested | 30,723,594 | 43,241,870 | ||||||
Cost of shares redeemed | (26,987,736 | ) | (43,389,400 | ) | ||||
261,834,786 | 435,692,774 | |||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 1,922,044 | 5,334,070 | ||||||
Dividends reinvested | 177,122 | 247,097 | ||||||
Cost of shares redeemed | (1,775,650 | ) | (908,056 | ) | ||||
323,516 | 4,673,111 | |||||||
Change in net assets from capital transactions | $ | 262,158,302 | $ | 440,365,885 | ||||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 20,991,889 | 37,794,353 | ||||||
Reinvested | 2,577,818 | 3,715,195 | ||||||
Redeemed | (2,186,986 | ) | (3,761,566 | ) | ||||
21,382,721 | 37,747,982 | |||||||
Class VI Shares | ||||||||
Issued | 155,748 | 459,055 | ||||||
Reinvested | 14,876 | 21,190 | ||||||
Redeemed | (146,028 | ) | (78,798 | ) | ||||
24,596 | 401,447 | |||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Investor Destinations Moderately Aggressive Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(c) | $ | 10.00 | 0.02 | 0.09 | 0.11 | (0.02 | ) | — | (0.02 | ) | $ | 10.09 | 1.12% | (e) | $ | 505 | 0.61% | (f) | 4.56% | (f) | 24.85% | (f) | (19.68% | )(f) | 11.10% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.09 | 0.12 | (1.59 | ) | (1.47 | ) | (0.12 | ) | (0.01 | ) | (0.13 | ) | $ | 8.49 | (14.59% | ) | $ | 71,962 | 0.56% | 1.89% | (g | ) | (g | ) | 43.38% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 8.49 | 0.14 | 2.10 | 2.24 | (0.13 | ) | — | (0.13 | ) | $ | 10.60 | 26.64% | $ | 290,666 | 0.56% | 1.73% | (g | ) | (g | ) | 22.22% | |||||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 10.60 | 0.19 | 1.08 | 1.27 | (0.19 | ) | (0.16 | ) | (0.35 | ) | $ | 11.52 | 12.09% | $ | 734,244 | 0.55% | 2.11% | (g | ) | (g | ) | 11.44% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.52 | 0.24 | 0.57 | 0.81 | (0.24 | ) | (0.24 | ) | (0.48 | ) | $ | 11.85 | 7.07% | $ | 1,202,098 | 0.57% | 2.23% | (g | ) | (g | ) | 7.53% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.85 | 0.11 | 0.38 | 0.49 | (0.11 | ) | (0.16 | ) | (0.27 | ) | $ | 12.07 | 4.18% | (e) | $ | 1,483,168 | 0.56% | (f) | 1.79% | (f) | (g | ) | (g | ) | 3.30% | |||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(h) | $ | 10.63 | 0.17 | 0.98 | 1.15 | (0.17 | ) | (0.10 | ) | (0.27 | ) | $ | 11.51 | 10.92% | (e) | $ | 2,751 | 0.41% | (f) | 4.26% | (f) | (g | ) | (g | ) | 11.44% | |||||||||||||||||
Year Ended December 31, 2005 | $ | 11.51 | 0.25 | 0.57 | 0.82 | (0.26 | ) | (0.24 | ) | (0.50 | ) | $ | 11.83 | 7.16% | $ | 7,575 | 0.48% | 2.59% | (g | ) | (g | ) | 7.53% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.83 | 0.11 | 0.37 | 0.48 | (0.11 | ) | (0.16 | ) | (0.27 | ) | $ | 12.04 | 4.17% | (e) | $ | 8,011 | 0.56% | (f) | 1.69% | (f) | (g | ) | (g | ) | 3.30% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from December 12, 2001 (commencement of operations) through December 31, 2001. |
(d) | On April 30, 2004, the existing share Class of the Fund was renamed Class II Shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
(h) | For the period from April 30, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Investor Destinations Moderately Aggressive Fund (the “Fund”).
The Fund is constructed as a “fund of funds,” which means that the Fund pursues its investment objective by allocating the Fund’s investments primarily among other affiliated mutual funds (the “Underlying Funds”). The Underlying Funds typically invest, either directly or indirectly, in stocks, bonds, and other securities including the Nationwide Contract. The Nationwide Contract is a fixed interest contract issued and guaranteed by Nationwide Life Insurance Company (“Nationwide”). This contract has a stable principal value and will pay the Fund a fixed rate of interest. The fixed interest rate must be at least 3.50% (on an annual basis), but may be higher and is currently adjusted on a quarterly basis. Nationwide will calculate the interest rate in the same way that it calculates guaranteed interest rates for similar contracts. Because the contract is guaranteed by Nationwide, assuming no default, the Fund receives no more or less than the guaranteed amount and will not directly participate in the actual experience of the assets underlying the contract. Although under certain market conditions the Fund’s performance may be hurt by its investment in the Nationwide Contract, the portfolio management team believes that the relatively stable nature of the Nationwide Contract should reduce the Fund’s volatility and overall risk, especially when the bond and stock markets decline simultaneously. The Fund’s target allocation range is 0-10%.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Shares of the Underlying Funds in which the Trust’s Fund invests are valued at their respective net asset values as reported by the Underlying Funds. The securities in the Underlying Funds generally are valued as of the close of business of the regular session of trading on the New York Stock Exchange (usually at 4 p.m. Eastern time). The Underlying Funds generally value securities and assets at current market value. Under most circumstances, the fixed interest contract is valued at par value each day, which is deemed to be fair value. The par value is calculated each day by the summation of the
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June 30, 2006 (Unaudited)
following factors: prior day’s par value; prior day’s interest accrued (par multiplied by guaranteed fixed rate); and current day net purchase or redemption.
The following policies, (b) through (i), represent the accounting policies applicable to the Underlying Funds.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
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June 30, 2006 (Unaudited)
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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June 30, 2006 (Unaudited)
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||
$1,370,166,133 | $ | 131,733,342 | $ | (10,130,548 | ) | $ | 121,602,794 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.13% based on the Fund’s average daily net assets.
Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Funds for expenses associated with the distribution of the shares of the Funds. GDSI is majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of each class of shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $1,014,990 in Administrative Services Fees from the Fund.
Because the Fund invests primarily in other affiliated funds, the Fund is a shareholder of those Underlying Funds. The Underlying Funds and the Nationwide Contract do not charge the Fund any sales charge for buying or selling shares. However, the Fund indirectly pays a portion of the operating expenses, including management fees of the Underlying Funds and short-term investments the Fund holds. These expenses are deducted from the Underlying Funds before their share prices are calculated and are in addition to the fees and expenses of the Fund. Actual indirect expenses vary depending on how the Fund’s assets are spread among the underlying investments.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $542.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $279,111,641 and sales of $43,924,665.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its composite benchmark by 434 basis points over the one-year period ended September 30, 2005 and by 232 basis points over the three-year period. The Board also considered that the Fund’s performance placed it in the second quartile of the Lipper Global Flexible Funds category for both the one- and three-year periods, and noted that the Fund beat its category median by 12 basis points and 48 basis points, respectively, over those periods.
Next, the Board reviewed the Fund’s contractual advisory fee which placed the Fund in the fourth quintile of its Lipper-constructed Expense Group. The Board also considered that the Fund’s total expenses placed the fund above the median of its Lipper Expense Group by 32 basis points. The Board discussed with management the reasons for this expense disparity. Management explained that the Fund share class used in the Lipper report was a share class with distribution expenses (Rule 12b-1 and administrative services fees) which are not found in most of the Fund’s peers in the Lipper reports either because Lipper had selected a share class without a Rule 12b-1 fee, or the actively managed underlying funds had higher fees and
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Supplemental Information (Continued)
June 30, 2006 (Unaudited)
distribution expenses may have been paid by the advisers of these other funds from profits. Without these fees, the Fund’s expenses are at the median of the Lipper Expense group. The Board was satisfied with management’s explanation of the expense disparity.
As the Fund is a “fund-of-funds” that invests its assets in one or more underlying funds (as well as a Nationwide insurance contract) the Fund bears its proportionate share of the operating expenses (including advisory fees) of each underlying fund in which the Fund invest. Therefore, as shareholders of the Fund, you indirectly bear a proportionate share of these underlying fund expenses. The Board considered whether the Fund’s payment of its proportionate share of the advisory fees of the underlying funds are for advisory services that are “in addition to” those advisory and subadvisory services your Fund receives from its adviser and subadviser, Fund Asset Management (“FAM”). The Board considered management’s reports that there was no layering of fees and noted the additional services management provides to the Fund that are in addition to the advisory services that are provided to the underlying funds. Finally, the Board reviewed the adviser’s profitability in light of all of these factors, and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
18
Table of Contents
Gartmore GVIT Investor Destinations Moderate Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIDM (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Investor Destinations Moderate Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period*2 | Annualized Expense Ratio*2 | ||||||||||
GVIT Investor Destinations Moderate Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,029.20 | $ | 2.77 | 0.55% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.07 | $ | 2.76 | 0.55% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,029.10 | $ | 2.82 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 184/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
2 | Expenses are based on the direct expenses of the Fund and do not include the effect of the underlying Funds’ expenses, which are disclosed in the Fee and Expense table and described more fully in a footnote to that table in your Fund prospectus. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Investor Destinations Moderate Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Mutual Funds | 92.2% | |
Fixed Contract | 7.8% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Asset Allocation Detail | ||
Equity Funds | 59.9% | |
Fixed Income Funds | 32.3% | |
Fixed Contract | 7.8% | |
100.0% | ||
Top Holdings | ||
Gartmore S&P 500 Index Fund, Institutional Class | 27.5% | |
Gartmore Bond Index Fund, Institutional Class | 25.1% | |
Gartmore International Index Fund, Institutional Class | 14.6% | |
Gartmore Mid Cap Market Index Fund, Institutional Class | 9.0% | |
Nationwide Fixed Contract, 3.50% | 7.8% | |
Gartmore Enhanced Income Fund, Institutional Class | 7.2% | |
Gartmore Small Cap Index Fund, Institutional Class | 5.0% | |
GVIT S&P 500 Index Fund, ID Class | 2.5% | |
GVIT Mid Cap Index Fund, ID Class | 0.9% | |
GVIT International Index Fund, ID Class | 0.4% | |
100.0% | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | |||
MUTUAL FUNDS (92.2%) | ||||
Equity Funds (59.9%) | ||||
GVIT International Index Fund, ID Class (b) | 803,042 | $ 7,669,049 | ||
GVIT Mid Cap Index Fund, ID Class (b) | 1,082,478 | 19,159,853 | ||
GVIT S&P 500 Index Fund, ID Class (b) | 5,658,517 | 50,134,464 | ||
Gartmore International Index Fund, Institutional Class (b) | 29,942,331 | 295,530,808 | ||
Gartmore Mid Cap Market Index Fund, Institutional Class (b) | 11,912,330 | 182,973,384 | ||
Gartmore S&P 500 Index Fund, Institutional Class (b) | 51,174,356 | 556,265,249 | ||
Gartmore Small Cap Index Fund, Institutional Class (b) | 7,858,991 | 101,066,619 | ||
1,212,799,426 | ||||
Fixed Income Funds (32.3%) | ||||
Gartmore Bond Index Fund, Institutional Class (b) | 48,194,593 | 507,007,118 | ||
Gartmore Enhanced Income Fund, Institutional Class (b) | 16,028,058 | 145,695,045 | ||
652,702,163 | ||||
Total Mutual Funds | 1,865,501,589 | |||
Principal Amount | Value | ||||||
FIXED CONTRACT (7.8%) | |||||||
Nationwide Fixed Contract, 3.50% (b) (c) | $ | 157,982,292 | $ | 157,982,292 | |||
Total Fixed Contract | 157,982,292 | ||||||
Total Investments (Cost $1,888,532,888) (a) — 100.0% | 2,023,483,881 | ||||||
Liabilities in excess of other assets — (0.0%) | (741,497 | ) | |||||
NET ASSETS — 100.0% | $ | 2,022,742,384 | |||||
(a) | See Notes to Statement of Investments for unrealized appreciation (depreciation) of securities. |
(b) | Investment in affiliate. |
(c) | The Nationwide Fixed Contract rate changes quarterly. The security is restricted and as the affiliated counterparty is required by contract to redeem within five days upon request, it has been deemed liquid pursuant to procedures approved by the Board of Trustees. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments in affiliated securities, at value (cost $1,888,532,888) | $ | 2,023,483,881 | |
Interest and dividends receivable | 2,167,520 | ||
Receivable for capital shares issued | 5,811,327 | ||
Receivable for investments sold | 3,526,685 | ||
Prepaid expenses and other assets | 21,747 | ||
Total Assets | 2,035,011,160 | ||
Liabilities: | |||
Payable for investments purchased | 11,316,895 | ||
Payable for capital shares redeemed | 172,622 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 209,033 | ||
Distribution fees | 401,991 | ||
Administrative servicing fees | 81,583 | ||
Other | 86,652 | ||
Total Liabilities | 12,268,776 | ||
Net Assets | $ | 2,022,742,384 | |
Represented by: | |||
Capital | $ | 1,872,070,780 | |
Accumulated net investment income (loss) | 318,461 | ||
Accumulated net realized gains (losses) from investment transactions | 15,402,150 | ||
Net unrealized appreciation (depreciation) on investments | 134,950,993 | ||
Net Assets | $ | 2,022,742,384 | |
Net Assets: | |||
Class II Shares | $ | 2,004,987,736 | |
Class VI Shares | 17,754,648 | ||
Total | $ | 2,022,742,384 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class II Shares | 174,211,685 | ||
Class VI Shares | 1,546,232 | ||
Total | 175,757,917 | ||
Net asset value and offering price per share:* | |||
Class II Shares | $ | 11.51 | |
Class VI Shares | $ | 11.48 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income from affiliates | $ | 2,034,291 | ||
Dividend income from affiliates | 21,927,174 | |||
Total Income | 23,961,465 | |||
Expenses: | ||||
Investment advisory fees | 1,175,564 | |||
Distribution Fees Class II | 2,239,801 | |||
Distribution Fees Class VI | 20,921 | |||
Administrative servicing fees | 1,300,145 | |||
Administrative servicing fees | 12,602 | |||
Trustee fees | 30,669 | |||
Other | 228,076 | |||
Total expenses before earnings credit | 5,007,778 | |||
Earnings credit (Note 6) | (604 | ) | ||
Total Expenses | 5,007,174 | |||
Net Investment Income (Loss) | 18,954,291 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Realized gains (losses) on investment transactions with affiliates | 17,498,948 | |||
Realized gains distributions from underlying funds | 171,731 | |||
Net realized gains (losses) on investment transactions | 17,670,679 | |||
Net change in unrealized appreciation/depreciation on investments | 9,786,643 | |||
Net realized/unrealized gains (losses) on investments | 27,457,322 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 46,411,613 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 18,954,291 | $ | 32,042,155 | ||||
Net realized gains (losses) on investment transactions | 17,670,679 | 30,278,077 | ||||||
Net change in unrealized appreciation/depreciation on investments | 9,786,643 | 13,980,124 | ||||||
Change in net assets resulting from operations | 46,411,613 | 76,300,356 | ||||||
Distributions to Class II Shareholders from: | ||||||||
Net investment income | (18,455,543 | ) | (31,722,167 | ) | ||||
Net realized gains on investments | (18,140,929 | ) | (24,058,008 | ) | ||||
Distributions to Class VI Shareholders from: | ||||||||
Net investment income | (180,287 | ) | (322,592 | ) | ||||
Net realized gains on investments | (162,221 | ) | (233,387 | ) | ||||
Change in net assets from shareholder distributions | (36,938,980 | ) | (56,336,154 | ) | ||||
Change in net assets from capital transactions | 401,395,298 | 464,410,031 | ||||||
Change in net assets | 410,867,931 | 484,374,233 | ||||||
Net Assets: | ||||||||
Beginning of period | 1,611,874,453 | 1,127,500,220 | ||||||
End of period | $ | 2,022,742,384 | $ | 1,611,874,453 | ||||
Accumulated net investment income (loss) | $ | 318,461 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 398,761,174 | $ | 461,597,186 | ||||
Dividends reinvested | 36,596,460 | 55,779,957 | ||||||
Cost of shares redeemed | (35,763,027 | ) | (59,202,326 | ) | ||||
399,594,607 | 458,174,817 | |||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 3,540,262 | 9,543,333 | ||||||
Dividends reinvested | 342,508 | 555,977 | ||||||
Cost of shares redeemed | (2,082,079 | ) | (3,864,096 | ) | ||||
1,800,691 | 6,235,214 | |||||||
Change in net assets from capital transactions | $ | 401,395,298 | $ | 464,410,031 | ||||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 34,066,545 | 40,972,573 | ||||||
Reinvested | 3,204,978 | 4,959,099 | ||||||
Redeemed | (3,057,896 | ) | (5,260,000 | ) | ||||
34,213,627 | 40,671,672 | |||||||
Class VI Shares | ||||||||
Issued | 304,285 | 851,248 | ||||||
Reinvested | 30,040 | 49,465 | ||||||
Redeemed | (177,988 | ) | (345,516 | ) | ||||
156,337 | 555,197 | |||||||
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Investor Destinations Moderate Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(c) | $ | 10.00 | 0.02 | 0.06 | 0.08 | (0.02 | ) | — | (0.02 | ) | $ | 10.06 | 0.84% | (e) | $ | 504 | 0.61% | (f) | 4.42% | (f) | 24.86% | (f) | (19.83% | )(f) | 0.74% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.06 | 0.15 | (1.11 | ) | (0.96 | ) | (0.15 | ) | (0.01 | ) | (0.16 | ) | $ | 8.94 | (9.60% | ) | $ | 165,555 | 0.56% | 2.41% | (g | ) | (g | ) | 21.58% | |||||||||||||||||
Year Ended December 31, 2003 | $ | 8.94 | 0.17 | 1.60 | 1.77 | (0.17 | ) | — | (0.17 | ) | $ | 10.54 | 20.05% | $ | 566,916 | 0.56% | 2.01% | (g | ) | (g | ) | 9.90% | |||||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 10.54 | 0.21 | 0.78 | 0.99 | (0.21 | ) | (0.06 | ) | (0.27 | ) | $ | 11.26 | 9.54% | $ | 1,118,116 | 0.56% | 2.19% | (g | ) | (g | ) | 5.54% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.26 | 0.26 | 0.33 | 0.59 | (0.26 | ) | (0.19 | ) | (0.45 | ) | $ | 11.40 | 5.34% | $ | 1,596,055 | 0.56% | 2.41% | (g | ) | (g | ) | 4.20% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.40 | 0.11 | 0.22 | 0.33 | (0.11 | ) | (0.11 | ) | (0.22 | ) | $ | 11.51 | 2.92% | (e) | $ | 2,004,988 | 0.55% | (f) | 2.10% | (f) | (g | ) | (g | ) | 3.16% | |||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(h) | $ | 10.54 | 0.19 | 0.72 | 0.91 | (0.19 | ) | (0.02 | ) | (0.21 | ) | $ | 11.24 | 8.72% | (e) | $ | 9,384 | 0.41% | (f) | 3.84% | (f) | (g | ) | (g | ) | 5.54% | |||||||||||||||||
Year Ended December 31, 2005 | $ | 11.24 | 0.27 | 0.33 | 0.60 | (0.27 | ) | (0.19 | ) | (0.46 | ) | $ | 11.38 | 5.50% | $ | 15,820 | 0.47% | 2.56% | (g | ) | (g | ) | 4.20% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 11.38 | 0.12 | 0.21 | 0.33 | (0.12 | ) | (0.11 | ) | (0.23 | ) | $ | 11.48 | 2.91% | (e) | $ | 17,755 | 0.56% | (f) | 2.07% | (f) | (g | ) | (g | ) | 3.16% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from December 12, 2001 (commencement of operations) through December 31, 2001. |
(d) | On April 30, 2004, the existing share Class of the Fund was renamed Class II Shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
(h) | For the period from April 30, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Investor Destinations Moderate Fund (the “Fund”).
The Fund is constructed as a “fund of funds,” which means that the Fund pursues its investment objective by allocating the Fund’s investments primarily among other affiliated mutual funds (the “Underlying Funds”). The Underlying Funds typically invest, either directly or indirectly, in stocks, bonds, and other securities including the Nationwide Contract. The Nationwide Contract is a fixed interest contract issued and guaranteed by Nationwide Life Insurance Company (“Nationwide”). This contract has a stable principal value and will pay the Fund a fixed rate of interest. The fixed interest rate must be at least 3.50% (on an annual basis), but may be higher and is currently adjusted on a quarterly basis. Nationwide will calculate the interest rate in the same way that it calculates guaranteed interest rates for similar contracts. Because the contract is guaranteed by Nationwide, assuming no default, the Fund receives no more or less than the guaranteed amount and will not directly participate in the actual experience of the assets underlying the contract. Although under certain market conditions the Fund’s performance may be hurt by its investment in the Nationwide Contract, the portfolio management team believes that the relatively stable nature of the Nationwide Contract should reduce the Fund’s volatility and overall risk, especially when the bond and stock markets decline simultaneously. The Fund’s target allocation range is 5-15%.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Shares of the Underlying Funds in which the Trust’s Fund invests are valued at their respective net asset values as reported by the Underlying Funds. The securities in the Underlying Funds generally are valued as of the close of business of the regular session of trading on the New York Stock Exchange (usually at 4 p.m. Eastern time). The Underlying Funds generally value securities and assets at current market value. Under most circumstances, the fixed interest contract is valued at par value each day, which is deemed to be fair value. The par value is calculated each day by the summation of the
7
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
following factors: prior day’s par value; prior day’s interest accrued (par multiplied by guaranteed fixed rate); and current day net purchase or redemption.
The following policies, (b) through (i), represent the accounting policies applicable to the Underlying Funds.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of future contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$1,891,249,229 | $155,845,816 | $(23,611,164) | $132,234,652 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.13% based on the Fund’s average daily net assets.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Funds for expenses associated with the distribution of the shares of the Funds. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of each class of shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $1,358,635 in Administrative Services Fees from the Fund.
Because the Fund invests primarily in other affiliated funds, the Fund is a shareholder of those Underlying Funds. The Underlying Funds and the Nationwide Contract do not charge the Fund any sales charge for buying or selling shares. However, the Fund indirectly pays a portion of the operating expenses, including management fees of the Underlying Funds and short-term investments the Fund holds. These expenses are deducted from the Underlying Funds before their share prices are calculated and are in addition to the fees and expenses of the Fund. Actual indirect expenses vary depending on how the Fund’s assets are spread among the underlying investments.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $2,062.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $400,175,843 and sales of $53,250,443.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its composite benchmark by 256 basis points for the one-year period ended September 30, 2005 and by 140 basis points for the trailing three-year period. The Board also considered that the Fund ranked in the second quartile of the Lipper Balanced Funds category for both the one- and three-year periods, beating the category median by 167 basis points and 118 basis points, respectively. The Board discussed with management the small number of peer funds in the report and the comparability of the Fund to others in its peer group since some of these funds are actively-managed.
Next, the Board reviewed the Fund’s contractual advisory fee and considered the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group, while the Fund’s total expenses are above the median of its Lipper Expense Group by 41 basis points. The Board discussed with management the reasons for this expense disparity. Management explained that the Fund share class used in the Lipper report was a share class with distribution expenses (Rule 12b-1 and administrative services fees) which are not found in most of the Fund’s peers in the Lipper reports either because
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Lipper had selected a share class without a Rule 12b-1 fee, or the actively managed underlying funds had higher fees and distribution expenses may have been paid by the advisers of these other funds from profits. Management noted that, without inclusion of these distribution fees, the Fund’s expenses are only 2 basis points above the median of its Lipper Expense Group. The Board was satisfied with management’s explanation of the expense disparity.
As the Fund is a “fund-of-funds” that invests its assets in one or more underlying funds (as well as a Nationwide insurance contract) the Fund bears its proportionate share of the operating expenses (including advisory fees) of each underlying fund in which the Fund invest. Therefore, as shareholders of the Fund, you indirectly bear a proportionate share of these underlying fund expenses. The Board considered whether the Fund’s payment of its proportionate share of the advisory fees of the underlying funds are for advisory services that are “in addition to” those advisory and subadvisory services your Fund receives from its adviser and subadviser, Fund Asset Management (“FAM”). The Board considered management’s reports that there was no layering of fees and noted the additional services management provides to the Fund that are in addition to the advisory services that are provided to the underlying funds. Finally, the Board reviewed the adviser’s profitability in light of all of these factors, and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Investor Destinations Moderately Conservative Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIDMC (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Investor Destinations Moderately Conservative Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period*2 | Annualized Expense Ratio*2 | ||||||||||
GVIT Investor Destinations Moderately Conservative Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,018.60 | $ | 2.80 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,018.40 | $ | 2.80 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 184/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
2 | Expenses are based on the direct expenses of the Fund and do not include the effect of the underlying Funds’ expenses, which are disclosed in the Fee and Expense table and described more fully in a footnote to that table in your Fund prospectus. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Investor Destinations Moderately Conservative Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Mutual Funds | 86.8% | |
Fixed Contract | 13.2% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Top Holdings | ||
Gartmore Bond Index Fund, Institutional Class | 35.0% | |
Gartmore S&P 500 Index Fund, Institutional Class | 18.4% | |
Nationwide Fixed Contract, 3.50% | 13.2% | |
Gartmore Enhanced Income Fund, Institutional Class | 11.8% | |
Gartmore Mid Cap Market Index Fund, Institutional Class | 9.1% | |
Gartmore International Index Fund, Institutional Class | 8.7% | |
GVIT S&P 500 Index Fund, ID Class | 1.6% | |
GVIT International Index Fund, ID Class | 1.3% | |
GVIT Mid Cap Index Fund, ID Class | 0.9% | |
100.0% | ||
Asset Allocation Detail | ||
Fixed Income Funds | 46.9% | |
Equity Funds | 39.9% | |
Fixed Contract | 13.2% | |
100.0% | ||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY CONSERVATIVE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | ||||
MUTUAL FUNDS (86.8%) | |||||
Equity Funds (39.9%) | |||||
GVIT International Index Fund, ID Class (b) | 803,042 | $ | 7,669,049 | ||
GVIT Mid Cap Index Fund, ID Class (b) | 303,707 | 5,375,618 | |||
GVIT S&P 500 Index Fund, ID Class (b) | 1,042,262 | 9,234,445 | |||
Gartmore International Index Fund, Institutional Class (b) | 5,054,841 | 49,891,285 | |||
Gartmore Mid Cap Market Index Fund, Institutional Class (b) | 3,397,442 | 52,184,716 | |||
Gartmore S&P 500 Index Fund, Institutional Class (b) | 9,741,143 | 105,886,220 | |||
230,241,333 | |||||
Fixed Income Funds (46.9%) | |||||
Gartmore Bond Index Fund, Institutional Class (b) | 19,214,115 | 202,132,493 | |||
Gartmore Enhanced Income Fund, Institutional Class (b) | 7,499,626 | 68,171,603 | |||
270,304,096 | |||||
Total Mutual Funds | 500,545,429 | ||||
Principal Amount | Value | ||||||
FIXED CONTRACT (13.2%) | |||||||
Nationwide Fixed Contract, 3.50% (b) (c) | $ | 75,957,015 | $ | 75,957,015 | |||
Total Fixed Contract | 75,957,015 | ||||||
Total Investments (Cost $555,662,576) (a) — 100.0% | 576,502,444 | ||||||
Liabilities in excess of other assets — (0.0%) | (200,943 | ) | |||||
NET ASSETS — 100.0% | $ | 576,301,501 | |||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Investment in affiliate. |
(c) | The Nationwide Fixed Contract rate changes quarterly. The security is restricted and as the affiliated counterparty is required by contract to redeem within five days upon request, it has been deemed liquid pursuant to procedures approved by the Board of Trustees. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY CONSERVATIVE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments in affiliated securities, at value (cost $555,662,576) | $ | 576,502,444 | |
Interest and dividends receivable | 906,811 | ||
Receivable for capital shares issued | 7,972,772 | ||
Prepaid expenses and other assets | 6,525 | ||
Total Assets | 585,388,552 | ||
Liabilities: | |||
Payable for investments purchased | 8,870,709 | ||
Payable for capital shares redeemed | 1,173 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 60,467 | ||
Distribution fees | 116,283 | ||
Administrative servicing fees | 26,652 | ||
Other | 11,767 | ||
Total Liabilities | 9,087,051 | ||
Net Assets | $ | 576,301,501 | |
Represented by: | |||
Capital | $ | 545,439,803 | |
Accumulated net investment income (loss) | 149,482 | ||
Accumulated net realized gains (losses) from investment transactions | 9,872,348 | ||
Net unrealized appreciation (depreciation) on investments | 20,839,868 | ||
Net Assets | $ | 576,301,501 | |
Net Assets: | |||
Class II Shares | $ | 572,207,987 | |
Class VI Shares | 4,093,514 | ||
Total | $ | 576,301,501 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class II Shares | 52,848,005 | ||
Class VI Shares | 378,812 | ||
Total | 53,226,817 | ||
Net asset value and offering price per share:* | |||
Class II Shares | $ | 10.83 | |
Class VI Shares | $ | 10.81 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income from affiliates | $ | 1,026,212 | ||
Dividend income from affiliates | 7,275,162 | |||
Total Income | 8,301,374 | |||
Expenses: | ||||
Investment advisory fees | 357,319 | |||
Distribution Fees Class II | 681,943 | |||
Distribution Fees Class VI | 5,215 | |||
Administrative servicing fees | 401,643 | |||
Administrative servicing fees | 3,129 | |||
Trustee fees | 11,348 | |||
Other | 81,325 | |||
Total expenses before earnings credit | 1,541,922 | |||
Earnings credit (Note 6) | (2 | ) | ||
Total Expenses | 1,541,920 | |||
Net Investment Income (Loss) | 6,759,454 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Realized gains (losses) on investment transactions with affiliates | 10,543,843 | |||
Realized gains distributions from underlying funds | 35,218 | |||
Net realized gains (losses) on investment transactions | 10,579,061 | |||
Net change in unrealized appreciation/depreciation on investments | (7,930,326 | ) | ||
Net realized/unrealized gains (losses) on investments | 2,648,735 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 9,408,189 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS MODERATELY CONSERVATIVE FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 6,759,454 | $ | 12,773,673 | ||||
Net realized gains (losses) on investment transactions | 10,579,061 | 12,711,017 | ||||||
Net change in unrealized appreciation/depreciation on investments | (7,930,326 | ) | (2,994,473 | ) | ||||
Change in net assets resulting from operations | 9,408,189 | 22,490,217 | ||||||
Distributions to Class II Shareholders from | ||||||||
Net investment income | (6,559,517 | ) | (12,666,533 | ) | ||||
Net realized gains on investments | (7,615,982 | ) | (8,952,770 | ) | ||||
Distributions to Class VI Shareholders from: | ||||||||
Net investment income | (50,455 | ) | (107,725 | ) | ||||
Net realized gains on investments | (54,581 | ) | (59,047 | ) | ||||
Change in net assets from shareholder distributions | (14,280,535 | ) | (21,786,075 | ) | ||||
Change in net assets from capital transactions | 51,482,830 | 103,201,873 | ||||||
Change in net assets | 46,610,484 | 103,906,015 | ||||||
Net Assets: | ||||||||
Beginning of period | 529,691,017 | 425,785,002 | ||||||
End of period | $ | 576,301,501 | $ | 529,691,017 | ||||
Accumulated net investment income (loss) | $ | 149,482 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 83,233,250 | $ | 137,854,059 | ||||
Dividends reinvested | 14,175,495 | 21,619,257 | ||||||
Cost of shares redeemed | (45,773,055 | ) | (59,772,596 | ) | ||||
51,635,690 | 99,700,720 | |||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 1,320,594 | 8,328,684 | ||||||
Dividends reinvested | 105,036 | 166,772 | ||||||
Cost of shares redeemed | (1,578,490 | ) | (4,994,303 | ) | ||||
(152,860 | ) | 3,501,153 | ||||||
Change in net assets from capital transactions | $ | 51,482,830 | $ | 103,201,873 | ||||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 7,536,173 | 12,685,140 | ||||||
Reinvested | 1,314,176 | 1,990,073 | ||||||
Redeemed | (4,152,713 | ) | (5,480,678 | ) | ||||
4,697,636 | 9,194,535 | |||||||
Class VI Shares | ||||||||
Issued | 119,854 | 767,804 | ||||||
Reinvested | 9,749 | 15,333 | ||||||
Redeemed | (142,145 | ) | (457,741 | ) | ||||
(12,542 | ) | 325,396 | ||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Investor Destinations Moderately Conservative Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(c) | $ | 10.00 | 0.03 | 0.04 | 0.07 | (0.03 | ) | — | (0.03 | ) | $ | 10.04 | 0.65% | (e) | $ | 503 | 0.61% | (f) | 4.56% | (f) | 24.88% | (f) | (19.71% | )(f) | 0.60% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.04 | 0.18 | (0.60 | ) | (0.42 | ) | (0.18 | ) | (0.01 | ) | (0.19 | ) | $ | 9.43 | (4.15% | ) | $ | 95,669 | 0.56% | 2.96% | (g | ) | (g) | 35.19% | ||||||||||||||||||
Year Ended December 31, 2003 | $ | 9.43 | 0.21 | 1.07 | 1.28 | (0.21 | ) | (0.02 | ) | (0.23 | ) | $ | 10.48 | 13.70% | $ | 258,529 | 0.56% | 2.32% | (g | ) | (g) | 12.61% | |||||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 10.48 | 0.23 | 0.50 | 0.73 | (0.23 | ) | (0.07 | ) | (0.30 | ) | $ | 10.91 | 7.16% | $ | 425,066 | 0.56% | 2.35% | (g | ) | (g) | 7.18% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.91 | 0.28 | 0.20 | 0.48 | (0.28 | ) | (0.20 | ) | (0.48 | ) | $ | 10.91 | 4.49% | $ | 525,426 | 0.56% | 2.66% | (g | ) | (g) | 11.32% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.91 | 0.13 | 0.07 | 0.20 | (0.13 | ) | (0.15 | ) | (0.28 | ) | $ | 10.83 | 1.86% | (e) | $ | 572,208 | 0.56% | (f) | 2.46% | (f) | (g | ) | (g) | 10.27% | ||||||||||||||||||
Class VI Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(h) | $ | 10.44 | 0.20 | 0.49 | 0.69 | (0.20 | ) | (0.03 | ) | (0.23 | ) | $ | 10.90 | 6.67% | (e) | $ | 719 | 0.41% | (f) | 3.37% | (f) | (g | ) | (g) | 7.18% | ||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.90 | 0.30 | 0.20 | 0.50 | (0.30 | ) | (0.20 | ) | (0.50 | ) | $ | 10.90 | 4.65% | $ | 4,265 | 0.48% | 2.65% | (g | ) | (g) | 11.32% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.90 | 0.14 | 0.06 | 0.20 | (0.14 | ) | (0.15 | ) | (0.29 | ) | $ | 10.81 | 1.84% | (e) | $ | 4,094 | 0.56% | (f) | 2.44% | (f) | (g | ) | (g) | 10.27% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from December 12, 2001 (commencement of operations) through December 31, 2001. |
(d) | On April 30, 2004, the existing share Class of the Fund was renamed Class II Shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
(h) | For the period from April 30, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Investor Destinations Moderately Conservative Fund (the “Fund”).
The Fund is constructed as a “fund of funds,” which means that the Fund pursues its investment objective by allocating the Fund’s investments primarily among other affiliated mutual funds (the “Underlying Funds”). The Underlying Funds typically invest, either directly or indirectly, in stocks, bonds, and other securities including the Nationwide Contract. The Nationwide Contract is a fixed interest contract issued and guaranteed by Nationwide Life Insurance Company (“Nationwide”). This contract has a stable principal value and will pay the Fund a fixed rate of interest. The fixed interest rate must be at least 3.50% (on an annual basis), but may be higher and is currently adjusted on a quarterly basis. Nationwide will calculate the interest rate in the same way that it calculates guaranteed interest rates for similar contracts. Because the contract is guaranteed by Nationwide, assuming no default, the Fund receives no more or less than the guaranteed amount and will not directly participate in the actual experience of the assets underlying the contract. Although under certain market conditions the Fund’s performance may be hurt by its investment in the Nationwide Contract, the portfolio management team believes that the relatively stable nature of the Nationwide Contract should reduce the Fund’s volatility and overall risk, especially when the bond and stock markets decline simultaneously. The Fund’s target allocation range is 10-20%.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Shares of the Underlying Funds in which the Trust’s Fund invests are valued at their respective net asset values as reported by the Underlying Funds. The securities in the Underlying Funds generally are valued as of the close of business of the regular session of trading on the New York Stock Exchange (usually at 4 p.m. Eastern time). The Underlying Funds generally value securities and assets at current market value. Under most circumstances, the fixed interest contract is valued at par value each day, which is deemed to be fair value. The par value is calculated each day by the summation of the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
following factors: prior day’s par value; prior day’s interest accrued (par multiplied by guaranteed fixed rate); and current day net purchase or redemption.
The following policies, (b) through (i), represent the accounting policies applicable to the Underlying Funds.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||||||
$556,957,990 | $ | 30,172,296 | $ | (10,627,842 | ) | $ | 19,544,454 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.13% based on the Fund’s average daily net assets.
Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Funds for expenses associated with the distribution of the shares of the Funds. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of each class of shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $412,502 in Administrative Services Fees from the Fund.
Because the Fund invests primarily in other affiliated funds, the Fund is a shareholder of those Underlying Funds. The Underlying Funds and the Nationwide Contract do not charge the Fund any sales charge for buying or selling shares. However, the Fund indirectly pays a portion of the operating expenses, including management fees of the Underlying Funds and short-term investments the Fund holds. These expenses are deducted from the Underlying Funds before their share prices are calculated and are in addition to the fees and expenses of the Fund. Actual indirect expenses vary depending on how the Fund’s assets are spread among the underlying investments.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had no contributions to capital due to collection of redemption fees.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $84,144,386 and sales of $49,798,686.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its composite benchmark by 161 basis points over the one-year period ended September 5, 2005 and by 79 basis points over the trailing three-year period. The Board considered that the Fund ranked in the second quartile of the Lipper Income Funds category for the one-year period, and beat the category median by 27 basis points, The Board also considered that the Fund ranked in the third quartile and underperformed its category median by 230 basis points over the three-year period.
Next, the Board reviewed the Fund’s contractual advisory fee and considered the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed expense group. Moreover, the Board considered that the Fund’s total expenses were above the median of the Fund’s lipper Expense Group by 24 basis points. The Board discussed with management the reasons for this expense disparity. Management explained that the Fund share class used in the Lipper report was a share class with distribution expenses (Rule 12b-1 and administrative services fees) which are not found in most of the Fund’s peers in the Lipper reports either because Lipper had selected a share class without a Rule 12b-1 fee, or the actively
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
managed underlying funds had higher fees and distribution expenses may have been paid by the advisers of these other funds from profits. Without these fees, the Fund’s expenses are at the median of the Lipper Expense group. The Board was satisfied with management’s explanation of the expense disparity.
As the Fund is a “fund-of-funds” that invests its assets in one or more underlying funds (as well as a Nationwide insurance contract) the Fund bears its proportionate share of the operating expenses (including advisory fees) of each underlying fund in which the Fund invest. Therefore, as shareholders of the Fund, you indirectly bear a proportionate share of these underlying fund expenses. The Board considered whether the Fund’s payment of its proportionate share of the advisory fees of the underlying funds are for advisory services that are “in addition to” those advisory and subadvisory services your Fund receives from its adviser and subadviser, Fund Asset Management (“FAM”). The Board considered management’s reports that there was no layering of fees and noted the additional services management provides to the Fund that are in addition to the advisory services that are provided to the underlying funds. Finally, the Board reviewed the adviser’s profitability in light of all of these factors and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Investor Destinations Conservative Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
6 | Financial Highlights | |
7 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIDC (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Investor Destinations Conservative Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period*2 | Annualized Expense Ratio*2 | ||||||||||
GVIT Investor Destinations Conservative Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,012.30 | $ | 2.79 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 1,012.00 | $ | 2.79 | 0.56% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,022.02 | $ | 2.81 | 0.56% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 184/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
2 | Expenses are based on the direct expenses of the Fund and do not include the effect of the underlying Funds’ expenses, which are disclosed in the Fee and Expense table and described more fully in a footnote to that table in your Fund prospectus. |
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Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Investor Destinations Conservative Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Mutual Funds | 85.1% | |
Fixed Contract | 14.9% | |
Liabilities in excess of other assets | 0.0% | |
100.0% | ||
Top Holdings | ||
Gartmore Bond Index Fund, Institutional Class | 40.1% | |
Gartmore Enhanced Income Fund, Institutional Class | 20.1% | |
Nationwide Fixed Contract, 3.50% | 14.9% | |
Gartmore S&P 500 Index Fund, Institutional Class | 8.9% | |
Gartmore GVIT Money Market Fund, ID Class | 5.0% | |
Gartmore Mid Cap Market Index Fund, Institutional Class | 4.4% | |
Gartmore International Index Fund, Institutional Class | 2.5% | |
GVIT International Index Fund, ID Class | 2.5% | |
GVIT S&P 500 Index Fund, ID Class | 1.0% | |
GVIT Mid Cap Index Fund, ID Class | 0.6% | |
100.0% | ||
Asset Allocation Detail | ||
Fixed Income Funds | 60.1% | |
Equity Funds | 20.0% | |
Money Market Fund | 5.0% | |
Fixed Contract | 14.9% | |
100.0% | ||
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GARTMORE GVIT INVESTOR DESTINATIONS CONSERVATIVE FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares | Value | ||||
MUTUAL FUNDS (85.1%) | |||||
Equity Funds (20.0%) | |||||
GVIT International Index Fund, ID Class (b) | 803,042 | $ | 7,669,049 | ||
GVIT Mid Cap Index Fund, ID Class (b) | 107,380 | 1,900,620 | |||
GVIT S&P 500 Index Fund, ID Class (b) | 360,657 | 3,195,425 | |||
Gartmore International Index Fund, Institutional Class (b) | 784,487 | 7,742,882 | |||
Gartmore Mid Cap Market Index Fund, Institutional Class (b) | 879,643 | 13,511,311 | |||
Gartmore S&P 500 Index Fund, Institutional Class (b) | 2,541,714 | 27,628,436 | |||
61,647,723 | |||||
Fixed Income Funds (60.1%) | |||||
Gartmore Bond Index Fund, Institutional Class (b) | 11,755,448 | 123,667,315 | |||
Gartmore Enhanced Income Fund, Institutional Class (b) | 6,837,668 | 62,154,402 | |||
185,821,717 | |||||
Money Market Funds (5.0%) | |||||
Gartmore GVIT Money Market Fund, ID Class (b) | 15,470,722 | 15,470,722 | |||
15,470,722 | |||||
Total Mutual Funds | 262,940,162 | ||||
Principal Amount | Value | ||||||
FIXED CONTRACT (14.9%) | |||||||
Nationwide Fixed Contract, 3.50% (b) (c) | $ | 45,930,320 | $ | 45,930,320 | |||
Total Fixed Contract | 45,930,320 | ||||||
Total Investments (Cost $309,572,843) (a) — 100.0% | 308,870,482 | ||||||
Liabilities in excess of other assets — (0.0%) | (127,801 | ) | |||||
NET ASSETS — 100.0% | $ | 308,742,681 | |||||
(a) | See notes to financial statements for unrealized appreciation (depreciation) of securities. |
(b) | Investment in affiliate. |
(c) | The Nationwide Fixed Contract rate changes quarterly. The security is restricted and as the affiliated counterparty is required by contract to redeem within five days upon request, it has been deemed liquid pursuant to procedures approved by the Board of Trustees. |
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GARTMORE GVIT INVESTOR DESTINATIONS CONSERVATIVE FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments in affiliated securities, at value (cost $309,572,843) | $ | 308,870,482 | ||
Interest and dividends receivable | 636,523 | |||
Receivable for capital shares issued | 310,498 | |||
Receivable for investments sold | 17,355,596 | |||
Prepaid expenses and other assets | 4,386 | |||
Total Assets | 327,177,485 | |||
Liabilities: | ||||
Payable for investments purchased | 631,867 | |||
Payable for capital shares redeemed | 17,666,094 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 33,681 | |||
Distribution fees | 64,772 | |||
Administrative servicing fees | 22,256 | |||
Other | 16,134 | |||
Total Liabilities | 18,434,804 | |||
Net Assets | $ | 308,742,681 | ||
Represented by: | ||||
Capital | $ | 306,237,874 | ||
Accumulated net investment income (loss) | 120,513 | |||
Accumulated net realized gains (losses) from investment transactions | 3,086,655 | |||
Net unrealized appreciation (depreciation) on investments | (702,361 | ) | ||
Net Assets | $ | 308,742,681 | ||
Net Assets: | ||||
Class II Shares | $ | 302,914,066 | ||
Class VI Shares | 5,828,615 | |||
Total | $ | 308,742,681 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 29,813,335 | |||
Class VI Shares | 574,852 | |||
Total | 30,388,187 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 10.16 | ||
Class VI Shares | $ | 10.14 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income from affiliates | $ | 894,533 | ||
Dividend income from affiliates | 4,198,737 | |||
Total Income | 5,093,270 | |||
Expenses: | ||||
Investment advisory fees | 194,646 | |||
Distribution Fees Class II | 368,261 | |||
Distribution Fees Class VI | 6,063 | |||
Administrative servicing fees | 218,923 | |||
Administrative servicing fees | 3,628 | |||
Trustee fees | 5,035 | |||
Other | 39,608 | |||
Total expenses before earnings credit | 836,164 | |||
Earnings credit (Note 6) | (1 | ) | ||
Total Expenses | 836,163 | |||
Net Investment Income (Loss) | 4,257,107 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Realized gains (losses) on investment transactions with affiliates | 4,310,708 | |||
Realized gains distributions from underlying funds | 17,864 | |||
Net realized gains (losses) on investment transactions | 4,328,572 | |||
Net change in unrealized appreciation/depreciation on investments | (4,715,681 | ) | ||
Net realized/unrealized gains (losses) on investments | (387,109 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 3,869,998 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT INVESTOR DESTINATIONS CONSERVATIVE FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 4,257,107 | $ | 7,755,784 | ||||
Net realized gains (losses) on investment transactions | 4,328,572 | 6,580,232 | ||||||
Net change in unrealized appreciation/depreciation on investments | (4,715,681 | ) | (5,118,290 | ) | ||||
Change in net assets resulting from operations | 3,869,998 | 9,217,726 | ||||||
Distributions to Class II Shareholders from | ||||||||
Net investment income | (4,067,505 | ) | (7,651,860 | ) | ||||
Net realized gains on investments | (3,126,505 | ) | (6,036,605 | ) | ||||
Distributions to Class VI Shareholders from: | ||||||||
Net investment income | (69,891 | ) | (103,122 | ) | ||||
Net realized gains on investments | (56,609 | ) | (80,678 | ) | ||||
Change in net assets from shareholder distributions | (7,320,510 | ) | (13,872,265 | ) | ||||
Change in net assets from capital transactions | 27,217,232 | 31,898,976 | ||||||
Change in net assets | 23,766,720 | 27,244,437 | ||||||
Net Assets: | ||||||||
Beginning of period | 284,975,961 | 257,731,524 | ||||||
End of period | $ | 308,742,681 | $ | 284,975,961 | ||||
Accumulated net investment income (loss) | $ | 120,513 | $ | 802 | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 76,768,468 | $ | 106,708,885 | ||||
Dividends reinvested | 7,193,980 | 13,688,459 | ||||||
Cost of shares redeemed | (58,007,271 | ) | (91,750,457 | ) | ||||
25,955,177 | 28,646,887 | |||||||
Class VI Shares | ||||||||
Proceeds from shares issued | 3,119,850 | 4,776,266 | ||||||
Dividends reinvested | 126,499 | 183,800 | ||||||
Cost of shares redeemed | (1,984,294 | ) | (1,707,977 | ) | ||||
1,262,055 | 3,252,089 | |||||||
Change in net assets from capital transactions | $ | 27,217,232 | $ | 31,898,976 | ||||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 7,442,136 | 10,236,570 | ||||||
Reinvested | 708,325 | 1,325,239 | ||||||
Redeemed | (5,631,835 | ) | (8,785,180 | ) | ||||
2,518,626 | 2,776,629 | |||||||
Class VI Shares | ||||||||
Issued | 301,713 | 460,054 | ||||||
Reinvested | 12,492 | 17,817 | ||||||
Redeemed | (192,183 | ) | (164,264 | ) | ||||
122,022 | 313,607 | |||||||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Investor Destinations Conservative Fund
Investment Activities: | Distributions | Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(c) | $ | 10.00 | 0.02 | 0.01 | 0.03 | (0.02 | ) | — | (0.02 | ) | $ | 10.01 | 0.34% | (e) | $ | 502 | 0.61% | (f) | 4.39% | (f) | 24.89% | (f) | (19.89% | )(f) | 0.40% | |||||||||||||||||
Year Ended December 31, 2002 | $ | 10.01 | 0.21 | (0.18 | ) | 0.03 | (0.21 | ) | — | (0.21 | ) | $ | 9.83 | 0.40% | $ | 90,358 | 0.56% | 3.30% | (g | ) | (g | ) | 28.70% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 9.83 | 0.24 | 0.53 | 0.77 | (0.24 | ) | (0.04 | ) | (0.28 | ) | $ | 10.32 | 7.91% | $ | 90,624 | 0.56% | 2.55% | (g | ) | (g | ) | 24.84% | |||||||||||||||||||
Year Ended December 31, 2004(d) | $ | 10.32 | 0.24 | 0.23 | 0.47 | (0.24 | ) | (0.10 | ) | (0.34 | ) | $ | 10.45 | 4.65% | $ | 256,277 | 0.56% | 2.39% | (g | ) | (g | ) | 15.34% | |||||||||||||||||||
Year Ended December 31, 2005 | $ | 10.45 | 0.29 | 0.05 | 0.34 | (0.29 | ) | (0.23 | ) | (0.52 | ) | $ | 10.27 | 3.31% | $ | 280,331 | 0.57% | 2.79% | (g | ) | (g | ) | 30.49% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.27 | 0.13 | (0.01 | ) | 0.12 | (0.13 | ) | (0.10 | ) | (0.23 | ) | $ | 10.16 | 1.23% | (e) | $ | 302,914 | 0.56% | (f) | 2.84% | (f) | (g | ) | (g | ) | 27.61% | |||||||||||||||
Class VI Shares | ||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2004(h) | $ | 10.26 | 0.21 | 0.25 | 0.46 | (0.21 | ) | (0.06 | ) | (0.27 | ) | $ | 10.45 | 4.48% | (e) | $ | 1,454 | 0.41% | (f) | 3.00% | (f) | (g | ) | (g | ) | 15.34% | ||||||||||||||||
Year Ended December 31, 2005 | $ | 10.45 | 0.31 | 0.04 | 0.35 | (0.31 | ) | (0.23 | ) | (0.54 | ) | $ | 10.26 | 3.39% | $ | 4,645 | 0.47% | 2.95% | (g | ) | (g | ) | 30.49% | |||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.26 | 0.14 | (0.02 | ) | 0.12 | (0.14 | ) | (0.10 | ) | (0.24 | ) | $ | 10.14 | 1.20% | (e) | $ | 5,829 | 0.56% | (f) | 2.82% | (f) | (g | ) | (g | ) | 27.61% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from December 12, 2001 (commencement of operations) through December 31, 2001. |
(d) | On April 30, 2004, the existing share Class of the Fund was renamed Class II Shares. |
(e) | Not annualized. |
(f) | Annualized. |
(g) | There were no fee reductions during the period. |
(h) | For the period from April 30, 2004 (commencement of operations) through December 31, 2004. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Investor Destinations Conservative Fund (the “Fund”).
The Fund is constructed as a “fund of funds,” which means that the Fund pursues its investment objective by allocating the Fund’s investments primarily among other affiliated mutual funds (the “Underlying Funds”). The Underlying Funds typically invest, either directly or indirectly, in stocks, bonds, and other securities including the Nationwide Contract. The Nationwide Contract is a fixed interest contract issued and guaranteed by Nationwide Life Insurance Company (“Nationwide”). This contract has a stable principal value and will pay the Fund a fixed rate of interest. The fixed interest rate must be at least 3.50% (on an annual basis), but may be higher and is currently adjusted on a quarterly basis. Nationwide will calculate the interest rate in the same way that it calculates guaranteed interest rates for similar contracts. Because the contract is guaranteed by Nationwide, assuming no default, the Fund receives no more or less than the guaranteed amount and will not directly participate in the actual experience of the assets underlying the contract. Although under certain market conditions the Fund’s performance may be hurt by its investment in the Nationwide Contract, the portfolio management team believes that the relatively stable nature of the Nationwide Contract should reduce the Fund’s volatility and overall risk, especially when the bond and stock markets decline simultaneously. The Fund’s target allocation range is 20-30%.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Shares of the Underlying Funds in which the Trust’s Fund invests are valued at their respective net asset values as reported by the Underlying Funds. The securities in the Underlying Funds generally are valued as of the close of business of the regular session of trading on the New York Stock Exchange (usually at 4 p.m. Eastern time). The Underlying Funds generally value securities and assets at current market value. Under most circumstances, the fixed interest contract is valued at par value each day, which is deemed to be fair value. The par value is calculated each day by the summation of the
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
following factors: prior day’s par value; prior day’s interest accrued (par multiplied by guaranteed fixed rate); and current day net purchase or redemption.
The following policies, (b) through (i), represent the accounting policies applicable to the Underlying Funds.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Mortgage Dollar Rolls |
The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Mortgage dollar rolls may be implemented in the “to be” announced (“TBA”) market and are referred to as TBA’s on the Statement of Investments of the Fund. During the roll period, the Fund foregoes principal and interest paid on the mortgage-backed securities. The Fund is compensated by fee income or the difference between the current sales price and the lower forward price for the future purchase. Mortgage dollar rolls are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Board of Trustees.
(i) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(j) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$311,877,935 | $3,751,668 | $(6,759,121) | $(3,007,453) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders.
Under the terms of the Investment Advisory Agreement, the Fund pays GMF an investment advisory fee of 0.13% based on the Fund’s average daily net assets.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Funds for expenses associated with the distribution of the shares of the Funds. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of each class of shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $224,709 in Administrative Services Fees from the Fund.
Because the Fund invests primarily in other affiliated funds, the Fund is a shareholder of those Underlying Funds. The Underlying Funds and the Nationwide Contract do not charge the Fund any sales charge for buying or selling shares. However, the Fund indirectly pays a portion of the operating expenses, including management fees of the Underlying Funds and short-term investments the Fund holds. These expenses are deducted from the Underlying Funds before their share prices are calculated and are in addition to the fees and expenses of the Fund. Actual indirect expenses vary depending on how the Fund’s assets are spread among the underlying investments.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $1,602.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $101,951,811 and sales of $66,701,491.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of each Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering each Funds’ investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about each Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreements (and, where applicable, the sub-advisory agreements) for the Funds, the Board considered among others, the following specific factors with respect to each Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew each Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its composite benchmark for the one- and three-year periods ended September 30, 2005. The Board also considered that the Fund ranked in the fourth quartile of the Lipper Income Funds category for the one- and three-year periods. The Board discussed with management the comparability of the Fund to others in its peer group since some of the funds in the peer group are actively-managed products.
Next, the Board reviewed the contractual advisory fee and noted that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group. Moreover the Fund’s total expenses placed it above the median of the Lipper Expense Group by 29 basis points. The Board discussed with management the reasons for this expense disparity. Management explained that the Fund share class used in the Lipper report was a share class with distribution expenses (Rule 12b-1 and administrative services fees) which are not found in most of the Fund’s peers in the Lipper reports either because Lipper had selected a share class without a Rule 12b-1 fee, or the actively managed underlying funds had higher fees and distribution expenses may have been paid by the advisers of these other funds from profits. Without these fees, the Fund’s expenses are at the median of the Lipper Expense group. The Board was satisfied with management’s explanation of the expense disparity.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
As the Fund is a “fund-of-funds” that invests its assets in one or more underlying funds (as well as a Nationwide insurance contract) the Fund bears its proportionate share of the operating expenses (including advisory fees) of each underlying fund in which the Fund invest. Therefore, as shareholders of the Fund, you indirectly bear a proportionate share of these underlying fund expenses. The Board considered whether the Fund’s payment of its proportionate share of the advisory fees of the underlying funds are for advisory services that are “in addition to” those advisory and subadvisory services your Fund receives from its adviser and subadviser, Fund Asset Management (“FAM”). The Board considered management’s reports that there was no layering of fees and noted the additional services management provides to the Fund that are in addition to the advisory services that are provided to the underlying funds. Finally, the Board reviewed the adviser’s profitability in light of all of these factors and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 1, 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Developing Markets Fund
SemiannualReport
[LOGO] | | June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
7 | Statement of Assets and Liabilities | |
7 | Statement of Operations | |
8 | Statements of Changes in Net Assets | |
9 | Financial Highlights | |
10 | Notes to Financial Statements |
Commentary provided by Gartmore Global Investments, investment adviser to Gartmore Variable Insurance Trust. All opinions and estimates included in this report constitute Gartmore Global Investments’ judgment as of the date of this report and are subject to change without notice.
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GDM (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Developing Markets Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual | Expenses |
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical | Example for Comparison Purposes |
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Developing Markets Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 1,062.10 | $ | 8.28 | 1.62% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,016.77 | $ | 8.13 | 1.62% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Developing Markets Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 91.3% | |
Participation Notes | 5.4% | |
Cash Equivalents | 2.7% | |
Foreign Bond | 0.0% | |
Other assets in excess of liabilities | 0.6% | |
100.0% | ||
Top Holdings* | ||
Samsung Electronics | 3.6% | |
Hana Financial Group, Inc. | 2.8% | |
Gazprom ADR | 2.6% | |
Companhia Vale do Rio Doce, Class A | 2.4% | |
Petroleo Brasileiro SA ADR | 2.2% | |
Bharti Airtel Ltd. | 1.9% | |
Lojas Renner SA | 1.8% | |
America Movil SA de CV ADR | 1.8% | |
Absa Group Ltd. | 1.6% | |
Investcom LLC GDR | 1.6% | |
Other Assets | 77.7% | |
100.0% | ||
Top Industries | ||
Oil & Gas | 14.2% | |
Banking | 12.2% | |
Telecommunications | 7.9% | |
Electronics | 7.7% | |
Retail | 5.5% | |
Financial Services | 5.4% | |
Steel | 4.8% | |
Metals & Mining | 3.7% | |
Mining | 2.7% | |
Building Products | 2.5% | |
Other Assets | 33.4% | |
100.0% | ||
Top Countries | ||
Korea | 16.5% | |
Brazil | 14.7% | |
Taiwan | 12.3% | |
South Africa | 8.5% | |
Russia | 7.5% | |
Mexico | 6.2% | |
Hong Kong | 5.5% | |
China | 4.3% | |
Malaysia | 2.9% | |
Thailand | 2.4% | |
Other Assets | 19.2% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (91.3%) | |||||
ARGENTINA (1.5%) | |||||
Steel (1.5%) | |||||
Ternium SA-Sponsored ADR (b) | 174,500 | $ | 4,217,665 | ||
BERMUDA (1.5%) | |||||
Television (1.5%) | |||||
Central European Media Enterprises Ltd. (b) | 69,800 | 4,410,662 | |||
BRAZIL (14.7%) | |||||
Banking (1.9%) | |||||
Banco Bradesco SA | 85,600 | 2,670,748 | |||
Unibanco GDR | 43,400 | 2,881,326 | |||
5,552,074 | |||||
Brewery (1.0%) | |||||
Ambev Cia Bebid PREF | 7,217,300 | 2,977,753 | |||
Cia De Bebidas PREF | 3,304 | 0 | |||
2,977,753 | |||||
Insurance (0.8%) | |||||
Porto Seguro SA | 133,400 | 2,280,447 | |||
Metals & Mining (2.4%) | |||||
Companhia Vale do Rio Doce, Class A | 338,834 | 6,903,798 | |||
Oil & Gas (3.7%) | |||||
Petroleo Brasileiro SA | 186,800 | 4,159,933 | |||
Petroleo Brasileiro SA ADR | 71,434 | 6,379,770 | |||
10,539,703 | |||||
Residential (1.0%) | |||||
Rossi Residencial SA | 309,000 | 2,926,677 | |||
Retail (1.8%) | |||||
Lojas Renner SA | 99,600 | 5,291,998 | |||
Steel (1.4%) | |||||
Usinas Siderurgicas de Minais Gerais SA | 110,100 | 3,949,947 | |||
Telecommunications (0.7%) | |||||
Tele Norte Leste Participacoes SA ADR | 148,400 | 1,892,100 | |||
42,314,497 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
CHINA (4.3%) | |||||
Building Products (1.0%) | |||||
Anhui Conch Cement Co., Ltd. (c) | 1,842,000 | $ | 3,011,483 | ||
Oil & Gas (2.2%) | |||||
CNOOC Ltd . (c) | 3,500,000 | 2,811,531 | |||
PetroChina Co., Ltd. (c) | 3,004,000 | 3,242,259 | |||
6,053,790 | |||||
Shipping (1.1%) | |||||
Cosco Pacific Ltd. (c) | 1,490,000 | 3,299,986 | |||
12,365,259 | |||||
HONG KONG (5.5%) | |||||
Auto Parts & Equipment (1.1%) | |||||
Dongfeng Motor Corp. (b) (c) | 6,952,000 | 3,255,878 | |||
Diversified Operations (1.3%) | |||||
China Resources Enterprise Ltd. (c) | 1,886,000 | 3,854,719 | |||
Insurance (0.8%) | |||||
China Life Insurance Co., Ltd. (c) | 1,500,000 | 2,376,229 | |||
Oil & Gas (1.3%) | |||||
China Petroleum & Chemical Corp. (c) | 6,726,000 | 3,856,649 | |||
Telecommunications (1.0%) | |||||
China Mobile (Hong Kong) Ltd. (c) | 524,000 | 2,996,657 | |||
16,340,132 | |||||
HUNGARY (0.5%) | |||||
Oil & Gas (0.5%) | |||||
MOL Magyar Olaj-es Gazipari Rt. (c) | 13,300 | 1,368,234 | |||
INDIA (0.2%) | |||||
Beverages (0.2%) | |||||
McDowell & Co., Ltd. GDR (b) | 95,700 | 444,048 | |||
INDONESIA (1.4%) | |||||
Banking (1.4%) | |||||
PT Bank Internasional Indonesia TBK (c) | 198,145,300 | 3,962,408 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
ISRAEL (1.1%) | |||||
Banking (1.1%) | |||||
Bank Leumi Le-Israel (c) | 849,400 | $ | 3,093,315 | ||
KAZAKHSTAN (0.7%) | |||||
Mining (0.7%) | |||||
Kazakhgold Group Ltd. GDR (b) | 97,100 | 1,956,565 | |||
KOREA (16.5%) | |||||
Banking (2.5%) | |||||
Industrial Bank of Korea (c) | 198,000 | 3,331,100 | |||
Kookmin Bank ADR | 47,900 | 3,978,574 | |||
7,309,674 | |||||
Construction (1.2%) | |||||
Hanjin Heavy Industries & Construction Co., Ltd. (c) | 33,500 | 897,441 | |||
Hyundai Development Co. (c) | 59,600 | 2,577,116 | |||
3,474,557 | |||||
Electronics (3.8%) | |||||
KH Vatec Co., Ltd. (b) (c) | 52,088 | 860,711 | |||
Samsung Electronics (c) | 16,090 | 10,216,220 | |||
Samsung Electronics Co., Ltd. GDR | 2 | 486 | |||
11,077,417 | |||||
Financial Services (2.7%) | |||||
Hana Financial Group, Inc. (c) | 169,391 | 7,948,920 | |||
Investment Company (0.6%) | |||||
Macquarie Korea Infrastructure GDR (b) | 235,200 | 1,656,325 | |||
Lighting Products (1.0%) | |||||
Kumho Electric, Inc. (c) | 62,506 | 2,819,002 | |||
Metals (0.9%) | |||||
Korea Zinc Co., Ltd. (c) | 32,500 | 2,548,529 | |||
Oil & Gas (1.5%) | |||||
SK Corp. (c) | 66,490 | 4,277,013 | |||
Retail (1.2%) | |||||
Lotte Shopping Co., Ltd. (b) | 182,951 | 3,509,000 | |||
Tobacco (1.1%) | |||||
KT&G Corp. (c) | 54,421 | 3,178,240 | |||
47,798,677 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
LEBANON (1.6%) | |||||
Telecommunications (1.6%) | |||||
Investcom LLC GDR (b) | 242,500 | $ | 4,651,150 | ||
MALAYSIA (2.9%) | |||||
Agriculture (1.4%) | |||||
IOI Corporation Berhad (c) | 1,013,500 | 3,949,225 | |||
Foreign Banking (1.5%) | |||||
Bumiputra Commerce Holdings Bhd (c) | 2,668,500 | 4,317,214 | |||
8,266,439 | |||||
MEXICO (6.2%) | |||||
Building Materials (1.4%) | |||||
Cemex SA ADR | 70,400 | 4,010,688 | |||
Financial Services (1.3%) | |||||
Grupo Financiero Banorte SA de CV | 1,576,634 | 3,658,342 | |||
Retail (1.1%) | |||||
Wal-Mart de Mexico SA de CV | 1,148,500 | 3,212,091 | |||
Steel (0.6%) | |||||
Industrias CH SA (b) | 644,400 | 1,637,366 | |||
Telecommunications (1.8%) | |||||
America Movil SA de CV ADR | 155,400 | 5,168,604 | |||
17,687,091 | |||||
PERU (1.3%) | |||||
Metals & Mining (1.3%) | |||||
Compania de Minas Buenaventura S.A.U. ADR | 132,100 | 3,603,688 | |||
RUSSIA (7.5%) | |||||
Automobile Manufacturers (0.9%) | |||||
JSC Severstal-Avto (c) | 132,080 | 2,524,398 | |||
Oil & Gas (2.6%) | |||||
Gazprom ADR (c) | 177,400 | 7,459,670 | |||
Retail (0.8%) | |||||
Pyaterochka Holding NV GDR (b) | 133,986 | 2,224,168 | |||
Steel (1.3%) | |||||
Mechel Steel Group OAO ADR | 171,100 | 3,830,929 | |||
4
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
RUSSIA (continued) | |||||
Telecommunications (0.7%) | |||||
Mobile Telesystems ADR | 72,000 | $ | 2,119,680 | ||
Utilities (1.2%) | |||||
RAO Unified Energy System GDR | 47,800 | 3,341,220 | |||
21,500,065 | |||||
SOUTH AFRICA (8.5%) | |||||
Banking (1.7%) | |||||
Absa Group Ltd. (c) | 337,198 | 4,706,725 | |||
Brewery (1.0%) | |||||
SABMiller PLC (c) | 159,100 | 2,863,884 | |||
Diversified Operations (1.0%) | |||||
Barloworld Ltd. (c) | 178,564 | 3,016,016 | |||
Mining (1.2%) | |||||
Harmony Gold Mining Co., Ltd. (b) (c) | 204,620 | 3,310,105 | |||
Oil & Gas (1.5%) | |||||
Sasol Ltd. (c) | 111,900 | 4,305,502 | |||
Retail (0.6%) | |||||
Truworths International Ltd. (c) | 573,400 | 1,722,228 | |||
Telecommunications (1.5%) | |||||
MTN Group Ltd. (c) | 604,163 | 4,452,685 | |||
24,377,145 | |||||
TAIWAN (12.3%) | |||||
Banking (0.7%) | |||||
TA Chong Bank Ltd. (b)(c) | 7,381,972 | 2,010,097 | |||
Building Products (1.5%) | |||||
Taiwan Cement Corp. (c) | 5,906,950 | 4,350,384 | |||
Chemicals (0.9%) | |||||
Taiwan Fertilizer Co., Ltd. (c) | 1,521,000 | 2,530,714 | |||
Circuit Boards (0.8%) | |||||
Unimicron Technology Corp. (c) | 1,700,000 | 2,215,078 | |||
Computers (1.4%) | |||||
Asustek Computer, Inc. (c) | 1,240,000 | 3,046,105 | |||
Hon Hai Precision Industry Co., Ltd. (c) | 160,000 | 989,277 | |||
4,035,382 | |||||
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
TAIWAN (continued) | ||||||
Electronics (3.9%) | ||||||
Au Optronics Corp. (c) | 2,206,830 | $ | 3,129,398 | |||
Delta Electronics, Inc. (c) | 1,525,000 | 4,330,877 | ||||
MediaTek, Inc. (c) | 411,000 | 3,809,764 | ||||
11,270,039 | ||||||
Financial Services (1.4%) | ||||||
Shin Kong Financial Holding Co., Ltd. (c) | 3,573,000 | 3,935,692 | ||||
Semiconductors (1.1%) | ||||||
Vanguard International Semiconductor Corp. (c) | 4,877,000 | 3,287,964 | ||||
Telecommunications (0.6%) | ||||||
Inventec Appliance Corp. (b) (c) | 424,000 | 1,609,304 | ||||
35,244,654 | ||||||
THAILAND (2.4%) | ||||||
Banking (0.7%) | ||||||
Phatra Securities Public Co., Ltd. (c) | 1,638,200 | 1,883,040 | ||||
Mining (0.8%) | ||||||
Banpu Public Co. Ltd. | 713,300 | 2,418,252 | ||||
Oil & Gas (0.9%) | ||||||
Thai Oil Public Co., Ltd. | 1,517,000 | 2,539,097 | ||||
6,840,389 | ||||||
TURKEY (0.7%) | ||||||
Banking (0.7%) | ||||||
Denizbank AS (b) (c) | 29,270 | 258,369 | ||||
Turkiye Vakiflar Bankasi | 453,643 | 1,777,868 | ||||
2,036,237 | ||||||
Total Common Stocks | 262,478,320 | |||||
FOREIGN BOND (0.0%) | ||||||
BRAZIL (0.0%) | ||||||
Metals & Mining (0.0%) | ||||||
Comp Vale DO Rio Doce, 0.00%, 09/29/49 (d) | $ | 20,000 | 0 | |||
Total Foreign Bond | 0 | |||||
5
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | |||||
PARTICIPATION NOTES (5.4%) | ||||||
INDIA (5.4%) | ||||||
Automotive (0.9%) | ||||||
Tata Motors Ltd. | $ | 145,200 | $ | 2,507,604 | ||
Banking (0.2%) | ||||||
ICICI Bank Ltd. | 61,749 | 654,539 | ||||
Building Materials (1.3%) | ||||||
India Cements Ltd. (b) | 1,078,318 | 3,677,065 | ||||
Petrochemicals (1.1%) | ||||||
Reliance Industries Ltd. | 136,366 | 3,140,509 | ||||
Telecommunication Services (1.9%) | ||||||
Bharti Airtel Ltd. (b) (c) | 676,600 | 5,438,979 | ||||
Total Participation Notes | 15,418,696 | |||||
Shares or Principal Amount | Value | |||||
CASH EQUIVALENTS (2.7%) | ||||||
Investments in repurchase agreements (collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $7,803,148) | $ | 7,799,833 | $ | 7,799,833 | ||
Total Cash Equivalents | 7,799,833 | |||||
Total Investments (Cost $277,353,060) (a) — 99.4% | 285,696,849 | |||||
Other assets in excess of liabilities — 0.6% | 1,693,913 | |||||
NET ASSETS — 100.0% | $ | 287,390,762 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair Valued Security. |
(d) | Security has been deemed illiquid. The pricing committee has deemed the security to have zero value based upon procedures adopted by the Board of Trustees. |
ADR | American Depositary Receipt |
GDR | Global Depositary Receipt |
PREF | Preferred Stock |
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation (Depreciation) | ||||||||||
Short Contracts: | ||||||||||||||
Turkish Lira | 07/03/06 | $ | (468,684 | ) | $ | (465,448 | ) | $ | 3,236 | |||||
South African Rand | 07/03/06 | (272,985 | ) | (276,627 | ) | (3,642 | ) | |||||||
South African Rand | 07/05/06 | (309,085 | ) | (316,224 | ) | (7,141 | ) | |||||||
South African Rand | 07/06/06 | (544,644 | ) | (555,750 | ) | (11,107 | ) | |||||||
South African Rand | 07/06/06 | (476,407 | ) | (476,067 | ) | 340 | ||||||||
Total Short Contracts: | $ | (2,071,605 | ) | $ | (2,090,117 | ) | $ | (18,314 | ) | |||||
Long Contract: | ||||||||||||||
Hong Kong Dollar | 07/03/06 | $ | 1,059,352 | $ | 1,059,832 | $ | 480 | |||||||
Hong Kong Dollar | 07/03/06 | 1,291,247 | 1,291,633 | 386 | ||||||||||
Total Long Contracts: | $ | 2,350,599 | $ | 2,351,465 | $ | 866 |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $269,553,227) | $ | 277,897,016 | |
Repurchase agreements, at cost and value | 7,799,833 | ||
Total Investments | 285,696,849 | ||
Cash | 91,115 | ||
Foreign currencies, at value (cost $1,599,859) | 1,609,682 | ||
Interest and dividends receivable | 730,351 | ||
Receivable for capital shares issued | 375,285 | ||
Receivable for investments sold | 6,191,044 | ||
Reclaims receivable | 3,677 | ||
Prepaid expenses and other assets | 171,629 | ||
Total Assets | 294,869,632 | ||
Liabilities: | |||
Payable for capital shares redeemed | 2,254 | ||
Payable for investments purchased | 5,812,692 | ||
Unrealized depreciation on forward foreign currency contracts | 17,448 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 987,023 | ||
Fund administration and transfer agent fees | 24,325 | ||
Distribution fees | 61,285 | ||
Administrative servicing fees | 554,653 | ||
Other | 19,190 | ||
Total Liabilities | 7,478,870 | ||
Net Assets | $ | 287,390,762 | |
Represented by: | |||
Capital | $ | 236,226,085 | |
Accumulated net investment income (loss) | 584,377 | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 42,217,002 | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 8,363,298 | ||
Net Assets | $ | 287,390,762 | |
Net Assets: | |||
Class II Shares | $ | 287,390,762 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class II Shares | 23,168,917 | ||
Net asset value and offering price per share:* | |||
Class II Shares | $ | 12.40 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 199,669 | ||
Dividend income (net of foreign withholding tax of $313,452) | 4,768,761 | |||
Total Income | 4,968,430 | |||
Expenses: | ||||
Investment advisory fees | 1,930,185 | |||
Fund administration and transfer agent fees | 133,839 | |||
Distribution fees Class II Shares | 459,566 | |||
Administrative servicing fees | 414,710 | |||
Trustee fees | 6,608 | |||
Other | 52,890 | |||
Total expenses before earnings credit | 2,997,798 | |||
Earnings credit (Note 6) | (13 | ) | ||
Total Expenses | 2,997,785 | |||
Net Investment Income (Loss) | 1,970,645 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 56,427,499 | |||
Net realized gains (losses) on foreign currency transactions | (235,360 | ) | ||
Net realized gains (losses) on investment and foreign currency transactions | 56,192,139 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (44,268,729 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 11,923,410 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 13,894,055 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT DEVELOPING MARKETS FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 1,970,645 | $ | 1,111,404 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 56,192,139 | 30,881,690 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (44,268,729 | ) | 27,644,222 | |||||
Change in net assets resulting from operations | 13,894,055 | 59,637,316 | ||||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (1,351,035 | ) | (1,197,279 | ) | ||||
Net realized gains on investments | (27,353,923 | ) | (29,349,917 | ) | ||||
Change in net assets from shareholder distributions | (28,704,958 | ) | (30,547,196 | ) | ||||
Change in net assets from capital transactions | (10,849,938 | ) | 89,063,147 | |||||
Change in net assets | (25,660,841 | ) | 118,153,267 | |||||
Net Assets: | ||||||||
Beginning of period | 313,051,603 | 194,898,336 | ||||||
End of period | $ | 287,390,762 | $ | 313,051,603 | ||||
Accumulated net investment income (loss) | $ | 584,377 | $ | (35,233 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Proceeds from shares issued | $ | 117,308,358 | $ | 193,005,165 | ||||
Dividends reinvested | 28,704,936 | 30,547,170 | ||||||
Cost of shares redeemed | (156,863,232 | ) | (134,489,188 | ) | ||||
Change in net assets from capital transactions | $ | (10,849,938 | ) | $ | 89,063,147 | |||
SHARE TRANSACTIONS: | ||||||||
Class II Shares | ||||||||
Issued | 7,892,516 | 16,020,981 | ||||||
Reinvested | 2,440,077 | 2,877,677 | ||||||
Redeemed | (11,163,674 | ) | (11,368,242 | ) | ||||
(831,081 | ) | 7,530,416 | ||||||
See notes to financial statements.
8
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Developing Markets Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover | |||||||||||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Year Ended December 31, 2001 | $ | 7.76 | 0.08 | (0.62 | ) | (0.54 | ) | — | — | — | $ | 7.22 | (6.96% | ) | $ | 100,899 | 1.59% | 1.19% | 1.67% | 1.11% | 118.00% | ||||||||||||||||||||||
Year Ended December 31, 2002 | $ | 7.22 | 0.03 | (0.73 | ) | (0.70 | ) | (0.01 | ) | — | (0.01 | ) | $ | 6.51 | (9.68% | ) | $ | 75,321 | 1.60% | 0.44% | 1.68% | 0.36% | 97.00% | ||||||||||||||||||||
Year Ended December 31, 2003(b) | $ | 6.51 | 0.06 | 3.83 | 3.89 | (0.01 | ) | — | (0.01 | ) | $ | 10.39 | 59.70% | $ | 165,601 | 1.64% | 0.75% | 1.80% | 0.60% | 167.45% | |||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.39 | 0.07 | 1.90 | 1.97 | (0.06 | ) | (0.47 | ) | (0.53 | ) | $ | 11.83 | 19.78% | $ | 194,898 | 1.78% | 0.69% | (c | ) | (c | ) | 167.98% | ||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.83 | 0.07 | 3.17 | 3.24 | (0.07 | ) | (1.96 | ) | (2.03 | ) | $ | 13.04 | 31.52% | $ | 313,052 | 1.77% | 0.49% | (c | ) | (c | ) | 157.77% | ||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 13.04 | 0.09 | 0.65 | 0.74 | (0.06 | ) | (1.32 | ) | (1.38 | ) | $ | 12.40 | 6.21% | (d) | $ | 287,391 | 1.62% | (e) | 1.07% | (e) | (c | ) | (c | ) | 83.38% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Upon reorganization on June 23, 2003, the existing shares of the Fund were designated Class II shares. |
(c) | There were no fee reductions during the period. |
(d) | Not annualized. |
(e) | Annualized. |
See notes to financial statements.
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, the separate accounts of American Skandia Life Insurance Corporation, Peoples Benefit Life Insurance Company, a subsidiary of Aegon, Canada Life Assurance Company, Transamerica Financial Life Insurance Company, Fortis Benefits, and First Great West Life & Annuity Insurance Company have purchased shares of the Gartmore GVIT Developing Markets Fund (the “Fund”). The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Fund.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
10
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis. In determining fair value prices, the Trust utilizes data furnished by an independent pricing service (and that data draws upon, among other information, the market values of foreign investments). The fair value prices of portfolio securities generally will be used when it is determined that the use of these prices will have a material impact on the net asset value of the Fund. When the Fund uses fair value pricing, the values assigned to the Fund’s foreign investments may not be the quoted or published prices of the investments on their primary markets or exchanges.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
11
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend up to 33 1/3% of the Fund’s total assets pursuant to agreements, requiring that the borrower deliver cash or securities as collateral with respect to each new loan of U.S. securities equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan of non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned, and thereafter requiring the borrower to mark-to-market the collateral on a daily basis and requiring the borrower to make up any shortfall of collateral. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. Collateral is marked-to-market daily to provide a level of collateral at least equal to the market value of securities loaned. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in the judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||||
$ | 279,900,082 | $ | 24,403,330 | $ | (18,606,563 | ) | $ | 5,796,767 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Global Asset Management Trust (“GGAMT”) manages the investment of the assets and supervises the daily business affairs of the Fund. GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GGAMT provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GGAMT advises. Gartmore Global Partners (the “subadviser”), an affiliate of GGAMT, manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund.
Under the terms of the Investment Advisory Agreement, the Fund pays the Fund’s adviser an investment advisory fee based on the Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, the adviser pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GGAMT and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||
Up to $500 million | 1.05% | 0.525% | 0.525% | |||
$500 million up to $2 billion | 1.00% | 0.500% | 0.500% | |||
$2 billion or more | 0.95% | 0.475% | 0.475% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the MSCI Emerging Markets Free Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
GGAMT and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.40% until at least May 1, 2007. GGAMT may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GGAMT, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GGAMT is not permitted.
As of the six months ended June 30, 2006, the cumulative potential reimbursements for all classes of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GGAMT, would be:
Amount | Amount Fiscal Year 2004 | Amount Fiscal Year 2005 | Six Months Ended June 30, 2006 | ||||||
$5,714 | $ | 0 | $ | 0 | $ | 0 |
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $289,549,704 and sales of $313,087,820.
5. Portfolio Investment Risks
Credit and Market Risk The Fund invests in emerging market instruments that are subject to certain additional credit and market risks. The yields of emerging market debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs are included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Funds’ annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board considered that the GVIT Developing Markets Fund underperformed its benchmark, the MSCI Emerging Markets Index, for the one-, three-, and five-year periods ended September 30, 2005 by 405, 151 and 295 basis points, respectively, and the Fund underperformed the median of the Lipper Emerging Markets Funds category by 288 basis points over the one-year period. The Board noted the Fund’s continuing underperformance and discussed with management the additional steps being taken to address the Fund’s ongoing performance issues including action to reduce performance volatility and the addition of personnel to the portfolio management team for this Fund. The Performance Committee of the Board was directed to continue to closely monitor performance of the Fund.
Next the Board reviewed and considered the contractual advisory (and subadvisory) fee and breakpoints for this Fund. The Board noted that the contractual advisory fee placed the Fund in the third quintile of the Lipper-constructed Expense Group. However, the Board noted that the Fund has implemented a performance based fee, effective January 1, 2006, at which time the base management fee has been reduced by 10 basis points. The Trustees considered the total expenses for the Fund and compared total expenses to the Lipper Expense Group. The Trustees considered that the total expense ration placed the Fund above the median for the funds in the Lipper Expense Group, and noted that the total expenses were above the median due to distribution expenses. Although the advisory fee and total expenses were above the median for the Lipper Expense Group, the Board concluded that the implementation of the performance based fee, effective January 1, 2006, would reduce the advisory fee and total expenses for 2007, and would result in a lower advisory fee and total expenses in future years if the Fund did not deliver expected performance. Finally, the Board considered the adviser’s profitability and concluded it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and sub-advisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen4
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association—College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
4 | Mr. Allen owns a 51% interest in Graimark Realty Advisors Inc., a 67% owner of G/W Jefferson-St Jean LLC (“Jefferson-St”), a real estate development company. Until July 28, 2004, Jefferson-St had a construction loan, guaranteed by Mr. Allen, in the principal amount of $12.5 million (“Construction Loan”), from Bank One, NA, obtained in August, 2002. On July 1, 2004, Bank One Corporation merged with and into J.P. Morgan Chase & Co. (the “Merger”). Bank One Corporation was the parent company of Bank One, NA. J.P. Morgan Chase & Co. is the parent company of J.P. Morgan Investment Management, Inc., subadviser to two of the Funds of the Trust. On July 28, 2004, the Construction Loan was refinanced with an unaffiliated permanent lender. Neither Mr. Allen, nor the Trust’s management, believes that the Construction Loan, secured well in advance of the Merger, and refinanced within 28 days following the completion of the Merger, should result in Mr. Allen having a material business relationship with an investment adviser (or subadviser) or controlling person of an investment adviser (or subadviser) of the Trust. |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”)3, Gartmore Investor Services, Inc. (“GISI”)3, Gartmore Morley Capital Management, Inc. (“GMCM”)3, Gartmore Morley Financial Services, Inc. (“GMFS”)3, NorthPointe Capital, LLC (“NorthPointe”)3, Gartmore Global Asset Management Trust (“GGAMT”)3, Gartmore Global Investments, Inc. (“GGI”)3, Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.3, as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company3. | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI3, GMFCT3, and GSA3. | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI3, GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT U.S. Growth Leaders Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
4 | Statement of Assets and Liabilities | |
4 | Statement of Operations | |
5 | Statements of Changes in Net Assets | |
7 | Financial Highlights | |
8 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GUSGL (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT U.S. Growth Leaders Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | |||||||||||
Gartmore GVIT U.S. Growth Leaders Fund | ||||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 961.30 | $ | 5.59 | 1.15% | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.77 | 1.15% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 959.30 | $ | 6.90 | 1.42% | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,017.76 | $ | 7.13 | 1.42% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 960.60 | $ | 5.59 | 1.15% | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.77 | 1.15% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT U.S. Growth Leaders Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 94.5% | |
Cash Equivalents | 5.9% | |
Other Investments* | 6.4% | |
Liabilities in excess of other assets** | -6.8% | |
100.0% | ||
Top Holdings*** | ||
Halliburton Co. | 5.4% | |
Emerson Electric Co. | 4.6% | |
Praxair, Inc. | 4.2% | |
Gilead Sciences, Inc. | 4.1% | |
Rockwell Collins, Inc. | 4.0% | |
Goldman Sachs Group, Inc. | 3.9% | |
Google, Inc. | 3.5% | |
Starwood Hotels & Resorts Worldwide, Inc. | 3.4% | |
Republic Services, Inc. | 3.4% | |
F5 Networks, Inc. | 3.4% | |
Other Assets | 60.1% | |
100.0% | ||
Top Industries | ||
Computer Software & Services | 19.9% | |
Financial Services | 11.2% | |
Oil & Gas | 8.2% | |
Aerospace & Defense | 6.9% | |
Pharmaceuticals | 6.9% | |
Retail | 6.6% | |
Hotels & Motels | 6.3% | |
Medical | 6.0% | |
Semiconductors | 5.3% | |
Electronics | 4.6% | |
Other Assets | 18.1% | |
100.0% | ||
* | Includes value of collateral received from securities lending. |
** | Includes value of collateral owed from securities lending. |
*** | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT U.S. GROWTH LEADERS FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (94.5%) | |||||
Aerospace & Defense (6.9%) | |||||
Boeing Co. (The) | 24,220 | $ | 1,983,860 | ||
Rockwell Collins, Inc. | 47,920 | 2,677,291 | |||
4,661,151 | |||||
Agricultural Services (2.5%) | |||||
Archer-Daniels-Midland Co. | 41,100 | 1,696,608 | |||
Chemicals (4.2%) | |||||
Praxair, Inc. | 52,760 | 2,849,040 | |||
Computer Software & Services (19.9%) | |||||
BEA Systems, Inc. (b) | 141,300 | 1,849,617 | |||
Cisco Systems, Inc. (b) | 84,750 | 1,655,168 | |||
Citrix Systems, Inc. (b) | 50,450 | 2,025,063 | |||
eBay, Inc. (b) | 44,960 | 1,316,878 | |||
F5 Networks, Inc. (b) (c) | 42,650 | 2,280,922 | |||
Google, Inc. (b) | 5,670 | 2,377,600 | |||
Red Hat, Inc. (b) | 80,690 | 1,888,146 | |||
13,393,394 | |||||
Electronics (4.6%) | |||||
Emerson Electric Co. | 36,590 | 3,066,608 | |||
Financial Services (11.2%) | |||||
AmeriCredit Corp. (b) | 72,980 | 2,037,602 | |||
E*TRADE Financial Corp. (b) | 61,760 | 1,409,363 | |||
Goldman Sachs Group, Inc. | 17,580 | 2,644,558 | |||
SLM Corp. | 28,150 | 1,489,698 | |||
7,581,221 | |||||
Gaming & Leisure (2.5%) | |||||
Penn National Gaming , Inc. (b) | 43,270 | 1,678,011 | |||
Hotels & Motels (6.3%) | |||||
Starwood Hotels & Resorts Worldwide, Inc. | 37,970 | 2,291,110 | |||
Station Casinos, Inc. (c) | 29,100 | 1,981,128 | |||
4,272,238 | |||||
Medical (6.0%) | |||||
Baxter International, Inc. | 54,350 | 1,997,906 | |||
Covance, Inc. (b) | 33,450 | 2,047,809 | |||
4,045,715 | |||||
Oil & Gas (8.2%) | |||||
Halliburton Co. | 48,910 | 3,629,611 | |||
Tesoro Corp. | 25,670 | 1,908,821 | |||
5,538,432 | |||||
Pharmaceuticals (6.9%) | |||||
Gilead Sciences, Inc. (b) | 46,900 | 2,774,604 | |||
Schering-Plough Corp. | 98,650 | 1,877,310 | |||
4,651,914 | |||||
Shares or Principal Amount | Value | ||||||
COMMON STOCKS (continued) | |||||||
Retail (6.6%) | |||||||
Abercrombie & Fitch Co., Class A | 39,820 | $ | 2,207,223 | ||||
Coach, Inc. (b) | 75,790 | 2,266,121 | |||||
4,473,344 | |||||||
Semiconductors (5.3%) | |||||||
Freescale Semiconductor, Inc. (b) | 54,500 | 1,602,300 | |||||
Marvel Technology Group Ltd. (b) | 44,150 | 1,957,170 | |||||
3,559,470 | |||||||
Waste Disposal (3.4%) | |||||||
Republic Services, Inc. | 56,650 | 2,285,261 | |||||
Total Common Stocks | 63,752,407 | ||||||
CASH EQUIVALENTS (5.9%) | |||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $3,951,144) | $ | 3,949,442 | 3,949,442 | ||||
Total Cash Equivalents | 3,949,442 | ||||||
SHORT-TERM SECURITIES HELD AS COLLATERAL FOR SECURITIES ON LOAN (6.4%) | |||||||
Pool of short-term securities for Gartmore Variable Insurance Trust Funds — Note 2 (Securities Lending) | 4,290,850 | 4,290,850 | |||||
Total Short-Term Securities Held as Collateral for Securities on Loan | 4,290,850 | ||||||
Total Investments (Cost $71,894,602) (a) — 106.8% | 71,992,699 | ||||||
Liabilities in excess of other assets — (6.8%) | (4,556,735 | ) | |||||
NET ASSETS — 100.0% | $ | 67,435,964 | |||||
(a) | See notes to financial statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | All or part of the security was on loan as of June 30, 2006. |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT U.S. GROWTH LEADERS FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $67,945,160) | $ | 68,043,257 | |
Repurchase agreements, at cost and value | 3,949,442 | ||
Total Investments | 71,992,699 | ||
Interest and dividends receivable | 24,821 | ||
Receivable for capital shares issued | 97,517 | ||
Receivable for investments sold | 5,036,438 | ||
Prepaid expenses and other assets | 901 | ||
Total Assets | 77,152,376 | ||
Liabilities: | |||
Payable for capital shares redeemed | 12,625 | ||
Payable for investments purchased | 5,211,746 | ||
Payable for return of collateral received for securities on loan | 4,290,850 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 182,030 | ||
Fund administration and transfer agent fees | 4,615 | ||
Distribution fees | 4,333 | ||
Administrative servicing fees | 4,862 | ||
Other | 5,351 | ||
Total Liabilities | 9,716,412 | ||
Net Assets | $ | 67,435,964 | |
Represented by: | |||
Capital | $ | 66,944,463 | |
Accumulated net investment income (loss) | 243,845 | ||
Accumulated net realized gains (losses) from investments | 149,559 | ||
Net unrealized appreciation (depreciation) on investments | 98,097 | ||
Net Assets | $ | 67,435,964 | |
Net Assets: | |||
Class I Shares | $ | 11,973,816 | |
Class II Shares | 21,406,578 | ||
Class III Shares | 34,055,570 | ||
Total | $ | 67,435,964 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 1,175,440 | ||
Class II Shares | 2,112,368 | ||
Class III Shares | 3,323,591 | ||
Total | 6,611,399 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 10.19 | |
Class II Shares | $ | 10.13 | |
Class III Shares | $ | 10.25 | |
* Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 490,057 | ||
Dividend income | 216,477 | |||
Income from securities lending | 3,098 | |||
Total Income | 709,632 | |||
Expenses: | ||||
Investment advisory fees | 346,238 | |||
Fund administration and transfer agent fees | 26,031 | |||
Distribution fees Class II Shares | 27,042 | |||
Administrative servicing fees Class I Shares | 8,788 | |||
Administrative servicing fees | 17,902 | |||
Administrative servicing fees | 28,749 | |||
Trustee fees | 1,304 | |||
Other | 9,912 | |||
Total expenses before earnings credit | 465,966 | |||
Earnings credit (Note 6) | (179 | ) | ||
Total Expenses | 465,787 | |||
Net Investment Income (Loss) | 243,845 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 729,852 | |||
Net change in unrealized appreciation/depreciation on investments | (3,962,660 | ) | ||
Net realized/unrealized gains (losses) on investments | (3,232,808 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (2,988,963 | ) | |
See notes to financial statements.
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT U.S. GROWTH LEADERS FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 243,845 | $ | (221,108 | ) | |||
Net realized gains (losses) on investment transactions | 729,852 | 6,990,468 | ||||||
Net change in unrealized appreciation/depreciation on investments | (3,962,660 | ) | (410,731 | ) | ||||
Change in net assets resulting from operations | (2,988,963 | ) | 6,358,629 | |||||
Distributions to Class I shareholders from: | ||||||||
Net realized gains on investments | (205,376 | ) | (1,571,409 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net realized gains on investments | (373,444 | ) | (2,858,984 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net realized gains on investments | (590,833 | ) | (5,955,110 | ) | ||||
Change in net assets from shareholder distributions | (1,169,653 | ) | (10,385,503 | ) | ||||
Change in net assets from capital transactions | 4,188,937 | 21,312,303 | ||||||
Change in net assets | 30,321 | 17,285,429 | ||||||
Net Assets: | ||||||||
Beginning of period | 67,405,643 | 50,120,214 | ||||||
End of period | $ | 67,435,964 | $ | 67,405,643 | ||||
Accumulated net investment income (loss) | $ | 243,845 | $ | — | ||||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 3,249,554 | $ | 6,497,974 | ||||
Dividends reinvested | 205,375 | 1,571,407 | ||||||
Cost of shares redeemed | (1,538,224 | ) | (2,954,315 | ) | ||||
1,916,705 | 5,115,066 | |||||||
Class II Shares | ||||||||
Proceeds from shares issued | 4,540,412 | 8,229,963 | ||||||
Dividends reinvested | 373,442 | 2,858,981 | ||||||
Cost of shares redeemed | (1,205,065 | ) | (1,533,299 | ) | ||||
3,708,789 | 9,555,645 | |||||||
Class III Shares | ||||||||
Proceeds from shares issued | 6,167,713 | 9,713,182 | ||||||
Dividends reinvested | 590,831 | 5,955,105 | ||||||
Cost of shares redeemed | (8,195,101 | ) | (9,026,695 | ) | ||||
(1,436,557 | ) | 6,641,592 | ||||||
Change in net assets from capital transactions | $ | 4,188,937 | $ | 21,312,303 | ||||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT U.S. GROWTH LEADERS FUND
Statements of Changes in Net Assets (Continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 295,706 | 564,383 | ||||
Reinvested | 20,314 | 145,366 | ||||
Redeemed | (139,368 | ) | (261,906 | ) | ||
176,652 | 447,843 | |||||
Class II Shares | ||||||
Issued | 412,855 | 725,460 | ||||
Reinvested | 37,158 | 265,327 | ||||
Redeemed | (110,452 | ) | (135,024 | ) | ||
339,561 | 855,763 | |||||
Class III Shares | ||||||
Issued | 550,790 | 849,981 | ||||
Reinvested | 58,153 | 547,996 | ||||
Redeemed | (744,044 | ) | (793,889 | ) | ||
(135,101 | ) | 604,088 | ||||
See notes to financial statements.
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT U.S. Growth Leaders Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of (Prior to Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(c) | $ | 8.64 | (0.02 | ) | 0.01 | (1.07 | ) | (1.08 | ) | — | — | $ | 7.56 | (12.50% | )(f) | $ | 476 | 1.16% | (g) | (0.56% | )(g) | (h) | (h) | 754.41% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.56 | (0.02 | ) | 0.01 | 3.95 | 3.94 | (0.76 | ) | (0.76 | ) | $ | 10.74 | 52.14% | $ | 6,199 | 1.19% | (0.50% | ) | (h) | (h) | 580.71% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.74 | (0.08 | ) | — | 1.36 | 1.28 | (0.46 | ) | (0.46 | ) | $ | 11.56 | 12.41% | $ | 6,369 | 1.29% | (0.77% | ) | (h) | (h) | 520.00% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.56 | (0.02 | ) | — | 1.32 | 1.30 | (2.06 | ) | (2.06 | ) | $ | 10.80 | 11.96% | $ | 10,783 | 1.17% | (0.39% | ) | (h) | (h) | 447.55% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.80 | 0.04 | — | (0.47 | ) | (0.43 | ) | (0.18 | ) | (0.18 | ) | $ | 10.19 | (3.87 | )%(f) | $ | 11,974 | 1.15% | (g) | 0.80% | (g) | (h) | (h) | 159.03% | ||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 8.17 | (0.02 | ) | 0.01 | 3.36 | 3.35 | (0.76 | ) | (0.76 | ) | $ | 10.76 | 41.02% | (f) | $ | 4,101 | 1.43% | (g) | (0.66% | )(g) | (h) | (h) | 580.71% | |||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.76 | (0.08 | ) | — | 1.33 | 1.25 | (0.46 | ) | (0.46 | ) | $ | 11.55 | 12.10% | $ | 10,593 | 1.53% | (1.03% | ) | (h) | (h) | 520.00% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.55 | (0.04 | ) | — | 1.31 | 1.27 | (2.06 | ) | (2.06 | ) | $ | 10.76 | 11.70% | $ | 19,067 | 1.41% | (0.63% | ) | (h) | (h) | 447.55% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.76 | 0.03 | — | (0.48 | ) | (0.45 | ) | (0.18 | ) | (0.18 | ) | $ | 10.13 | (4.07 | )%(f) | $ | 21,407 | 1.42% | (g) | 0.56% | (g) | (h) | (h) | 159.03% | ||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(e) | $ | 10.00 | — | — | (0.08 | ) | (0.08 | ) | — | — | $ | 9.92 | (0.80% | )(f) | $ | 2,976 | 1.25% | (g) | (0.40% | )(g) | 7.56% | (g) | (6.71% | )(g) | 9.71% | ||||||||||||||||||
Year Ended December 31, 2002 | $ | 9.92 | (0.05 | ) | 0.01 | (2.30 | ) | (2.34 | ) | — | — | $ | 7.58 | (23.59% | ) | $ | 6,501 | 1.10% | (0.64% | ) | (h) | (h) | 754.41% | ||||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.58 | (0.03 | ) | 0.01 | 3.99 | 3.97 | (0.76 | ) | (0.76 | ) | $ | 10.79 | 52.39% | $ | 54,959 | 1.19% | (0.50% | ) | (h) | (h) | 580.71% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 10.79 | (0.11 | ) | — | 1.40 | 1.29 | (0.46 | ) | (0.46 | ) | $ | 11.62 | 12.45% | $ | 33,158 | 1.29% | (0.77% | ) | (h) | (h) | 520.00% | |||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.62 | (0.03 | ) | — | 1.33 | 1.30 | (2.06 | ) | (2.06 | ) | $ | 10.86 | 11.99% | $ | 37,556 | 1.17% | (0.38% | ) | (h) | (h) | 447.55% | |||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.86 | 0.05 | — | (0.48 | ) | (0.43 | ) | (0.18 | ) | (0.18 | ) | $ | 10.25 | (3.94% | )(f) | $ | 34,056 | 1.15% | (g) | 0.81% | (g) | (h) | (h) | 159.03% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from June 3, 2002 (commencement of operations) through December 31, 2002. |
(d) | For the period from March 21, 2003 (commencement of operations) through December 31, 2003. |
(e) | For the period from December 18, 2001 (commencement of operations) through December 31, 2001. Registration of shares effective with the Securities and Exchange Commission on December 28, 2001. On the effective date, the net asset value was $9.92 per share. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See | notes to financial statements. |
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT U.S. Growth Leaders Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the
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June 30, 2006 (Unaudited)
methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 331/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers.
The cash collateral received by the Fund was pooled and, at June 30, 2006, was invested in the following:
Security Type | Issuer Name | Value | Maturity Rate | Maturity Date | |||||
Bank Note — Floating Rate | Bank of America | $ | 500,000 | 5.31% | 07/03/06 | ||||
Commercial Paper | Aegis Finance LLC | 99,546 | 5.29% | 07/21/06 | |||||
Repurchase Agreement | Bank of America Securities LLC | 3,691,304 | 5.32% | 07/03/06 |
Information on the investment of cash collateral is shown in the Statement of Investments.
As of June 30, 2006, the Fund had securities with the following market value on loan:
Value of Loaned Securities | Value of Collateral | ||||||
$4,262,050 | $ | 4,290,850 |
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code,
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized | |||
$71,894,602 | $2,633,165 | $(2,535,068) | $98,097 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Gartmore Global Investments, Inc. (“GGI”), a holding company. GGI is a majority-owned subsidiary of Gartmore Global Asset Management Trust (“GGAMT”). GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. Under the terms of the Investment Advisory Agreement, the Fund pays GMF a base investment advisory fee that can vary depending on the Fund’s performance relative to the Fund’s benchmark, the S&P 500 Index, as follows:
Fee Schedule* | Fees | |
Up to $500 million | 0.90% | |
$500 million up to $2 billion | 0.80% | |
$2 billion or more | 0.75% |
* | The U.S. Growth Leaders Fund pays GMF a base management fee (as shown above) which may be adjusted upward or downward depending on the Fund’s performance relative to the Fund’s benchmark, the S&P 500 Index. Thus, if the Fund outperforms the Fund’s benchmark by 12% or more over a 36-month period, the Fund will pay higher management fees. Conversely, if the Fund underperforms the Fund’s benchmark by 12% or more over a 36 month period, the Fund will pay lower management fees. No adjustment will take place if the under or overperformance is less than 12% and GMF will receive the applicable base fee. The base rate and the performance rate are applied separately. The base rate (as may be reduced by any applicable base advisory fee breakpoints) is applied to the Fund’s average net assets over the current quarter, while the performance adjustment percentage is applied to the Fund’s average net assets over the rolling 36-month performance period. The corresponding dollar values then are added to arrive at the overall GMF advisory fee for the current period. The base fee is either increased or decreased by the following amounts at each breakpoint: |
Fee Schedule | Fee Adjustment | |
Up to $500 million | +/-0.22% | |
$500 million up to $2 billion | +/-0.18% | |
$2 billion or more | +/-0.16% |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
On September 21, 2004, the Enforcement Staff of the Commission’s Fort Worth District Office (the “Staff”) contacted GMF. The Staff asserted that the methodology used to calculate the performance fee for the Fund did not comply with the requirements of Rule 205-2 under the Investment Advisers Act of 1940 (the “Advisers Act”). Appropriate remedial actions have been taken, and an offer of settlement has been submitted to the Securities and Exchange Commission for its consideration. Management has forgone the performance fee bonus adjustment or paying a performance fee penalty during the period of the SEC investigation. Upon final resolution of the SEC investigation, management will resume collecting a performance bonus or paying a performance penalty on the Fund’s performance for each successive period.
GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) limiting operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 1.15% for all classes until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the six months ended June 30, 2006, there were no cumulative potential reimbursements for all classes of shares of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $54,203 in Administrative Services Fees from the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $8,128.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $113,255,759 and sales of $110,600,106.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that for the one- and three-year periods ended September 30, 2005, the Fund had outperformed its benchmark, the S&P 500 Index, by 1,047 and 898 basis points, respectively. The Board also considered that the Fund ranked in the first quartile of the Lipper Multi-Cap Growth Funds category for both periods.
The Board then discussed with management the distribution of the Fund and the pending resolution of the investigation by the SEC into the Fund’s performance fee structure. Management explained that while the Fund continues to maintain its performance-based fee structure, management has foregone the performance fee bonus adjustment during the period of the SEC investigation. Upon final resolution of the SEC investigation, management will resume collecting a performance bonus or paying a performance penalty on the Fund’s performance for each successive period.
Next, the Board reviewed the Fund’s contractual advisory fee and breakpoints and considered the performance-based fee structure of the advisory fee. The Board noted that the contractual advisory fee placed the Fund in the fifth quintile of its Lipper-constructed Expense Group, but within the range of contractual advisory fees of the Lipper Expense Group. The Board considered that the Fund’s total expenses were above the median of the Fund’s Lipper Expense Group by 43 basis points. Management explained to the Board that the Fund’s higher expenses are attributable to a higher management fee as
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Supplemental Information (Continued)
June 30, 2006 (Unaudited)
well as a higher distribution cost. Management also noted that there were not many concentrated funds in the insurance space, so it was difficult for Lipper to construct an appropriate Expense Group of peers, which affected the expense comparisons. Finally, the Board considered the adviser’s profitability in light of all of the above, and determined it was not excessive.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory agreement for the Fund for an annual period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
18
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
19
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
20
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
21
Table of Contents
Gartmore GVIT Global Utilities Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
5 | Statement of Assets and Liabilities | |
5 | Statement of Operations | |
6 | Statements of Changes in Net Assets | |
8 | Financial Highlights | |
9 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGU (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Global Utilities Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, January 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Global Utilities Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,115.50 | $ | 5.56 | 1.06% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.54 | $ | 5.32 | �� | 1.06% | |||||
Class II | Actual | $ | 1,000.00 | $ | 1,113.90 | $ | 6.71 | 1.28% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.45 | $ | 6.43 | 1.28% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,115.40 | $ | 5.30 | 1.01% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.79 | $ | 5.07 | 1.01% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Global Utilities Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 96.2% | |
Cash Equivalents | 3.1% | |
Other assets in excess of liabilities | 0.7% | |
100.0% | ||
Top Industries | ||
Telecommunications | 51.3% | |
Electric Utility | 19.6% | |
Gas & Electric Utility | 14.3% | |
Water Utility | 7.9% | |
Oil & Gas Utility | 1.3% | |
Building & Construction | 0.6% | |
Gas Utility | 0.5% | |
Electric | 0.5% | |
Oil & Gas | 0.2% | |
Other Assets | 3.8% | |
100.0% | ||
Top Holdings* | ||
Vodafone Group PLC | 8.0% | |
AT&T Inc. | 6.4% | |
Verizon Communications, Inc. | 6.0% | |
Telefonica SA | 5.5% | |
BellSouth Corp. | 5.3% | |
Sprint Nextel Corp. | 4.0% | |
Suez SA | 3.7% | |
E. ON AG | 3.6% | |
Deutsche Telekom AG | 3.0% | |
International Power PLC | 2.5% | |
Other Assets | 52.0% | |
100.0% | ||
Top Countries | ||
United States | 31.7% | |
United Kingdom | 22.0% | |
Spain | 11.2% | |
Germany | 8.0% | |
Japan | 6.5% | |
France | 5.2% | |
Italy | 4.1% | |
Norway | 1.8% | |
Greece | 1.7% | |
Finland | 1.3% | |
Other Assets | 6.5% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL UTILITIES FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (96.2%) | |||||
AUSTRIA (1.2%) | |||||
Telecommunications (1.2%) | |||||
Telekom Austria AG (c) | 23,470 | $ | 522,482 | ||
BELGIUM (0.4%) | |||||
Electric Utility (0.2%) | |||||
Elia System Operator SA (c) | 2,660 | 103,049 | |||
Telecommunications (0.2%) | |||||
Mobistar SA (c) | 790 | 62,607 | |||
165,656 | |||||
FINLAND (1.3%) | |||||
Oil & Gas Utility (1.3%) | |||||
Fortum Oyj (c) | 21,835 | 557,776 | |||
FRANCE (5.2%) | |||||
Building & Construction (0.6%) | |||||
Bouygues SA (c) | 4,590 | 235,664 | |||
Electric (0.5%) | |||||
Electricite De France (c) | 3,770 | 199,000 | |||
Telecommunications (0.4%) | |||||
France Telecom SA (c) | 7,872 | 167,946 | |||
Water Utility (3.7%) | |||||
Suez SA (c) | 37,120 | 1,541,342 | |||
2,143,952 | |||||
GERMANY (8.0%) | |||||
Gas & Electric Utility (5.0%) | |||||
E. ON AG (c) | 13,360 | 1,535,226 | |||
RWE AG (c) | 6,812 | 565,692 | |||
2,100,918 | |||||
Telecommunications (3.0%) | |||||
Deutsche Telekom AG (c) | 78,197 | 1,254,867 | |||
3,355,785 | |||||
GREECE (1.7%) | |||||
Telecommunications (1.7%) | |||||
Cosmote Mobile Telecommunications SA (c) | 22,200 | 501,237 | |||
Hellenic Telecommunications Organization SA (b) (c) | 10,381 | 228,632 | |||
729,869 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
HONG KONG (0.2%) | |||||
Electric Utility (0.2%) | |||||
CLP Holdings Ltd. (c) | 12,000 | $ | 70,219 | ||
ITALY (4.1%) | |||||
Electric Utility (1.8%) | |||||
Enel SPA (c) | 88,020 | 757,156 | |||
Oil & Gas (0.2%) | |||||
Snam Rete Gas SPA (c) | 14,475 | 63,596 | |||
Telecommunications (2.1%) | |||||
Telecom Italia SPA (c) | 324,898 | 904,108 | |||
1,724,860 | |||||
JAPAN (6.5%) | |||||
Electric Utility (2.4%) | |||||
Chubu Electric Power Co., Inc. (c) | 8,400 | 226,927 | |||
Kansai Electric Power Co., Inc. (c) | 7,200 | 161,140 | |||
Kyushu Electric Power Co., Inc. (c) | 5,900 | 137,220 | |||
Tohoku Electric Power Co., Inc. (c) | 5,400 | 118,428 | |||
Tokyo Electric Power Co., Inc. (c) | 13,700 | 378,594 | |||
1,022,309 | |||||
Gas Utility (0.5%) | |||||
Osaka Gas Co. Ltd. (c) | 33,000 | 106,135 | |||
Tokyo Gas Co. Ltd. (c) | 25,000 | 117,840 | |||
223,975 | |||||
Telecommunications (3.6%) | |||||
KDDI Corp. (c) | 61 | 375,481 | |||
Nippon Telegraph & Telephone Corp. (c) | 118 | 576,245 | |||
NTT DoCoMo, Inc. (c) | 395 | 578,002 | |||
1,529,728 | |||||
2,776,012 | |||||
MEXICO (0.9%) | |||||
Telecommunications (0.9%) | |||||
America Movil SA de CV | 11,840 | 393,798 | |||
NORWAY (1.8%) | |||||
Telecommunications (1.8%) | |||||
Telenor ASA (c) | 64,400 | 778,386 | |||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL UTILITIES FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SPAIN (11.2%) | |||||
Electric Utility (3.0%) | |||||
Iberdrola SA (c) | 25,780 | $ | 887,106 | ||
Red Electrica de Espana (c) | 11,310 | 390,263 | |||
1,277,369 | |||||
Gas & Electric Utility (2.7%) | |||||
Endesa SA (c) | 28,200 | 979,693 | |||
Union Fenosa SA (c) | 3,467 | 134,223 | |||
1,113,916 | |||||
Telecommunications (5.5%) | |||||
Telefonica SA (c) | 139,510 | 2,318,758 | |||
4,710,043 | |||||
UNITED KINGDOM (22.0%) | |||||
Electric Utility (8.4%) | |||||
International Power PLC (c) | 198,340 | 1,041,600 | |||
National Grid PLC (c) | 51,425 | 555,589 | |||
Scottish & Southern Energy PLC (c) | 45,762 | 973,148 | |||
Scottish Power PLC (c) | 90,972 | 979,856 | |||
3,550,193 | |||||
Gas & Electric Utility (1.4%) | |||||
Centrica PLC (c) | 106,990 | 563,327 | |||
Telecommunications (8.0%) | |||||
Vodafone Group PLC (c) | 1,583,080 | 3,368,983 | |||
Water Utility (4.2%) | |||||
AWG PLC (c) | 26,231 | 579,986 | |||
Northumbrian Water Group PLC (c) | 102,678 | 464,903 | |||
Pennon Group PLC (c) | 30,110 | 742,156 | |||
1,787,045 | |||||
9,269,548 | |||||
UNITED STATES (31.7%) | |||||
Electric Utility (3.5%) | |||||
AES Corp. (b) | 30,680 | 566,046 | |||
DPL, Inc. | 8,610 | 230,748 | |||
Edison International | 6,266 | 244,374 | |||
PPL Corp. | 13,464 | 434,887 | |||
1,476,055 | |||||
Shares or Principal Amount | Value | |||||
COMMON STOCKS (continued) | ||||||
UNITED STATES (continued) | ||||||
Gas & Electric Utility (5.2%) | ||||||
Exelon Corp. | 13,915 | $ | 790,789 | |||
FirstEnergy Corp. | 6,640 | 359,954 | ||||
PG&E Corp. | 8,660 | 340,165 | ||||
TXU Corp. | 10,350 | 618,827 | ||||
Wisconsin Energy Corp. | 2,380 | 95,914 | ||||
2,205,649 | ||||||
Telecommunications (23.0%) | ||||||
ALLTEL Corp. | 8,900 | 568,087 | ||||
AT&T Inc. | 96,843 | 2,700,952 | ||||
BellSouth Corp. | 61,544 | 2,227,893 | ||||
Sprint Nextel Corp. | 84,171 | 1,682,578 | ||||
Verizon Communications, Inc. | 75,680 | 2,534,523 | ||||
9,714,033 | ||||||
13,395,737 | ||||||
Total Common Stocks | 40,594,123 | |||||
CASH EQUIVALENTS (3.1%) | ||||||
Investments in repurchase agreements (colleteralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $1,323,210) | $ | 1,322,640 | 1,322,640 | |||
Total Cash Equivalents | 1,322,640 | |||||
Total Investments (Cost $39,090,209) (a) — 99.3% | 41,916,763 | |||||
Other assets in excess of liabilities — 0.7% | 290,788 | |||||
NET ASSETS — 100.0% | $ | 42,207,551 | ||||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair Valued Security. |
See notes to financial statements.
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL UTILITIES FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | |||
Investments, at value (cost $37,767,569) | $ | 40,594,123 | |
Repurchase agreements, at cost and value | 1,322,640 | ||
Total Investments | 41,916,763 | ||
Foreign currency, at value (cost $6,295) | 6,296 | ||
Interest and dividends receivable | 142,952 | ||
Receivable for capital shares issued | 202,488 | ||
Reclaims receivable | 20,967 | ||
Prepaid expenses and other assets | 2,514 | ||
Total Assets | 42,291,980 | ||
Liabilities: | |||
Payable to custodian | 5,988 | ||
Payable for capital shares redeemed | 4,478 | ||
Accrued expenses and other payables: | |||
Investment advisory fees | 66,025 | ||
Fund administration and transfer agent fees | 4,198 | ||
Distribution fees | 194 | ||
Administrative servicing fees | 3,475 | ||
Other | 71 | ||
Total Liabilities | 84,429 | ||
Net Assets | $ | 42,207,551 | |
Represented by: | |||
Capital | $ | 37,396,708 | |
Accumulated net investment income (loss) | 286,386 | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 1,698,316 | ||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 2,826,141 | ||
Net Assets | $ | 42,207,551 | |
Net Assets: | |||
Class I Shares | $ | 4,591,709 | |
Class II Shares | 959,270 | ||
Class III Shares | 36,656,572 | ||
Total | $ | 42,207,551 | |
Shares outstanding (unlimited number of shares authorized): | |||
Class I Shares | 413,264 | ||
Class II Shares | 86,080 | ||
Class III Shares | 3,290,276 | ||
Total | 3,789,620 | ||
Net asset value and offering price per share:* | |||
Class I Shares | $ | 11.11 | |
Class II Shares | $ | 11.14 | |
Class III Shares | $ | 11.14 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | |||
Interest income | $ | 9,322 | |
Dividend income (net of foreign withholding tax of $89,886) | 846,648 | ||
Total Income | 855,970 | ||
Expenses: | |||
Investment advisory fees | 133,130 | ||
Fund administration and transfer agent fees | 20,385 | ||
Distribution fees Class II Shares | 1,178 | ||
Administrative servicing fees Class I Shares | 4,182 | ||
Administrative servicing fees Class II Shares | 775 | ||
Administrative servicing fees Class III Shares | 23,556 | ||
Trustee fees | 660 | ||
Other | 10,324 | ||
Total Expenses | 194,190 | ||
Net Investment Income (Loss) | 661,780 | ||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | |||
Net realized gains (losses) on investment transactions | 2,020,478 | ||
Net realized gains (losses) on foreign currency transactions | 8,545 | ||
Net realized gains (losses) on investment and foreign currency transactions | 2,029,023 | ||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | 1,728,396 | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 3,757,419 | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 4,419,199 | |
See notes to financial statements.
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL UTILITIES FUND
Statements of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 661,780 | $ | 829,339 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 2,029,023 | 4,465,246 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | 1,728,396 | (2,671,779 | ) | |||||
Change in net assets resulting from operations | 4,419,199 | 2,622,806 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (40,637 | ) | (107,515 | ) | ||||
Net realized gains on investments | (37,686 | ) | (666,112 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (7,689 | ) | (16,842 | ) | ||||
Net realized gains on investments | (8,005 | ) | (127,171 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (326,326 | ) | (767,979 | ) | ||||
Net realized gains on investments | (298,933 | ) | (4,867,573 | ) | ||||
Change in net assets from shareholder distributions | (719,276 | ) | (6,553,192 | ) | ||||
Change in net assets from capital transactions | (907,483 | ) | 6,120,037 | |||||
Change in net assets | 2,792,440 | 2,189,651 | ||||||
Net Assets: | ||||||||
Beginning of period | 39,415,111 | 37,225,460 | ||||||
End of period | $ | 42,207,551 | $ | 39,415,111 | ||||
Accumulated net investment income (loss) | $ | 286,386 | $ | (742 | ) | |||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 1,034,746 | $ | 4,005,419 | ||||
Dividends reinvested | 78,323 | 773,626 | ||||||
Cost of shares redeemed | (1,542,161 | ) | (4,396,497 | ) | ||||
(429,092 | ) | 382,548 | ||||||
Class II Shares | ||||||||
Proceeds from shares issued | 39 | 181 | ||||||
Dividends reinvested | 15,694 | 144,013 | ||||||
Cost of shares redeemed | (45,107 | ) | (225,117 | ) | ||||
(29,374 | ) | (80,923 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 6,800,208 | 14,946,239 | ||||||
Dividends reinvested | 625,257 | 5,635,550 | ||||||
Cost of shares redeemed | (7,874,482 | ) | (14,763,377 | ) | ||||
(449,017 | ) | 5,818,412 | ||||||
Change in net assets from capital transactions | $ | (907,483 | ) | $ | 6,120,037 | |||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL UTILITIES FUND
Statements of Changes in Net Assets (Continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 94,498 | 350,987 | ||||
Reinvested | 7,241 | 73,715 | ||||
Redeemed | (142,691 | ) | (386,185 | ) | ||
(40,952 | ) | 38,517 | ||||
Class II Shares | ||||||
Issued | — | (a) | — | (a) | ||
Reinvested | 1,447 | 13,719 | ||||
Redeemed | (4,126 | ) | (19,667 | ) | ||
(2,679 | ) | (5,948 | ) | |||
Class III Shares | ||||||
Issued | 619,192 | 1,305,948 | ||||
Reinvested | 57,693 | 535,608 | ||||
Redeemed | (724,463 | ) | (1,294,226 | ) | ||
(47,578 | ) | 547,330 | ||||
(a) | Amount is less than 1 share. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Global Utilities Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(c) | $ | 8.38 | 0.08 | 0.01 | (0.96 | ) | (0.87 | ) | (0.09 | ) | — | (0.09 | ) | $ | 7.42 | (10.36% | )(f) | $ | 169 | 1.20% | (g) | 1.83% | (g) | (h) | (h) | 153.83% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.42 | 0.06 | 0.01 | 1.71 | 1.78 | (0.04 | ) | — | (0.04 | ) | $ | 9.16 | 24.05% | $ | 1,104 | 1.11% | 1.28% | (h) | (h) | 116.62% | ||||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.16 | 0.13 | — | 2.60 | 2.73 | (0.13 | ) | (0.50 | ) | (0.63 | ) | $ | 11.26 | 29.97% | $ | 4,679 | 1.08% | 1.78% | (h) | (h) | 358.63% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.26 | 0.22 | — | 0.48 | 0.70 | (0.24 | ) | (1.59 | ) | (1.83 | ) | $ | 10.13 | 6.39% | $ | 4,602 | 1.12% | 1.92% | (h) | (h) | 234.81% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 10.13 | 0.18 | — | 0.99 | 1.17 | (0.10 | ) | (0.09 | ) | (0.19 | ) | $ | 11.11 | 11.55% | (f) | $ | 4,592 | 1.06% | (g) | 3.31% | (g) | (h) | (h) | 48.93% | ||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 7.08 | 0.03 | 0.01 | 2.09 | 2.13 | (0.03 | ) | — | (0.03 | ) | $ | 9.18 | 30.16% | (f) | $ | 1,092 | 1.36% | (g) | 0.76% | (g) | (h) | (h) | 116.62% | |||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.18 | 0.18 | — | 2.53 | 2.71 | (0.11 | ) | (0.50 | ) | (0.61 | ) | $ | 11.28 | 29.56% | $ | 1,069 | 1.33% | 1.58% | (h) | (h) | 358.63% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.28 | 0.20 | — | 0.48 | 0.68 | (0.21 | ) | (1.59 | ) | (1.80 | ) | $ | 10.16 | 6.19% | $ | 902 | 1.37% | 1.68% | (h) | (h) | 234.81% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 | $ | 10.16 | 0.17 | — | 0.99 | 1.16 | (0.09 | ) | (0.09 | ) | (0.18 | ) | $ | 11.14 | 11.39% | (f) | $ | 959 | 1.28% | (g) | 3.15% | (g) | (h) | (h) | 48.93% | ||||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(e) | $ | 10.00 | — | — | 0.01 | 0.01 | — | — | — | $ | 10.01 | 0.10% | (f) | $ | 3,002 | 1.15% | (g) | (0.12% | )(g) | 8.45% | (g) | (7.42% | )(g) | 0.00% | |||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.01 | 0.12 | 0.01 | (2.62 | ) | (2.49 | ) | (0.09 | ) | — | (0.09 | ) | $ | 7.43 | (24.85% | ) | $ | 3,571 | 1.10% | 1.79% | 1.11% | 1.78% | 153.83% | |||||||||||||||||||||
Year Ended December 31, 2003 | $ | 7.43 | 0.10 | 0.01 | 1.68 | 1.79 | (0.04 | ) | — | (0.04 | ) | $ | 9.18 | 24.17% | $ | 7,054 | 1.04% | 1.39% | (h) | (h) | 116.62% | ||||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 9.18 | 0.14 | — | 2.60 | 2.74 | (0.14 | ) | (0.50 | ) | (0.64 | ) | $ | 11.28 | 29.95% | $ | 31,478 | 1.05% | 1.73% | (h) | (h) | 358.63% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 11.28 | 0.22 | — | 0.49 | 0.71 | (0.24 | ) | (1.59 | ) | (1.83 | ) | $ | 10.16 | 6.48% | $ | 33,911 | 1.10% | 1.96% | (h) | (h) | 234.81% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 | $ | 10.16 | 0.17 | — | 1.00 | 1.17 | (0.10 | ) | (0.09 | ) | (0.19 | ) | $ | 11.14 | 11.54% | (f) | $ | 36,657 | 1.01% | (g) | 3.34% | (g) | (h) | (h) | 48.93% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from May 10, 2002 (commencement of operations) through December 31, 2002. |
(d) | For the period from March 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | For the period from December 18, 2001 (commencement of operations) through December 31, 2001. Registration of shares effective with the Securities and Exchange Commission on December 28, 2001. On the effective date, the net asset value was $10.01 per share. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Global Utilities Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized | Unrealized | Net Unrealized | |||
$39,090,209 | $4,153,305 | $(1,326,752) | $2,826,553 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Global Asset Management Trust (“GGAMT”) manages the investment of the assets and supervises the daily business affairs of the Fund. GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GGAMT provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GGAMT advises. Gartmore Global Partners (the “subadviser”), an affiliate of GGAMT, manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays GGAMT an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GGAMT pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GGAMT and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | ||||||
Up to $500 million | 0.70 | % | 0.350 | % | 0.350 | % | |||
$500 million up to $2 billion | 0.65 | % | 0.325 | % | 0.325 | % | |||
Over $2 billion | 0.60 | % | 0.300 | % | 0.300 | % |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the Global Utilities Composite Index, which is comprised of 60% MSCI World Telecommunication Services Index and 40% MSCI World Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $25,421 in Administrative Services Fees from the Fund.
As of June 30, 2006, the adviser or affiliates of the adviser directly held 10% of the shares outstanding of the Fund.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $1,653.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $18,762,971 and sales of $21,226,042.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the MSCI World Utilities Index (40%)/MSCI World Telecom Index (60%), by 1,071 basis points for the one-year period ended September 30, 2005 and by 290 basis points for the three-year period. The Board also considered that the Fund ranked in the third quartile of the Lipper Utilities Fund category for the one-year period and ranked in the second quartile for the three-year period. The Board then discussed with management the performance and distribution of the Fund.
Next, the Board reviewed the Fund’s contractual advisory fee (including the subadvisory fee) and breakpoints and considered that the contractual advisory fee placed the Fund in the fourth quintile of the Fund’s Lipper-constructed Expense Group. The Board also noted that the Fund’s total expenses were above the median of the Fund’s Lipper Expense Group by 2 basis points. The Board considered, however, that this Fund implemented a performance-based fee structure on January 1, 2006, and the base management fee was reduced by 10 basis points on that date. Finally, the Board considered the adviser’s profit margin in managing the Fund in light of all of the above, and determined it was not excessive.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and subadvisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Board approve a new Subadvisory agreement with newly-unaffiliated GGP, in reliance upon the Manager of Managers Exemptive order the Funds have obtained from the SEC to take effect immediately upon the closing of the U.K. Sale to ensure continued provision of Subadvisory services by GGP to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale: (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of affiliated GGP at this time; (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies used by affiliated GGP now; and (3) the Subadvisory fees paid to unaffiliated GGP will be the same as those currently paid to affiliated GGP. At the time the Board selected and approved the adviser to the Fund, Board considered, among other factors, the advisory fee compared to a peer group of funds, the extent to which economies of scale would be realized as the Fund grows, and whether the advisory fee levels reflect these economies of scale for the benefit of Fund shareholders. Since the adviser will pay the sub-adviser from the fees paid by the Fund to the adviser, and since the fees and expenses for the Fund will not change as a result of the change to the sub-adviser, the Board did not further consider these factors. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the continuation of affiliated GGP’s subadvisory agreement with new unaffiliated GGP, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3 c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association – College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
* | Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920. |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President – Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Gartmore GVIT Global Financial Services Fund
SemiannualReport
| June 30, 2006 (unaudited) |
Contents | ||
3 | Statement of Investments | |
6 | Statement of Assets and Liabilities | |
6 | Statement of Operations | |
7 | Statements of Changes in Net Assets | |
9 | Financial Highlights | |
10 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GGFS (8/06)
Table of Contents
Shareholder
Expense Example | Gartmore GVIT Global Financial Services Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, January 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, | Ending Account Value, June 30, 2006 | Expenses Paid During Period* | Annualized Expense Ratio* | ||||||||||
Gartmore GVIT Global Financial Services Fund | |||||||||||||
Class I | Actual | $ | 1,000.00 | $ | 1,071.30 | $ | 6.11 | 1.19% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.90 | $ | 5.97 | 1.19% | ||||||
Class II | Actual | $ | 1,000.00 | $ | 1,070.20 | $ | 7.39 | 1.44% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.66 | $ | 7.23 | 1.44% | ||||||
Class III | Actual | $ | 1,000.00 | $ | 1,070.50 | $ | 6.01 | 1.17% | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.00 | $ | 5.87 | 1.17% |
* | Expenses are equal to the Fund’s annualized expense ratio multiplied by the average account value over the period multiplied by 181/365 (to reflect the one-half year period). The expense ratio presented represents a six-month, annualized ratio in accordance with SEC guidelines. The expenses reported above do not include the effect of additional expenses imposed by variable annuity contracts. |
1 | Represents the hypothetical 5% return before expenses. |
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Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | Gartmore GVIT Global Financial Services Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 96.6% | |
Cash Equivalents | 4.3% | |
Other assets in excess of liabilities | -0.9% | |
100.0% | ||
Top Holdings* | ||
Bank of America Corp. | 4.0% | |
Citigroup, Inc. | 3.6% | |
HSBC Holdings PLC | 3.3% | |
Royal Bank of Scotland Group PLC | 3.0% | |
UBS AG | 3.0% | |
BNP Paribas SA | 3.0% | |
Mizuho Financial Group, Inc. | 3.0% | |
Wachovia Corp. | 2.9% | |
UniCredito Italiano SpA | 2.6% | |
Mitsubishi UFJ Financial Group, Inc. | 2.3% | |
Other Assets | 69.3% | |
100.0% | ||
Top Industries | ||
Banking | 40.5% | |
Financial Services | 31.9% | |
Insurance | 17.2% | |
Real Estate Investment Trusts | 2.8% | |
Real Estate | 2.2% | |
Property Trust | 1.2% | |
Paper Products | 0.8% | |
Other Assets | 3.4% | |
100.0% | ||
Top Countries | ||
United States | 48.8% | |
Japan | 9.5% | |
United Kingdom | 8.9% | |
Australia | 4.8% | |
France | 3.9% | |
Germany | 3.8% | |
Netherlands | 3.3% | |
Switzerland | 3.0% | |
Italy | 2.6% | |
Ireland | 2.2% | |
Other Assets | 9.2% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (96.6%) | |||||
AUSTRALIA (4.8%) | |||||
Banking (2.9%) | |||||
Australia & New Zealand Banking Group Ltd. (c) | 29,770 | $ | 588,423 | ||
Commonwealth Bank of Australia (c) | 12,040 | 396,522 | |||
984,945 | |||||
Insurance (0.7%) | |||||
Promina Group Ltd. (c) | 58,600 | 244,279 | |||
Property Trust (1.2%) | |||||
Westfield Group (c) | 32,000 | 411,865 | |||
1,641,089 | |||||
CANADA (1.8%) | |||||
Financial Services (1.8%) | |||||
Manulife Financial Corp. | 18,650 | 591,085 | |||
FRANCE (3.9%) | |||||
Banking (3.0%) | |||||
BNP Paribas SA (c) | 10,610 | 1,014,456 | |||
Financial Services (0.9%) | |||||
Credit Agricole SA (c) | 7,860 | 298,253 | |||
1,312,709 | |||||
GERMANY (3.8%) | |||||
Banking (1.3%) | |||||
Commerzbank AG (c) | 11,990 | 434,099 | |||
Financial Services (0.5%) | |||||
Hypo Real Estate Holding AG (c) | 2,800 | 169,524 | |||
Insurance (2.0%) | |||||
Allianz AG (c) | 4,270 | 671,873 | |||
1,275,496 | |||||
GREECE (1.2%) | |||||
Banking (1.2%) | |||||
Alpha Bank AE (c) | 15,550 | 387,923 | |||
HONG KONG (0.6%) | |||||
Financial Services (0.6%) | |||||
Hang Lung Group Ltd. (c) | 87,420 | 189,235 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
IRELAND (2.2%) | |||||
Banking (2.2%) | |||||
Anglo Irish Bank Corp. PLC (c) | 23,260 | $ | 362,422 | ||
Bank of Ireland (c) | 20,710 | 368,098 | |||
730,520 | |||||
ITALY (2.6%) | |||||
Banking (2.6%) | |||||
UniCredito Italiano SpA (c) | 113,104 | 884,495 | |||
JAPAN (9.5%) | |||||
Banking (3.3%) | |||||
Mitsubishi UFJ Financial Group, Inc. (c) | 56 | 785,141 | |||
Sumitomo Mitsui Financial Group, Inc. (c) | 23 | 243,609 | |||
Suruga Bank Ltd. (c) | 5,000 | 67,715 | |||
1,096,465 | |||||
Financial Services (4.0%) | |||||
Daiwa Securities Group, Inc. (c) | 14,000 | 166,850 | |||
Mizuho Financial Group, Inc. (c) | 117 | 992,435 | |||
Orix Corp. (c) | 700 | 170,838 | |||
1,330,123 | |||||
Real Estate (2.2%) | |||||
Mitsubishi Estate Co. Ltd. (c) | 13,000 | 276,706 | |||
Mitsui Fudosan Co. Ltd. (c) | 8,000 | 173,893 | |||
Sumitomo Realty & Development Co. Ltd. (c) | 12,000 | 296,154 | |||
746,753 | |||||
3,173,341 | |||||
NETHERLANDS (3.3%) | |||||
Financial Services (1.0%) | |||||
Fortis NV (c) | 9,550 | 325,621 | |||
Insurance (2.3%) | |||||
ING Groep NV (c) | 19,760 | 775,640 | |||
1,101,261 | |||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SPAIN (2.2%) | |||||
Banking (2.2%) | |||||
Banco Bilbao Vizcaya Argentaria SA (c) | 35,430 | $ | 728,969 | ||
SWITZERLAND (3.0%) | |||||
Financial Services (3.0%) | |||||
UBS AG (c) | 9,270 | 1,015,033 | |||
UNITED KINGDOM (8.9%) | |||||
Banking (8.9%) | |||||
Barclays PLC (c) | 36,430 | 412,936 | |||
HBOS PLC (c) | 11,510 | 199,724 | |||
HSBC Holdings PLC (c) | 62,370 | 1,097,292 | |||
Lloyds TSB Group PLC (c) | 25,310 | 247,912 | |||
Royal Bank of Scotland Group PLC (c) | 30,950 | 1,015,825 | |||
2,973,689 | |||||
UNITED STATES (48.8%) | |||||
Banking (12.9%) | |||||
Bank of America Corp. | 28,140 | 1,353,534 | |||
Colonial BancGroup, Inc. | 15,920 | 408,826 | |||
Hudson City Bancorp, Inc. | 22,000 | 293,260 | |||
SunTrust Banks, Inc. | 6,450 | 491,877 | |||
Synovus Financial Corp. | 4,900 | 131,222 | |||
U.S. Bancorp | 16,650 | 514,152 | |||
Wachovia Corp. | 17,860 | 965,869 | |||
Zions Bancorp | 2,060 | 160,556 | |||
4,319,296 | |||||
Financial Services (20.1%) | |||||
Accredited Home Lenders Holding Co. (b) | 2,100 | 100,401 | |||
American Express Co. | 2,150 | 114,423 | |||
AmeriCredit Corp. (b) | 11,780 | 328,898 | |||
Capital One Financial Corp. | 5,900 | 504,155 | |||
Chicago Mercantile Exchange | 860 | 422,389 | |||
Citigroup, Inc. | 25,150 | 1,213,235 | |||
Clayton Holdings, Inc. (b) | 2,390 | 31,190 | |||
E*TRADE Financial Corp. (b) | 7,240 | 165,217 | |||
Fannie Mae | 3,240 | 155,844 | |||
Goldman Sachs Group, Inc. | 5,140 | 773,210 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED STATES (continued) | |||||
Financial Services (continued) | |||||
Greenhill & Co., Inc. | 4,200 | $ | 255,192 | ||
J.P. Morgan Chase & Co. | 15,610 | 655,620 | |||
Lehman Brothers Holdings, Inc. | 4,720 | 307,508 | |||
Moody’s Corp. | 2,400 | 130,704 | |||
SLM Corp. | 4,720 | 249,782 | |||
State Street Corp. | 4,000 | 232,360 | |||
T. Rowe Price Group, Inc. | 4,200 | 158,802 | |||
Thomas Weisel Partners Group, Inc. (b) | 8,220 | 156,262 | |||
United PanAm Financial Corp. (b) | 8,370 | 254,448 | |||
Washington Mutual, Inc. | 6,900 | 314,502 | |||
Wright Express Corp. (b) | 6,200 | 178,188 | |||
6,702,330 | |||||
Insurance (12.2%) | |||||
AFLAC, Inc. | 4,470 | 207,185 | |||
Allstate Corp. | 4,830 | 264,346 | |||
American International Group, Inc. | 10,050 | 593,452 | |||
Assurant, Inc. | 11,110 | 537,724 | |||
Endurance Specialty Holdings Ltd. | 10,940 | 350,080 | |||
Genworth Financial, Inc., Class A | 7,060 | 245,970 | |||
Lincoln National Corp. | 4,600 | 259,624 | |||
Metlife, Inc. | 3,980 | 203,816 | |||
PartnerRe Ltd. | 2,500 | 160,125 | |||
Progressive Corp. (The) | 16,770 | 431,157 | |||
Prudential Financial, Inc. | 4,200 | 326,340 | |||
St. Paul Travelers Cos. | 7,150 | 318,747 | |||
United Fire & Casualty Co. | 6,310 | 190,120 | |||
4,088,686 | |||||
Paper Products (0.8%) | |||||
Potlatch Corp. | 6,786 | 256,172 | |||
Real Estate Investment Trusts (2.8%) | |||||
General Growth Properties, Inc. | 3,000 | 135,180 | |||
New Century Financial Corp. | 2,210 | 101,108 | |||
ProLogis | 5,180 | 269,982 |
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||||
COMMON STOCKS (continued) | |||||||
UNITED STATES (continued) | |||||||
Real Estate Investment Trusts (continued) | |||||||
Redwood Trust, Inc. | 5,410 | $ | 264,170 | ||||
Ventas, Inc. | 4,530 | 153,476 | |||||
923,916 | |||||||
16,290,400 | |||||||
Total Common Stocks | 32,295,245 | ||||||
CASH EQUIVALENTS (4.3%) | |||||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $1,449,020) | $ | 1,448,396 | 1,448,396 | ||||
Total Cash Equivalents | 1,448,396 | ||||||
Total Investments (Cost $32,297,966) (a) — 100.9% | 33,743,641 | ||||||
Liabilities in excess of other assets — (0.9%) | (316,856 | ) | |||||
NET ASSETS — 100.0% | $ | 33,426,785 | |||||
(a) | See notes to financial statements for tax and unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair valued security. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $30,849,570) | $ | 32,295,245 | ||
Repurchase agreements, at cost and value | 1,448,396 | |||
Total Investments | 33,743,641 | |||
Foreign currencies, at value (cost $16,020) | 16,218 | |||
Interest and dividends receivable | 46,504 | |||
Receivable for capital shares issued | 27,213 | |||
Receivable for investments sold | 882,778 | |||
Reclaims receivable | 13,605 | |||
Prepaid expenses and other assets | 473 | |||
Total Assets | 34,730,432 | |||
Liabilities: | ||||
Payable to custodian | 18,812 | |||
Payable for capital shares redeemed | 399,526 | |||
Payable for investments purchased | 800,284 | |||
Unrealized depreciation on forward foreign currency contracts | 4,490 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 75,027 | |||
Fund administration and transfer agent fees | 1,887 | |||
Distribution fees | 354 | |||
Administrative servicing fees | 3,257 | |||
Other | 10 | |||
Total Liabilities | 1,303,647 | |||
Net Assets | $ | 33,426,785 | ||
Represented by: | ||||
Capital | $ | 29,307,904 | ||
Accumulated net investment income (loss) | (220,758 | ) | ||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 2,893,350 | |||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign currencies | 1,446,289 | |||
Net Assets | $ | 33,426,785 | ||
Net Assets: | ||||
Class I Shares | $ | 7,237,739 | ||
Class II Shares | 1,749,972 | |||
Class III Shares | 24,439,074 | |||
Total | $ | 33,426,785 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class I Shares | 546,852 | |||
Class II Shares | 132,601 | |||
Class III Shares | 1,845,702 | |||
Total | 2,525,155 | |||
Net asset value and offering price per share:* | ||||
Class I Shares | $ | 13.24 | ||
Class II Shares | $ | 13.20 | ||
Class III Shares | $ | 13.24 |
* | Not subject to a front-end sales charge. |
For the six months ended June 30, 2006 (Unaudited)
Investment Income: | ||||
Interest income | $ | 15,305 | ||
Dividend income (net of foreign withholding tax of $30,426) | 487,566 | |||
Total Income | 502,871 | |||
Expenses: | ||||
Investment advisory fees | 144,369 | |||
Fund administration and transfer agent fees | 16,457 | |||
Distribution fees Class II Shares | 2,189 | |||
Administrative servicing fees Class I Shares | 4,914 | |||
Administrative servicing fees Class II Shares | 1,303 | |||
Administrative servicing fees Class III Shares | 15,045 | |||
Trustee fees | 565 | |||
Other | 6,180 | |||
Total expenses before earnings credit | 191,022 | |||
Earnings credit (Note 6) | (2 | ) | ||
Total Expenses | 191,020 | |||
Net Investment Income (Loss) | 311,851 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | 3,083,206 | |||
Net realized gains (losses) on foreign currency transactions | 10,009 | |||
Net realized gains (losses) on investment and foreign currency transactions | 3,093,215 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (1,355,610 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | 1,737,605 | |||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,049,456 | ||
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Changes in Net Assets
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||||
(Unaudited) | ||||||||
From Investment Activities: | ||||||||
Operations: | ||||||||
Net investment income (loss) | $ | 311,851 | $ | 284,157 | ||||
Net realized gains (losses) on investment and foreign currency transactions | 3,093,215 | 2,410,937 | ||||||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (1,355,610 | ) | (500,989 | ) | ||||
Change in net assets resulting from operations | 2,049,456 | 2,194,105 | ||||||
Distributions to Class I shareholders from: | ||||||||
Net investment income | (92,180 | ) | (74,845 | ) | ||||
Net realized gains on investments | (76,898 | ) | (493,113 | ) | ||||
Distributions to Class II shareholders from: | ||||||||
Net investment income | (21,119 | ) | (29,857 | ) | ||||
Net realized gains on investments | (18,311 | ) | (161,050 | ) | ||||
Distributions to Class III shareholders from: | ||||||||
Net investment income | (324,034 | ) | (323,915 | ) | ||||
Net realized gains on investments | (253,070 | ) | (1,878,073 | ) | ||||
Change in net assets from shareholder distributions | (785,612 | ) | (2,960,853 | ) | ||||
Change in net assets from capital transactions | 3,320,341 | 4,086,038 | ||||||
Change in net assets | 4,584,185 | 3,319,290 | ||||||
Net Assets: | ||||||||
Beginning of period | 28,842,600 | 25,523,310 | ||||||
End of period | $ | 33,426,785 | $ | 28,842,600 | ||||
Accumulated net investment income (loss) | $ | (220,758 | ) | $ | (95,276 | ) | ||
CAPITAL TRANSACTIONS: | ||||||||
Class I Shares | ||||||||
Proceeds from shares issued | $ | 1,966,109 | $ | 3,305,266 | ||||
Dividends reinvested | 169,077 | 567,957 | ||||||
Cost of shares redeemed | (915,357 | ) | (1,906,576 | ) | ||||
1,219,829 | 1,966,647 | |||||||
Class II Shares | ||||||||
Proceeds from shares issued | 128 | 196 | ||||||
Dividends reinvested | 39,430 | 190,907 | ||||||
Cost of shares redeemed | (50,788 | ) | (361,011 | ) | ||||
(11,230 | ) | (169,908 | ) | |||||
Class III Shares | ||||||||
Proceeds from shares issued | 9,673,751 | 8,227,215 | ||||||
Dividends reinvested | 577,102 | 2,201,984 | ||||||
Cost of shares redeemed | (8,139,111 | ) | (8,139,900 | ) | ||||
2,111,742 | 2,289,299 | |||||||
Change in net assets from capital transactions | $ | 3,320,341 | $ | 4,086,038 | ||||
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GARTMORE VARIABLE INSURANCE TRUST
GARTMORE GVIT GLOBAL FINANCIAL SERVICES FUND
Statement of Changes in Net Assets (Continued)
Six Months Ended June 30, 2006 | Year Ended December 31, 2005 | |||||
(Unaudited) | ||||||
SHARE TRANSACTIONS: | ||||||
Class I Shares | ||||||
Issued | 144,530 | 252,815 | ||||
Reinvested | 12,904 | 45,191 | ||||
Redeemed | (68,609 | ) | (152,719 | ) | ||
88,825 | 145,287 | |||||
Class II Shares | ||||||
Issued | — | (a) | — | (a) | ||
Reinvested | 3,015 | 15,326 | ||||
Redeemed | (3,842 | ) | (28,739 | ) | ||
(827 | ) | (13,413 | ) | |||
Class III Shares | ||||||
Issued | 723,106 | 635,243 | ||||
Reinvested | 43,963 | 175,497 | ||||
Redeemed | (607,667 | ) | (655,199 | ) | ||
159,402 | 155,541 | |||||
(a) | Amount is less than 1 share. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
Gartmore GVIT Global Financial Services Fund
Investment Activities | Distributions | Ratios/Supplemental Data | |||||||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Redemption Fees | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Net Realized Gains | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | ||||||||||||||||||||||||||||||
Class I Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2002(c) | $ | 10.23 | — | 0.01 | (1.27 | ) | (1.26 | ) | (0.01 | ) | — | (0.01 | ) | $ | 8.96 | (12.26% | )(f) | $ | 218 | 1.37% | (g) | 0.30% | (g) | (h) | (h) | 211.21% | |||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.96 | 0.10 | 0.01 | 3.58 | 3.69 | (0.05 | ) | (1.21 | ) | (1.26 | ) | $ | 11.39 | 41.45% | $ | 3,121 | 1.27% | 1.47% | (h) | (h) | 261.68% | |||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.39 | 0.17 | 0.01 | 2.19 | 2.37 | (0.17 | ) | (0.77 | ) | (0.94 | ) | $ | 12.82 | 20.99% | $ | 4,011 | 1.27% | 1.19% | (h) | (h) | 127.69% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.82 | 0.19 | — | 1.18 | 1.37 | (0.25 | ) | (1.28 | ) | (1.53 | ) | $ | 12.66 | 11.15% | $ | 5,799 | 1.34% | 1.24% | (h) | (h) | 217.57% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.66 | 0.14 | — | 0.76 | 0.90 | (0.18 | ) | (0.14 | ) | (0.32 | ) | $ | 13.24 | 7.13% | (f) | $ | 7,238 | 1.19% | (g) | 1.96% | (g) | (h) | (h) | 129.76% | ||||||||||||||||||||
Class II Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2003(d) | $ | 8.46 | 0.04 | 0.01 | 4.11 | 4.16 | (0.04 | ) | (1.21 | ) | (1.25 | ) | $ | 11.37 | 49.51% | (f) | $ | 913 | 1.51% | (g) | 1.20% | (g) | (h) | (h) | 261.68% | ||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.37 | 0.11 | 0.01 | 2.22 | 2.34 | (0.14 | ) | (0.77 | ) | (0.91 | ) | $ | 12.80 | 20.76% | $ | 1,879 | 1.52% | 1.00% | (h) | (h) | 127.69% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.80 | 0.14 | — | 1.18 | 1.32 | (0.22 | ) | (1.28 | ) | (1.50 | ) | $ | 12.62 | 10.79% | $ | 1,685 | 1.59% | 1.08% | (h) | (h) | 217.57% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.62 | 0.11 | — | 0.77 | 0.88 | (0.16 | ) | (0.14 | ) | (0.30 | ) | $ | 13.20 | 7.02% | (f) | $ | 1,750 | 1.44% | (g) | 1.67% | (g) | (h) | (h) | 129.76% | ||||||||||||||||||||
Class III Shares | |||||||||||||||||||||||||||||||||||||||||||||
Period Ended December 31, 2001(e) | $ | 10.00 | — | — | 0.13 | 0.13 | — | — | — | $ | 10.13 | 1.32% | (f) | $ | 3,041 | 1.35% | (g) | 0.33% | (g) | 8.56% | (g) | (6.88% | )(g) | 0.00% | |||||||||||||||||||||
Year Ended December 31, 2002 | $ | 10.13 | 0.04 | 0.01 | (1.21 | ) | (1.16 | ) | (0.01 | ) | — | (0.01 | ) | $ | 8.96 | (11.41% | ) | $ | 6,009 | 1.31% | 0.66% | (h) | (h) | 211.21% | |||||||||||||||||||||
Year Ended December 31, 2003 | $ | 8.96 | 0.13 | 0.01 | 3.55 | 3.69 | (0.05 | ) | (1.21 | ) | (1.26 | ) | $ | 11.39 | 41.46% | $ | 11,634 | 1.22% | 1.57% | (h) | (h) | 261.68% | |||||||||||||||||||||||
Year Ended December 31, 2004 | $ | 11.39 | 0.14 | 0.01 | 2.23 | 2.38 | (0.17 | ) | (0.77 | ) | (0.94 | ) | $ | 12.83 | 21.13% | $ | 19,634 | 1.24% | 1.28% | (h) | (h) | 127.69% | |||||||||||||||||||||||
Year Ended December 31, 2005 | $ | 12.83 | 0.20 | — | 1.17 | 1.37 | (0.25 | ) | (1.28 | ) | (1.53 | ) | $ | 12.67 | 11.17% | $ | 21,359 | 1.29% | 1.36% | (h) | (h) | 217.57% | |||||||||||||||||||||||
Six Months Ended June 30, 2006 (Unaudited) | $ | 12.67 | 0.13 | — | 0.76 | 0.89 | (0.18 | ) | (0.14 | ) | (0.32 | ) | $ | 13.24 | 7.05% | (f) | $ | 24,439 | 1.17% | (g) | 1.96% | (g) | (h) | (h) | 129.76% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as a whole without distinguishing among the classes of shares. |
(c) | For the period from May 10, 2002 (commencement of operations) through December 31, 2002. |
(d) | For the period from March 28, 2003 (commencement of operations) through December 31, 2003. |
(e) | For the period from December 18, 2001 (commencement of operations) through December 31, 2001. Registration of shares effective with the Securities and Exchange Commission on December 28, 2001. On the effective date, the net asset value was $10.13 per share. |
(f) | Not annualized. |
(g) | Annualized. |
(h) | There were no fee reductions during the period. |
See notes to financial statements.
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of October 30, 1997, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the Gartmore GVIT Global Financial Services Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Debt (including defaulted issues) and other fixed income securities (other than short-term obligations) are valued at the last quoted bid price and/or by using a combination of daily quotes and matrix evaluations provided by an independent pricing service, the use of which has been approved by the Trust’s Board of Trustees. Short-term debt securities, such as commercial paper and U.S. Treasury Bills having a remaining maturity of 60 days or less at the time of purchase, are considered to be “short-term” and are valued at amortized cost which approximates market value.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee,
10
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk of imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Short Sales |
The Fund is authorized to engage in short-selling of portfolio securities which obligates the Fund to replace any security that the Fund has borrowed by purchasing the security at current market value sometime in the future. The Fund will incur a loss if the
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
price of the security increases between the date of the short sale and the date on which the Fund replaces the borrowed security. The Fund generally will realize a gain if the price of the security declines between these dates. Until the Fund replaces the borrowed security, the Fund will maintain a segregated account with cash, U.S. Government securities and/or securities held long to sufficiently cover the Fund’s short position on a daily basis. Dividends declared on securities sold short are recorded as an expense on the ex-dividend date and paid to the counterparty on the dividend pay date. The collateral for securities sold short includes the deposits with brokers and securities held long as shown in the Statement of Investments for the Fund.
(i) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(j) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(k) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(l) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
As of June 30, 2006, the tax cost of securities and breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized | Net Unrealized Appreciation (Depreciation)* | |||
$32,393,165 | $1,834,310 | $(388,636) | $1,445,674 |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(m) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Global Asset Management Trust (“GGAMT”) manages the investment of the assets and supervises the daily business affairs of the Fund. GGAMT is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GGAMT provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GGAMT advises. Gartmore Global Partners (the “subadviser”), an affiliate of GGAMT, manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund.
Under the terms of the Investment Advisory Agreement, the Fund pays GGAMT an investment advisory fee based on that Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreement, GGAMT pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GGAMT and the subadviser is as follows for the six months ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||
Up to $500 million | 0.90% | 0.450% | 0.450% | |||
$500 million up to $2 billion | 0.85% | 0.425% | 0.425% | |||
$2 billion and more | 0.80% | 0.400% | 0.400% |
Beginning January 1, 2007, the Fund’s base management fee (as adjusted for any applicable breakpoints) may increase or decrease proportionately depending on how the Fund performs relative to its benchmark, the MSCI World Financials Index. This performance fee is intended to reward or penalize the investment adviser for outperforming or underperforming the Fund’s benchmark.
The calculation of the total management fee is done in two separate steps. First, the Fund calculates a base fee (to be paid at the end of each quarter). The base fee rate results in an annual fee, calculated and accrued daily. The fee rate is applied to the Fund’s average net assets over that quarter. Second, a performance adjustment percentage is applied to the Fund’s average net assets over the 12-month rolling performance period. The performance adjustment amount is then added to (or subtracted from, as applicable) the base fee to arrive at the Fund’s total advisory fee for the most recently completed quarterly sub-period and that total fee is paid at the end of that most recently completed quarter.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
The performance fee calculation applies to all of the Fund’s share classes equally, based on the performance of the Class III shares during the performance period. The table below shows the performance adjustment rate applicable to each Fund’s base fee.
Out or Underperformance | Change in Fees | |
+/- 1 percentage point | +/- 0.02% | |
+/- 2 percentage point | +/- 0.04% | |
+/- 3 percentage point | +/- 0.06% | |
+/- 4 percentage point | +/- 0.08% | |
+/- 5 percentage point | +/- 0.10% |
The first such payment or penalty, if any, will be made at the end of March 2007 for the Fund (15 months after implementation of the performance-based fees on January 1, 2006). Thereafter, the performance adjusted advisory fee will be paid quarterly.
Under this performance fee arrangement, the investment adviser can receive a performance fee increase even if the Fund experiences negative performance that still exceeds its benchmark by more than the relevant percentage amount shown above.
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares of the Fund at an annual rate not to exceed 0.25%.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the six months ended June 30, 2006, Nationwide Financial Services received $20,019 in Administrative Services Fees from the Fund.
As of June 30, 2006, the adviser or affiliates of the adviser directly held 16% of the shares outstanding of the Fund.
4. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $43,594,819 and sales of $41,484,059.
4. Short-Term Trading Fees
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class III shares that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class III shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class III shares on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class III shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the six months ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $4,902.
5. Investment Transactions
For the six months ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $43,594,819 and sales of $41,484,059.
6. Bank Loans and Earnings Credit
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information
June 30, 2006 (Unaudited)
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year. In the Lipper reports, Lipper selected an expense group consisting of the Fund and a representative sample of comparable funds (an “Expense Group”). The Lipper report also contained comparisons of total return performance. For purposes of the Lipper report, a “Performance Group” was used by Lipper to compare the total return performance of the Fund against that of similar funds, and the Performance Group may have been comprised of the same funds as the Fund’s Expense Group. The Lipper ranking methodology ranks the Fund based upon expense and performance comparisons. The highest/best performing funds are ranked in the first quintile, with the lowest performing funds ranked in the fifth quintile. The funds with the lowest expenses are ranked in the first quintile and the funds with the highest expenses are ranked in the fifth quintile. Therefore, the highest expense is defined as being in the 5th quintile while the highest performance is defined as being in the 1st quartile.
In considering whether to renew the investment advisory agreement (and, where applicable, the sub-advisory agreement) for the Fund, the Board considered among others, the following specific factors with respect to the Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund compared to its benchmark and its peer group of funds; and |
5. | the profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
The Board reviewed the Fund’s performance and considered that the Fund outperformed its benchmark, the MSCI World/Financials Index, by 4 basis points for the one-year period ended September 30, 2005 and by 335 basis points for the three-year period. The Board considered that the Fund ranked in the second quartile of the Lipper Specialty/Miscellaneous Funds category for the one-year period, and ranked in the first quartile for the three-year period. The Board discussed with management the performance and distribution of this Fund.
Next, the Board reviewed the Fund’s contractual advisory fee (including the subadvisory fee) and breakpoints and noted that the contractual advisory fee placed the Fund in the fifth quintile of its Lipper-constructed Expense Group. The Board also considered the Fund’s total expenses placed the Fund above the median of its Lipper Expense Group by 24 basis points. Management explained that the Fund’s higher expense ratio relative to its peers was primarily due to a higher management fee. However, the Board considered that the management fee was reduced by 10 basis points on January 1, 2006, in conjunction with the implementation of a performance-based fee structure for this Fund. Finally, the Board considered the adviser’s profitability in light of all of the above and determined it was not excessive.
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GARTMORE VARIABLE INSURANCE TRUST
Supplemental Information (Continued)
June 30, 2006 (Unaudited)
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to continue the investment advisory (and subadvisory) agreements for the Fund for an annual period which commenced on May 1, 2006.
On May 25, 2006, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company (collectively, “Nationwide”), the parent companies of Gartmore Global Asset Management Trust (“GGAMT”) and GGAMT’s investment advisory subsidiaries, Gartmore Mutual Fund Capital Trust (“GMFCT”) and Gartmore Morley Capital Management, Inc. (“GMCM”), each of which, along with GGAMT, serves as an investment adviser to various series of the Gartmore Variable Insurance Trust (the “Funds”), announced that Nationwide entered into a definitive agreement for the sale of Gartmore Group Limited (“GGL”), including certain of GGL’s subsidiaries based in the United Kingdom (the “U.K. Sale”). GGL’s U.K. investment advisory subsidiaries includes Gartmore Global Partners (“GGP”), the Fund’s current sub-adviser. Management informed the Board that, pending regulatory approval in the U.K. and other such appropriate jurisdiction, the U.K. Sale is expected to close during the third quarter of 2006, at which time a change in control of GGP will occur that will cause GGP’s current subadvisory agreement with the Fund to terminate. Management recommended that the Fund’s adviser assume responsibility for the day-to-day management of the Fund immediately upon the closing of the U.K. Sale to ensure continued provision of investment management services to the Fund. The Board considered management’s representation that upon the closing of the U.K. Sale (1) the Fund will be managed by the same portfolio managers who manage the Fund’s assets at this time; however, they will now do so on behalf of the adviser; and (2) that the Fund will be managed in the same way, utilizing the same investment objective and strategies currently used by GGP. Consequently, at its Regular Quarterly Meeting on June 14, 2006, the Board approved the assumption by the adviser of day-to-day management of this Fund, effective immediately upon the closing of the U.K. Sale which as of the date of printing of this report, had not yet occurred.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Table of Contents
American Funds GVIT Asset Allocation Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
2 | Statement of Assets and Liabilities | |
2 | Statement of Operations | |
3 | Statements of Changes in Net Assets | |
4 | Financial Highlights | |
5 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-AGAA (8/06)
Table of Contents
Shareholder
Expense Example | American Funds GVIT Asset Allocation Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, May 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period | Annualized Expense Ratio | ||||||||||
American Funds GVIT Asset Allocation Fund | |||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 973.10 | $ | 2.84a | 0.58%a | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,021.92 | $ | 2.91b | 0.58%b | ||||||
Class VII | Actual | $ | 1,000.00 | $ | 972.80 | $ | 5.58a | 1.14%a | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,019.15 | $ | 5.72b | 1.14%b |
1 | Represents the hypothetical 5% return before expenses. |
a | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
b | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
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GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT ASSET ALLOCATION FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments in Portfolio (cost $19,067,516) | $ | 19,056,971 | ||
Receivable for capital shares issued | 414,792 | |||
Total Assets | 19,471,763 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 18 | |||
Accrued expenses and other payables: | ||||
Fund administration and transfer agent fees | 1,312 | |||
Master feeder service provider fee | 880 | |||
Distribution fees | 2,199 | |||
Administrative servicing fees | 2,156 | |||
Trustee fees | 52 | |||
Other | 2,047 | |||
Total Liabilities | 8,664 | |||
Net Assets | $ | 19,463,099 | ||
Represented by: | ||||
Capital | $ | 19,306,296 | ||
Accumulated net investment income (loss) | 169,015 | |||
Accumulated net realized gains (losses) from investment | (1,667 | ) | ||
Net unrealized appreciation (depreciation) on investments | (10,545 | ) | ||
Net Assets | $ | 19,463,099 | ||
Net Assets: | ||||
Class II Shares | 19,462,125 | |||
Class VII Shares | 974 | |||
Total | $ | 19,463,099 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 1,117,605 | |||
Class VII Shares | 56 | |||
Total | 1,117,661 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 17.41 | ||
Class VII Shares | $ | 17.42 | (a) |
For the period ended June 30, 2006 (Unaudited)(b)
Investment Income: | ||||
Dividend income | $ | 222,027 | ||
Total Income | 222,027 | |||
Expenses: | ||||
Fund administration and transfer agent fees | 1,436 | |||
Master feeder service provider fee | 2,675 | |||
Distribution fees Class II Shares | 2,674 | |||
Distribution fees Class VII Shares | 1 | |||
Administrative servicing fees Class II Shares | 2,674 | |||
Administrative servicing fees Class VII Shares | 1 | |||
Professional fees | 2,162 | |||
Trustee fees | 74 | |||
Other | 1,129 | |||
Total expenses before waived expenses | 12,826 | |||
Expenses waived | (1,605 | ) | ||
Total Expenses | 11,221 | |||
Net Investment Income (Loss) | 210,806 | |||
REALIZED/UNREALIZED GAINS | ||||
Net realized gains (losses) on investment transactions | (1,667 | ) | ||
Net change in unrealized appreciation/depreciation on investments | (10,545 | ) | ||
Net realized/unrealized gains (losses) on investments | (12,212 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 198,594 | ||
* | Not subject to a front-end sales charge. |
(a) | Due to rounding, Net Assets divided by shares outstanding does not equal the NAV. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT ASSET ALLOCATION FUND
Statement of Changes in Net Assets
Period Ended June 30, 2006(a) | ||||
(Unaudited) | ||||
From Investment Activities: | ||||
Operations: | ||||
Net investment income (loss) | $ | 210,806 | ||
Net realized gains (losses) on investment transactions | (1,667 | ) | ||
Net change in unrealized appreciation/depreciation on investments | (10,545 | ) | ||
Change in net assets resulting from operations | 198,594 | |||
Distributions to Class II shareholders from: | ||||
Net investment income | (41,789 | ) | ||
Distributions to Class VII shareholders from: | ||||
Net investment income | (2 | ) | ||
Change in net assets from shareholder distributions | (41,791 | ) | ||
Change in net assets from capital transactions | 19,306,296 | |||
Change in net assets | 19,463,099 | |||
Net Assets: | ||||
Beginning of period | — | |||
End of period | $ | 19,463,099 | ||
Accumulated net investment income (loss) | $ | 169,015 | ||
CAPITAL TRANSACTIONS: | ||||
Class II Shares | ||||
Proceeds from shares issued | $ | 19,344,114 | ||
Dividends reinvested | 41,789 | |||
Cost of shares redeemed | (80,609 | ) | ||
19,305,294 | ||||
Class VII Shares | ||||
Proceeds from shares issued | 1,000 | |||
Dividends reinvested | 2 | |||
1,002 | ||||
Change in net assets from capital transactions | $ | 19,306,296 | ||
SHARE TRANSACTIONS: | ||||
Class II Shares | ||||
Issued | 1,119,888 | |||
Reinvested | 2,442 | |||
Redeemed | (4,725 | ) | ||
1,117,605 | ||||
Class VII Shares | ||||
Issued | 56 | |||
Reinvested | — | (b) | ||
56 | ||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(b) | Amount is less than 1 share. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
American Funds GVIT Asset Allocation Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets | Portfolio Turnover(a) | |||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b) | $ | 17.92 | 0.20 | (0.66 | ) | (0.46 | ) | (0.05 | ) | (0.05 | ) | $ | 17.41 | (2.58% | )(c) | $ | 19,462 | 0.50% | (d) | 10.96% | (d) | 0.58% | (d) | 10.87% | (d) | 21.00% | ||||||||||||||
Class VII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b) | $ | 17.92 | 0.26 | (0.73 | ) | (0.47 | ) | (0.03 | ) | (0.03 | ) | $ | 17.42 | (2.61% | )(c) | $ | 1 | 1.14% | (d) | 9.29% | (d) | 1.14% | (d) | 9.29% | (d) | 21.00% |
(a) | Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(c) | Not annualized. |
(d) | Annualized. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the American Funds GVIT Asset Allocation Fund (the “Fund”).
The Fund operates as a “feeder fund” which means that the Fund does not buy individual securities directly. Instead, the Fund invests all of its assets in another mutual fund, the American Asset Allocation Fund (the “Master Fund”), a series of the American Funds Insurance Series® (“American Funds”), which invests directly in individual securities. The Fund, therefore, has the same investment objective and limitations as the Master Fund in which the Fund invests and the same gross investment returns as the Master Fund.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
The net asset value (“NAV”) per share of each class of the Fund is calculated by taking the NAV of the Master Fund, subtracting the Fund’s liabilities attributable to the Fund, and dividing by the number of shares of that class that are outstanding. The Fund’s NAV is determined at the close of regular trading on the New York Stock Exchange (the “Exchange”) (usually 4 p.m. Eastern Time) (“Close of Trading”) on each day the Exchange is open for trading (“Business Day”). Each Fund may reject any order to buy Fund shares and may suspend the sale of Fund shares at any time.
The Master Fund calculates its NAV at the Close of Trading on each Business Day. Assets held by the Master Fund are valued primarily on the basis of market quotations. The Master Fund, however, has adopted procedures for making “fair value” determinations if market quotations are not readily available. For example, if events occur between the close of markets outside the United States and the close of regular trading on the New York Stock Exchange that, in the opinion of Capital Research and Management Company (“Capital Research”), the Master Fund’s investment adviser, materially affect the value of the portfolio securities of the Master Fund, the securities will be valued in accordance with the Master Fund’s
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
fair value procedures. Use of these procedures is intended to result in more appropriate NAVs. In addition, such use will reduce, if not eliminate, potential arbitrage opportunities otherwise available to short-term investors in the Master Fund.
(b) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(c) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the NAV of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(d) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||
$19,069,183 | $ | — | $ | (12,212 | ) | $ | (12,212 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(e) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Master Fund’s Investment Advisory Agreement, Capital Research manages the investment of the assets and supervises the daily business affairs of the Master Fund. Gartmore SA Capital Trust (“GSA”) provides non-investment master-feeder operational support services to the Fund. Under the terms of the Trust’s Master-Feeder Services Agreement with GSA on behalf of the Fund, the Fund pays GSA a fee of 0.25% based on the Fund’s average daily net assets. GSA has entered into a contractual agreement with the Trust under which GSA will waive 0.15% of the fees GSA receives for the providing the Fund with non-investment master-feeder operational support services until May 1, 2007.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, GSA provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all Funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Fund for expenses associated with the distribution of the shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares and Class VII shares of the Fund at an annual rate not to exceed 0.25% of Class II shares and 0.40% of Class VII shares.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the period ended June 30, 2006, Nationwide Financial Services received $2,867 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the period ended June 30, 2006, (excluding short-term securities) the Master Fund had purchases of $1,231,288 and sales of $1,240,593.
5. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging markets instruments that are subject to certain additional credit and market risks. The yields of emerging markets debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association-College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
9
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”),3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
11
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
12
Table of Contents
Financial Statements
for the American Funds Master Fund
AMERICAN FUNDS INSURANCE SERIES
Asset Allocation Fund
INVESTMENT MIX BY SECURITY TYPE
Where the fund’s assets were invested
based on total net assets as of
June 30, 2006
Percent of net assets | |||
Equity Securities | 70.2 | ||
Corporate bonds | 9.3 | ||
U.S. Government & government agency bonds & notes | 5.5 | ||
Non-U.S. government bonds & notes | 0.1 | ||
Mortgage-backed obligations | 6.0 | ||
Asset-backed obligations | 0.9 | ||
Short-term securities & other assets less liabilities | 8.0 | ||
100.0 | % | ||
Table of Contents
AMERICAN FUNDS INSURANCE SERIES
Asset Allocation Fund
LARGEST INDIVIDUAL EQUITY SECURITIES
As of June 30, 2006
Percent of net assets | |||
Microsoft | 3.8 | % | |
Altria Group | 3.5 | ||
Schlumberger | 2.5 | ||
Suncor Energy | 2.4 | ||
Boeing | 2.0 | ||
Petro-Canada | 1.6 | ||
Lowe’s Companies | 1.6 | ||
BHP Biliton | 1.6 | ||
Medtronic | 1.4 | ||
Fannie Mae | 1.3 |
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American Funds Insurance Series Asset Allocation Fund
Investment portfolio, June 30, 2006
Common stocks | Shares | Market value | ||
(000) | ||||
Abbott Laboratories | 750,000 | 32,708 | ||
AFLAC Inc. | 700,000 | 32,445 | ||
Alcan Inc. | 875,000 | 41,073 | ||
Alcoa Inc. | 1,100,000 | 35,596 | ||
Allstate Corp. | 540,000 | 29,554 | ||
Altria Group, Inc. | 3,100,000 | 227,633 | ||
Anheuser-Busch Companies, Inc. | 750,000 | 34,193 | ||
Applied Materials, Inc. | 2,500,000 | 40,700 | ||
Arch Coal, Inc. | 1,000,000 | 42,370 | ||
AstraZeneca PLC (ADR) (United Kingdom) | 700,000 | 41,874 | ||
AstraZeneca PLC (Sweden) | 106,000 | 6,395 | ||
Aventine Renewable Energy, Inc. (1) (2) | 1,350,000 | 52,515 | ||
Avnet, Inc. (2) | 1,400,000 | 28,028 | ||
Bank of America Corp. | 1,250,000 | 60,125 | ||
BellSouth Corp. | 2,190,000 | 79,278 | ||
Best Buy Co., Inc. | 705,350 | 38,681 | ||
BHP Billiton Ltd. | 4,775,000 | 102,845 | ||
Boeing Co. | 1,550,000 | 126,961 | ||
Bristol-Myers Squibb Co. | 2,000,000 | 51,720 | ||
C&C Group PLC | 4,234,622 | 36,735 | ||
Cameco Corp. | 1,200,000 | 47,817 | ||
Cardinal Health, Inc. | 1,000,000 | 64,330 | ||
Carnival Corp., units | 1,200,000 | 50,088 | ||
CDW Corp. | 300,000 | 16,395 | ||
Ceridian Corp. (2) | 457,000 | 11,169 | ||
Chevron Corp. | 1,234,328 | 76,602 | ||
CIGNA Corp. | 300,000 | 29,553 | ||
Cisco Systems, Inc. (2) | 2,000,000 | 39,060 | ||
Citigroup Inc. | 1,200,000 | 57,888 | ||
CNX Gas Corp. (1) (2) | 125,000 | 3,750 | ||
COLT Telecom Group SA (2) (4) | 51,200 | 166 | ||
Commerce Bancorp, Inc. | 1,000,000 | 35,670 | ||
CONSOL Energy Inc. | 395,000 | 18,454 | ||
DataPath, Inc. (1) (2) (4) | 1,193,063 | 13,124 | ||
Deere & Co. | 640,000 | 53,434 | ||
Delta Air Lines, Inc. (1) (2) | 48,101 | 36 | ||
DigitalGlobe Inc. (1) (2) (4) | 1,225,858 | 1,226 | ||
Eli Lilly and Co. | 1,200,000 | 66,324 | ||
Energy XXI Acquisition Corp. (Bermuda) Ltd. (1) (2) | 1,108,618 | 5,599 | ||
Fannie Mae | 1,800,000 | 86,580 | ||
Freddie Mac | 800,000 | 45,608 | ||
General Electric Co. | 1,700,000 | 56,032 | ||
General Mills, Inc. | 600,000 | 30,996 | ||
Hewlett-Packard Co. | 1,800,000 | 57,024 | ||
HSBC Holdings PLC (ADR) | 500,000 | 44,175 | ||
Intel Corp. | 2,022,725 | 38,331 | ||
International Business Machines Corp. | 600,000 | 46,092 | ||
J.P. Morgan Chase & Co. | 1,500,000 | 63,000 | ||
Johnson & Johnson | 500,000 | 29,960 | ||
Kohl’s Corp. (2) | 1,000,000 | 59,120 |
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Lockheed Martin Corp. | 700,000 | 50,218 | |||
Lowe’s Companies, Inc. | 1,700,000 | 103,139 | |||
Magna International Inc., Class A | 320,000 | 23,030 | |||
Marathon Oil Corp. | 750,000 | 62,475 | |||
Marshall & Ilsley Corp. | 1,000,000 | 45,740 | |||
Martek Biosciences Corp. (2) | 600,000 | 17,370 | |||
Medtronic, Inc. | 2,000,000 | 93,840 | |||
Mellon Financial Corp. | 1,200,000 | 41,316 | |||
Microsoft Corp. | 10,500,000 | 244,650 | |||
Mitsubishi Corp. | 2,000,000 | 39,944 | |||
Murphy Oil Corp. | 200,000 | 11,172 | |||
Oracle Corp. (2) | 3,000,000 | 43,470 | |||
PepsiCo, Inc. | 600,000 | 36,024 | |||
Petro-Canada | 2,200,000 | 104,401 | |||
Pfizer Inc | 2,000,000 | 46,940 | |||
Raytheon Co. | 1,040,000 | 46,353 | |||
Reliant Energy, Inc. (2) | 4,000,000 | 47,920 | |||
Rio Tinto PLC | 1,112,230 | 58,732 | |||
Roche Holding AG | 300,000 | 49,506 | |||
Rosetta Resources Inc. (1) (2) (3) | 2,970,000 | 49,361 | |||
Royal Dutch Shell PLC, Class A (ADR) | 600,000 | 40,188 | |||
Sanofi-Aventis | 360,000 | 35,093 | |||
Schlumberger Ltd. | 2,459,800 | $ | 160,158 | ||
Sealed Air Corp. | 800,000 | 41,664 | |||
Société Générale | 465,000 | 68,320 | |||
Sprint Nextel Corp., Series 1 | 1,500,000 | 29,985 | |||
State Street Corp. | 1,250,000 | 72,612 | |||
Suncor Energy Inc. | 1,958,788 | 158,564 | |||
Symantec Corp. (2) | 2,000,000 | 31,080 | |||
Target Corp. | 1,150,000 | 56,201 | |||
Telephone and Data Systems, Inc. | 575,000 | 23,805 | |||
Telephone and Data Systems, Inc., Special Common Shares | 575,000 | 22,368 | |||
Toyota Motor Corp. | 800,000 | 41,884 | |||
Verizon Communications Inc. | 1,200,000 | 40,188 | |||
Walgreen Co. | 1,708,900 | 76,627 | |||
Weyerhaeuser Co. | 480,000 | 29,880 | |||
Other common stocks in initial period of acquisition | 115,345 | ||||
Total common stocks (cost: $3,600,832,000) | 4,548,595 | ||||
Preferred stocks | Shares | Market value | |||
(000) | |||||
BNP Paribas 5.186% noncumulative (1) (5) | 2,500,000 | 2,271 | |||
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred (1) (5) | 250,000 | 268 | |||
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred (1) (5) | 2,250,000 | 2,365 | |||
National Bank of Canada, Series A, 8.35% exchangeable preferred depositary shares | 60,000 | 1,576 | |||
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative preferred (1) (5) | 3,905,000 | $ | 3,728 | ||
Total preferred stocks (cost: $10,209,000) | 10,208 |
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Rights & warrants | Shares | Market value | ||
(000) | ||||
GT Group Telecom Inc., warrants, expire 2010 (1) (2) (4) | 2,250 | 0 | ||
Total rights & warrants (cost: $117,000) | ||||
Bonds & notes | Principal amount | Market value | ||
(000) | (000) | |||
Abitibi-Consolidated Co. of Canada 6.00% 2013 | 950 | 774 | ||
Accellent Inc. 10.50% 2013 | 2,540 | 2,610 | ||
Accuride Corp. 8.50% 2015 | 1,740 | 1,679 | ||
ACE Capital Trust II 9.70% 2030 | 2,000 | 2,470 | ||
ACIH, Inc. 0%/11.50% 2012 (1) (8) | 1,060 | 848 | ||
Advanta Business Card Master Trust, Series 2005-A2, Class A-2, 5.397% 2013 (5) | 9,860 | 9,849 | ||
AES Corp. 8.75% 2013 (1) | 2,200 | 2,365 | ||
AES Corp. 9.375% 2010 | 112 | 120 | ||
AES Corp. 9.50% 2009 | 2,800 | 2,982 | ||
Ahern Rentals, Inc. 9.25% 2013 | 2,075 | 2,106 | ||
Ainsworth Lumber Co. Ltd. 7.25% 2012 | 2,100 | 1,733 | ||
Albertson’s, Inc. 7.45% 2029 | 2,500 | 2,160 | ||
Allied Waste North America, Inc. 8.50% 2008 | 875 | 910 | ||
Allied Waste North America, Inc., Series B, 5.75% 2011 | 750 | 703 | ||
Allied Waste North America, Inc., Series B, 6.125% 2014 | 750 | 679 | ||
Allied Waste North America, Inc., Series B, 7.375% 2014 | 3,890 | 3,715 | ||
AMC Entertainment Inc. 9.50% 2011 | 1,080 | 1,066 | ||
AMC Entertainment Inc. 9.875% 2012 | 500 | 500 | ||
American Airlines, Inc., Series 2001-1, Class B, 7.377% 2019 (6) | 100 | 91 | ||
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 2013 (6) | 1,490 | 1,580 | ||
American Cellular Corp., Series B, 10.00% 2011 | 2,250 | 2,379 | ||
American Commercial Lines LLC and ACL Finance Corp. 9.50% 2015 | 1,346 | 1,481 | ||
American Media Operations, Inc. 8.875% 2011 | 1,715 | 1,526 | ||
American Media Operations, Inc., Series B, 10.25% 2009 | 2,325 | 2,180 | ||
American Tower Corp. 7.125% 2012 | 7,840 | 7,860 | ||
American Tower Corp. 7.50% 2012 | 250 | 254 | ||
AmeriCredit Automobile Receivables Trust, Series 2003-C-F, Class A-4, FSA insured, 3.48% 2010 | 2,130 | 2,108 | ||
Ameriquest Mortgage Securities Inc., Series 2003-12, Class M-1, 6.073% 2033 (5) | 5,000 | 5,059 | ||
AMH Holdings, Inc. 0%/11.25% 2014 (8) | 1,860 | 1,130 | ||
AMR HoldCo, Inc. and EmCare HoldCo, Inc. 10.00% 2015 | 2,040 | 2,147 | ||
Appalachian Power Co., Series M, 5.55% 2011 | 1,375 | 1,353 | ||
Argo-Tech Corp. 9.25% 2011 | 2,285 | 2,365 | ||
Ashtead Group PLC 8.625% 2015 (1) | 550 | 558 | ||
Associated Materials Inc. 9.75% 2012 | 1,020 | 1,020 | ||
Assurant, Inc. 5.625% 2014 | 1,500 | 1,441 | ||
AT&T Corp. 7.30% 2011 (5) | 686 | 729 | ||
Atlantic Broadband Finance, LLC and Atlantic Broadband Finance, Inc. 9.375% 2014 | 2,300 | 2,173 | ||
Aztar Corp. 7.875% 2014 | 1,500 | 1,594 | ||
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 2011 (1) (6) | 4,782 | 4,904 | ||
Banc of America Commercial Mortgage Inc., Series 2004-5, Class A-3, 4.561% 2041 | 6,000 | 5,671 | ||
Banc of America Mortgage Securities Trust, Series 2003-G, Class 2-A-1, 4.088% 2033 (5) | 1,622 | 1,560 | ||
Bank of Ireland 6.107% (undated) (1) (5) | 2,250 | 2,099 | ||
Bear Stearns ARM Trust, Series 2003-9, Class III-A-2, 4.98% 2034 (5) | 2,541 | 2,485 | ||
Bear Stearns ARM Trust, Series 2004-3, Class II-A, 4.251% 2034 (5) | 3,114 | 2,996 |
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Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-3, 4.868% 2042 | 7,000 | 6,597 | ||
BellSouth Corp. 4.20% 2009 | 3,000 | 2,862 | ||
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014 | 2,255 | 2,007 | ||
Boyd Gaming Corp. 7.75% 2012 | 1,000 | 1,014 | ||
Brandywine Operating Partnership, LP 5.75% 2012 | 1,000 | 980 | ||
Buffets, Inc. 11.25% 2010 | 2,000 | 2,077 | ||
Building Materials Corp. of America 7.75% 2014 | 2,275 | 2,184 | ||
Building Materials Corp. of America 8.00% 2008 | 420 | 425 | ||
Building Materials Corp. of America, Series B, 8.00% 2007 | 250 | 253 | ||
Burlington Coat Factory Holdings, Inc. 11.125% 2014 (1) | 2,250 | 2,194 | ||
Cablevision Systems Corp., Series B, 8.00% 2012 | 3,150 | 3,122 | ||
California Infrastructure and Economic Development Bank, Special Purpose Trust, SCE-1, Series 1997-1, | 120 | 121 | ||
CanWest Media Inc., Series B, 8.00% 2012 | 3,687 | 3,669 | ||
Cardinal Health, Inc. 5.85% 2017 | 3,000 | 2,866 | ||
Carmike Cinemas, Inc., Series B, 7.937% 2012 (5) | 475 | 476 | ||
CCMG Acquisition Corp. 10.50% 2016 (1) | 2,125 | 2,263 | ||
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013 | 3,750 | 3,675 | ||
Celestica Inc. 7.625% 2013 | 1,145 | 1,116 | ||
Celestica Inc. 7.875% 2011 | 3,655 | 3,609 | ||
Cendant Corp. 6.25% 2008 | 2,000 | 2,019 | ||
Cendant Corp. 6.875% 2006 | 1,000 | 1,001 | ||
Centennial Communications Corp. 10.74% 2013 (5) | 1,000 | 1,025 | ||
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013 | 1,475 | 1,560 | ||
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC and Centennial Puerto Rico Operations Corp. 8.125% 2014 (5) | 1,725 | 1,669 | ||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.375% 2014 (1) | 2,750 | 2,767 | ||
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032 | 1,168 | 1,226 | ||
CHL Mortgage Pass-Through Trust, Series 2003-27, Class A-1, 3.704% 2033 (5) | 879 | 835 | ||
CHL Mortgage Pass-Through Trust, Series 2004-HYB6, Class A-3, 5.149% 2034 (5) | 4,691 | 4,626 | ||
CHL Mortgage Pass-Through Trust, Series 2005-HYB8, Class 4-A-1, 5.71% 2035 (5) | 8,774 | 8,625 | ||
Cinemark USA, Inc. 9.00% 2013 | 2,325 | 2,453 | ||
Circus and Eldorado Joint Venture and Silver Legacy Resort Casino 10.125% 2012 | 2,295 | 2,436 | ||
Cisco Systems, Inc. 5.25% 2011 | 2,375 | 2,333 | ||
Citigroup Commercial Mortgage Trust, Series 2004-C2, Class A-1, 3.787% 2041 | 1,881 | 1,828 | ||
CNA Financial Corp. 7.25% 2023 | 1,800 | 1,801 | ||
Comcast Cable Communications, Inc. 6.875% 2009 | 4,000 | 4,118 | ||
Comcast Corp. 5.85% 2015 | 2,000 | 1,930 | ||
Commercial Mortgage Trust, Series 2003-LNB1, Class A-2, 4.084% 2038 | 6,000 | 5,417 | ||
Concentra Operating Corp. 9.50% 2010 | 2,750 | 2,860 | ||
Consumer Credit Reference Index Securities Program Trust, Series 2002-2A, Class FX, 10.421% 2007 (1) | 1,000 | 1,016 | ||
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 2019 (6) | 811 | 815 | ||
Continental Airlines, Inc., Series 2000-1, Class B, 8.388% 2022 (6) | 1,132 | 1,103 | ||
Continental Airlines, Inc., Series 2003-ERJ1, Class A, 7.875% 2020 (6) | 426 | 415 | ||
Cooper-Standard Automotive Inc. 7.00% 2012 | 1,530 | 1,377 | ||
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035 | 12,939 | 12,774 | ||
Countrywide Alternative Loan Trust, Series 2005-6CB, Class 2-A-1, 5.00% 2020 | 7,467 | 7,123 | ||
Covalence Specialty Materials Corp. 10.25% 2016 (1) | 3,175 | 3,064 | ||
Cox Communications, Inc. 7.875% 2009 | 4,000 | 4,205 | ||
CPS Auto Receivables Trust, Series 2003-A, Class A-2, XLCA insured, 2.89% 2009 (1) | 518 | 508 | ||
CPS Auto Receivables Trust, Series 2004-B, Class A-2, XLCA insured, 3.56% 2011 (1) | 1,967 | 1,931 | ||
CPS Auto Receivables Trust, Series 2006-A, Class 1-A-4, FSA insured, 5.33% 2012 (1) | 700 | 687 | ||
Crown Castle Towers LLC, Series 2005-1, Class D, 5.612% 2035 (1) | 3,800 | 3,702 | ||
CS First Boston Mortgage Securities Corp., Series 2001-CF2, Class A-3, 6.238% 2034 | 1,709 | 1,717 |
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CS First Boston Mortgage Securities Corp., Series 2001-CK1, Class A-3, 6.38% 2035 | 8,000 | 8,154 | ||
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036 | 5,000 | 5,124 | ||
CS First Boston Mortgage Securities Corp., Series 2004-5, Class IV-A-1, 6.00% 2034 | 2,415 | 2,358 | ||
CS First Boston Mortgage Securities Corp., Series 2004-AR1, Class II-A-1, 4.663% 2034 (5) | 1,538 | 1,505 | ||
CS First Boston Mortgage Securities Corp., Series 2005-7, Class III-A-1, 5.00% 2020 | 2,241 | 2,138 | ||
CS First Boston Mortgage Securities Corp., Series 2006-3, Class 1-A-4A, 5.896% 2036 | 2,000 | 1,968 | ||
DaimlerChrysler North America Holding Corp. 7.20% 2009 | 1,000 | 1,032 | ||
DaimlerChrysler North America Holding Corp. 7.75% 2011 | 1,000 | 1,057 | ||
Delphi Corp. 6.50% 2013 (9) | 985 | 773 | ||
Developers Diversified Realty Corp. 3.875% 2009 | 3,000 | 2,857 | ||
Developers Diversified Realty Corp. 5.50% 2015 | 2,000 | 1,886 | ||
Dex Media, Inc., Series B, 8.00% 2013 | 1,750 | 1,767 | ||
DLJ Mortgage Acceptance Corp., Series 1998-CF1, Class A-1B, 6.41% 2031 | 4,444 | 4,480 | ||
Dobson Cellular Systems, Inc. 8.375% 2011 (1) | 1,500 | 1,549 | ||
Dobson Cellular Systems, Inc. 9.875% 2012 | 1,250 | 1,325 | ||
Dobson Communications Corp. 8.875% 2013 | 1,750 | 1,728 | ||
Dole Food Co., Inc. 7.25% 2010 | 1,000 | 900 | ||
Dole Food Co., Inc. 8.875% 2011 | 1,160 | 1,093 | ||
Dollarama Group LP 8.875% 2012 (1) | 2,650 | 2,676 | ||
DRS Technologies, Inc. 6.625% 2016 | 850 | 827 | ||
DRS Technologies, Inc. 6.875% 2013 | 1,350 | 1,306 | ||
DRS Technologies, Inc. 7.625% 2018 | 275 | 275 | ||
Drummond Co., Inc. 7.375% 2016 (1) | 3,375 | 3,147 | ||
DynCorp International and DIV Capital Corp., Series A, 9.50% 2013 | 2,528 | 2,642 | ||
E*TRADE Financial Corp. 7.875% 2015 | 2,560 | 2,637 | ||
Earle M. Jorgensen Co. 9.75% 2012 | 1,100 | 1,177 | ||
Edison Mission Energy 7.50% 2013 (1) | 3,725 | 3,669 | ||
Edison Mission Energy 7.73% 2009 | 6,750 | 6,851 | ||
El Paso Corp. 6.375% 2009 (1) | 150 | 148 | ||
El Paso Corp. 7.875% 2012 | 1,125 | 1,150 | ||
El Paso Energy Corp. 7.375% 2012 | 2,245 | 2,239 | ||
El Paso Energy Corp. 7.75% 2010 (1) | 875 | 893 | ||
Electricidad de Caracas Finance BV 10.25% 2014 (1) | 1,280 | 1,334 | ||
Electronic Data Systems Corp. 7.45% 2029 | 1,885 | 1,947 | ||
Electronic Data Systems Corp., Series B, 6.50% 2013 (5) | 5,105 | 5,043 | ||
Elizabeth Arden, Inc. 7.75% 2014 | 1,455 | 1,437 | ||
Emmis Operating Co. 6.875% 2012 | 2,000 | 1,970 | ||
Encore Acquisition Co. 6.00% 2015 | 2,000 | 1,810 | ||
Energy Transfer Partners, LP 5.95% 2015 | 2,000 | 1,929 | ||
Enterprise Products Operating LP 6.875% 2033 | 2,600 | 2,550 | ||
EOP Operating LP 4.65% 2010 | 1,000 | 949 | ||
EOP Operating LP 7.25% 2018 | 1,000 | 1,073 | ||
EOP Operating LP 7.75% 2007 | 1,000 | 1,025 | ||
Equistar Chemicals, LP 10.125% 2008 | 2,100 | 2,221 | ||
Exelon Corp. 4.45% 2010 | 1,500 | 1,429 | ||
Exelon Generation Co., LLC 6.95% 2011 | 1,680 | 1,753 | ||
Fairfax Financial Holdings Ltd. 7.75% 2012 | 1,550 | 1,356 | ||
Fannie Mae 4.00% 2015 | 7,995 | 7,443 | ||
Fannie Mae 4.89% 2012 | 10,000 | 9,577 | ||
Fannie Mae 5.00% 2018 | 8,092 | 7,825 | ||
Fannie Mae 5.50% 2017 | 3,222 | 3,169 | ||
Fannie Mae 5.50% 2033 | 6,700 | 6,459 | ||
Fannie Mae 5.50% 2036 | 4,880 | 4,686 | ||
Fannie Mae 6.00% 2021 | 1,250 | 1,254 | ||
Fannie Mae 6.25% 2029 | 3,000 | 3,247 | ||
Fannie Mae 6.50% 2036 | 4,092 | 4,114 | ||
Fannie Mae 7.00% 2009 | 46 | 46 |
Table of Contents
Fannie Mae 7.00% 2032 | 682 | 698 | |||
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041 | 1,092 | 1,112 | |||
Fannie Mae, Series 2006-43, Class JO, principal only, 0% 2036 | 997 | 699 | |||
Fannie Mae, Series 2006-49, Class PA, 6.00% 2036 | 3,842 | 3,844 | |||
Federal Agricultural Mortgage Corp. 4.25% 2008 | 3,000 | 2,925 | |||
Federal Home Loan Bank 4.50% 2012 | 30,000 | 28,461 | |||
Federal Home Loan Bank 5.625% 2016 | 6,000 | 5,932 | |||
Federal Realty Investment Trust 6.125% 2007 | 1,000 | 1,002 | |||
FelCor Lodging LP 8.50% 2011 (5) | 2,072 | 2,207 | |||
First Investors Auto Owner Trust, Series 2003-A, Class A, MBIA insured, 2.58% 2011 (1) | 728 | 710 | |||
First Investors Auto Owner Trust, Series 2005-A, Class A-2, MBIA insured, 4.23% 2012 (1) | 3,632 | 3,585 | |||
Fisher Communications, Inc. 8.625% 2014 | 3,750 | 3,900 | |||
Freddie Mac 3.625% 2008 | 2,000 | 1,926 | |||
Freddie Mac 4.789% 2035 (5) | 8,920 | 8,683 | |||
Freddie Mac 5.00% 2018 | 2,885 | 2,786 | |||
Freddie Mac 5.00% 2035 | 3,733 | 3,487 | |||
Freddie Mac 5.802% 2036 (5) | 6,980 | 6,910 | |||
Freddie Mac 6.00% 2036 | 53,106 | 52,272 | |||
Freddie Mac 6.50% 2016 | $ | 1,244 | 1,259 | ||
Freddie Mac, Series T-041, Class 3-A, 7.50% 2032 | 1,176 | 1,207 | |||
Gaylord Entertainment Co. 8.00% 2013 | 2,000 | 2,007 | |||
GE Capital Commercial Mortgage Corp., Series 2002-1, Class A-3, 6.269% 2035 | 3,338 | 3,420 | |||
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.333% 2045 | 5,000 | 4,889 | |||
GE SeaCo Finance SRL, Series 2004-1, Class A, AMBAC insured, 5.552% 2019 (1) (5) | 3,917 | 3,917 | |||
General Dynamics Corp. 4.50% 2010 | 1,000 | 961 | |||
General Electric Capital Corp., Series A, 5.00% 2007 | 2,000 | 1,989 | |||
General Motors Acceptance Corp. 6.125% 2006 | 2,810 | 2,806 | |||
General Motors Acceptance Corp. 7.00% 2012 | 3,250 | 3,088 | |||
General Motors Acceptance Corp. 7.25% 2011 | 3,500 | 3,397 | |||
General Motors Corp. 7.20% 2011 | 1,865 | 1,660 | |||
General Motors Corp. 7.70% 2016 | 2,875 | 2,372 | |||
Georgia-Pacific Corp. 8.30% 2013 (5) | 850 | 859 | |||
GMAC Commercial Mortgage Securities, Inc., Series 1999-C3, Class C, 7.786% 2036 | 1,000 | 1,056 | |||
Gold Kist Inc. 10.25% 2014 | 1,804 | 1,890 | |||
Goodman Global Holdings, Inc., Series B, 7.875% 2012 | 2,960 | 2,842 | |||
Government National Mortgage Assn. 4.00% 2035 (5) | 5,396 | 5,257 | |||
Government National Mortgage Assn. 4.00% 2035 (5) | 1,649 | 1,601 | |||
Government National Mortgage Assn. 4.00% 2035 (5) | 1,530 | 1,486 | |||
Government National Mortgage Assn. 5.50% 2036 | 24,961 | 24,087 | |||
Government National Mortgage Assn. 6.00% 2036 | 15,000 | 14,847 | |||
Government National Mortgage Assn. 6.00% 2036 | 5,000 | 4,947 | |||
Government National Mortgage Assn. 8.50% 2021 | 97 | 103 | |||
Graphic Packaging International, Inc. 8.50% 2011 | 1,250 | 1,253 | |||
Graphic Packaging International, Inc. 9.50% 2013 | 1,980 | 1,970 | |||
Gray Communications Systems, Inc. 9.25% 2011 | 2,000 | 2,090 | |||
Greenwich Capital Commercial Funding Corp., Series 2002-C1, Class A-2, 4.112% 2017 | 5,370 | 5,171 | |||
Grupo Posadas, SA de CV 8.75% 2011 (1) | 2,000 | 2,010 | |||
Hawaiian Telcom Communications, Inc. 10.789% 2013 (5) | 175 | 178 | |||
Hawaiian Telcom Communications, Inc. 9.75% 2013 | 1,720 | 1,759 | |||
HBOS PLC, Series B, 5.92% (undated) (1) (5) | 6,500 | 5,999 | |||
HealthSouth Corp. 10.75% 2016 (1) | 1,500 | 1,478 | |||
Horizon Lines, LLC and Horizon Lines Holding Corp. 9.00% 2012 | 2,167 | 2,210 | |||
Hospitality Properties Trust 6.75% 2013 | 1,000 | 1,025 | |||
Host Marriott, LP, Series G, 9.25% 2007 | 1,250 | 1,295 | |||
Host Marriott, LP, Series I, 9.50% 2007 | 350 | 360 | |||
Hughes Network Systems, LLC and HNS Finance Corp. 9.50% 2014 (1) | 2,750 | 2,709 |
Table of Contents
Huntsman LLC 11.50% 2012 | 759 | 852 | |||
HVB Funding Trust I 8.741% 2031 (1) | 900 | 1,063 | |||
HVB Funding Trust III 9.00% 2031 (1) | 1,600 | 1,938 | |||
Iesy Repository GmbH 10.125% 2015 | € | 1,000 | 1,233 | ||
Impac CMB Grantor Trust, Series 2004-6, Class 1-A-1, 5.723% 2034 (5) | $ | 1,079 | 1,089 | ||
Intelsat (Bermuda), Ltd. 8.25% 2013 | 2,030 | 2,025 | |||
Intelsat PanAmSat Opco 9.00% 2016 (1) | 1,750 | 1,785 | |||
International Coal Group, Inc. 10.25% 2014 (1) | 1,250 | 1,255 | |||
International Lease Finance Corp. 4.35% 2008 | 1,500 | 1,457 | |||
International Lease Finance Corp. 4.50% 2008 | 2,000 | 1,959 | |||
International Lease Finance Corp. 5.00% 2012 | 1,500 | 1,430 | |||
Iron Mountain Inc. 6.625% 2016 | 980 | 887 | |||
Iron Mountain Inc. 7.75% 2015 | 1,590 | 1,526 | |||
iStar Financial, Inc. 6.05% 2015 | 4,000 | 3,918 | |||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-CIBC12, Class A-3B, 5.511% 2037 (5) | 5,000 | 4,893 | |||
Jacuzzi Brands, Inc. 9.625% 2010 | 1,500 | 1,592 | |||
Jefferson Smurfit Corp. (U.S.) 7.50% 2013 | 1,450 | 1,305 | |||
Jefferson Smurfit Corp. (U.S.) 8.25% 2012 | 910 | 858 | |||
John Deere Capital Corp., Series D, 4.125% 2010 | 2,000 | 1,901 | |||
JSG Funding PLC 9.625% 2012 | 1,565 | 1,620 | |||
JSG Holdings PLC 11.50% 2015 (7) | € | 3,107 | 3,953 | ||
K&F Industries, Inc. 7.75% 2014 | $ | 1,800 | 1,782 | ||
K. Hovnanian Enterprises, Inc. 7.75% 2013 | 1,250 | 1,147 | |||
K. Hovnanian Enterprises, Inc. 8.875% 2012 | 780 | 780 | |||
Koninklijke KPN NV 8.00% 2010 | 4,000 | 4,247 | |||
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 2026 (1) | 1,908 | 2,000 | |||
LaBranche & Co Inc. 11.00% 2012 | 2,000 | 2,200 | |||
Lazard Group LLC 7.125% 2015 | 880 | 891 | |||
LBI Media, Inc. 10.125% 2012 | 3,900 | 4,173 | |||
Liberty Media Corp. 5.70% 2013 | 1,500 | 1,370 | |||
Liberty Media Corp. 7.875% 2009 | 1,250 | 1,300 | |||
Liberty Mutual Group Inc. 6.50% 2035 (1) | 1,335 | 1,169 | |||
Lighthouse International Co. SA 8.00% 2014 | € | 975 | 1,319 | ||
Lincoln National Corp. 7.00% 2066 (5) | $ | 3,515 | 3,494 | ||
Linens n’ Things, Inc. 10.702% 2014 (1) (5) | 2,500 | 2,381 | |||
Long Beach Mortgage Loan Trust, Series 2004-A, Class M-2, 5.923% 2024 (5) | 72 | 72 | |||
MASTR Alternative Loan Trust, Series 2004-2, Class 2-A-1, 6.00% 2034 | 4,986 | 4,867 | |||
MASTR Asset-backed Securities Trust, Series 2006-AB1, Class A-4, 5.719% 2036 | 750 | 726 | |||
MBNA Credit Card Master Note Trust, Series 2002-1, Class B, 5.15% 2009 | 3,000 | 2,992 | |||
Mediacom LLC and Mediacom Capital Corp. 9.50% 2013 | 2,250 | 2,250 | |||
Merrill Lynch Mortgage Investors, Inc., Series 2002-MW1, Class A-3, 5.403% 2034 | 4,000 | 3,946 | |||
MetroPCS, Inc. 12.00% 2007 (5) | 1,125 | 1,184 | |||
MGM MIRAGE 6.00% 2009 | 1,575 | 1,540 | |||
MGM MIRAGE 6.625% 2015 | 425 | 398 | |||
MGM MIRAGE 6.75% 2013 (1) | 870 | 834 | |||
MidAmerican Energy Holdings Co. 6.125% 2036 (1) | 3,000 | 2,814 | |||
Millicom International Cellular SA 10.00% 2013 | 2,010 | 2,251 | |||
MMCA Auto Owner Trust, Series 2002-2, Class A-4, 4.30% 2010 | 115 | 115 | |||
Mohegan Tribal Gaming Authority 6.375% 2009 | 1,280 | 1,253 | |||
Morgan Stanley Capital I, Inc., Series 1998-HF2, Class A-2, 6.48% 2030 | 2,546 | 2,577 | |||
Morris Publishing Group, LLC and Morris Publishing Finance Co., Series B, 7.00% 2013 | 2,250 | 2,149 | |||
Nalco Co. 7.75% 2011 | 1,190 | 1,193 | |||
Nalco Co. 8.875% 2013 | 1,000 | 1,013 | |||
National Westminster Bank PLC 7.75% (undated) (5) | 2,000 | 2,045 | |||
Neenah Paper, Inc. 7.375% 2014 | 775 | 717 | |||
Neiman Marcus Group, Inc. 9.00% 2015 (1) (7) | 4,150 | 4,357 |
Table of Contents
Nevada Power Co., General and Refunding Mortgage Notes, Series G, 9.00% 2013 | 1,089 | 1,184 | ||
Newfield Exploration Co. 6.625% 2014 | 1,225 | 1,173 | ||
Newfield Exploration Co. 6.625% 2016 | 3,925 | 3,719 | ||
News America Inc. 5.30% 2014 | 1,165 | 1,107 | ||
Nextel Communications, Inc., Series E, 6.875% 2013 | 3,250 | 3,273 | ||
Nortel Networks Ltd. 10.125% 2013 (1) | 1,975 | 2,019 | ||
Northwest Pipeline Corp. 8.125% 2010 | 1,850 | 1,933 | ||
NPF XII, Inc., Series 2001-3, Class A, 5.52% 2007 (1) (10) | 5,000 | 138 | ||
NRG Energy, Inc. 7.25% 2014 | 2,250 | 2,199 | ||
NTL Cable PLC 8.75% 2014 | 2,000 | 1,995 | ||
Oregon Steel Mills, Inc. 10.00% 2009 | 2,000 | 2,100 | ||
Origen Manufactured Housing Contract Trust, Series 2001-A, Class A-5, 7.08% 2032 | 5,000 | 5,074 | ||
Origen Manufactured Housing Contract Trust, Series 2004-B, Class A-4, 5.46% 2035 | 1,800 | 1,657 | ||
Owens-Brockway Glass Container Inc. 7.75% 2011 | 2,000 | 2,025 | ||
Owens-Illinois, Inc. 7.35% 2008 | 750 | 759 | ||
Pacific Gas and Electric Co., First Mortgage Bonds, 3.60% 2009 | 1,500 | 1,425 | ||
Pathmark Stores, Inc. 8.75% 2012 | 2,975 | 2,841 | ||
Payless ShoeSource, Inc. 8.25% 2013 | 1,350 | 1,402 | ||
PETCO Animal Supplies, Inc. 10.75% 2011 | 250 | 265 | ||
Petro Stopping Centers, LP and Petro Financial Corp. 9.00% 2012 | 4,670 | 4,658 | ||
PG&E Energy Recovery Funding LLC, Series 2005-1, Class A-2, 3.87% 2011 | 2,940 | 2,866 | ||
Plastipak Holdings, Inc. 8.50% 2015 (1) | 2,750 | 2,764 | ||
Playtex Products, Inc. 8.00% 2011 | 1,500 | 1,560 | ||
Playtex Products, Inc. 9.375% 2011 | 250 | 262 | ||
Plum Creek Timberlands, LP 5.875% 2015 | 2,000 | 1,914 | ||
Pogo Producing Co. 6.625% 2015 | 150 | 139 | ||
Pogo Producing Co. 6.875% 2017 | 1,750 | 1,630 | ||
Pogo Producing Co. 7.875% 2013 (1) | 2,075 | 2,091 | ||
Premcor Refining Group Inc. 7.50% 2015 | 1,500 | 1,551 | ||
ProLogis 5.625% 2015 (1) | 1,000 | 957 | ||
Prudential Financial, Inc., Series D, 5.50% 2016 | 2,000 | 1,926 | ||
Prudential Holdings, LLC, Series C, 8.695% 2023 (1) (6) | 3,000 | 3,570 | ||
PSEG Energy Holdings Inc. 8.625% 2008 | 1,775 | 1,828 | ||
Pulte Homes, Inc. 4.875% 2009 | 3,000 | 2,896 | ||
Pulte Homes, Inc. 7.875% 2011 | 1,000 | 1,051 | ||
Qwest Capital Funding, Inc. 7.25% 2011 | 2,550 | 2,493 | ||
Qwest Capital Funding, Inc. 7.75% 2006 | 1,260 | 1,266 | ||
Qwest Capital Funding, Inc. 7.75% 2031 | 1,370 | 1,288 | ||
Radio One, Inc., Series B, 8.875% 2011 | 1,935 | 2,015 | ||
Ras Laffan Liquefied Natural Gas III 5.838% 2027 (1) (6) | 5,000 | 4,669 | ||
Raytheon Co. 4.85% 2011 | 3,000 | 2,892 | ||
Reader’s Digest Assn., Inc. 6.50% 2011 | 1,500 | 1,455 | ||
Rental Car Finance Corp., Series 2005-1, Class A-2, XLCA insured, 4.59% 2011 (1) | 6,860 | 6,581 | ||
Residential Accredit Loans, Inc., Series 2004-QS6, Class A-1, 5.00% 2019 | 4,467 | 4,261 | ||
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034 | 9,842 | 9,671 | ||
Residential Accredit Loans, Inc., Series 2006-QA1, Class A-III-1, 6.284% 2036 (5) | 7,237 | 7,243 | ||
Residential Asset Mortgage Products Trust, Series 2003-RS11, Class A-I-7, 4.828% 2033 | 2,000 | 1,909 | ||
Residential Asset Securities Corp. Trust, Series 2004-KS12, Class A-1-2, 5.553% 2035 (5) | 6,948 | 6,961 | ||
Residential Asset Securitization Trust, Series 2005-A8CB, Class A-11, 6.00% 2035 | 4,347 | 4,244 | ||
Residential Capital Corp. 6.00% 2011 | 3,000 | 2,910 | ||
Residential Capital Corp. 6.375% 2010 | 1,000 | 987 | ||
Resona Bank, Ltd. 5.85% (undated) (1) (5) | 1,000 | 932 | ||
Riddell Bell Holdings Inc. 8.375% 2012 | 2,925 | 2,896 | ||
Rite Aid Corp. 6.125% 2008 (1) | 2,125 | 2,067 | ||
Rite Aid Corp. 6.875% 2013 | 2,500 | 2,175 | ||
Rite Aid Corp. 7.70% 2027 | 250 | 206 |
Table of Contents
Rockwood Specialties Group, Inc. 7.50% 2014 | 1,165 | 1,148 | |||
Rural Cellular Corp. 10.899% 2012 (1) (5) | 1,300 | 1,341 | |||
Rural Cellular Corp. 9.75% 2010 | 1,500 | 1,502 | |||
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class B, 6.758% 2033 | 1,000 | 1,030 | |||
Salomon Brothers Commercial Mortgage Trust, Series 2001-C1, Class A-3, 6.428% 2035 | 5,000 | 5,115 | |||
Sanmina-SCI Corp. 6.75% 2013 | 1,500 | 1,406 | |||
Sanmina-SCI Corp. 8.125% 2016 | 4,000 | 3,920 | |||
SBA CMBS Trust, Series 2005-1, Class B, 5.565% 2035 (1) | 4,000 | 3,934 | |||
SBC Communications Inc. 4.125% 2009 | 2,250 | 2,139 | |||
SBC Communications Inc. 5.10% 2014 | 1,125 | 1,045 | |||
Scotia Pacific Co. LLC, Series B, Class A-2, 7.11% 2028 (6) | 1,560 | 1,257 | |||
Scottish Power PLC 5.375% 2015 | 1,500 | 1,426 | |||
Sealy Mattress Co. 8.25% 2014 | 2,750 | 2,764 | |||
Select Medical Corp. 7.625% 2015 | 1,650 | 1,444 | |||
Seneca Gaming Corp. 7.25% 2012 | 2,100 | 2,045 | |||
Sensata Technologies BV 8.00% 2014 (1) | 2,010 | 1,950 | |||
Serena Software, Inc. 10.375% 2016 (1) | 658 | 663 | |||
Sierra Pacific Power Co., General and Refunding Mortgage Notes, Series H, 6.25% 2012 | 1,125 | 1,111 | |||
Sierra Pacific Resources 8.625% 2014 | 550 | 585 | |||
Six Flags, Inc. 9.75% 2013 | 2,605 | 2,406 | |||
SLM Corp., Series A, 4.00% 2010 | 2,500 | 2,363 | |||
SLM Corp., Series A, 4.50% 2010 | 2,000 | 1,908 | |||
Solectron Global Finance Ltd 8.00% 2016 (1) | 1,250 | 1,238 | |||
Sonat Inc. 7.625% 2011 | 125 | 127 | |||
St. Paul Travelers Companies, Inc. 6.25% 2016 | 1,800 | 1,796 | |||
Standard Aero Holdings, Inc. 8.25% 2014 | 1,950 | 1,745 | |||
Stater Bros. Holdings Inc. 8.125% 2012 | 3,200 | 3,176 | |||
Stone Container Corp. 8.375% 2012 | 500 | 475 | |||
Stoneridge, Inc. 11.50% 2012 | 2,000 | 1,930 | |||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-2, Class 5-A-1, 6.00% 2036 (5) | 7,634 | 7,564 | |||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 4-A-1, 5.995% 2036 (5) | 6,079 | 5,997 | |||
Structured Adjustable Rate Mortgage Loan Trust, Series 2006-4, Class 5-A-1, 5.991% 2036 (5) | 10,063 | 9,937 | |||
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.526% 2027 (1) (5) | 611 | 615 | |||
Sumitomo Mitsui Banking Corp. 5.625% (undated) (1) (5) | 8,155 | 7,619 | |||
Sun Media Corp. 7.625% 2013 | 2,000 | 2,022 | |||
SunGard Data Systems Inc. 9.125% 2013 (1) | 3,140 | 3,273 | |||
Targa Resources, Inc. and Targa Resources Finance Corp. 8.50% 2013 (1) | 2,060 | 1,998 | |||
Team Finance LLC and Health Finance Corp. 11.25% 2013 | 2,000 | 2,100 | |||
Technical Olympic USA, Inc. 10.375% 2012 | 2,500 | 2,412 | |||
Teekay Shipping Corp. 8.875% 2011 | 625 | 658 | |||
Telecom Italia Capital SA 5.25% 2015 | 4,000 | 3,627 | |||
Telenet Communications NV 9.00% 2013 | € | 1,419 | 1,995 | ||
Telenet Group Holding NV 0%/11.50% 2014 (1) (8) | $ | 844 | 720 | ||
Tenet Healthcare Corp. 6.375% 2011 | 4,850 | 4,353 | |||
Tenet Healthcare Corp. 7.375% 2013 | 2,440 | 2,239 | |||
Tenet Healthcare Corp. 9.25% 2015 (1) | 1,550 | 1,527 | |||
Tenneco Automotive Inc. 8.625% 2014 | 2,990 | 2,997 | |||
TFM, SA de CV 10.25% 2007 | 475 | 492 | |||
TFM, SA de CV 12.50% 2012 | 435 | 482 | |||
TFM, SA de CV 9.375% 2012 | 2,500 | 2,675 | |||
THL Buildco, Inc. 8.50% 2014 | 3,230 | 3,141 | |||
Toll Brothers, Inc. 4.95% 2014 | 3,750 | 3,282 | |||
Tower Ventures, LLC, Series 2006-1, Class A-2, 5.45% 2036 (1) | 2,000 | 1,957 | |||
Tower Ventures, LLC, Series 2006-1, Class F, 7.036% 2036 (1) | 1,460 | 1,440 |
Table of Contents
Tri-State Generation and Transmission Assn. Inc., Pass Through Trust, Series 2003-A, 6.04% 2018 (1) (6) | 1,500 | 1,472 | |||
Triton PCS, Inc. 8.50% 2013 | 5,800 | 5,350 | |||
U S WEST Capital Funding, Inc. 6.375% 2008 | 720 | 713 | |||
U S WEST Capital Funding, Inc. 6.875% 2028 | 275 | 239 | |||
U.S. Treasury 3.375% 2008 | 6,500 | 6,246 | |||
U.S. Treasury 3.875% 2010 | 164,000 | 156,505 | |||
U.S. Treasury 4.25% 2013 | 10,000 | 9,489 | |||
U.S. Treasury 5.25% 2029 | 50,000 | 49,789 | |||
U.S. Treasury 5.75% 2010 | 2,500 | 2,562 | |||
U.S. Treasury 7.00% 2006 | 25,000 | 25,014 | |||
U.S. Treasury 7.25% 2016 | 2,000 | 2,316 | |||
U.S. Treasury 7.875% 2021 | 22,000 | 27,679 | |||
U.S. Treasury 8.875% 2017 | 20,000 | 26,100 | |||
U.S. Treasury 9.25% 2016 | 5,000 | 6,527 | |||
UCAR Finance Inc. 10.25% 2012 | 1,850 | 1,961 | |||
Ultrapetrol (Bahamas) Ltd., First Preferred Ship Mortgage Notes, 9.00% 2014 | 3,425 | 3,108 | |||
United Air Lines, Inc., Series 1995-A1, 9.02% 2012 (6) (9) | 920 | 537 | |||
United Air Lines, Inc., Series 1996-A2, 7.87% 2019 (6) (9) | 2,246 | 1,404 | |||
United Air Lines, Inc., Series B, 8.986% 2012 (5) | 3,750 | 3,802 | |||
United Mexican States Government Global 6.75% 2034 | 8,000 | 7,800 | |||
United Rentals (North America), Inc., Series B, 6.50% 2012 | 1,750 | 1,663 | |||
Valor Telecommunications Enterprises, LLC and Valor Telecommunications Enterprises Finance Corp. 7.75% 2015 | 1,290 | 1,338 | |||
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-B-1, 8.395% 2016 | 955 | 961 | |||
Verizon Wireless Capital LLC and Cellco Partnership 5.375% 2006 | 4,000 | 3,996 | |||
Viacom Inc. 6.25% 2016 (1) | 2,000 | 1,945 | |||
Vidéotron Ltée 6.375% 2015 | 1,000 | 917 | |||
Vidéotron Ltée 6.875% 2014 | 1,225 | 1,167 | |||
Vitamin Shoppe Industries, Inc. 12.67% 2012 (1) (5) | 3,130 | 3,216 | |||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 2042 | 4,000 | 3,773 | |||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR7, Class A-7, 3.842% 2033 (5) | 1,071 | 1,044 | |||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR8, Class A, 4.03% 2033 (5) | 2,217 | 2,164 | |||
WaMu Mortgage Pass-Through Certificates Trust, Series 2004-AR11, Class A, 4.572% 2034 (5) | 3,975 | 3,863 | |||
Warner Chilcott Corp. 8.75% 2015 | 2,840 | 2,939 | |||
Warner Music Group 7.375% 2014 | 2,500 | 2,437 | |||
Washington Mutual Preferred Funding I Ltd. 6.534% (undated) (1) (5) | 5,500 | 5,288 | |||
Washington Mutual Securities Corp., WMALT Series 2005-1, Class 5-A-1, 6.00% 2035 | 7,722 | 7,635 | |||
Washington Mutual, Inc. 5.25% 2017 | 2,000 | 1,831 | |||
Waste Management, Inc. 6.875% 2009 | 2,000 | 2,058 | |||
WCI Communities, Inc. 9.125% 2012 | 1,500 | 1,414 | |||
WDAC Subsidiary Corp. 8.375% 2014 (1) | 1,675 | 1,654 | |||
WDAC Subsidiary Corp. 8.50% 2014 | € | 375 | 477 | ||
Wells Fargo & Co. 3.50% 2008 | $ | 2,000 | 1,930 | ||
Westfield Capital Corp. Ltd. and WT Finance (Australia) Pty Ltd. and WEA Finance LLC 4.375% | 3,500 | 3,306 | |||
Weyerhaeuser Co. 7.375% 2032 | 2,000 | 2,031 | |||
WH Holdings (Cayman Islands) Ltd. and WH Capital Corp. 9.50% 2011 | 1,500 | 1,650 | |||
William Lyon Homes, Inc. 10.75% 2013 | 2,500 | 2,412 | |||
William Lyon Homes, Inc. 7.50% 2014 | 1,000 | 835 | |||
Williams Companies, Inc. 8.75% 2032 | 1,660 | 1,814 | |||
Williams Scotsman, Inc. 8.50% 2015 | 2,200 | 2,183 | |||
Windstream Corp. 8.125% 2013 (1) | 3,250 | 3,331 | |||
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014 | 3,100 | 2,937 | |||
XM Satellite Radio Holdings Inc. 9.75% 2014 (1) | 2,250 | 2,070 | |||
Young Broadcasting Inc. 10.00% 2011 | 3,367 | 3,013 | |||
Total bonds & notes (cost: $1,451,344,000) | 1,417,231 |
Table of Contents
Short-term securities | Principal amount | Market value | ||||
(000) | (000) | |||||
3M Co. 5.02% due 7/27/2006 | 50,000 | 49,812 | ||||
Atlantic Industries 5.22% due 8/14/2006 (1) (11) | 20,000 | 19,869 | ||||
BellSouth Corp. 5.00% due 7/13/2006 (1) | 24,300 | 24,258 | ||||
CAFCO, LLC 5.04%-5.35% due 7/14-8/28/2006 (1) | 33,500 | 33,313 | ||||
Chevron Funding Corp. 5.06% due 7/27/2006 | 25,000 | 24,905 | ||||
Ciesco LLC 5.23% due 8/24/2006 (1) (11) | 14,200 | 14,090 | ||||
Clipper Receivables Co., LLC 5.08% due 7/10/2006 (1) | 21,600 | 21,569 | ||||
Coca-Cola Co. 4.95% due 7/24/2006 | 20,000 | 19,933 | ||||
Concentrate Manufacturing Co. of Ireland 5.17% due 7/21/2006 (1) | 4,800 | 4,786 | ||||
Edison Asset Securitization LLC 5.02% due 8/1/2006 (1) (11) | 22,600 | 22,498 | ||||
Fannie Mae 4.94% due 8/2/2006 (11) | 14,700 | 14,633 | ||||
Federal Home Loan Bank 4.905%-5.25 due 7/26-9/13/2006 (11) | 80,751 | 80,148 | ||||
Hershey Co. 5.23% due 8/29/2006 (1) | 18,000 | 17,843 | ||||
Hewlett-Packard Co. 5.20% due 7/31/2006 (1) | 25,000 | 24,888 | ||||
International Lease Finance Corp. 5.04%-5.26% due 8/2-8/10/2006 (11) | 27,700 | 27,560 | ||||
Medtronic Inc. 5.21% due 8/25/2006 (1) | 20,000 | 19,843 | ||||
Park Avenue Receivables Co., LLC 5.21% due 7/20/2006 (1) | 50,000 | 49,855 | ||||
Preferred Receivables Funding Corp. 5.19% due 7/18/2006 (1) | 10,290 | 10,263 | ||||
Ranger Funding Co. LLC 5.17% due 7/26-8/9/2006 (1) | 46,400 | 46,189 | ||||
Tennessee Valley Authority 5.15% due 8/3/2006 | 13,200 | 13,136 | ||||
Three Pillars Funding LLC 5.06% due 7/3/2006 (1) | 15,100 | 15,094 | ||||
Variable Funding Capital Corp. 5.02% due 7/6/2006 (1) | 50,000 | 49,958 | ||||
Total short-term securities (cost: $604,426,000) | 604,443 | |||||
Total investment securities (cost: $5,666,928,000) | 6,580,477 | |||||
Other assets less liabilities | (82,109 | ) | ||||
Net assets | $ | 6,498,368 |
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
(1) | Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $667,231,000, which represented 10.27% of the net assets of the fund. |
(2) | Security did not produce income during the last 12 months. |
(3) | Represents an affiliated company as defined under the Investment Company Act of 1940. |
(4) | Valued under fair value procedures adopted by authority of the board of trustees. |
(5) | Coupon rate may change periodically. |
Table of Contents
(6) | Pass-through securities backed by a pool of mortgages or other loans on which principal payments are periodically made. Therefore, the effective maturities are shorter than the stated maturities. |
(7) | Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
(8) | Step bond; coupon rate will increase at a later date. |
(9) | Scheduled interest payments not being made; reorganization pending. |
(10) | Company not making scheduled interest payments; bankruptcy proceedings pending. |
(11) | This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future. |
ADR | = American Depositary Receipts |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Assets: | ||||||||||||
Investment securities at market: | ||||||||||||
Unaffiliated issuers | $ | 3,334,719 | $ | 24,093,055 | $ | 6,531,116 | $ | 2,919,735 | ||||
Affiliated issuers | — | 143,235 | 49,361 | — | ||||||||
Cash denominated in non-U.S. currencies | 2,690 | 4,325 | — | — | ||||||||
Cash | 236 | 1,728 | 2,008 | 7,411 | ||||||||
Receivables for: | ||||||||||||
Sales of investments | 4,219 | 136,311 | 38,340 | 1,388 | ||||||||
Sales of fund’s shares | 3,034 | 22,713 | 4,098 | 2,121 | ||||||||
Open forward currency contracts | — | — | 19 | 392 | ||||||||
Dividends and interest | 6,391 | 23,180 | 24,729 | 34,881 | ||||||||
3,351,289 | 24,424,547 | 6,649,671 | 2,965,928 | |||||||||
Liabilities: | ||||||||||||
Payables for: | ||||||||||||
Purchases of investments | 2,443 | 70,125 | 147,523 | 40,145 | ||||||||
Repurchases of fund’s shares | 44 | 5,358 | 843 | 17 | ||||||||
Open forward currency contracts | — | — | 98 | 267 | ||||||||
Investment advisory services | 1,338 | 5,694 | 1,536 | 887 | ||||||||
Distribution services | 624 | 4,125 | 1,123 | 554 | ||||||||
Deferred trustees’ compensation | 40 | 625 | 166 | 33 | ||||||||
Other fees and expenses | 622 | 237 | 14 | 11 | ||||||||
5,111 | 86,164 | 151,303 | 41,914 | |||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | ||||
Investment securities at cost | ||||||||||||
Unaffiliated issuers | $ | 2,758,589 | $ | 19,440,548 | $ | 5,618,447 | $ | 2,954,017 | ||||
Affiliated issuers | — | $ | 133,658 | $ | 48,481 | — | ||||||
Cash denominated in non-U.S. currencies at cost | $ | 2,659 | $ | 4,338 | — | — |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Net assets consist of: | |||||||||||||
Capital paid in on shares of beneficial interest | $ | 2,664,757 | $ | 18,351,261 | $ | 5,366,389 | $ | 2,899,532 | |||||
Undistributed (distributions in excess of) net investment income | 33,224 | 103,564 | 77,407 | 69,335 | |||||||||
Undistributed (accumulated) net realized gain (loss) | 72,534 | 1,221,378 | 141,096 | (10,776 | ) | ||||||||
Net unrealized appreciation (depreciation) | 575,663 | 4,662,180 | 913,476 | (34,077 | ) | ||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | |||||
Shares of beneficial interest issued and outstanding - unlimited shares authorized: | |||||||||||||
Class 1: | |||||||||||||
Net assets (total: $11,157,497) | $ | 214,609 | $ | 3,490,659 | $ | 903,248 | $ | 187,817 | |||||
Shares outstanding | 10,399 | 57,813 | 52,575 | 17,074 | |||||||||
Net asset value per share | $ | 20.64 | $ | 60.38 | $ | 17.18 | $ | 11.00 | |||||
Class 2: | |||||||||||||
Net assets (total: $65,221,819) | $ | 3,131,569 | $ | 20,385,930 | $ | 5,519,490 | $ | 2,736,197 | |||||
Shares outstanding | 152,508 | 340,114 | 323,378 | 250,811 | |||||||||
Net asset value per share | $ | 20.53 | $ | 59.94 | $ | 17.07 | $ | 10.91 | |||||
Class 3: | |||||||||||||
Net assets (total: $1,181,927) | — | $ | 461,794 | $ | 75,630 | — | |||||||
Shares outstanding | — | 7,655 | 4,406 | — | |||||||||
Net asset value per share | — | $ | 60.33 | $ | 17.16 | — |
* | Amount less than one thousand |
See Notes to Financial Statements
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Investment income: | ||||||||||||
Income (net of non-U.S. taxes): | ||||||||||||
Dividends | $ | 34,509 | $ | 118,613 | $ | 42,570 | $ | 329 | ||||
Interest | 11,885 | 51,547 | 52,240 | 78,520 | ||||||||
46,394 | 170,160 | 94,810 | 78,849 | |||||||||
Fees and expenses: | ||||||||||||
Investment advisory services | 8,777 | 38,583 | 10,390 | 5,618 | ||||||||
Distribution services - Class 2 | 3,654 | 24,498 | 6,773 | 3,131 | ||||||||
Distribution services - Class 3 | — | 437 | 69 | — | ||||||||
Transfer agent services | 1 | 8 | 2 | 1 | ||||||||
Reports to shareholders | 47 | 358 | 96 | 41 | ||||||||
Registration statement and prospectus | 62 | 479 | 130 | 53 | ||||||||
Postage, stationery and supplies | 8 | 60 | 16 | 7 | ||||||||
Trustees’ compensation | 13 | 132 | 35 | 11 | ||||||||
Auditing and legal | 6 | 21 | 7 | 2 | ||||||||
Custodian | 386 | 725 | 89 | 55 | ||||||||
State and local taxes | 28 | 220 | 60 | 25 | ||||||||
Other | 15 | 48 | 15 | 5 | ||||||||
Total fees and expenses before waiver | 12,997 | 65,569 | 17,682 | 8,949 | ||||||||
Less waiver of fees and expenses: | ||||||||||||
Investment advisory services | 878 | 3,858 | 1,039 | 562 | ||||||||
Total fees and expenses after waiver | 12,119 | 61,711 | 16,643 | 8,387 | ||||||||
Net investment income | 34,275 | 108,449 | 78,167 | 70,462 |
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency: | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | 135,390 | 1,227,220 | 145,831 | (2,595 | ) | ||||||||||
Non-U.S. currency transactions | 5,200 | 261 | (466 | ) | (3,677 | ) | |||||||||
140,590 | 1,227,481 | 145,365 | (6,272 | ) | |||||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 538 | (795,483 | ) | 117,305 | (31,900 | ) | |||||||||
Non-U.S. currency translations | 89 | 208 | (97 | ) | 485 | ||||||||||
627 | (795,275 | ) | 117,208 | (31,415 | ) | ||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency | 141,217 | 432,206 | 262,573 | (37,687 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 175,492 | $ | 540,655 | $ | 340,740 | $ | 32,775 |
See Notes to Financial Statements
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended 2005 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 34,275 | $ | 30,708 | �� | $ | 108,449 | $ | 128,993 | $ | 78,167 | $ | 126,432 | $ | 70,462 | $ | 110,408 | |||||||||||||||
Net realized gain (loss) on investments and non-U.S. currency transactions | 140,590 | 83,182 | 1,227,481 | 637,504 | 145,365 | 133,120 | (6,272 | ) | 2,178 | |||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and non-U.S. currency translations | 627 | 222,184 | (795,275 | ) | 2,278,471 | 117,208 | 234,416 | (31,415 | ) | (77,663 | ) | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 175,492 | 336,074 | 540,655 | 3,044,968 | 340,740 | 493,968 | 32,775 | 34,923 | ||||||||||||||||||||||||
Dividends and distributions paid to shareholders: | ||||||||||||||||||||||||||||||||
Dividends from net investment income and non-U.S. currency gains: | ||||||||||||||||||||||||||||||||
Class 1 | (2,252 | ) | (1,641 | ) | (5,705 | ) | (31,560 | ) | (3,555 | ) | (20,656 | ) | (7,578 | ) | (7,502 | ) | ||||||||||||||||
Class 2 | (27,641 | ) | (14,177 | ) | (25,853 | ) | (112,734 | ) | (19,628 | ) | (106,102 | ) | (106,551 | ) | (73,453 | ) | ||||||||||||||||
Class 3 | — | — | (605 | ) | (3,387 | ) | (279 | ) | (1,653 | ) | — | — | ||||||||||||||||||||
Total dividends from net investment income and non-U.S. currency gains | (29,893 | ) | (15,818 | ) | (32,163 | ) | (147,681 | ) | (23,462 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) | ||||||||||||||||
Distributions from net realized gain on investments: | ||||||||||||||||||||||||||||||||
Short-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Long-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | (21,900 | ) | — | (11,851 | ) | — | — | — | ||||||||||||||||||||||
Class 2 | — | — | (127,584 | ) | — | (72,811 | ) | — | — | — | ||||||||||||||||||||||
Class 3 | — | — | (2,908 | ) | — | (1,004 | ) | — | — | — | ||||||||||||||||||||||
Total distributions from net realized gain on investments | — | — | (152,392 | ) | — | (85,666 | ) | — | — | — | ||||||||||||||||||||||
Total dividends and distributions paid to shareholders | (29,893 | ) | (15,818 | ) | (184,555 | ) | (147,681 | ) | (109,128 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended 2005 | |||||||||||||||||||||||||
Capital share transactions: | ||||||||||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||||||||||
Proceeds from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Proceeds from shares sold | 9,129 | 4,184 | 9,292 | 5,159 | 25,104 | 6,110 | 12,562 | 10,970 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 2,252 | 1,641 | 27,605 | 31,560 | 15,406 | 20,656 | 7,578 | 7,502 | ||||||||||||||||||||||||
Cost of shares repurchased | (13,591 | ) | (26,337 | ) | (323,657 | ) | (588,755 | ) | (50,269 | ) | (104,648 | ) | (9,822 | ) | (26,416 | ) | ||||||||||||||||
Net increase (decrease) from Class 1 transactions | (2,210 | ) | (20,512 | ) | (286,760 | ) | (552,036 | ) | (9,759 | ) | (77,882 | ) | 10,318 | (7,944 | ) | |||||||||||||||||
Class 2: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | 373,544 | 541,733 | 1,846,045 | 4,085,834 | 391,458 | 970,962 | 416,369 | 561,561 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 27,641 | 14,177 | 153,437 | 112,734 | 92,439 | 106,102 | 106,551 | 73,453 | ||||||||||||||||||||||||
Cost of shares repurchased | (21,874 | ) | (30,170 | ) | (235,018 | ) | (220,641 | ) | (279,357 | ) | (56,161 | ) | (22,339 | ) | (40,314 | ) | ||||||||||||||||
Net increase from Class 2 transactions | 379,311 | 525,740 | 1,764,464 | 3,977,927 | 204,540 | 1,020,903 | 500,581 | 594,700 | ||||||||||||||||||||||||
Class 3: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | — | — | 5,657 | 16,188 | 1,925 | 2,351 | — | — | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | — | — | 3,513 | 3,387 | 1,283 | 1,653 | — | — | ||||||||||||||||||||||||
Cost of shares repurchased | — | — | (55,454 | ) | (106,454 | ) | (6,411 | ) | (14,040 | ) | — | — | ||||||||||||||||||||
Net increase (decrease) from Class 3 transactions | — | — | (46,284 | ) | (86,879 | ) | (3,203 | ) | (10,036 | ) | — | — | ||||||||||||||||||||
Net increase in net assets resulting from capital share transactions | 377,101 | 505,228 | 1,431,420 | 3,339,012 | 191,578 | 932,985 | 510,899 | 586,756 | ||||||||||||||||||||||||
Total increase (decrease) in net assets | 522,700 | 825,484 | 1,787,520 | 6,236,299 | 423,190 | 1,298,542 | 429,545 | 540,724 | ||||||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||||||
Beginning of period | 2,823,478 | 1,997,994 | 22,550,863 | 16,314,564 | 6,075,178 | 4,776,636 | 2,494,469 | 1,953,745 | ||||||||||||||||||||||||
End of period | $ | 3,346,178 | $ | 2,823,478 | $ | 24,338,383 | $ | 22,550,863 | $ | 6,498,368 | $ | 6,075,178 | $ | 2,924,014 | $ | 2,494,469 | ||||||||||||||||
Undistributed (distributions in excess of) net investment income | $ | 33,224 | $ | 28,842 | $ | 103,564 | $ | 27,278 | $ | 77,407 | $ | 22,702 | $ | 69,335 | $ | 113,002 |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended 2005 | |||||||||||||||||
Shares of beneficial interest: | ||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||
Shares issued from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||
Shares sold | 438 | 233 | 153 | 94 | 1,454 | 385 | 1,109 | 962 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 114 | 95 | 477 | 549 | 920 | 1,258 | 691 | 670 | ||||||||||||||||
Shares repurchased | (658 | ) | (1,486 | ) | (5,299 | ) | (11,005 | ) | (2,902 | ) | (6,585 | ) | (864 | ) | (2,323 | ) | ||||||||
Net increase (decrease) in shares outstanding | (106 | ) | (1,158 | ) | (4,669 | ) | (10,362 | ) | (528 | ) | (4,942 | ) | 936 | (691 | ) | |||||||||
Class 2: | ||||||||||||||||||||||||
Shares sold | 18,130 | 30,710 | 30,379 | 77,199 | 22,735 | 61,664 | 36,917 | 49,855 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 1,402 | 824 | 2,668 | 1,976 | 5,559 | 6,492 | 9,793 | 6,611 | ||||||||||||||||
Shares repurchased | (1,077 | ) | (1,695 | ) | (3,920 | ) | (4,104 | ) | (15,780 | ) | (3,564 | ) | (1,984 | ) | (3,572 | ) | ||||||||
Net increase in shares outstanding | 18,455 | 29,839 | 29,127 | 75,071 | 12,514 | 64,592 | 44,726 | 52,894 | ||||||||||||||||
Class 3: | ||||||||||||||||||||||||
Shares sold | — | — | 91 | 320 | 111 | 148 | — | — | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | — | — | 61 | 60 | 76 | 101 | — | — | ||||||||||||||||
Shares repurchased | — | — | (912 | ) | (2,009 | ) | (370 | ) | (887 | ) | — | — | ||||||||||||
Net increase (decrease) in shares outstanding | — | — | (760 | ) | (1,629 | ) | (183 | ) | (638 | ) | — | — |
(1) | Unaudited. |
See Notes to Financial Statements
Table of Contents
Financial Highlights (1)
Income (loss) from investment operations (2) | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||
Period | Net asset value, beginning of period | Net investment income (loss) | Net gains (losses) (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of expenses to average net assets before waiver | Ratio of expenses to average net assets after | Ratio of net income (loss) to average net assets | |||||||||||||||||||||||||||||||
Global Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 19.63 | $ | .24 | $ | .99 | $ | 1.23 | $ | (.22 | ) | $ | — | $ | (.22 | ) | $ | 20.64 | 6.31 | % | $ | 215 | .60 | %(6) | .54 | %(6) | 2.37 | %(6) | ||||||||||||||||
12/31/05 | 17.31 | .28 | 2.19 | 2.47 | (.15 | ) | — | (.15 | ) | 19.63 | 14.37 | 206 | .62 | .57 | 1.56 | |||||||||||||||||||||||||||||
12/31/04 | 15.30 | .18 | 1.92 | 2.10 | (.09 | ) | — | (.09 | ) | 17.31 | 13.80 | 202 | .65 | .64 | 1.15 | |||||||||||||||||||||||||||||
12/31/03 | 11.35 | .12 | 3.91 | 4.03 | (.08 | ) | — | (.08 | ) | 15.30 | 35.63 | 188 | .70 | .70 | .94 | |||||||||||||||||||||||||||||
12/31/02 | 13.42 | .09 | (2.02 | ) | (1.93 | ) | (.14 | ) | — | (.14 | ) | 11.35 | (14.46 | ) | 152 | .71 | .71 | .73 | ||||||||||||||||||||||||||
12/31/01 | 17.25 | .18 | (2.50 | ) | (2.32 | ) | (.15 | ) | (1.36 | ) | (1.51 | ) | 13.42 | (13.99 | ) | 215 | .70 | .70 | 1.24 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 19.52 | .22 | .97 | 1.19 | (.18 | ) | $ | — | (.18 | ) | 20.53 | 6.16 | 3,131 | .85 | (6) | .79 | (6) | 2.17 | (6) | |||||||||||||||||||||||||
12/31/05 | 17.23 | .23 | 2.18 | 2.41 | (.12 | ) | — | (.12 | ) | 19.52 | 14.07 | 2,617 | .87 | .82 | 1.30 | |||||||||||||||||||||||||||||
12/31/04 | 15.25 | .14 | 1.91 | 2.05 | (.07 | ) | — | (.07 | ) | 17.23 | 13.49 | 1,796 | .90 | .89 | .92 | |||||||||||||||||||||||||||||
12/31/03 | 11.32 | .09 | 3.89 | 3.98 | (.05 | ) | — | (.05 | ) | 15.25 | 35.27 | 1,082 | .95 | .95 | .68 | |||||||||||||||||||||||||||||
12/31/02 | 13.38 | .06 | (2.01 | ) | (1.95 | ) | (.11 | ) | — | (.11 | ) | 11.32 | (14.64 | ) | 592 | .96 | .96 | .48 | ||||||||||||||||||||||||||
12/31/01 | 17.21 | .13 | (2.49 | ) | (2.36 | ) | (.11 | ) | (1.36 | ) | (1.47 | ) | 13.38 | (14.22 | ) | 600 | .95 | .95 | .88 | |||||||||||||||||||||||||
Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 59.36 | $ | .34 | $ | 1.16 | $ | 1.50 | $ | (.10 | ) | $ | (.38 | ) | $ | (.48 | ) | $ | 60.38 | 2.56 | % | $ | 3,490 | .34 | %(6) | .31 | %(6) | 1.12 | %(6) | |||||||||||||||
12/31/05 | 51.39 | .46 | 8.00 | 8.46 | (.49 | ) | — | (.49 | ) | 59.36 | 16.50 | 3,709 | .35 | .32 | .87 | |||||||||||||||||||||||||||||
12/31/04 | 45.74 | .32 | 5.51 | 5.83 | (.18 | ) | — | (.18 | ) | 51.39 | 12.75 | 3,744 | .36 | .36 | .68 | |||||||||||||||||||||||||||||
12/31/03 | 33.47 | .16 | 12.26 | 12.42 | (.15 | ) | — | (.15 | ) | 45.74 | 37.15 | 3,877 | .39 | .39 | .41 | |||||||||||||||||||||||||||||
12/31/02 | 44.30 | .12 | (10.87 | ) | (10.75 | ) | (.08 | ) | — | (.08 | ) | 33.47 | (24.27 | ) | 3,195 | .40 | .40 | .30 | ||||||||||||||||||||||||||
12/31/01 | 73.51 | .18 | (11.99 | ) | (11.81 | ) | (.41 | ) | (16.99 | ) | (17.40 | ) | 44.30 | (17.93 | ) | 5,207 | .38 | .38 | .34 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 58.98 | .27 | 1.15 | 1.42 | (.08 | ) | (.38 | ) | (.46 | ) | 59.94 | 2.44 | 20,386 | .59 | (6) | .56 | (6) | .88 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.10 | .34 | 7.92 | 8.26 | (.38 | ) | — | (.38 | ) | 58.98 | 16.19 | 18,343 | .60 | .57 | .64 | |||||||||||||||||||||||||||||
12/31/04 | 45.50 | .23 | 5.45 | 5.68 | (.08 | ) | — | (.08 | ) | 51.10 | 12.50 | 12,055 | .61 | .61 | .50 | |||||||||||||||||||||||||||||
12/31/03 | 33.29 | .06 | 12.19 | 12.25 | (.04 | ) | — | (.04 | ) | 45.50 | 36.80 | 7,107 | .64 | .64 | .16 | |||||||||||||||||||||||||||||
12/31/02 | 44.09 | .03 | (10.82 | ) | (10.79 | ) | (.01 | ) | — | (.01 | ) | 33.29 | (24.46 | ) | 3,009 | .65 | .65 | .07 | ||||||||||||||||||||||||||
12/31/01 | 73.28 | .04 | (11.94 | ) | (11.90 | ) | (.30 | ) | (16.99 | ) | (17.29 | ) | 44.09 | (18.15 | ) | 2,937 | .63 | .63 | .07 | |||||||||||||||||||||||||
Class 3 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 59.34 | .28 | 1.17 | 1.45 | (.08 | ) | (.38 | ) | (.46 | ) | 60.33 | 2.48 | 462 | .52 | (6) | .49 | (6) | .94 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.38 | .37 | 7.98 | 8.35 | (.39 | ) | — | (.39 | ) | 59.34 | 16.28 | 499 | .53 | .50 | .69 | |||||||||||||||||||||||||||||
12/31/04 (7) | 47.74 | .24 | 3.50 | 3.74 | (.10 | ) | — | (.10 | ) | 51.38 | 7.85 | 516 | .54 | (6) | .53 | (6) | .54 | (6) | ||||||||||||||||||||||||||
Asset Allocation Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 16.56 | $ | .23 | $ | .69 | $ | .92 | $ | (.07 | ) | $ | (.23 | ) | $ | (.30 | ) | $ | 17.18 | 5.60 | % | $ | 903 | .34 | %(6) | .31 | %(6) | 2.66 | %(6) | |||||||||||||||
12/31/05 | 15.49 | .41 | 1.05 | 1.46 | (.39 | ) | — | (.39 | ) | 16.56 | 9.45 | 879 | .35 | .32 | 2.57 | |||||||||||||||||||||||||||||
12/31/04 | 14.58 | .39 | .84 | 1.23 | (.32 | ) | — | (.32 | ) | 15.49 | 8.50 | 899 | .38 | .37 | 2.64 | |||||||||||||||||||||||||||||
12/31/03 | 12.23 | .41 | 2.29 | 2.70 | (.35 | ) | — | (.35 | ) | 14.58 | 22.14 | 911 | .42 | .42 | 3.12 | |||||||||||||||||||||||||||||
12/31/02 | 14.30 | .45 | (2.19 | ) | (1.74 | ) | (.33 | ) | — | (.33 | ) | 12.23 | (12.19 | ) | 797 | .45 | .45 | 3.31 | ||||||||||||||||||||||||||
12/31/01 | 15.71 | .49 | (.37 | ) | .12 | (.59 | ) | (.94 | ) | (1.53 | ) | 14.30 | .77 | 1,012 | .45 | .45 | 3.30 | |||||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.47 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.07 | 5.46 | 5,519 | .59 | (6) | .56 | (6) | 2.41 | (6) | |||||||||||||||||||||||||
12/31/05 | 15.42 | .37 | 1.04 | 1.41 | (.36 | ) | — | (.36 | ) | 16.47 | 9.14 | 5,120 | .60 | .57 | 2.31 | |||||||||||||||||||||||||||||
12/31/04 | 14.51 | .36 | .84 | 1.20 | (.29 | ) | — | (.29 | ) | 15.42 | 8.34 | 3,797 | .62 | .62 | 2.42 | |||||||||||||||||||||||||||||
12/31/03 | 12.18 | .37 | 2.27 | 2.64 | (.31 | ) | �� | (.31 | ) | 14.51 | 21.74 | 2,314 | .67 | .67 | 2.81 | |||||||||||||||||||||||||||||
12/31/02 | 14.25 | .42 | (2.18 | ) | (1.76 | ) | (.31 | ) | — | (.31 | ) | 12.18 | (12.38 | ) | 1,056 | .70 | .70 | 3.11 | ||||||||||||||||||||||||||
12/31/01 | 15.67 | .45 | (.36 | ) | .09 | (.57 | ) | (.94 | ) | (1.51 | ) | 14.25 | .52 | 730 | .70 | .70 | 3.03 |
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Financial Highlights (1)
Income (loss) from investment operations (2) | Dividends and distributions | ||||||||||||||||||||||||||||||||||||||||||
Period | Net asset value, beginning of period | Net investment income (loss) | Net gains (losses) (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of expenses to average net assets before waiver | Ratio of expenses to average net assets after | Ratio of net income (loss) to average net assets | ||||||||||||||||||||||||||||||
Asset Allocation Fund (Continued) | |||||||||||||||||||||||||||||||||||||||||||
Class 3 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.56 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.16 | 5.44 | 76 | .52 | (6) | .49 | (6) | 2.48 | (6) | ||||||||||||||||||||||||
12/31/05 | 15.49 | .38 | 1.05 | 1.43 | (.36 | ) | — | (.36 | ) | 16.56 | 9.26 | 76 | .53 | .50 | 2.39 | ||||||||||||||||||||||||||||
12/31/04 (7) | 14.85 | .36 | .58 | .94 | (.30 | ) | — | (.30 | ) | 15.49 | 6.38 | 81 | .55 | (6) | .55 | (6) | 2.50 | (6) | |||||||||||||||||||||||||
Bond Fund | |||||||||||||||||||||||||||||||||||||||||||
Class 1 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 11.31 | $ | .31 | $ | (.15 | ) | $ | .16 | $ | (.47 | ) | $ | — | $ | (.47 | ) | $ | 11.00 | 1.41 | % | $ | 188 | .43 | %(6) | .39 | %(6) | 5.48 | %(6) | ||||||||||||||
12/31/05 | 11.57 | .60 | (.40 | ) | .20 | (.46 | ) | — | (.46 | ) | 11.31 | 1.77 | 182 | .44 | .40 | 5.30 | |||||||||||||||||||||||||||
12/31/04 | 11.34 | .56 | .10 | .66 | (.43 | ) | — | (.43 | ) | 11.57 | 6.04 | 195 | .45 | .44 | 4.94 | ||||||||||||||||||||||||||||
12/31/03 | 10.41 | .57 | .78 | 1.35 | (.42 | ) | — | (.42 | ) | 11.34 | 13.07 | 213 | .47 | .47 | 5.19 | ||||||||||||||||||||||||||||
12/31/02 | 10.44 | .67 | (.24 | ) | .43 | (.46 | ) | — | (.46 | ) | 10.41 | 4.26 | 218 | .49 | .49 | 6.60 | |||||||||||||||||||||||||||
12/31/01 | 10.18 | .77 | .08 | .85 | (.59 | ) | — | (.59 | ) | 10.44 | 8.48 | 194 | .49 | .49 | 7.38 | ||||||||||||||||||||||||||||
Class 2 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 11.22 | .29 | (.15 | ) | .14 | (.45 | ) | — | (.45 | ) | 10.91 | 1.23 | 2,736 | .68 | (6) | .64 | (6) | 5.23 | (6) | ||||||||||||||||||||||||
12/31/05 | 11.48 | .57 | (.39 | ) | .18 | (.44 | ) | — | (.44 | ) | 11.22 | 1.59 | 2,312 | .69 | .65 | 5.06 | |||||||||||||||||||||||||||
12/31/04 | 11.27 | .53 | .09 | .62 | (.41 | ) | — | (.41 | ) | 11.48 | 5.72 | 1,759 | .70 | .69 | 4.68 | ||||||||||||||||||||||||||||
12/31/03 | 10.36 | .53 | .78 | 1.31 | (.40 | ) | — | (.40 | ) | 11.27 | 12.80 | 1,280 | .72 | .72 | 4.88 | ||||||||||||||||||||||||||||
12/31/02 | 10.40 | .64 | (.24 | ) | .40 | (.44 | ) | — | (.44 | ) | 10.36 | 4.05 | 697 | .74 | .74 | 6.34 | |||||||||||||||||||||||||||
12/31/01 | 10.16 | .73 | .08 | .81 | (.57 | ) | — | (.57 | ) | 10.40 | 8.15 | 349 | .74 | .74 | 7.06 |
Portfolio turnover rate for all classes of shares
Six months ended June 30, 2006 (5) | Year Ended December 31 | 2004 | 2003 | 2002 | 2001 | |||||||
Global Growth Fund | 17 | 26 | 24 | 27 | 30 | 38 | ||||||
Growth Fund | 23 | 29 | 30 | 34 | 34 | 31 | ||||||
Asset Allocation Fund | 21 | 23 | 20 | 20 | 25 | 32 | ||||||
Bond Fund | 29 | 46 | 34 | 20 | 29 | 59 |
(1) | Based on operations for the period shown (unless otherwise noted) and, accordingly, may not be representative of a full year. |
(2) | Based on average shares outstanding. |
(3) | The ratios in this column reflect the impact, if any, of certain waivers by CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. |
(4) | Commenced operations July 5, 2001. |
(5) | Unaudited. |
(6) | Annualized. |
(7) | From January 16, 2004, when Class 3 shares were first issued. |
See Notes to Financial Statements
Table of Contents
Notes to financial statements | unaudited |
1. Organization and significant accounting policies
Organization – American Funds Insurance Series (the “series”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company with 14 different funds. The assets of each fund are segregated, with each fund accounted for separately. The funds’ investment objectives are as follows:
Global Discovery Fund | Long-term growth of capital by investing primarily in stocks of companies in the services and information area of the global economy. | |
Global Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies located around the world. | |
Global Small Capitalization Fund | Long-term growth of capital by investing primarily in stocks of smaller companies located around the world. | |
Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies that offer opportunities for growth of capital. | |
International Fund | Long-term growth of capital by investing primarily in common stocks of companies located outside the U.S. | |
New World Fund | Long-term growth of capital by investing primarily in stocks of companies with significant exposure to countries with developing economies and/or markets. | |
Blue Chip Income and Growth Fund | To produce income exceeding the average yield on U.S. stocks and to provide an opportunity for growth of principal. | |
Global Growth and Income Fund | Long-term growth of capital and current income by investing primarily in stocks of well-established companies located around the world. | |
Growth-Income Fund | Growth of capital and income by investing primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. | |
Asset Allocation Fund | High total return (including income and capital gains) consistent with long-term preservation of capital. | |
Bond Fund | As high a level of current income as is consistent with the preservation of capital by investing primarily in fixed-income securities. | |
High-Income Bond Fund | High current income and, secondarily, capital appreciation by investing primarily in intermediate and long-term corporate obligations, with emphasis on higher yielding, higher risk, lower rated or unrated securities. | |
U.S. Government/AAA-Rated Securities Fund | A high level of current income consistent with prudent investment risk and preservation of capital by investing primarily in a combination of securities guaranteed by the U.S. government and other debt securities rated AAA or Aaa. | |
Cash Management Fund | High current yield while preserving capital by investing in a diversified selection of high-quality money market instruments. |
Each fund offers two or three share classes (1, 2 and 3). Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for certain distribution expenses. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
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Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the series:
Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the funds to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable are fair valued as determined in good faith under procedures adopted by authority of the series’ board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued.
Security transactions and related investment income – Security transactions are recorded by the series as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the series will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations –Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution expenses, are accrued daily and charged directly to the respective share class.
Dividends and distributions to shareholders –Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Non-U.S. currency translation – Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.
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Forward currency contracts – The series may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The series enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the series could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the series values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The series records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Mortgage dollar rolls – The series may enter into mortgage dollar roll transactions in which a fund in the series sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
2. Non-U.S. investments
Investment risk – The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the funds on the sale of securities in certain countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
3. Federal income taxation and distributions
The series complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The series is not subject to income taxes to the extent such distributions are made.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; deferred expenses; paydowns on fixed-income securities; net capital losses; non-U.S. taxes on capital gains; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of December 31, 2005, the funds’ most recent fiscal year end. Tax-basis unrealized appreciation (depreciation) and cost of investments are reported as of June 30, 2006.
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Additional tax basis disclosures are as follows:
(dollars in thousands)
Growth Fund | Global Fund | Asset Allocation | Bond Fund | |||||||||||||
As of December 31, 2005: | ||||||||||||||||
Undistributed ordinary income | $ | 29,555 | $ | 31,502 | $ | 22,899 | $ | 113,791 | ||||||||
Undistributed long-term capital gains | — | 151,590 | 85,106 | — | ||||||||||||
Capital loss carryforwards | (66,686 | ) | — | — | (3,617 | ) | ||||||||||
As of June 30, 2006: | ||||||||||||||||
Gross unrealized appreciation on investment securities | 632,332 | 5,224,347 | 1,067,049 | 30,547 | ||||||||||||
Gross unrealized depreciation on investment securities | (56,728 | ) | (569,283 | ) | (156,712 | ) | (66,148 | ) | ||||||||
Net unrealized appreciation (depreciation) on investment securities | 575,604 | 4,655,064 | 910,337 | (35,601 | ) | |||||||||||
Cost of portfolio securities | 2,759,115 | 19,581,226 | 5,670,140 | 2,955,336 | ||||||||||||
Capital loss carryforwards expire in: | ||||||||||||||||
2006 | $ | — | — | — | $ | — | ||||||||||
2007 | — | — | — | — | ||||||||||||
2008 | — | — | — | — | ||||||||||||
2009 | — | — | — | — | ||||||||||||
2010 | 10,546 | — | — | — | ||||||||||||
2011 | 56,140 | — | — | 3,029 | ||||||||||||
2012 | — | — | — | — | ||||||||||||
2013 | — | — | — | 588 | ||||||||||||
$ | 66,686 | — | — | $ | 3,617 |
* | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
† | Amount less than one thousand. |
4. Fees and transactions with related parties
Capital Research and Management Company (“CRMC”), the series’ investment adviser, is the parent company of American Funds Service Company SM (“AFS”), the series’ transfer agent, and American Funds Distributors, Inc. SM (“AFD”), the principal underwriter of the series’ shares.
Investment advisory services – The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on annual rates that generally decrease as average net asset levels increase.
The board of trustees approved an amended agreement for Growth-Income Fund and Global Small Capitalization Fund, effective April 1, 2006, and July 1, 2006, respectively, that provided for reduced annual rates as reflected in the chart below. During the six months ended June 30, 2006, CRMC voluntarily reduced investment advisory services fees to the rates provided by the amended agreement for Global Small Capitalization Fund. Additionally, CRMC is currently waiving 10% of investment advisory services fees for all funds in the series. During the six months ended June 30, 2006, total aggregate investment advisory services fees waived by CRMC were $13,732,000. As a result, the aggregate fees shown on the accompanying financial statements of $137,318,000 were reduced to $123,586,000. The amended range of rates and asset levels and the current annualized rates of average net assets for the series, before and after the expense waiver, are as follows:
Rates | Net asset level (in billions) | For the six months ended June 30, 2006, before waiver | For the six months ended June 30, 2006, after waiver | |||||||||
Fund | Beginning with | Ending with | Up to | In excess of | ||||||||
Global Growth | .690 | .480 | .6 | 3.0 | .56 | .50 | ||||||
Growth | .500 | .285 | .6 | 27.0 | .33 | .29 | ||||||
Asset Allocation | .500 | .250 | .6 | 8.0 | .33 | .29 | ||||||
Bond | .480 | .360 | .6 | 3.0 | .42 | .38 |
* | Results based on activity during the period May 1, 2006, commencement of operations, through June 30, 2006. |
Transfer agent services – The aggregate fee of $25,000 was incurred during the six months ended June 30, 2006, pursuant to an agreement with AFS. Under this agreement, the series compensates AFS for transfer agent services, including shareholder recordkeeping, communications and transaction processing.
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Deferred trustees’ compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the series, are treated as if invested in one or more of the American Funds. These amounts represent general, unsecured liabilities of the series and vary according to the total returns of the selected funds. Trustees’ compensation of $421,000, shown on the accompanying financial statements, includes $244,000 in current fees (either paid in cash or deferred) and a net increase of $177,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the series are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the series.
5. Distribution services
The series has adopted plans of distribution for Class 2 and 3 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares. The plans provide for annual expenses, based on average daily net assets, of 0.25% for Class 2 and 0.18% for Class 3 to pay service fees to firms that have entered into agreements with the series. During the six months ended June 30, 2006, distribution expenses under the plans for the series aggregated $77,715,000 for Class 2 and $1,101,000 for Class 3. Class 1 shares have not adopted a plan of distribution.
6. Investment transactions and other disclosures
As of June 30, 2006, Asset Allocation Fund, Bond Fund and High-Income Bond Fund had outstanding forward currency contracts to sell non-U.S. currencies as follows:
(dollars in thousands)
Fund | Non-U.S. currency sale contracts | Contract amount | U.S. | U.S. valuation | |||||||||||
Non-U.S. | Amount | Unrealized (depreciation) appreciation | |||||||||||||
Asset Allocation | Euro, expiring 7/19-9/29/2006 | € | 6,710 | $ | 8,520 | $ | 8,599 | $ | (79 | ) | |||||
Bond | Euro, expiring 9/14/2006 | € | 5,585 | 7,078 | 7,173 | (95 | ) | ||||||||
Pound, expiring 7/13-8/23/2006 | £ | 5,780 | 12,125 | 11,905 | 220 |
The following table presents additional information for the six months ended June 30, 2006:
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Purchases of investment securities (1) | $ | 615,964 | $ | 5,156,655 | $ | 1,231,288 | $ | 886,794 | |||||
Sales of investment securities (1) | 451,141 | 5,061,567 | 1,240,593 | 608,522 | |||||||||
Non-U.S taxes paid on dividend income | 3,333 | 5,318 | 1,139 | — | |||||||||
Non-U.S taxes paid on interest income - | — | — | (3 | ) | 61 | ||||||||
Non-U.S taxes paid on realized gains | 132 | — | — | — | |||||||||
Non-U.S taxes provided on unrealized gains as of June 30, 2006 | 545 | 17 | — | — | |||||||||
Dividends from affiliated issuers | — | — | — | — | |||||||||
Realized gain on affiliated issuers | — | — | 16,897 | — |
(1) | Excludes short-term securities, except for Cash Management Fund. |
(2) | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
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Expense example | unaudited |
The funds in the American Funds Insurance Series serve as the underlying investment vehicle for various insurance products. As an owner of an insurance contract that invests in one of the funds in the series, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. Additional fees are charged by the insurance companies related to the various benefits they provide. This example is intended to help you understand your ongoing costs (in dollars) of investing in the underlying funds only so you can compare these costs with the ongoing costs of investing in other mutual funds that serve a similar function in other annuity products. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006, through June 30, 2006).
Actual expenses:
The first line of each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled “Expenses paid during period” to estimate the expenses you paid on your account during this period. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Hypothetical example for comparison purposes:
The second line of each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. 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 the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 1/1/2006 | Ending account value 6/30/2006 | Expenses paid during period* | Annualized expense ratio | |||||||||
Global Discovery Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.73 | $ | 2.86 | .57 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.97 | 2.86 | .57 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.95 | 4.12 | .82 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.73 | 4.11 | .82 | ||||||||
Global Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,063.06 | $ | 2.76 | .54 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.12 | 2.71 | .54 | ||||||||
Class 2 — actual return | 1,000.00 | 1,061.57 | 4.04 | .79 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.88 | 3.96 | .79 | ||||||||
Global Small Capitalization Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,094.50 | $ | 3.64 | .70 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.32 | 3.51 | .70 | ||||||||
Class 2 — actual return | 1,000.00 | 1,093.52 | 4.93 | .95 |
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Class 2 — assumed 5% return | 1,000.00 | 1,020.08 | 4.76 | .95 | ||||||||
Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.61 | $ | 1.56 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.37 | 2.81 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,024.77 | 2.46 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
International Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,060.13 | $ | 2.55 | .50 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.32 | 2.51 | .50 | ||||||||
Class 2 — actual return | 1,000.00 | 1,058.33 | 3.83 | .75 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.08 | 3.76 | .75 | ||||||||
Class 3 — actual return | 1,000.00 | 1,058.74 | 3.47 | .68 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.42 | 3.41 | .68 | ||||||||
New World Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,089.69 | $ | 4.20 | .81 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,020.78 | 4.06 | .81 | ||||||||
Class 2 — actual return | 1,000.00 | 1,089.24 | 5.49 | 1.06 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,019.54 | 5.31 | 1.06 | ||||||||
Blue Chip Income and Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,046.45 | $ | 1.98 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,045.57 | 3.25 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 | ||||||||
Global Growth and Income Fund† | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 961.00 | $ | 1.05 | .65 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.57 | 3.26 | .65 | ||||||||
Class 2 — actual return | 1,000.00 | 960.00 | 1.45 | .90 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.33 | 4.51 | .90 | ||||||||
Growth-Income Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,040.86 | $ | 1.32 | .26 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.51 | 1.30 | .26 | ||||||||
Class 2 — actual return | 1,000.00 | 1,039.62 | 2.58 | .51 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.27 | 2.56 | .51 | ||||||||
Class 3 — actual return | 1,000.00 | 1,039.98 | 2.23 | .44 | �� | |||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.61 | 2.21 | .44 | ||||||||
Asset Allocation Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,055.97 | $ | 1.58 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,054.62 | 2.85 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,054.43 | 2.50 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,014.08 | $ | 1.95 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,012.33 | 3.19 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 |
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High-Income Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,033.23 | $ | 2.27 | .45 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.56 | 2.26 | .45 | ||||||||
Class 2 — actual return | 1,000.00 | 1032.38 | 3.53 | .70 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1021.32 | 3.51 | .70 | ||||||||
Class 3 — actual return | 1,000.00 | 1,032.67 | 3.18 | .63 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.67 | 3.16 | .63 | ||||||||
U.S. Government/AAA-Rated Securities Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 993.10 | $ | 2.12 | .43 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.66 | 2.16 | .43 | ||||||||
Class 2 — actual return | 1,000.00 | 992.63 | 3.31 | .67 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.47 | 3.36 | .67 | ||||||||
Class 3 — actual return | 1,000.00 | 992.50 | 3.01 | .61 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.77 | 3.06 | .61 | ||||||||
Cash Management Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,021.95 | $ | 1.50 | .30 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.31 | 1.51 | .30 | ||||||||
Class 2 — actual return | 1,000.00 | 1,021.44 | 2.76 | .55 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.07 | 2.76 | .55 | ||||||||
Class 3 — actual return | 1,000.00 | 1,021.19 | 2.41 | .48 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.41 | 2.41 | .48 |
* | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period). |
† | The annualized expense ratio and the information in the first line of each share class are based on operations for the period May 1, 2006 (when the fund commenced operations), through June 30, 2006, and, accordingly, are not representative of a full period. |
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Board of trustees
“Non-interested” trustees
Name and age | Year first a trustee | Principal occupation(s) during past five years | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
Lee A. Ault III, 70 Chairman of the Board | 1999 | Chairman of the Board, In-Q-Tel, Inc. (an independent technology venture company funded principally by the Central Intelligence Agency); former Chairman of the Board, President and CEO, Telecredit, Inc. | 1 | Anworth Mortgage Asset Corporation; Office Depot, Inc. | ||||
H. Frederick Christie, 73 | 1994 | Private investor; former President and CEO, The Mission Group (non-utility holding company, subsidiary of Southern California Edison Company) | 19 | Ducommun Incorporated; IHOP Corporation; Southwest Water Company | ||||
Joe E. Davis, 72 | 1991 | Private investor; former Chairman of the Board, Linear Corporation (linear motor design and production); former President and CEO, National Health Enterprises, Inc; | 1 | Anworth Mortgage Asset Corporation; Natural Alternatives, Inc. | ||||
Martin Fenton, 71 | 1995 | Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities) | 16 | None | ||||
Leonard R. Fuller, 60 | 1999 | President and CEO, Fuller Consulting (financial management consulting firm) | 14 | None | ||||
Mary Myers Kauppila, 52 | 1994 | Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc. | 5 | None | ||||
Kirk P. Pendleton, 66 | 1996 | Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment) |
“Interested” trustees
Name, age and position with series | Year first elected a trustee or officer of the series1 | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
James K. Dunton, 68 Vice Chairman of the Board | 1993 | Senior Vice President and Director, Capital Research and Management Company | 2 | None | ||||
Donald D. O’Neal, 46 President | 1998 | Senior Vice President, Capital Research and Management Company | 3 | None |
The statement of additional information includes additional information about the series’ trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all trustees and officers of the series is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.
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Other officers
Name, age and position with series | Year first elected a trustee or officer of the series1 | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | ||
Alan N. Burro, 45 Senior Vice President | 1998 | Vice President, Capital Research and Management Company; Senior Vice President, Capital Research Company5 | ||
Michael J. Downer, 51 Senior Vice President | 1991 | Vice President and Secretary, Capital Research and Management Company; Director, American Funds Distributors, Inc.; 5 Director, Capital Bank and Trust Company5 | ||
Abner D. Goldstine. 76 Senior Vice President | 1993 | Senior Vice President and Director, Capital Research and Management Company | ||
John H. Smut, 49 Senior Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, American Funds Distributors, Inc.5 | ||
Claudia P. Huntington, 54 Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5 | ||
Robert W. Lovelace, 43 Vice President | 1997 | Senior Vice President, Capital Research and Management Company; Chairman of the Board, Capital Research Company,5 Director, The Capital Group Companies, Inc.5 | ||
Susan M. Tolson, 44 Vice President | 1999 | Senior Vice President, Capital Research Company5 | ||
Chad L. Norton, 46 Secretary | 1994 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
David A. Pritchett, 40 Treasurer | 1999 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Steven I. Koszalka, 42 Assistant Secretary | 2003 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Karl C. Grauman, 38 Assistant Treasurer | 2006 | Vice President — Fund Business Management Group, Capital Research and Management Compa | ||
Sheryl F. Johnson, 38 Assistant Treasurer | 1997 | Vice President — Fund Business Management Group, Capital Research and Management Company |
1 | Trustees and officers of the series serve until their resignation, removal or retirement. |
2 | Capital Research and Management Company manages the American Funds, consisting of 29 funds, and Endowments, whose shareholders are limited to certain nonprofit organizations. |
3 | This includes all directorships (other than those in the American Funds) that are held by each trustee as a director of a public company or a registered investment company. |
4 | “Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the series’ investment adviser, Capital Research and Management Company, or affiliated entities (including the series’ principal underwriter). |
5 | Company affiliated with Capital Research and Management Company. |
Table of Contents
American Funds GVIT Bond Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
2 | Statement of Assets and Liabilities | |
2 | Statement of Operations | |
3 | Statements of Changes in Net Assets | |
4 | Financial Highlights | |
5 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-AGB (8/06)
Table of Contents
Shareholder
Expense Example | American Funds GVIT Bond Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, May 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period | Annualized Expense Ratio | ||||||||||||
American Funds GVIT Bond Fund | |||||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 999.90 | $ | 6.05 | (a) | 1.22% | (a) | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.75 | $ | 6.12 | (b) | 1.22% | (b) | ||||||
Class VII | Actual | $ | 1,000.00 | $ | 999.10 | $ | 10.46 | (a) | 2.11% | (a) | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,014.34 | $ | 10.59 | (b) | 2.11% | (b) |
1 | Represents the hypothetical 5% return before expenses. |
(a) | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
(b) | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT BOND FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments in Portfolio cost $5,152,967 | $ | 5,042,085 | ||
Receivable for capital shares issued | 170,113 | |||
Total Assets | 5,212,198 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 86 | |||
Accrued expenses and other payables: | ||||
Fund administration and transfer agent fees | 928 | |||
Master feeder service provider fee | 230 | |||
Distribution fees | 574 | |||
Administrative servicing fees | 564 | |||
Trustee fees | 67 | |||
Other | 2,048 | |||
Total Liabilities | 4,497 | |||
Net Assets | $ | 5,207,701 | ||
Represented by: | ||||
Capital | $ | 5,319,442 | ||
Accumulated net investment income (loss) | (759 | ) | ||
Accumulated net realized gains (losses) from investment | (100 | ) | ||
Net unrealized appreciation (depreciation) on investments | (110,882 | ) | ||
Net Assets | $ | 5,207,701 | ||
Net Assets: | ||||
Class II Shares | $ | 5,206,703 | ||
Class VII Shares | 998 | |||
Total | $ | 5,207,701 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 468,380 | |||
Class VII Shares | 90 | |||
Total | 468,470 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 11.12 | ||
Class VII Shares | $ | 11.12 | (a) |
For the period ended June 30, 2006 (Unaudited) (b)
Investment Income: | ||||
Dividend income | $ | 120,031 | ||
Total Income | 120,031 | |||
Expenses: | ||||
Fund administration and transfer agent fees | 970 | |||
Master feeder service provider fee | 734 | |||
Distribution fees Class II Shares | 733 | |||
Distribution fees Class VII Shares | 1 | |||
Administrative servicing fees Class II Shares | 733 | |||
Administrative servicing fees Class VII Shares | 1 | |||
Professional fees | 2,162 | |||
Printing fees | 469 | |||
Trustee fees | 74 | |||
Other | 660 | |||
Total expenses before waived expenses | 6,537 | |||
Expenses waived | (440 | ) | ||
Total Expenses | 6,097 | |||
Net Investment Income (Loss) | 113,934 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) | (100 | ) | ||
Net change in unrealized appreciation/depreciation on investments | (110,882 | ) | ||
Net realized/unrealized gains (losses) on investments | (110,982 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,952 | ||
* | Not subject to a front-end sales charge. |
(a) | Due to rounding, Net Assets divided by shares outstanding does not equal the NAV. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
2
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GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT BOND FUND
Statement of Changes in Net Assets
Period Ended June 30, 2006(a) | ||||
(Unaudited) | ||||
From Investment Activities: | ||||
Operations: | ||||
Net investment income (loss) | $ | 113,934 | ||
Net realized gains (losses) on investment transactions | (100 | ) | ||
Net change in unrealized appreciation/depreciation on investments | (110,882 | ) | ||
Change in net assets resulting from operations | 2,952 | |||
Distributions to Class II shareholders from: | ||||
Net investment income | (114,666 | ) | ||
Distributions to Class VII shareholders from: | ||||
Net investment income | (27 | ) | ||
Change in net assets from shareholder distributions | (114,693 | ) | ||
Change in net assets from capital transactions | 5,319,442 | |||
Change in net assets | 5,207,701 | |||
Net Assets: | ||||
Beginning of period | — | |||
End of period | $ | 5,207,701 | ||
Accumulated net investment income (loss) | $ | (759 | ) | |
CAPITAL TRANSACTIONS: | ||||
Class II Shares | ||||
Proceeds from shares issued | $ | 5,502,425 | ||
Dividends reinvested | 114,666 | |||
Cost of shares redeemed | (298,676 | ) | ||
5,318,415 | ||||
Class VII Shares | ||||
Proceeds from shares issued | 1,000 | |||
Dividends reinvested | 27 | |||
1,027 | ||||
Change in net assets from capital transactions | $ | 5,319,442 | ||
SHARE TRANSACTIONS: | ||||
Class II Shares | ||||
Issued | 484,161 | |||
Reinvested | 10,377 | |||
Redeemed | (26,158 | ) | ||
468,380 | ||||
Class VII Shares | ||||
Issued | 88 | |||
Reinvested | 2 | |||
90 | ||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
3
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GARTMORE VARIABLE INSURANCE TRUST
Selected Data for Each Share of Capital Outstanding
American Funds GVIT Bond Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimburse- ments) to Average Net Assets | Ratio of Net Investment Income (Loss) (Prior to Reimburse- ments) to Average Net Assets | Portfolio Turnover(a) | |||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b)(e) | $ | 11.45 | 0.42 | (0.43 | ) | (0.01 | ) | (0.32 | ) | (0.32 | ) | $ | 11.12 | (0.09% | )(c) | $ | 5,207 | 1.14% | (d) | 22.88% | (d) | 1.22% | (d) | 22.79% | (d) | 29.00% | ||||||||||||||
Class VII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b) | $ | 11.45 | 0.43 | (0.45 | ) | (0.02 | ) | (0.31 | ) | (0.31 | ) | $ | 11.12 | (0.18% | )(c) | $ | 1 | 2.11% | (d) | 22.42% | (d) | 2.11% | (d) | 22.42% | (d) | 29.00% |
(a) | Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(c) | Not annualized. |
(d) | Annualized. |
(e) | Net investment income (loss) is based on average shares outstanding during the period. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the American Funds GVIT Bond Fund (the “Fund”).
The Fund operates as a “feeder fund” which means that the Fund does not buy individual securities directly. Instead, the Fund invests all of its assets in another mutual fund, the American Bond Fund (the “Master Fund”), a series of the American Funds Insurance Series® (“American Funds”), which invests directly in individual securities. The Fund, therefore, has the same investment objective and limitations as the Master Fund in which the Fund invests and the same gross investment returns as the Master Fund.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
The net asset value (“NAV”) per share of each class of the Fund is calculated by taking the NAV of the Master Fund, subtracting the Fund’s liabilities attributable to the Fund, and dividing by the number of shares of that class that are outstanding. The Fund’s NAV is determined at the close of regular trading on the New York Stock Exchange (the “Exchange”) (usually 4 p.m. Eastern Time) (“Close of Trading”) on each day the Exchange is open for trading (“Business Day”). Each Fund may reject any order to buy Fund shares and may suspend the sale of Fund shares at any time.
The Master Fund calculates its NAV at the Close of Trading on each Business Day. Assets held by the Master Fund are valued primarily on the basis of market quotations. The Master Fund, however, has adopted procedures for making “fair value” determinations if market quotations are not readily available. For example, if events occur between the close of markets outside the United States and the close of regular trading on the New York Stock Exchange that, in the opinion of Capital Research and Management Company (“Capital Research”), the Master Fund’s investment adviser, materially affect the value of the portfolio securities of the Master Fund, the securities will be valued in accordance with the Master Fund’s fair value procedures. Use of these procedures is intended to result in more appropriate NAVs. In addition, such use will reduce, if not eliminate, potential arbitrage opportunities otherwise available to short-term investors in the Master Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(b) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(c) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the NAV of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(d) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$5,152,967 | $— | $(110,882) | $(110,882) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(e) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Master Fund’s Investment Advisory Agreement, Capital Research manages the investment of the assets and supervises the daily business affairs of the Master Fund. Gartmore SA Capital Trust (“GSA”) provides non-investment master-feeder operational support services to the Fund. Under the terms of the Trust’s Master-Feeder Services Agreement with GSA on behalf of the Fund, the Fund pays GSA a fee of 0.25% based on the Fund’s average daily net assets. GSA has entered into a contractual agreement with the Trust under which GSA will waive 0.15% of the fees GSA receives for the providing the Fund with non-investment master-feeder operational support services until May 1, 2007.
Under the terms of a Fund Administration and Transfer Agency Agreement, GSA provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all Funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Fund for expenses associated with the distribution of the shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares and Class VII shares of the Fund at an annual rate not to exceed 0.25% of Class II shares and 0.40% of Class VII shares.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the period ended June 30, 2006, Nationwide Financial Services received $782 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the period ended June 30, 2006, (excluding short-term securities) the Master Fund had purchases of $886,794 and sales of $608,522.
5. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging markets instruments that are subject to certain additional credit and market risks. The yields of emerging markets debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of the Gartmore | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Financial Statements
for the American Funds Master Fund
American Funds Insurance Series Bond Fund
Investment portfolio, June 30, 2006
unaudited
Bonds & notes - 77.79% | Principal amount | Market value | ||||
(000) | (000) | |||||
General Motors Nova Scotia Finance Co. 6.85% 2008 | $ | 3,500 | $ | 3,334 | ||
Residential Capital Corp. 6.168% 2009 (1) | 2,700 | 2,695 | ||||
Residential Capital Corp. 6.375% 2010 | 3,500 | 3,455 | ||||
General Motors Acceptance Corp. 7.75% 2010 | 530 | 528 | ||||
Residential Capital Corp. 6.00% 2011 | 6,000 | 5,820 | ||||
General Motors Corp. 7.20% 2011 | 4,540 | 4,041 | ||||
General Motors Acceptance Corp. 7.25% 2011 | 12,530 | 12,160 | ||||
General Motors Acceptance Corp. 6.875% 2012 | 1,000 | 943 | ||||
General Motors Acceptance Corp. 7.00% 2012 | 3,700 | 3,516 | ||||
Residential Capital Corp. 6.50% 2013 | 3,000 | 2,948 | ||||
General Motors Corp. 7.125% 2013 | 7,710 | 6,476 | ||||
General Motors Corp. 7.25% 2013 | € | 1,000 | 1,060 | |||
General Motors Acceptance Corp. 7.431% 2014 (1) | $ | 5,000 | 4,853 | |||
General Motors Corp. 7.70% 2016 | 9,585 | 7,908 | ||||
General Motors Corp. 8.80% 2021 | 2,500 | 2,137 | ||||
General Motors Corp. 9.40% 2021 | 1,000 | 872 | ||||
General Motors Corp. 8.375% 2033 | 1,000 | 805 | ||||
Ford Motor Credit Co. 4.875% 2007 | € | 1,350 | 1,714 | |||
Ford Motor Credit Co. 7.375% 2009 | $ | 14,625 | 13,531 | |||
Ford Motor Credit Co. 6.638% 2010 (1) | 3,670 | 3,346 | ||||
Ford Motor Credit Co. 7.875% 2010 | 7,625 | 7,040 | ||||
Ford Motor Credit Co. 9.75% 2010 (2) | 1,750 | 1,707 | ||||
DaimlerChrysler North America Holding Corp. 5.74% 2009 (1) | 5,000 | 5,007 | ||||
DaimlerChrysler North America Holding Corp. 7.20% 2009 | 3,000 | 3,097 | ||||
DaimlerChrysler North America Holding Corp. 4.875% 2010 | 2,500 | 2,392 | ||||
DaimlerChrysler North America Holding Corp. 8.00% 2010 | 6,325 | 6,721 | ||||
DaimlerChrysler North America Holding Corp. 7.75% 2011 | 3,250 | 3,434 | ||||
Royal Caribbean Cruises Ltd. 7.00% 2007 | 1,175 | 1,192 | ||||
Royal Caribbean Cruises Ltd. 8.00% 2010 | 1,875 | 1,970 | ||||
Royal Caribbean Cruises Ltd. 8.75% 2011 | 2,675 | 2,889 | ||||
Royal Caribbean Cruises Ltd. 7.00% 2013 | 5,615 | 5,592 | ||||
Royal Caribbean Cruises Ltd. 7.25% 2016 | 2,000 | 1,991 | ||||
News America Inc. 4.75% 2010 | 2,000 | 1,928 | ||||
News America Holdings Inc. 9.25% 2013 | 2,500 | 2,898 | ||||
News America Holding Inc. 8.25% 2018 | 3,885 | 4,458 | ||||
News America Inc. 6.40% 2035 | 3,000 | 2,783 | ||||
News America Inc. 6.75% 2038 | 1,000 | 1,018 | ||||
Clear Channel Communications, Inc. 4.625% 2008 | 875 | 857 | ||||
Clear Channel Communications, Inc. 6.625% 2008 | 750 | 756 | ||||
Chancellor Media Corp. of Los Angeles 8.00% 2008 | 4,250 | 4,421 | ||||
Clear Channel Communications, Inc. 5.75% 2013 | 1,575 | 1,480 | ||||
Clear Channel Communications, Inc. 5.50% 2014 | 5,425 | 4,919 | ||||
J.C. Penney Co., Inc. 8.00% 2010 | 7,380 | 7,869 | ||||
J.C. Penney Co., Inc. 9.00% 2012 | 2,485 | 2,852 | ||||
J.C. Penney Co., Inc. 7.65% 2016 | 1,000 | 1,088 | ||||
MGM MIRAGE 6.00% 2009 | 4,750 | 4,643 | ||||
MGM MIRAGE 6.75% 2012 | 4,000 | 3,870 | ||||
MGM MIRAGE 6.75% 2013 (2) | 1,250 | 1,198 | ||||
MGM MIRAGE 5.875% 2014 | 1,700 | 1,532 | ||||
Comcast Cable Communications, Inc. 8.375% 2007 | 750 | 766 | ||||
Tele-Communications, Inc. 9.80% 2012 | 2,000 | 2,310 | ||||
Comcast Corp. 5.85% 2015 | 5,825 | 5,620 |
Table of Contents
Comcast Corp. 6.50% 2015 | 1,750 | 1,767 | |||
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 11.75% 2011 | 1,225 | 766 | |||
Charter Communications Holdings, LLC and Charter Communications Holdings Capital Corp. 13.50% 2011 | 425 | 278 | |||
Charter Communications Operating, LLC and Charter Communications Operating Capital Corp. 8.00% 2012 (2) | 4,000 | 4,000 | |||
Charter Communications, Series B, 7.755% 2013 (1) | 1,175 | 1,179 | |||
CCO Holdings, LLC and CCO Holdings Capital Corp. 8.75% 2013 | 2,425 | 2,377 | |||
Delphi Automotive Systems Corp. 6.50% 2009 (4) | 7,500 | 6,300 | |||
Delphi Corp. 6.50% 2013 (4) | 480 | 377 | |||
Delphi Automotive Systems Corp. 6.55% 2006 (4) | 500 | 417 | |||
Delphi Automotive Systems Corp. 7.125% 2029 (4) | 1,750 | 1,374 | |||
Harrah’s Operating Co., Inc. 5.50% 2010 | 4,500 | 4,394 | |||
Harrah’s Operating Co., Inc. 5.625% 2015 | 4,250 | 3,938 | |||
Cox Communications, Inc. 5.869% 2007 (1) | 1,750 | 1,759 | |||
Cox Communications, Inc. 7.875% 2009 | 1,500 | 1,577 | |||
Cox Communications, Inc. 4.625% 2010 | 1,750 | 1,671 | |||
Cox Communications, Inc. 5.45% 2014 | 3,500 | 3,241 | |||
Mohegan Tribal Gaming Authority 6.375% 2009 | 5,250 | 5,138 | |||
Mohegan Tribal Gaming Authority 7.125% 2014 | 1,750 | 1,702 | |||
Liberty Media Corp. 7.75% 2009 | 1,750 | 1,812 | |||
Liberty Media Corp. 7.875% 2009 | 2,200 | 2,289 | |||
Liberty Media Corp. 8.25% 2030 | 2,375 | 2,285 | |||
D.R. Horton, Inc. 8.00% 2009 | 2,700 | 2,809 | |||
D.R. Horton, Inc. 7.875% 2011 | 1,100 | 1,156 | |||
Schuler Homes, Inc. 10.50% 2011 | 250 | 263 | |||
D.R. Horton, Inc. 6.875% 2013 | 600 | 599 | |||
D.R. Horton, Inc. 6.50% 2016 | 855 | 824 | |||
Wynn Las Vegas, LLC and Wynn Las Vegas Capital Corp. 6.625% 2014 | 5,700 | 5,401 | |||
Radio One, Inc., Series B, 8.875% 2011 | 4,600 | 4,790 | |||
Radio One, Inc. 6.375% 2013 | 525 | 483 | |||
Vidéotron Ltée 6.875% 2014 | 4,125 | 3,929 | |||
Vidéotron Ltée 6.375% 2015 | 1,000 | 918 | |||
Visteon Corp. 8.25% 2010 | 3,200 | 3,008 | |||
Visteon Corp. 7.00% 2014 | 2,000 | 1,643 | |||
NTL Cable PLC 8.75% 2014 | 1,825 | 1,820 | |||
NTL Cable PLC 8.75% 2014 | € | 1,000 | 1,305 | ||
NTL Cable PLC 9.75% 2014 | £ | 700 | 1,296 | ||
Starwood Hotels & Resorts Worldwide, Inc. 7.375% 2007 | $ | 2,730 | 2,761 | ||
Starwood Hotels & Resorts Worldwide, Inc. 7.875% 2012 | 1,575 | 1,652 | |||
K. Hovnanian Enterprises, Inc. 10.50% 2007 | 1,000 | 1,051 | |||
K. Hovnanian Enterprises, Inc. 6.00% 2010 | 3,225 | 3,040 | |||
K. Hovnanian Enterprises, Inc. 7.50% 2016 | 225 | 210 | |||
Cinemark USA, Inc. 9.00% 2013 | 4,000 | 4,220 | |||
Hilton Hotels Corp. 7.625% 2008 | 695 | 713 | |||
Hilton Hotels Corp. 7.20% 2009 | 825 | 843 | |||
Hilton Hotels Corp. 8.25% 2011 | 2,522 | 2,656 | |||
Dex Media, Inc., Series B, 0%/9.00% 2013 (3) | 1,400 | 1,186 | |||
Dex Media, Inc., Series B, 0%/9.00% 2013 (3) | 1,250 | 1,059 | |||
R.H. Donnelley Corp., Series A-1, 6.875% 2013 (2) | 425 | 393 | |||
Dex Media, Inc., Series B, 8.00% 2013 | 1,250 | 1,263 | |||
R.H. Donnelley Corp., Series A-3, 8.875% 2016 (2) | 200 | 203 | |||
Grupo Posadas, SA de CV 8.75% 2011 (2) | 4,000 | 4,020 | |||
AOL Time Warner Inc. 6.875% 2012 | 1,250 | 1,293 | |||
AOL Time Warner Inc. 7.625% 2031 | 2,250 | 2,430 | |||
MDC Holdings, Inc. 5.50% 2013 | 3,885 | 3,551 | |||
Thomson Corp. 6.20% 2012 | 1,035 | 1,047 | |||
Thomson Corp. 5.50% 2035 | 2,680 | 2,324 | |||
Marriott International, Inc., Series F, 4.625% 2012 | 3,350 | 3,094 | |||
Centex Corp. 5.25% 2015 | 650 | 585 | |||
Centex Corp. 6.50% 2016 | 2,500 | 2,434 | |||
Kabel Deutschland GmbH 10.625% 2014 (2) | 2,625 | 2,782 | |||
Toll Brothers, Inc. 4.95% 2014 | 580 | 508 | |||
Toll Brothers, Inc. 5.15% 2015 | 2,600 | 2,273 | |||
CSC Holdings, Inc., Series B, 8.125% 2009 | 750 | 767 | |||
CSC Holdings, Inc., Series B, 7.625% 2011 | 1,000 | 1,005 |
Table of Contents
Cablevision Systems Corp., Series B, 8.00% 2012 | 1,000 | 991 | |||
American Media Operations, Inc. 8.875% 2011 | 3,030 | 2,697 | |||
Telenet Communications NV 9.00% 2013 | € | 747 | 1,050 | ||
Telenet Group Holding NV 0%/11.50% 2014 (2) (3) | $ | 1,635 | 1,394 | ||
American Honda Finance Corp. 5.125% 2010 (2) | 2,500 | 2,441 | |||
Young Broadcasting Inc. 10.00% 2011 | 2,716 | 2,431 | |||
DIRECTV Holdings LLC and DIRECTV Financing Co., Inc. 8.375% 2013 | 2,275 | 2,394 | |||
Viacom Inc. 6.25% 2016 (2) | 2,040 | 1,984 | |||
Viacom Inc. 6.875% 2036 (2) | 260 | 252 | |||
Dillard’s, Inc. 6.625% 2008 | 700 | 705 | |||
Dillard Department Stores, Inc. 9.125% 2011 | 1,400 | 1,515 | |||
Ryland Group, Inc. 5.375% 2012 | 2,400 | 2,219 | |||
Staples, Inc. 7.375% 2012 | 2,000 | 2,138 | |||
Tenneco Automotive Inc. 8.625% 2014 | 2,000 | 2,005 | |||
Neiman Marcus Group, Inc. 9.00% 2015 (2) (5) | 1,900 | 1,995 | |||
Reader’s Digest Assn., Inc. 6.50% 2011 | 2,000 | 1,940 | |||
Seminole Tribe of Florida 5.798% 2013 (2) | 2,000 | 1,940 | |||
Standard Pacific Corp. 5.125% 2009 | 2,000 | 1,885 | |||
KB Home 6.25% 2015 | 2,000 | 1,788 | |||
Hyatt Equities, LLC 6.875% 2007 (2) | 1,500 | 1,509 | |||
Pulte Homes, Inc. 8.125% 2011 | 1,395 | 1,478 | |||
TRW Automotive Acquisition Corp. 9.375% 2013 | 1,375 | 1,468 | |||
Adelphia Communications Corp. 10.25% 2006 (4) | 1,000 | 540 | |||
Adelphia Communications Corp. 10.25% 2011 (4) | 1,450 | 841 | |||
CanWest Media Inc., Series B, 8.00% 2012 | 1,358 | 1,351 | |||
LBI Media, Inc. 10.125% 2012 | 1,250 | 1,337 | |||
Quebecor Media Inc. 7.75% 2016 (2) | 1,325 | 1,305 | |||
William Lyon Homes, Inc. 7.625% 2012 | 1,500 | 1,252 | |||
Carnival Corp. 3.75% 2007 | 500 | 486 | |||
Carnival Corp. 6.15% 2008 | 750 | 754 | |||
Viacom Inc. 5.625% 2007 | 1,200 | 1,199 | |||
YUM! Brands, Inc. 7.70% 2012 | 1,000 | 1,077 | |||
Regal Cinemas Corp., Series B, 9.375% 2012 (6) | 1,000 | 1,061 | |||
Six Flags, Inc. 8.875% 2010 | 1,000 | 955 | |||
Omnicom Group Inc. 5.90% 2016 | 995 | 955 | |||
Gray Communications Systems, Inc. 9.25% 2011 | 875 | 914 | |||
Boyd Gaming Corp. 7.75% 2012 | 750 | 760 | |||
AMC Entertainment Inc. 8.00% 2014 | 675 | 622 | |||
Toys “R” Us, Inc. 7.875% 2013 | 525 | 416 | |||
British Sky Broadcasting Group PLC 8.20% 2009 | 375 | 398 | |||
RBS-Zero Editora Jornalística SA 11.00% 2010 (2) | 189 | 195 | |||
U.S. Treasury 7.00% 2006 | 4,000 | 4,002 | |||
U.S. Treasury 3.25% 2007 | 7,000 | 6,847 | |||
U.S. Treasury 6.25% 2007 | 33,455 | 33,638 | |||
U.S. Treasury 3.625% 2009 | 55,250 | 52,945 | |||
U.S. Treasury 3.875% 2009 | 7,500 | 7,250 | |||
U.S. Treasury 6.00% 2009 | 7,315 | 7,498 | |||
U.S. Treasury 5.00% 2011 | 45,490 | 45,362 | |||
U.S. Treasury 5.00% 2011 | 2,000 | 1,995 | |||
U.S. Treasury 10.375% 2012 | 1,000 | 1,068 | |||
U.S. Treasury 4.25% 2013 | 33,250 | 31,551 | |||
U.S. Treasury 4.00% 2014 | 22,970 | 21,341 | |||
U.S. Treasury 4.50% 2036 | 50,615 | 45,396 | |||
Freddie Mac 2.875% 2006 | 37,275 | 36,829 | |||
Freddie Mac 5.50% 2011 | 9,000 | 9,015 | |||
Fannie Mae 2.625% 2006 | 6,225 | 6,159 | |||
Fannie Mae 5.25% 2007 | 12,750 | 12,698 | |||
Fannie Mae 1.75% 2008 | ¥ | 640,000 | 5,693 | ||
United States Agency for International Development, Republic of Egypt 4.45% 2015 | $ | 5,000 | 4,637 | ||
Federal Home Loan Bank 5.625% 2016 | 2,000 | 1,977 | |||
Small Business Administration, Series 2001-20J, 5.76% 2021 (7) | 538 | 540 | |||
AIG SunAmerica Global Financing XII 5.30% 2007 (2) | 4,000 | 3,985 | |||
AIG SunAmerica Global Financing VII 5.85% 2008 (2) | 1,000 | 1,004 | |||
International Lease Finance Corp., Series O, 4.55% 2009 | 7,000 | 6,750 | |||
American General Finance Corp. 5.85% 2013 | 2,500 | 2,482 | |||
American International Group, Inc. 6.25% 2036 (2) | 2,000 | 1,923 | |||
ILFC E-Capital Trust I 5.90% 2065 (1) (2) | 6,000 | 5,854 |
Table of Contents
ILFC E-Capital Trust II 6.25% 2065 (1) (2) | 4,875 | 4,614 | |||
Sumitomo Mitsui Banking Corp. 4.375% 2014 (1) | € | 1,645 | 2,110 | ||
Sumitomo Mitsui Banking Corp. 5.625% (undated) (1) (2) | $ | 18,920 | 17,676 | ||
Washington Mutual, Inc. 5.737% 2012 (1) | 6,850 | 6,836 | |||
Providian Financial Corp., Series A, 9.525% 2027 (2) | 750 | 797 | |||
Washington Mutual Preferred Funding I Ltd. 6.534% (undated) (1) (2) | 11,300 | 10,864 | |||
Santander Issuances, SA Unipersonal 5.805% 2016 (2) | 7,300 | 7,247 | |||
Abbey National PLC 6.70% (undated) (1) | 5,600 | 5,678 | |||
Abbey National PLC 7.35% (undated) (1) | 3,000 | 3,018 | |||
J.P. Morgan Chase & Co. 5.75% 2013 | 750 | 743 | |||
J.P. Morgan Chase & Co. 4.75% 2015 | 3,000 | 2,754 | |||
J.P. Morgan Chase & Co. 4.891% 2015 | 5,300 | 5,108 | |||
Chase Capital II, Global Floating Rate Capital Securities, Series B, 5.649% 2027 (1) | 5,000 | 4,821 | |||
CIT Group Inc. 3.65% 2007 | 3,585 | 3,487 | |||
CIT Group Inc. 5.75% 2007 | 1,500 | 1,500 | |||
CIT Group Inc. 6.875% 2009 | 2,500 | 2,578 | |||
CIT Group Inc. 7.75% 2012 | 750 | 814 | |||
CIT Group Inc. 5.40% 2013 | 4,000 | 3,875 | |||
HBOS PLC 5.375% (undated) (1) (2) | 2,750 | 2,608 | |||
HBOS PLC, Series B, 5.92% (undated) (1) (2) | 9,200 | 8,490 | |||
Bank of Scotland 7.00% (undated) (1) (2) | 480 | 486 | |||
Mizuho Capital Investment (USD) 1 Ltd. and Mizuho Capital Investment (EUR) 1 Ltd. 6.686% | 11,476 | 10,909 | |||
Resona Bank, Ltd. 3.75% 2015 (1) | € | 1,015 | 1,266 | ||
Resona Bank, Ltd. 4.125% (undated) (1) | 970 | 1,180 | |||
Resona Bank, Ltd. 5.85% (undated) (1) (2) | $ | 6,465 | 6,026 | ||
Household Finance Corp. 4.125% 2009 | 2,000 | 1,905 | |||
HSBC Finance Corp. 4.625% 2010 | 1,500 | 1,439 | |||
Household Finance Corp. 6.375% 2011 | 1,000 | 1,023 | |||
HSBC Finance Capital Trust IX 5.911% 2035 (1) | 4,000 | 3,824 | |||
Lazard Group LLC 7.125% 2015 | 6,840 | 6,924 | |||
ZFS Finance (USA) Trust I 6.15% 2065 (1) (2) | 5,000 | 4,795 | |||
ZFS Finance (USA) Trust II 6.45% 2065 (2) | 2,000 | 1,833 | |||
Rouse Co. 3.625% 2009 | 1,140 | 1,065 | |||
Rouse Co. 7.20% 2012 | 3,860 | 3,890 | |||
Rouse Co. (TRC) 6.75% 2013 (2) | 1,500 | 1,468 | |||
iStar Financial, Inc. 7.00% 2008 | 950 | 965 | |||
iStar Financial, Inc. 8.75% 2008 | 309 | 325 | |||
iStar Financial, Inc. 5.375% 2010 | 3,500 | 3,420 | |||
iStar Financial, Inc. 6.00% 2010 | 750 | 748 | |||
iStar Financial, Inc., Series B, 5.125% 2011 | 1,000 | 958 | |||
Citigroup Inc. 4.25% 2009 | 3,000 | 2,889 | |||
Citigroup Inc. 4.125% 2010 | 3,000 | 2,855 | |||
Host Marriott, LP, Series M, 7.00% 2012 | 4,050 | 4,035 | |||
Host Marriott, LP, Series K, 7.125% 2013 | 1,500 | 1,502 | |||
Nationwide Life Insurance Co. 5.35% 2007 (2) | 1,000 | 998 | |||
North Front Pass Through Trust 5.81% 2024 (1) (2) | 3,125 | 2,976 | |||
Nationwide Mutual Insurance Co. 7.875% 2033 (2) | 750 | 834 | |||
Berkshire Hathaway Finance Corp. 4.125% 2010 | 5,000 | 4,761 | |||
World Savings Bank, FSB, Bank Notes, Series 2008-FXR, 4.125% 2008 | 4,750 | 4,634 | |||
ProLogis Trust 7.05% 2006 | 250 | 250 | |||
ProLogis 5.50% 2012 | 2,500 | 2,437 | |||
ProLogis 5.50% 2013 | 2,000 | 1,944 | |||
Lincoln National Corp. 7.00% 2066 (1) | 4,650 | 4,622 | |||
New York Life Global Funding 3.875% 2009 (2) | 2,250 | 2,157 | |||
New York Life Global Funding 4.625% 2010 (2) | 2,500 | 2,405 | |||
HVB Funding Trust I 8.741% 2031 (2) | 1,245 | 1,470 | |||
HVB Funding Trust III 9.00% 2031 (2) | 2,500 | 3,029 | |||
CNA Financial Corp. 6.75% 2006 | 230 | 231 | |||
CNA Financial Corp. 6.60% 2008 | 1,736 | 1,764 | |||
CNA Financial Corp. 5.85% 2014 | 2,575 | 2,433 | |||
Downey Financial Corp. 6.50% 2014 | 4,500 | 4,424 | |||
Bank of America Corp. 4.375% 2010 | 3,000 | 2,853 | |||
MBNA Corp., Series F, 6.125% 2013 | 1,500 | 1,524 | |||
Development Bank of Singapore Ltd. 7.875% 2009 (2) | 4,000 | 4,214 | |||
Met Life Global Funding I 2.60% 2008 (2) | 4,450 | 4,192 | |||
PRICOA Global Funding I 4.20% 2010 (2) | 2,750 | 2,614 |
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Prudential Holdings, LLC, Series C, 8.695% 2023 (2) (7) | 1,250 | 1,488 | |||
Capital One Financial Corp. 4.738% 2007 | 3,000 | 2,972 | |||
Capital One Financial Corp. 8.75% 2007 | 800 | 813 | |||
Capital One Capital I 6.699% 2027 (1) (2) | 250 | 252 | |||
XL Capital Ltd. 5.25% 2014 | 1,130 | 1,044 | |||
Twin Reefs Asset Trust (XLFA), Series B, 6.17% (undated) (1) (2) | 2,500 | 2,500 | |||
Simon Property Group, LP 4.875% 2010 | 1,000 | 965 | |||
Simon Property Group, LP 5.375% 2011 | 2,500 | 2,440 | |||
USA Education, Inc. 5.625% 2007 | 3,250 | 3,247 | |||
SocGen Real Estate Co. LLC, Series A, 7.64% (undated) (1) (2) | 3,000 | 3,064 | |||
ERP Operating LP 4.75% 2009 | 1,000 | 974 | |||
ERP Operating LP 6.625% 2012 | 2,000 | 2,072 | |||
ACE INA Holdings Inc. 5.875% 2014 | 1,080 | 1,045 | |||
ACE INA Holdings Inc. 6.70% 2036 | 2,050 | 1,972 | |||
E*TRADE Financial Corp. 7.375% 2013 | 1,900 | 1,909 | |||
E*TRADE Financial Corp. 7.875% 2015 | 1,050 | 1,082 | |||
US Bank National Assn. 4.40% 2008 | 3,000 | 2,936 | |||
Hospitality Properties Trust 6.75% 2013 | 1,500 | 1,537 | |||
Hospitality Properties Trust 6.30% 2016 | 1,300 | 1,283 | |||
Kimco Realty Corp. 6.00% 2012 | 500 | 502 | |||
Kimco Realty Corp., Series C, 4.82% 2014 | 2,500 | 2,292 | |||
Kazkommerts International BV 7.00% 2009 (2) | 500 | 496 | |||
Kazkommerts International BV 7.875% 2014 (2) | 800 | 790 | |||
Kazkommerts International BV 8.00% 2015 (2) | 1,250 | 1,219 | |||
United Dominion Realty Trust, Inc., Series E, 4.50% 2008 | 500 | 489 | |||
United Dominion Realty Trust, Inc. 6.50% 2009 | 1,000 | 1,030 | |||
United Dominion Realty Trust, Inc. 5.00% 2012 | 1,000 | 947 | |||
Countrywide Home Loans, Inc., Series M, 4.125% 2009 | 2,500 | 2,379 | |||
EOP Operating LP 8.10% 2010 | 500 | 538 | |||
EOP Operating LP 6.75% 2012 | 750 | 775 | |||
EOP Operating LP 4.75% 2014 | 1,000 | 908 | |||
Protective Life Insurance Co., Series 2005-C, 4.85% 2010 | 2,250 | 2,192 | |||
Shinsei Bank, Ltd. 3.75% 2016 | € | 1,030 | 1,266 | ||
Shinsei Bank, Ltd. 3.75% 2016 (1) | 675 | 830 | |||
Liberty Mutual Group Inc. 6.50% 2035 (2) | $ | 2,380 | 2,084 | ||
Allstate Financial Global Funding LLC 5.25% 2007 (2) | 750 | 749 | |||
Allstate Financial Global Funding LLC 4.25% 2008 (2) | 1,250 | 1,215 | |||
Rodamco Europe Finace BV 3.75% 2012 | € | 1,600 | 1,946 | ||
WT Finance (Australia) Pty Ltd., Westfield Europe Finance PLC, and WEA Finance LLC 3.625% 2012 | 1,595 | 1,935 | |||
Plum Creek Timberlands, LP 5.875% 2015 | $ | 2,000 | 1,914 | ||
Developers Diversified Realty Corp. 3.875% 2009 | 1,000 | 952 | |||
Developers Diversified Realty Corp. 4.625% 2010 | 1,000 | 953 | |||
John Hancock Global Funding II, Series 2004-A, 3.50% 2009 (2) | 2,000 | 1,903 | |||
Marsh & McLennan Companies, Inc. 5.75% 2015 | 1,800 | 1,702 | |||
Zions Bancorporation 5.50% 2015 | 740 | 707 | |||
Zions Bancorporation 6.00% 2015 | 1,000 | 993 | |||
UnumProvident Finance Co. PLC 6.85% 2015 (2) | 1,500 | 1,477 | |||
City National Corp. 5.125% 2013 | 1,500 | 1,434 | |||
Banco Santander-Chile 5.375% 2014 (2) | 1,500 | 1,429 | |||
TuranAlem Finance BV 7.75% 2013 (2) | 1,000 | 976 | |||
TuranAlem Finance BV 8.50% 2015 (2) | 375 | 370 | |||
First Industrial, LP 6.875% 2012 | 1,250 | 1,288 | |||
ReliaStar Financial Corp. 8.00% 2006 | 250 | 252 | |||
ING Security Life Institutional Funding 2.70% 2007 (2) | 1,000 | 980 | |||
Chevy Chase Bank, FSB 6.875% 2013 | 1,000 | 1,005 | |||
Chohung Bank 4.50% 2014 (1) | 1,030 | 971 | |||
Assurant, Inc. 5.625% 2014 | 1,000 | 961 | |||
Monumental Global Funding Trust II, Series 2002-A, 5.20% 2007 (2) | 750 | 748 | |||
Skandinaviska Enskilda Banken AB 4.958% (undated) (1) (2) | 750 | 670 | |||
Bank of Ireland 6.107% (undated) (1) (2) | 600 | 560 | |||
BCI U.S. Funding Trust I 8.01% noncumulative preferred (undated) (1) (2) | 500 | 519 | |||
Advanta Capital Trust I, Series B, 8.99% 2026 | 500 | 506 | |||
Comerica, Inc., Imperial Capital Trust I, Imperial Bancorp, Series B, 9.98% 2026 | 350 | 380 | |||
BankUnited Capital Trust, BankUnited Financial Corp. 10.25% 2026 | 250 | 271 | |||
National Westminster Bank PLC 7.75% (undated) (1) | 250 | 256 | |||
Fannie Mae, Series 2000-T5B, 7.30% 2010 | 6,500 | 6,907 |
Table of Contents
Fannie Mae, Series 2001-T11, Class B, 5.503% 2011 | 5,000 | 4,983 | ||
Fannie Mae, Series 2001-T6B, 6.088% 2011 | 6,750 | 6,885 | ||
Fannie Mae 10.00% 2018 | 15 | 17 | ||
Fannie Mae 6.00% 2021 | 910 | 913 | ||
Fannie Mae, Series 2001-4, Class GA, 10.269% 2025 (1) | 183 | 201 | ||
Fannie Mae 7.00% 2026 | 68 | 70 | ||
Fannie Mae, Series 2002-W3, Class A-5, 7.50% 2028 | 225 | 231 | ||
Fannie Mae 7.50% 2031 | 36 | 37 | ||
Fannie Mae, Series 2001-20, Class C, 12.009% 2031 (1) | 120 | 133 | ||
Fannie Mae 5.00% 2035 | 3,301 | 3,087 | ||
Fannie Mae 5.50% 2035 | 1,663 | 1,602 | ||
Fannie Mae 5.50% 2036 | 18,930 | 18,176 | ||
Fannie Mae 5.50% 2036 | 4,757 | 4,568 | ||
Fannie Mae 6.50% 2036 | 21 | 21 | ||
Fannie Mae, Series 2001-T10, Class A-1, 7.00% 2041 | 164 | 167 | ||
Fannie Mae, Series 2001-50, Class BA, 7.00% 2041 | 148 | 151 | ||
Fannie Mae, Series 2002-W1, Class 2A, 7.50% 2042 | 225 | 230 | ||
Countrywide Alternative Loan Trust, Series 2005-J8, Class 2-A-1, 5.00% 2020 | 5,780 | 5,515 | ||
Countrywide Alternative Loan Trust, Series 2005-62, Class 2-A-1, 5.011% 2035 (1) | 2,960 | 2,962 | ||
Countrywide Alternative Loan Trust, Series 2005-40CB, Class A-1, 5.50% 2035 | 2,740 | 2,617 | ||
Countrywide Alternative Loan Trust, Series 2005-46CB, Class A-8, 5.50% 2035 | 2,580 | 2,547 | ||
Countrywide Alternative Loan Trust, Series 2005-64CB, Class 1-A-7, 5.50% 2035 | 2,586 | 2,540 | ||
Countrywide Alternative Loan Trust, Series 2005-21CB, Class A-9, 5.50% 2035 | 2,089 | 2,063 | ||
Countrywide Alternative Loan Trust, Series 2005-21CB, Class A-17, 6.00% 2035 | 4,163 | 4,101 | ||
Countrywide Alternative Loan Trust, Series 2004-36CB, Class 1-A-1, 6.00% 2035 | 3,804 | 3,785 | ||
Countrywide Alternative Loan Trust, Series 2006-6CB, Class 1-A-1, 5.50% 2036 | 3,161 | 3,087 | ||
Countrywide Alternative Loan Trust, Series 2006-16CB, Class A-2, 6.00% 2036 | 2,897 | 2,867 | ||
Freddie Mac 4.00% 2015 | 2,383 | 2,209 | ||
Freddie Mac 5.00% 2035 | 6,113 | 5,708 | ||
Freddie Mac 5.00% 2035 | 6,105 | 5,701 | ||
Freddie Mac 5.50% 2035 | 3,027 | 2,907 | ||
Freddie Mac 5.50% 2035 | 3,025 | 2,905 | ||
Freddie Mac, Series 3061, Class PN, 5.50% 2035 | 2,157 | 2,120 | ||
Freddie Mac, Series 3146, Class PO, principal only, 0% 2036 | 3,481 | 2,354 | ||
Freddie Mac, Series 3156, Class PO, principal only, 0% 2036 | 2,993 | 2,094 | ||
Government National Mortgage Assn. 6.00% 2036 | 19,000 | 18,800 | ||
CS First Boston Mortgage Securities Corp., Series 2001-CK6, Class A-3, 6.387% 2036 | 3,000 | 3,074 | ||
CS First Boston Mortgage Securities Corp., Series 2004-C5, Class A-1A, 3.883% 2037 | 1,719 | 1,671 | ||
CS First Boston Mortgage Securities Corp., Series 2005-C6, Class A-3, 5.23% 2040 | 7,000 | 6,731 | ||
CS First Boston Mortgage Securities Corp., Series 1998-C1, Class A-1B, 6.48% 2040 | 1,170 | 1,184 | ||
Wachovia Bank Commercial Mortgage Trust, Series 2002-C1, Class A-2, 5.681% 2034 | 2,500 | 2,497 | ||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-2, 4.782% 2042 | 4,000 | 3,878 | ||
Wachovia Bank Commercial Mortgage Trust, Series 2005-C17, Class A-4, 5.083% 2042 | 3,250 | 3,065 | ||
Crown Castle Towers LLC, Series 2005-1, Class A-FX, 4.643% 2035 (2) | 3,000 | 2,875 | ||
Crown Castle Towers LLC, Series 2005-1, Class D, 5.612% 2035 (2) | 6,300 | 6,138 | ||
Bear Stearns ALT-A Trust, Series 2006-2, Class II-4-A-1, 5.982% 2036 (1) | 8,162 | 8,117 | ||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2003-LN1, Class H, 5.557% 2037 (2) | 2,000 | 1,934 | ||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP4, Class A-2, 4.79% 2042 | 2,540 | 2,450 | ||
J.P. Morgan Chase Commercial Mortgage Securities Corp., Series 2005-LDP1, Class A-2, 4.625% 2046 | 3,500 | 3,382 | ||
Bear Stearns Commercial Mortgage Securities Inc., Series 2000-WF2, Class A-2, 7.32% 2032 | 1,520 | 1,601 | ||
Bear Stearns Commercial Mortgage Securities Inc., Series 2002-PBW1, Class A-1, 3.97% 2035 | 2,131 | 2,056 | ||
Bear Stearns Commercial Mortgage Securities Inc., Series 2001-TOP2, Class A-2, 6.48% 2035 | 750 | 771 | ||
Bear Stearns Commercial Mortgage Securities Inc., Series 2005-PWR9, Class A-2, 4.735% 2042 | 3,000 | 2,893 | ||
WaMu Mortgage Pass-Through Certificates Trust, Series 2003-AR5, Class A-7, 4.208% 2033 (1) | 496 | 483 | ||
WaMu Mortgage Pass-Through Certificates Trust, Series 2006-AR2, Class 2-A1, 5.844% 2037 (1) | 3,894 | 3,818 | ||
WaMu Mortgage Pass-Through Certificates Trust, Series 2005-AR15, Class A-1-A, 5.583% 2045 (1) | 2,789 | 2,798 | ||
Tower Ventures, LLC, Series 2006-1, Class C, 5.707% 2036 (2) | 500 | 491 | ||
Tower Ventures, LLC, Series 2006-1, Class D, 6.052% 2036 (2) | 6,000 | 5,948 | ||
First Horizon Alternative Mortgage Securities Trust, Series 2005-FA8, Class I-A-14, 5.50% 2035 | 1,801 | 1,775 |
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First Horizon Alternative Mortgage Securities Trust, Series 2005-FA11, Class I-A-5, 5.75% 2036 | 4,307 | 4,226 | |||
Hilton Hotel Pool Trust, Series 2000-HLTA, Class F, 7.75% 2015 (2) | 5,000 | 5,086 | |||
SBA CMBS Trust, Series 2005-1, Class A, 5.369% 2035 (2) | 1,750 | 1,716 | |||
SBA CMBS Trust, Series 2005-1, Class D, 6.219% 2035 (2) | 3,000 | 2,970 | |||
Bear Stearns ARM Trust, Series 2003-3, Class III-A-1, 5.118% 2033 (1) | 848 | 830 | |||
Bear Stearns ARM Trust, Series 2003-9, Class III-A-2, 4.98% 2034 (1) | 1,016 | 994 | |||
Bear Stearns ARM Trust, Series 2005-10, Class A-3, 4.65% 2035 (1) | 3,000 | 2,859 | |||
Residential Accredit Loans, Inc., Series 2005-QR1, Class A, 6.00% 2034 | 2,953 | 2,901 | |||
Residential Accredit Loans, Inc., Series 2006-QS1, Class A-3, 5.75% 2036 | 1,212 | 1,205 | |||
IndyMac INDX Mortgage Loan Trust, Series 2006-AR5, Class 2-A-1, 5.884% 2036 (1) | 3,921 | 3,868 | |||
GMAC Commercial Mortgage Securities, Inc., Series 2001-C1, Class A-2, 6.465% 2034 | 3,750 | 3,840 | |||
Nykredit 4.00% 2035 | DKr | 23,923 | 3,714 | ||
Chase Commercial Mortgage Securities Corp., Series 1998-2, Class A-2, 6.39% 2030 | $ | 707 | 716 | ||
Chase Commercial Mortgage Securities Corp., Series 1998-1, Class A-2, 6.56% 2030 | 892 | 901 | |||
Chase Commercial Mortgage Securities Corp., Series 2000-1, Class A-2, 7.757% 2032 | 1,572 | 1,651 | |||
Structured Adjustable Rate Mortgage Loan Trust, Series 2005-22, Class 5-A1, 6.038% 2035 (1) | 3,150 | 3,118 | |||
GE Commercial Mortgage Corp., Series 2005-C4, Class A-3A, 5.333% 2045 | 3,000 | 2,933 | |||
Merrill Lynch Mortgage Investors, Inc., Series 1999-C1, Class A-2, 7.56% 2031 | 1,421 | 1,478 | |||
Merrill Lynch Mortgage Investors, Inc., Series 2004-A1, Class II-A-1, 4.595% 2034 (1) | 1,306 | 1,276 | |||
Commercial Mortgage Trust, Series 2000-C1, Class E, 8.132% 2033 | 2,500 | 2,623 | |||
L.A. Arena Funding, LLC, Series 1, Class A, 7.656% 2026 (2) | 2,503 | 2,623 | |||
GS Mortgage Securities Corp. II, Series 1998-C1, Class E, 7.42% 2030 (1) | 1,250 | 1,288 | |||
GS Mortgage Securities Corp. II, Series 1998-C1, Class D, 7.42% 2030 (1) | 1,000 | 1,030 | |||
Morgan Stanley Mortgage Loan Trust, Series 2004-3, Class 4-A, 5.693% 2034 (1) | 2,035 | 1,946 | |||
HarborView Mortgage Loan Trust, Series 2005-15, Class 2-A1A2, 6.067% 2045 (1) | 1,682 | 1,699 | |||
Salomon Brothers Commercial Mortgage Trust, Series 2000-C1, Class A-1, 7.46% 2008 | 279 | 282 | |||
Salomon Brothers Commercial Mortgage Trust, Series 2000-C3, Class A-2, 6.592% 2033 | 1,250 | 1,284 | |||
Morgan Stanley Dean Witter Capital I Trust, Series 2001-TOP5, Class A-3, 6.16% 2035 | 1,250 | 1,265 | |||
Banc of America Commercial Mortgage Inc., Series 2001-1, Class A-2, 6.503% 2036 | 968 | 994 | |||
Morgan Stanley Capital I, Inc., Series 1998-HF2, Class A-2, 6.48% 2030 | 849 | 859 | |||
Chase Manhattan Bank - First Union National Bank, Commercial Mortgage Trust, | 750 | 790 | |||
Citigroup Mortgage Loan Trust, Inc., Series 2004-HYB1, Class A-3-1, 4.55% 2034 (1) | 744 | 729 | |||
GGP Mall Properties Trust, Series 2001-GGP1, Class A-2, 5.007% 2011 (2) | 716 | 715 | |||
First Union National Bank Commercial Mortgage Trust, Series 2002-C1, Class A-1, 5.585% 2034 | 712 | 711 | |||
LB-UBS Commercial Mortgage Trust, Series 2000-C3, Class A-2, 7.95% 2025 | 500 | 534 | |||
DLJ Commercial Mortgage Corp., Series 1999-CG1, Class A-1B, 6.46% 2032 | 500 | 509 | |||
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.526% 2027 (1) (2) | 108 | 109 | |||
Nomura Asset Securities Corp., Series 1998-D6, Class A-1A, 6.28% 2030 | 83 | 83 | |||
German Government 4.50% 2006 | € | 12,330 | 15,780 | ||
German Government 5.25% 2008 | 5,650 | 7,397 | |||
German Government 5.25% 2011 | 1,750 | 2,364 | |||
German Government 4.25% 2014 | 5,530 | 7,186 | |||
Korean Government 4.00% 2010 | KRW | 7,540,000 | 7,674 | ||
Korean Government 5.00% 2011 | 7,685,000 | 8,082 | |||
Korean Government 4.25% 2014 | 8,765,000 | 8,769 | |||
United Mexican States Government Global 9.875% 2010 | $ | 1,000 | 1,127 | ||
United Mexican States Government, Series MI10, 9.50% 2014 | MXP | 130,500 | 11,871 | ||
United Mexican States Government Global 11.375% 2016 | $ | 1,920 | 2,621 | ||
United Mexican States Government Global 5.625% 2017 | 1,500 | 1,399 | |||
United Mexican States Government, Series M20, 10.00% 2024 | MXP | 22,000 | 2,043 | ||
United Mexican States Government Global 7.50% 2033 | $ | 1,080 | 1,150 | ||
United Kingdom 7.50% 2006 | £ | 2,980 | 5,570 | ||
United Kingdom 4.75% 2015 | 2,030 | 3,757 | |||
United Kingdom 4.75% 2020 | 1,340 | 2,498 | |||
United Kingdom 4.75% 2038 | 2,240 | 4,451 | |||
Spanish Government 4.25% 2007 | € | 11,395 | 14,711 | ||
French Government O.A.T. Eurobond 4.75% 2035 | 8,685 | 11,825 | |||
Polish Government 5.75% 2010 | PLN | 36,825 | 11,693 | ||
Japanese Government 0.50% 2007 | ¥ | 872,300 | 7,627 | ||
Japanese Government 2.30% 2035 | 380,400 | 3,176 | |||
Thai Government 4.125% 2009 | THB | 146,380 | 3,684 | ||
Thai Government 5.00% 2014 | 68,105 | 1,717 | |||
Thai Government 5.40% 2016 | 83,125 | 2,136 | |||
Aries Vermögensverwaltungs GmbH, Series C, 9.60% 2014 | $ | 5,750 | 7,159 |
Table of Contents
Israeli Government 7.50% 2014 | ILS | 21,870 | 5,202 | ||
Russian Federation 8.25% 2010 | $ | 3,111 | 3,239 | ||
Russian Federation 8.25% 2010 (2) | 1,778 | 1,851 | |||
Panama (Republic of) Global 7.125% 2026 | 390 | 378 | |||
Panama (Republic of) Global 9.375% 2029 | 1,000 | 1,185 | |||
Panama (Republic of) Global 6.70% 2036 | 2,805 | 2,581 | |||
Singapore (Republic of) 3.125% 2011 | S$ | 3,060 | 1,915 | ||
Singapore (Republic of) 3.75% 2016 | 2,985 | 1,913 | |||
Argentina (Republic of) 4.278% 2012 (1) | $ | 2,000 | 1,625 | ||
Canadian Government 4.25% 2026 (8) | C$ | 1,000 | 1,556 | ||
El Salvador (Republic of) 7.65% 2035 (2) | $ | 1,250 | 1,206 | ||
Dominican Republic 9.04% 2018 (2) (5) | 1,069 | 1,122 | |||
Brazil (Federal Republic of) Global 10.25% 2013 | 375 | 445 | |||
Brazil (Federal Republic of) Global 11.00% 2040 | 500 | 621 | |||
State of Qatar 9.75% 2030 | 500 | 698 | |||
Sprint Capital Corp. 4.78% 2006 | 1,500 | 1,498 | |||
Nextel Communications, Inc., Series E, 6.875% 2013 | 6,410 | 6,455 | |||
Nextel Communications, Inc., Series D, 7.375% 2015 | 26,790 | 27,287 | |||
Sprint Capital Corp. 6.875% 2028 | 1,250 | 1,263 | |||
SBC Communications Inc. 5.38% 2008 (1) | 1,625 | 1,629 | |||
SBC Communications Inc. 4.125% 2009 | 2,500 | 2,377 | |||
AT&T Corp. 7.30% 2011 (1) | 6,580 | 6,993 | |||
SBC Communications Inc. 5.10% 2014 | 2,700 | 2,509 | |||
SBC Communications Inc. 5.625% 2016 | 1,750 | 1,662 | |||
Qwest Capital Funding, Inc. 7.75% 2006 | 625 | 628 | |||
U S WEST Capital Funding, Inc. 6.375% 2008 | 100 | 99 | |||
Qwest Capital Funding, Inc. 7.90% 2010 | 3,820 | 3,820 | |||
Qwest Capital Funding, Inc. 7.25% 2011 | 3,950 | 3,861 | |||
Qwest Corp. 8.875% 2012 | 1,250 | 1,325 | |||
Qwest Capital Funding, Inc. 7.625% 2021 | 500 | 466 | |||
U S WEST Capital Funding, Inc. 6.875% 2028 | 2,300 | 1,995 | |||
American Tower Corp. 7.25% 2011 | 1,825 | 1,875 | |||
American Tower Corp. 7.125% 2012 | 5,250 | 5,263 | |||
American Tower Corp. 7.50% 2012 | 4,500 | 4,567 | |||
Dobson Cellular Systems, Inc. 8.375% 2011 (2) | 2,500 | 2,581 | |||
American Cellular Corp., Series B, 10.00% 2011 | 4,750 | 5,023 | |||
Dobson Cellular Systems, Inc. 9.875% 2012 | 500 | 530 | |||
Dobson Communications Corp. 8.875% 2013 | 688 | 679 | |||
Telefónica Emisiones, SAU 5.984% 2011 | 5,000 | 4,987 | |||
Telefónica Emisiones, SAU 7.045% 2036 | 3,000 | 3,008 | |||
France Télécom 7.75% 2011 (1) | 6,500 | 6,989 | |||
Telecom Italia SpA 6.25% 2012 | € | 920 | 1,258 | ||
Telecom Italia Capital SA, Series B, 5.25% 2013 | $ | 2,750 | 2,546 | ||
Telecom Italia Capital SA 4.95% 2014 | 2,500 | 2,242 | |||
Telecom Italia Capital SA 5.25% 2015 | 1,000 | 907 | |||
Rogers Wireless Inc. 7.25% 2012 | 3,825 | 3,873 | |||
Rogers Wireless Inc. 7.50% 2015 | 1,975 | 2,005 | |||
Rogers Cantel Inc. 9.75% 2016 | 500 | 579 | |||
Hawaiian Telcom Communications, Inc. 9.75% 2013 | 2,870 | 2,935 | |||
Hawaiian Telcom Communications, Inc. 10.789% 2013 (1) | 2,195 | 2,228 | |||
Hawaiian Telcom Communications, Inc., Series B, 12.50% 2015 | 1,125 | 1,184 | |||
Cingular Wireless LLC 5.625% 2006 | 1,000 | 1,000 | |||
AT&T Wireless Services, Inc. 7.875% 2011 | 1,890 | 2,038 | |||
AT&T Wireless Services, Inc. 8.125% 2012 | 2,850 | 3,140 | |||
Windstream Corp. 8.625% 2016 (2) | 5,100 | 5,240 | |||
Cincinnati Bell Inc. 7.25% 2013 | 5,250 | 5,197 | |||
Intelsat (Bermuda), Ltd. 9.614% 2012 (1) | 3,325 | 3,375 | |||
Intelsat (Bermuda), Ltd. 8.25% 2013 | 1,775 | 1,771 | |||
BellSouth Corp. 4.75% 2012 | 1,250 | 1,161 | |||
BellSouth Corp. 6.55% 2034 | 3,000 | 2,866 | |||
MetroPCS, Inc. 12.00% 2007 (1) | 900 | 947 | |||
MetroPCS, Inc. 9.25% 2011 (1) | 3,000 | 3,060 | |||
Centennial Cellular Corp. 10.75% 2008 | 324 | 330 | |||
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC 10.125% 2013 | 1,000 | 1,058 | |||
Centennial Communications Corp. 10.74% 2013 (1) | 500 | 513 | |||
Centennial Communications Corp. and Centennial Cellular Operating Co. LLC and Centennial Puerto Rico Operations Corp. 8.125% 2014 (1) | 2,000 | 1,935 |
Table of Contents
Triton PCS, Inc. 9.375% 2011 | 1,000 | 720 | |||
Triton PCS, Inc. 8.50% 2013 | 3,250 | 2,998 | |||
Verizon Wireless Capital LLC and Cellco Partnership 5.375% 2006 | 3,090 | 3,087 | |||
Deutsche Telekom International Finance BV 8.125% 2012 (1) | € | 835 | 1,257 | ||
Deutsche Telekom International Finance BV 8.25% 2030 (1) | $ | 1,250 | 1,447 | ||
Intelsat PanAmSat Opco 9.00% 2016 (2) | 2,500 | 2,550 | |||
NTELOS Inc., Series B, 7.48% 2011 (1) | 2,494 | 2,497 | |||
ALLTEL Corp. 4.656% 2007 | 1,600 | 1,589 | |||
Verizon Global Funding Corp. 7.75% 2030 | 1,230 | 1,330 | |||
PCCW-HKT Capital Ltd. 8.00% 2011 (1) (2) | 1,000 | 1,072 | |||
TELUS Corp. 8.00% 2011 | 750 | 813 | |||
Koninklijke KPN NV 8.00% 2010 | 750 | 796 | |||
Singapore Telecommunications Ltd. 6.375% 2011 (2) | 750 | 764 | |||
Continental Airlines, Inc., Series 2001-1, Class A-2, 6.503% 2011 | 1,000 | 999 | |||
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.487% 2012 | 3,570 | 3,661 | |||
Continental Airlines, Inc., Series 1997-4B, Class B, 6.90% 2018 (7) | 1,684 | 1,576 | |||
Continental Airlines, Inc., Series 1998-1, Class A, 6.648% 2019 (7) | 2,746 | 2,733 | |||
Continental Airlines, Inc., Series 1997-4, Class A, 6.90% 2019 (7) | 3,316 | 3,331 | |||
Continental Airlines, Inc., Series 1999-1, Class A, 6.545% 2020 (7) | 1,204 | 1,193 | |||
Continental Airlines, Inc., Series 2003-ERJ1, Class A, 7.875% 2020 (7) | 1,703 | 1,662 | |||
Continental Airlines, Inc., Series 2001-1, Class A-1, 6.703% 2022 (7) | 744 | 740 | |||
Continental Airlines, Inc., Series 2000-2, Class A-1, 7.707% 2022 (7) | 2,419 | 2,529 | |||
Continental Airlines, Inc., Series 2000-1, Class A-1, 8.048% 2022 (7) | 2,338 | 2,468 | |||
American Airlines, Inc., Series 2001-2, Class A-1, 6.978% 2012 (7) | 2,490 | 2,538 | |||
American Airlines, Inc., Series 2001-2, Class A-2, 7.858% 2013 | 9,475 | 10,050 | |||
American Airlines, Inc., Series 2001-1, Class B, 7.377% 2019 (7) | 1,091 | 999 | |||
AMR Corp. 10.00% 2021 | 1,200 | 1,125 | |||
Delta Air Lines, Inc. 8.00% 2007 (2) (4) | 1,500 | 420 | |||
Delta Air Lines, Inc., Series 2000-1, Class B, 7.92% 2012 | 1,000 | 931 | |||
Delta Air Lines, Inc., Series 2002-1, Class C, 7.779% 2013 (7) | 328 | 304 | |||
Delta Air Lines, Inc., Series 2002-1, Class G-2, MBIA insured, 6.417% 2014 | 10,798 | 10,917 | |||
Delta Air Lines, Inc., Series 2002-1, Class G-1, MBIA insured, 6.718% 2024 | 1,837 | 1,869 | |||
Allied Waste North America, Inc. 8.50% 2008 | 4,750 | 4,940 | |||
Allied Waste North America, Inc., Series B, 6.50% 2010 | 2,250 | 2,182 | |||
Allied Waste North America, Inc., Series B, 5.75% 2011 | 1,000 | 937 | |||
Allied Waste North America, Inc., Series B, 6.125% 2014 | 2,000 | 1,810 | |||
Allied Waste North America, Inc. 7.25% 2015 | 2,000 | 1,920 | |||
Cendant Corp. 6.25% 2008 | 4,200 | 4,239 | |||
Cendant Corp. 7.375% 2013 | 5,405 | 5,921 | |||
General Electric Capital Corp., Series A, 5.375% 2007 | 1,250 | 1,249 | |||
General Electric Capital Corp., Series A, 6.00% 2012 | 1,000 | 1,013 | |||
General Electric Co. 5.00% 2013 | 2,750 | 2,638 | |||
General Electric Capital Corp., Series A, 5.223% 2016 (1) | 2,000 | 2,003 | |||
General Electric Capital Corp., Series A, 5.53% 2026 (1) | 3,000 | 3,010 | |||
United Air Lines, Inc., Series 2001-1, Class A-2, 6.201% 2010 (7) | 1,100 | 1,101 | |||
United Air Lines, Inc., Series B, 8.986% 2012 (1) | 5,275 | 5,348 | |||
United Air Lines, Inc., Series 2001-1, Class A-1, 6.071% 2014 (7) | 894 | 893 | |||
United Air Lines, Inc., Series 2001-1, Class A-3, 6.602% 2015 (7) | 1,584 | 1,591 | |||
United Air Lines, Inc., 1991 Equipment Trust Certificates, Series A, 10.11% 2006 (4) (7) | 246 | 123 | |||
Hutchison Whampoa International Ltd. 7.00% 2011 (2) | 500 | 520 | |||
Hutchison Whampoa International Ltd. 6.50% 2013 (2) | 6,750 | 6,844 | |||
Terex Corp. 9.25% 2011 | 1,250 | 1,334 | |||
Terex Corp. 7.375% 2014 | 6,000 | 6,000 | |||
TFM, SA de CV 10.25% 2007 | 2,445 | 2,531 | |||
TFM, SA de CV 9.375% 2012 | 3,150 | 3,370 | |||
Burlington Northern and Santa Fe Railway Co. Pass Through Trust, Series 2002-2, 5.14% 2021 (7) | 990 | 939 | |||
BNSF Funding Trust I 6.613% 2055 (1) | 4,900 | 4,615 | |||
American Standard Inc. 8.25% 2009 | 1,700 | 1,794 | |||
American Standard Inc. 7.625% 2010 | 2,300 | 2,403 | |||
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class B, 7.156% 2011 (2) (7) | 1,232 | 1,264 | |||
BAE SYSTEMS 2001 Asset Trust, Series 2001, Class G, MBIA insured, 6.664% 2013 (2) (7) | 2,041 | 2,103 | |||
THL Buildco, Inc. 8.50% 2014 | 3,225 | 3,136 | |||
Kansas City Southern Railway Co. 9.50% 2008 | 1,850 | 1,947 | |||
Kansas City Southern Railway Co. 7.50% 2009 | 750 | 754 | |||
Tyco International Group SA 6.125% 2008 | 2,375 | 2,391 | |||
Northwest Airlines, Inc. 9.875% 2007 (4) | 1,000 | 510 |
Table of Contents
Northwest Airlines, Inc. 7.875% 2008 (4) | 1,000 | 505 | |||
Northwest Airlines, Inc. 10.00% 2009 (4) | 2,750 | 1,341 | |||
H-Lines Finance Holding Corp. 0%/11.00% 2013 (3) | 2,600 | 2,242 | |||
Waste Management, Inc. 7.00% 2006 | 1,000 | 1,003 | |||
Waste Management, Inc. 7.375% 2010 | 650 | 686 | |||
WMX Technologies, Inc. 7.10% 2026 | 500 | 526 | |||
CCMG Acquisition Corp. 8.875% 2014 (2) | 2,000 | 2,060 | |||
Union Pacific Railroad Co. Pass Through Trust, Series 2002-1, 6.061% 2023 (7) | 493 | 503 | |||
Union Pacific Railroad Co. Pass Through Trust, Series 2003-1, 4.698% 2024 (7) | 1,488 | 1,366 | |||
Bombardier Inc. 6.30% 2014 (2) | 2,100 | 1,837 | |||
Williams Scotsman, Inc. 8.50% 2015 | 1,500 | 1,489 | |||
John Deere Capital Corp., Series D, 4.375% 2008 | 1,500 | 1,469 | |||
DynCorp International and DIV Capital Corp., Series A, 9.50% 2013 | 1,369 | 1,431 | |||
Standard Aero Holdings, Inc. 8.25% 2014 | 1,575 | 1,410 | |||
K&F Industries, Inc. 7.75% 2014 | 1,400 | 1,386 | |||
Southwest Airlines Co., Series 2001-1, Class B, 6.126% 2006 (7) | 1,000 | 1,002 | |||
Qantas Airways Ltd. 6.05% 2016 (2) | 900 | 873 | |||
Southern Capital Corp. Pass Through Trust, Series 2002-1, Class G, MBIA insured, 5.70% 2023 (2) (7) | 563 | 549 | |||
Jet Equipment Trust, Series 1994-A, 11.79% 2013 (2) (4) | 250 | — | |||
Abitibi-Consolidated Co. of Canada 5.25% 2008 | 1,500 | 1,410 | |||
Abitibi-Consolidated Finance LP 7.875% 2009 | 2,812 | 2,707 | |||
Abitibi-Consolidated Co. of Canada 8.829% 2011 (1) | 3,500 | 3,430 | |||
Abitibi-Consolidated Co. of Canada 8.375% 2015 | 8,175 | 7,501 | |||
JSG Funding PLC 9.625% 2012 | 575 | 595 | |||
JSG Funding PLC 7.75% 2015 | € | 3,000 | 3,593 | ||
JSG Funding PLC 7.75% 2015 | $ | 2,000 | 1,820 | ||
JSG Holdings PLC 11.50% 2015 (5) | € | 3,420 | 4,351 | ||
Boise Cascade, LLC and Boise Cascade Finance Corp. 7.125% 2014 | $ | 8,275 | 7,365 | ||
Owens-Brockway Glass Container Inc. 8.875% 2009 | 2,500 | 2,588 | |||
Owens-Brockway Glass Container Inc. 8.75% 2012 | 2,250 | 2,354 | |||
Owens-Brockway Glass Container Inc. 6.75% 2014 | € | 1,250 | 1,581 | ||
Stone Container Corp. 9.75% 2011 | $ | 816 | 843 | ||
Jefferson Smurfit Corp. (U.S.) 8.25% 2012 | 2,000 | 1,885 | |||
Stone Container Corp. 8.375% 2012 | 250 | 237 | |||
Jefferson Smurfit Corp. (U.S.) 7.50% 2013 | 2,800 | 2,520 | |||
Norske Skogindustrier ASA 7.625% 2011 (2) | 4,000 | 4,044 | |||
Norske Skogindustrier ASA 6.125% 2015 (2) | 1,500 | 1,344 | |||
Rhodia SA 8.00% 2010 | € | 1,300 | 1,731 | ||
Rhodia 10.25% 2010 | $ | 1,625 | 1,743 | ||
Rhodia SA 9.25% 2011 | € | 1,172 | 1,565 | ||
UPM-Kymmene Corp. 5.625% 2014 (2) | $ | 4,500 | 4,258 | ||
Georgia-Pacific Corp. 7.449% 2012 (1) | 1,020 | 1,021 | |||
Georgia-Pacific Corp. 8.30% 2013 (1) | 3,075 | 3,106 | |||
Graphic Packaging International, Inc. 8.50% 2011 | 3,475 | 3,484 | |||
Graphic Packaging International, Inc. 9.50% 2013 | 500 | 497 | |||
Lyondell Chemical Co. 9.50% 2008 | 1,355 | 1,399 | |||
Equistar Chemicals, LP and Equistar Funding Corp. 8.75% 2009 | 750 | 778 | |||
Equistar Chemicals, LP and Equistar Funding Corp. 10.625% 2011 | 1,500 | 1,618 | |||
International Paper Co. 5.85% 2012 | 3,640 | 3,588 | |||
Weyerhaeuser Co. 5.95% 2008 | 533 | 534 | |||
Weyerhaeuser Co. 7.375% 2032 | 2,565 | 2,604 | |||
Stora Enso Oyj 6.404% 2016 (2) | 700 | 680 | |||
Stora Enso Oyj 7.25% 2036 (2) | 2,265 | 2,218 | |||
United States Steel Corp. 9.75% 2010 | 2,103 | 2,250 | |||
Ainsworth Lumber Co. Ltd. 7.25% 2012 | 375 | 309 | |||
Ainsworth Lumber Co. Ltd. 6.75% 2014 | 2,000 | 1,530 | |||
Ainsworth Lumber Co. Ltd. 6.75% 2014 | 500 | 383 | |||
Neenah Paper, Inc. 7.375% 2014 | 2,325 | 2,151 | |||
Plastipak Holdings, Inc. 8.50% 2015 (2) | 2,000 | 2,010 | |||
Graham Packaging Co., LP and GPC Capital Corp. 9.875% 2014 | 2,000 | 1,990 | |||
Rockwood Specialties Group, Inc. 7.625% 2014 | € | 1,500 | 1,950 | ||
Building Materials Corp. of America 7.75% 2014 | $ | 2,000 | 1,920 | ||
Airgas, Inc. 6.25% 2014 | 2,000 | 1,880 | |||
Steel Dynamics, Inc. 9.50% 2009 | 1,750 | 1,805 | |||
Associated Materials Inc. 9.75% 2012 | 1,750 | 1,750 | |||
Crystal US Holdings 3 LLC and Crystal US Sub 3 Corp., Series B, 0%/10.50% 2014 (3) | 1,044 | 822 |
Table of Contents
BCP Caylux Holdings Luxembourg SCA 9.625% 2014 | 650 | 708 | ||
Domtar Inc. 7.125% 2015 | 1,500 | 1,312 | ||
Cytec Industries Inc. 6.00% 2015 | 1,150 | 1,094 | ||
Oregon Steel Mills, Inc. 10.00% 2009 | 1,000 | 1,050 | ||
Allegheny Technologies, Inc. 8.375% 2011 | 500 | 519 | ||
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 2009 (2) (7) | 4,534 | 4,355 | ||
Ras Laffan Liquefied Natural Gas Co. Ltd. 3.437% 2009 (7) | 63 | 60 | ||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 2014 (7) | 675 | 742 | ||
Ras Laffan Liquefied Natural Gas Co. Ltd. 8.294% 2014 (2) (7) | 360 | 396 | ||
Ras Laffan Liquefied Natural Gas II 5.298% 2020 (2) (7) | 7,500 | 7,006 | ||
Premcor Refining Group Inc. 9.25% 2010 | 3,750 | 3,992 | ||
Premcor Refining Group Inc. 6.125% 2011 | 2,000 | 2,009 | ||
Premcor Refining Group Inc. 6.75% 2011 | 2,700 | 2,771 | ||
Premcor Refining Group Inc. 9.50% 2013 | 650 | 711 | ||
Premcor Refining Group Inc. 6.75% 2014 | 2,000 | 2,023 | ||
Premcor Refining Group Inc. 7.50% 2015 | 275 | 284 | ||
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 2014 (2) (7) | 6,250 | 6,070 | ||
Tengizchevroil Finance Co. S.àr.l., Series A, 6.124% 2014 (7) | 3,000 | 2,914 | ||
Williams Companies, Inc. 6.375% 2010 (2) | 1,000 | 980 | ||
Williams Companies, Inc. 7.125% 2011 | 500 | 503 | ||
Williams Partners LP 7.50% 2011 (2) | 2,950 | 2,972 | ||
Williams Companies, Inc. 8.125% 2012 | 4,030 | 4,201 | ||
Energy Transfer Partners, LP 5.95% 2015 | 8,555 | 8,252 | ||
El Paso Corp. 6.375% 2009 (2) | 150 | 148 | ||
El Paso Energy Corp. 7.75% 2010 (2) | 1,500 | 1,530 | ||
El Paso Energy Corp. 7.375% 2012 | 100 | 100 | ||
El Paso Natural Gas Co. 7.50% 2026 | 175 | 172 | ||
Tennessee Gas Pipeline Co. 7.00% 2028 | 2,000 | 1,862 | ||
Southern Natural Gas Co. 7.35% 2031 | 1,000 | 964 | ||
Southern Natural Gas Co. 8.00% 2032 | 1,325 | 1,376 | ||
Qatar Petroleum 5.579% 2011 (2) | 5,500 | 5,475 | ||
Pogo Producing Co. 7.875% 2013 (2) | 1,325 | 1,335 | ||
Pogo Producing Co. 6.625% 2015 | 100 | 93 | ||
Pogo Producing Co. 6.875% 2017 | 4,000 | 3,725 | ||
Delek & Avner-Yam Tethys Ltd. 5.326% 2013 (2) (7) | 4,302 | 4,181 | ||
Newfield Exploration Co. 6.625% 2014 | 1,000 | 958 | ||
Newfield Exploration Co. 6.625% 2016 | 3,250 | 3,079 | ||
Petroleum Export Ltd., Class A-3, 5.265% 2011 (2) (7) | 3,969 | 3,851 | ||
Teekay Shipping Corp. 8.875% 2011 | 3,100 | 3,263 | ||
Encore Acquisition Co. 6.00% 2015 | 2,500 | 2,262 | ||
Kinder Morgan Energy Partners LP 6.75% 2011 | 2,000 | 2,045 | ||
Pemex Project Funding Master Trust 6.625% 2035 (2) | 2,000 | 1,812 | ||
Gulfstream Natural Gas System LLC 6.19% 2025 (2) | 1,220 | 1,182 | ||
Enterprise Products Operating LP, Series B, 5.00% 2015 | 1,055 | 954 | ||
Drummond Co., Inc. 7.375% 2016 (2) | 950 | 886 | ||
Reliance Industries Ltd., Series B, 10.25% 2097 | 500 | 664 | ||
Overseas Shipholding Group, Inc. 8.25% 2013 | 525 | 547 | ||
AES Corp. 9.50% 2009 | 695 | 740 | ||
AES Corp. 9.375% 2010 | 4,019 | 4,320 | ||
AES Corp. 8.75% 2013 (2) | 6,350 | 6,826 | ||
AES Corp. 9.00% 2015 (2) | 350 | 378 | ||
AES Red Oak, LLC, Series A, 8.54% 2019 (7) | 911 | 965 | ||
AES Ironwood, LLC 8.857% 2025 (7) | 1,154 | 1,252 | ||
AES Red Oak, LLC, Series B, 9.20% 2029 (7) | 2,500 | 2,713 | ||
Mission Energy Holding Co. 13.50% 2008 | 1,525 | 1,708 | ||
Edison Mission Energy 7.73% 2009 | 1,500 | 1,523 | ||
Edison Mission Energy 7.75% 2016 (2) | 6,000 | 5,925 | ||
Midwest Generation, LLC, Series B, 8.56% 2016 (7) | 1,691 | 1,777 | ||
Midwest Generation, LLC and Midwest Finance Corp. 8.75% 2034 | 3,250 | 3,461 | ||
Southern Power Co., Series B, 6.25% 2012 | 6,000 | 6,055 | ||
Nevada Power Co., General and Refunding Mortgage Notes, Series G, 9.00% 2013 | 3,562 | 3,873 | ||
Nevada Power Co., General and Refunding Mortgage Notes, Series L, 5.875% 2015 | 150 | 143 | ||
Nevada Power Co., Series M, 5.95% 2016 (2) | 1,450 | 1,382 | ||
American Electric Power Co., Inc. 5.75%/4.709% 2007 (1) | 5,000 | 4,940 | ||
Virginia Electric and Power Co., Series 2002-A, 5.375% 2007 | 2,750 | 2,743 | ||
Dominion Resources, Inc., Series 2002-D, 5.125% 2009 | 1,500 | 1,464 | ||
NRG Energy, Inc. 7.25% 2014 | 725 | 709 |
Table of Contents
NRG Energy, Inc. 7.375% 2016 | 3,275 | 3,201 | |||
Constellation Energy Group, Inc. 6.125% 2009 | 2,550 | 2,569 | |||
Constellation Energy Group, Inc. 4.55% 2015 | 1,080 | 958 | |||
MidAmerican Energy Holdings Co. 5.00% 2014 | 2,200 | 2,059 | |||
MidAmerican Energy Holdings Co. 6.125% 2036 (2) | 1,500 | 1,407 | |||
Commonwealth Edison Co., Series 99, 3.70% 2008 | 1,500 | 1,453 | |||
Exelon Generation Co., LLC 6.95% 2011 | 1,300 | 1,357 | |||
Cilcorp Inc. 8.70% 2009 | 1,000 | 1,079 | |||
Union Electric Co. 5.25% 2012 | 1,495 | 1,448 | |||
Veolia Environnement 4.875% 2013 | € | 1,630 | 2,109 | ||
Duke Capital Corp. 6.25% 2013 | $ | 1,000 | 1,011 | ||
Duke Capital Corp. 5.50% 2014 | 1,000 | 964 | |||
SP PowerAssets Ltd. 3.80% 2008 (2) | 2,000 | 1,916 | |||
Mirant Americas Generation, Inc. 8.30% 2011 | 1,500 | 1,489 | |||
Scottish Power PLC 5.375% 2015 | 1,230 | 1,169 | |||
Israel Electric Corp. Ltd. 7.70% 2018 (2) | 1,000 | 1,068 | |||
PSEG Energy Holdings Inc. 8.625% 2008 | 1,000 | 1,030 | |||
Oncor Electric Delivery Co. 6.375% 2012 | 800 | 808 | |||
ARG Funding Corp., Series 2005-1, Class A-1, MBIA insured, 4.02% 2009 (2) | 3,000 | 2,925 | |||
ARG Funding Corp., Series 2005-1, Class A-3, MBIA insured, 4.29% 2011 (2) | 3,250 | 3,103 | |||
ARG Funding Corp., Series 2005-2, Class A-4, AMBAC insured, 4.84% 2011 (2) | 5,000 | 4,863 | |||
MBNA Credit Card Master Note Trust, Series 2005-6, Class A, 4.50% 2013 | 5,250 | 5,061 | |||
MBNA Credit Card Master Note Trust, Series 2002-1, Class C, 6.80% 2014 | 2,500 | 2,607 | |||
Drivetime Auto Owner Trust, Series 2005-A, Class A-3, MBIA insured, 4.302% 2009 (2) | 4,500 | 4,439 | |||
Drive Auto Receivables Trust, Series 2006-1, Class A-4, FSA insured, 5.54% 2013 (2) | 4,000 | 3,980 | |||
Vanderbilt Mortgage and Finance, Inc., Series 1999-B, Class I-B-1, 8.395% 2016 | 923 | 928 | |||
Vanderbilt Mortgage and Finance, Inc., Series 2001-A, Class B-1, 8.20% 2020 | 2,880 | 2,940 | |||
CPS Auto Receivables Trust, Series 2002-B, Class A-2, XLCA insured, 3.50% 2009 (2) | 146 | 145 | |||
CPS Auto Receivables Trust, Series 2005-D, Class A-2, FSA insured, 5.06% 2012 (2) | 3,000 | 2,966 | |||
PG&E Energy Recovery Funding LLC, Series 2005-1, Class A-3, 4.14% 2012 | 3,000 | 2,876 | |||
Capital Auto Receivables Asset Trust, Series 2004-2, Class A-4, 3.75% 2009 | 2,750 | 2,665 | |||
Specialty Underwriting and Residential Finance Trust, Series 2004-BC4, Class A-2B, 5.633% 2035 (1) | 2,500 | 2,507 | |||
Chase Issuance Trust, Series 2005-7, Class A, 4.55% 2013 | 2,250 | 2,166 | |||
Residential Asset Securities Corp. Trust, Series 2004-KS12, Class A-1-2, 5.553% 2035 (1) | 2,070 | 2,074 | |||
Hertz Vehicle Financing LLC, Rental Car Asset-backed Notes, Series 2005-2, Class A-6, AMBAC insured, | 2,000 | 1,947 | |||
Conseco Finance Home Loan Trust, Series 1999-G, Class B-2, 10.96% 2029 (4) | 1,686 | 1,652 | |||
Consumer Credit Reference Index Securities Program Trust, Series 2002-2A, Class FX, 10.421% 2007 (2) | 1,500 | 1,524 | |||
Cendant Timeshare Receivables Funding, LLC, Series 2005-1, Class A-1, FGIC insured, 4.67% 2017 (2) | 1,072 | 1,046 | |||
CWABS, Inc., Series 2004-12, Class 2-AV-2, 5.603% 2033 (1) | 908 | 909 | |||
Nordstrom Credit Card Master Note Trust, Series 2002-1, Class B, 5.899% 2010 (1) (2) | 750 | 754 | |||
First Investors Auto Owner Trust, Series 2003-A, Class A, MBIA insured, 2.58% 2011 (2) | 364 | 355 | |||
MMCA Auto Owner Trust, Series 2002-2, Class A-4, 4.30% 2010 | 86 | 86 | |||
Electronic Data Systems Corp. 6.334% 2006 | 2,000 | 2,001 | |||
Electronic Data Systems Corp., Series B, 6.50% 2013 (1) | 10,025 | 9,904 | |||
Electronic Data Systems Corp. 7.45% 2029 | 1,250 | 1,291 | |||
Celestica Inc. 7.875% 2011 | 5,650 | 5,579 | |||
Celestica Inc. 7.625% 2013 | 3,450 | 3,364 | |||
Sanmina-SCI Corp. 6.75% 2013 | 5,500 | 5,156 | |||
Sanmina-SCI Corp. 8.125% 2016 | 425 | 417 | |||
Xerox Corp. 7.125% 2010 | 5,000 | 5,063 | |||
Motorola, Inc. 7.625% 2010 | 239 | 256 | |||
Motorola, Inc. 8.00% 2011 | 2,000 | 2,195 | |||
Motorola, Inc. 7.50% 2025 | 500 | 548 | |||
Motorola, Inc. 5.22% 2097 | 250 | 189 | |||
SunGard Data Systems Inc. 9.125% 2013 (2) | 3,000 | 3,127 | |||
Jabil Circuit, Inc. 5.875% 2010 | 3,060 | 3,037 | |||
Sabre Holdings Corp. 6.35% 2016 | 3,180 | 2,980 | |||
Freescale Semiconductor, Inc. 6.875% 2011 | 2,400 | 2,424 | |||
Nortel Networks Ltd.10.75% 2016 (2) | 1,550 | 1,585 | |||
Cisco Systems, Inc. 5.25% 2011 | 1,500 | 1,474 | |||
Exodus Communications, Inc. 11.625% 2010 (4) (6) | 377 | — |
Table of Contents
Columbia/HCA Healthcare Corp. 7.00% 2007 | 2,500 | 2,527 | |||
HCA Inc. 5.50% 2009 | 6,150 | 5,957 | |||
HCA Inc. 6.50% 2016 | 2,000 | 1,859 | |||
Concentra Operating Corp. 9.50% 2010 | 4,000 | 4,160 | |||
Concentra Operating Corp. 9.125% 2012 | 3,250 | 3,380 | |||
Tenet Healthcare Corp. 6.375% 2011 | 1,000 | 897 | |||
Tenet Healthcare Corp. 9.875% 2014 | 1,600 | 1,608 | |||
Tenet Healthcare Corp. 9.25% 2015 (2) | 750 | 739 | |||
Humana Inc. 7.25% 2006 | 1,500 | 1,501 | |||
Humana Inc. 6.45% 2016 | 1,500 | 1,487 | |||
Aetna Inc. 5.75% 2011 | 3,000 | 2,982 | |||
Mylan Laboratories Inc. 5.75% 2010 | 3,000 | 2,873 | |||
Wyeth 5.50% 2016 | 3,000 | 2,869 | |||
Amgen Inc. 4.00% 2009 | 2,500 | 2,378 | |||
Triad Hospitals, Inc. 7.00% 2012 | 2,250 | 2,250 | |||
HealthSouth Corp. 11.418% 2014 (1) (2) | 875 | 877 | |||
HealthSouth Corp. 10.75% 2016 (2) | 875 | 862 | |||
Universal Health Services, Inc. 7.125% 2016 | 1,200 | 1,208 | |||
Cardinal Health, Inc. 5.85% 2017 | 1,235 | 1,180 | |||
Warner Chilcott Corp. 8.75% 2015 | 1,000 | 1,035 | |||
UnitedHealth Group Inc. 5.20% 2007 | 1,000 | 998 | |||
WellPoint, Inc. 5.25% 2016 | 625 | 587 | |||
Jean Coutu Group (PJC) Inc. 7.625% 2012 | 800 | 780 | |||
Jean Coutu Group (PJC) Inc. 8.50% 2014 | 6,475 | 5,989 | |||
Delhaize America, Inc. 8.125% 2011 | 6,100 | 6,446 | |||
Spectrum Brands, Inc. 7.375% 2015 | 7,375 | 6,029 | |||
Ahold Finance U.S.A., Inc. 6.25% 2009 | 1,225 | 1,216 | |||
Ahold Finance U.S.A., Inc. 8.25% 2010 | 2,000 | 2,095 | |||
Ahold Lease Pass Through Trust, Series 2001-A-1, 7.82% 2020 (7) | 130 | 132 | |||
Ahold Lease Pass Through Trust, Series 2001-A-2, 8.62% 2025 (7) | 1,790 | 1,778 | |||
Stater Bros. Holdings Inc. 8.829% 2010 (1) | 2,550 | 2,595 | |||
Stater Bros. Holdings Inc. 8.125% 2012 | 1,000 | 992 | |||
SUPERVALU INC. 7.50% 2012 | 1,800 | 1,782 | |||
Albertson’s, Inc. 7.45% 2029 | 1,000 | 864 | |||
Albertson’s, Inc. 8.00% 2031 | 1,000 | 906 | |||
CVS Corp. 6.117% 2013 (2) (7) | 1,294 | 1,286 | |||
CVS Corp. 5.298% 2027 (2) (7) | 1,752 | 1,618 | |||
Rite Aid Corp. 6.875% 2013 | 2,125 | 1,849 | |||
Tyson Foods, Inc. 6.60% 2016 | 1,500 | 1,469 | |||
Gold Kist Inc. 10.25% 2014 | 1,371 | 1,436 | |||
Duane Reade Inc. 9.829% 2010 (1) | 1,000 | 975 | |||
Tesco PLC 5.50% 2033 | £ | 330 | 625 | ||
State of Winsonsin, Badger Tobacco Asset Securitization Corp., Tobacco Settlement Asset-backed Bonds, 6.125% 2027 | $ | 2,920 | 3,098 | ||
State of California, Golden State Tobacco Securitization Corp., Tobacco Settlement Asset-backed Bonds, Series 2003-A-1, 6.25% 2033 | 1,500 | 1,623 | |||
State of North Carolina, Eastern Municipal Power Agency, Power System Revenue Refunding Bonds, Federally Taxable, Series 2003-E, 5.55% 2014 | 1,625 | 1,540 | |||
State of South Dakota, Educational Enhancement Funding Corp., Tobacco Settlement Asset-backed Bonds, Series 2002-A, Class A, 6.72% 2025 | 1,523 | 1,485 | |||
State of Louisiana, Tobacco Settlement Financing Corp., Tobacco Settlement Asset-backed Bonds, Series 2001-A, Class A, 6.36% 2025 | 401 | 399 | |||
Total bonds & notes (cost: $2,311,813,000) | 2,274,706 | ||||
Convertible securities - 0.25% | Shares or principal amount | ||||
Amazon.com, Inc. 6.875% PEACS convertible notes 2010 | € | 1,518,000 | 1,973 | ||
Amazon.com, Inc. 4.75% convertible debentures 2009 | $ | 648,000 | 625 | ||
Ford Motor Co. Capital Trust II 6.50% cumulative convertible trust preferred 2032 | 13,600 | 378 | |||
Conexant Systems, Inc. 4.00% convertible notes 2007 | $ | 1,500,000 | 1,483 | ||
SCI Systems, Inc. 3.00% convertible debentures 2007 | $ | 1,000,000 | 972 | ||
American Tower Corp. 5.00% convertible debentures 2010 | $ | 2,000,000 | 1,998 | ||
Total convertible securities (cost: $6,440,000) | 7,429 | ||||
Table of Contents
Preferred stocks - 2.91% | Shares | ||||
Shinsei Finance II (Cayman) Ltd. 7.16% noncumulative preferred (undated) (1) (2) | 15,050,000 | $ | 14,368 | ||
Fuji JGB Investment LLC, Series A, 9.87% noncumulative preferred (undated) (1) (2) | 6,430,000 | 6,888 | |||
IBJ Preferred Capital Co. LLC, Series A, 8.79% noncumulative preferred (undated) (1) (2) | 6,075,000 | 6,387 | |||
Chuo Mitsui Trust and Banking Co., Ltd. 5.506% (undated) (1) (2) | 10,090,000 | 9,217 | |||
HSBC Capital Funding LP, Series 1, 9.547% noncumulative step-up perpetual preferred (undated) (1) (2) | 8,030,000 | 9,006 | |||
Tokai Preferred Capital Co. LLC, Series A, 9.98% noncumulative preferred (undated) (1) (2) | 4,650,000 | 4,991 | |||
MUFG Capital Finance 1 Ltd. 6.346% noncumulative preferred (undated) (1) | 1,415,000 | 1,363 | |||
Fannie Mae, Series O, 7.065% preferred (2) | 100,000 | 5,394 | |||
ING Capital Funding Trust III 8.439% noncumulative preferred (undated) (1) | 4,250,000 | 4,655 | |||
BNP Paribas 5.186% noncumulative (undated) (1) (2) | 2,200,000 | 1,998 | |||
BNP U.S. Funding LLC, Series A, 7.738% noncumulative preferred (undated) (1) (2) | 1,175,000 | 1,204 | |||
BNP Paribas Capital Trust 9.003% noncumulative trust preferred (undated) (1) (2) | 850,000 | 947 | |||
SB Treasury Co. LLC, Series A, 9.40% noncumulative preferred (undated) (1) (2) | 3,750,000 | 3,985 | |||
RBS Capital Trust I 4.709% noncumulative trust preferred (undated) (1) | 3,500,000 | 3,168 | |||
Deutsche Bank Capital Funding Trust I, 7.872% (undated) (1) (2) | 2,500,000 | 2,620 | |||
Wachovia Capital Trust III 5.80% (undated) | 2,450,000 | 2,380 | |||
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual capital securities (2) | 65,000 | 1,834 | |||
HVB Funding Trust VIII 7.055% (undated) (1) | 900,000 | 1,281 | |||
ACE Ltd., Series C, 7.80% preferred depositary shares | 42,760 | 1,105 | |||
DBS Capital Funding Corp., Series A, 7.657% noncumulative guaranteed preference shares (undated) (1) (2) | 750,000 | 800 | |||
First Republic Capital Corp., Series A, 10.50% preferred (2) | 750 | 788 | |||
National Bank of Canada, Series A, 8.35% exchangeable preferred depositary shares | 20,000 | 525 | |||
ZiLOG, Inc. - MOD III Inc., units (6) (9) | 55 | 8 | |||
Adelphia Communications Corp., Series B, 13.00% preferred 2009 (9) | 5,000 | 3 | |||
Total preferred stocks (cost: $85,940,000) | 84,915 | ||||
Common stocks - 0.21% | |||||
Drax Group PLC (9) | 231,144 | 3,509 | |||
Sprint Nextel Corp., Series 1 | 33,726 | 674 | |||
XO Holdings, Inc. (9) | 1,134 | 5 | |||
DigitalGlobe Inc. (2) (6) (9) | 306,464 | 306 | |||
Delta Air Lines, Inc. (2) (9) | 60,887 | 46 | |||
ZiLOG, Inc. (9) | 32,500 | 110 | |||
Clarent Hospital Corp. (6) (9) | 16,114 | 4 | |||
Other common stocks in initial period of acquisition | 1,431 | ||||
Total common stocks (cost: $3,173,000) | 6,085 | ||||
Rights & warrants - 0.00% | |||||
XO Holdings, Inc., Series A, warrants, expire 2010 (9) | 2,273 | $ | 2 | ||
XO Holdings, Inc., Series B, warrants, expire 2010 (9) | 1,704 | 1 | |||
XO Holdings, Inc., Series C, warrants, expire 2010 (9) | 1,704 | — | |||
GT Group Telecom Inc., warrants, expire 2010 (2) (6) (9) | 1,000 | — | |||
Total rights & warrants (cost: $52,000) | 3 | ||||
Table of Contents
Short-term securities - 18.69% | Principal amount | |||||
(000) | ||||||
Federal Home Loan Bank 4.915%-5.02% due 7/12-8/4/2006 | $ | 75,900 | $ | 75,642 | ||
Gannett Co. 5.00% due 7/7-7/13/2006 (2) | 36,800 | 36,755 | ||||
Coca-Cola Co. 5.00% due 8/14/2006 | 20,000 | 19,872 | ||||
Atlantic Industries 4.92% due 7/6/2006 (2) | 13,100 | 13,089 | ||||
Variable Funding Capital Corp. 5.03%-5.23% due 7/14-7/24/2006 (2) | 33,000 | 32,922 | ||||
Hershey Co. 4.95%-5.05% due 7/5-7/21/2006 (2) | 32,500 | 32,452 | ||||
NetJets Inc. 4.98% due 7/12-7/18/2006 (2) | 28,600 | 28,534 | ||||
Clipper Receivables Co., LLC 5.05%-5.07% due 7/12-7/25/2006 (2) | 28,600 | 28,534 | ||||
3M Co. 5.00%-5.02% due 7/20-7/26/2006 | 28,300 | 28,205 | ||||
E.I. duPont de Nemours and Co. 5.03% due 7/17/2006 (2) | 25,000 | 24,941 | ||||
Hewlett-Packard Co. 5.21% due 7/31/2006 (2) | 25,000 | 24,888 | ||||
Ranger Funding Co. LLC 5.30% due 8/11/2006 (2) (10) | 25,000 | 24,845 | ||||
Wal-Mart Stores Inc. 5.05% due 7/11/2006 (2) | 23,500 | 23,464 | ||||
Concentrate Manufacturing Co. of Ireland 5.20% due 7/20/2006 (2) | 21,000 | 20,939 | ||||
CAFCO, LLC 5.06% due 7/25/2006 (2) | 14,400 | 14,350 | ||||
Ciesco LLC 5.29% due 8/17/2006 (2) | 6,600 | 6,553 | ||||
International Lease Finance Corp. 5.28%-5.29% due 8/28/2006 | 20,800 | 20,622 | ||||
Park Avenue Receivables Co., LLC 5.04% due 7/6/2006 (2) | 20,000 | 19,983 | ||||
Caterpillar Financial Services Corp. 5.20% due 8/3/2006 (10) | 19,200 | 19,106 | ||||
Harley-Davidson Funding Corp. 5.09% due 8/2/2006 (2) (10) | 13,500 | 13,437 | ||||
Target Corp. 5.20% due 7/10/2006 | 13,400 | 13,381 | ||||
Scripps (E.W.) Co. 5.00%-5.28% due 7/3-7/6/2006 (2) | 13,100 | 13,090 | ||||
Three Pillars Funding, LLC 5.28% due 7/3/2006 (2) | 9,300 | 9,296 | ||||
FCAR Owner Trust I 5.04% due 7/14/2006 | 1,700 | 1,697 | ||||
Total short-term securities (cost: $546,599,000) | 546,597 | |||||
Total investment securities (cost: $2,954,017,000) | 2,919,735 | |||||
Other assets less liabilities | 4,279 | |||||
Net assets | $ | 2,924,014 | ||||
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
(1) | Coupon rate may change periodically. |
(2) | Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $782,363,000, which represented 26.76% of the net assets of the fund. |
(3) | Step bond; coupon rate will increase at a later date. |
(4) | Company not making scheduled [interest/dividend] payments; bankruptcy proceedings pending. |
(5) | Payment in kind; the issuer has the option of paying additional securities in lieu of cash. |
(6) | Valued under fair value procedures adopted by authority of the board of trustees. |
(7) | Pass-through securities backed by a pool of mortgages or other loans on which principal payments are periodically made. Therefore, the effective maturities are shorter than the stated maturities. |
(8) | Index-linked bond whose principal amount moves with a government retail price index. |
(9) | Security did not produce income during the last 12 months. |
(10) | This security, or a portion of this security, has been segregated to cover funding requirements on investment transactions settling in the future. |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Assets: | ||||||||||||
Investment securities at market: | ||||||||||||
Unaffiliated issuers | $ | 3,334,719 | $ | 24,093,055 | $ | 6,531,116 | $ | 2,919,735 | ||||
Affiliated issuers | — | 143,235 | 49,361 | — | ||||||||
Cash denominated in non-U.S. currencies | 2,690 | 4,325 | — | — | ||||||||
Cash | 236 | 1,728 | 2,008 | 7,411 | ||||||||
Receivables for: | ||||||||||||
Sales of investments | 4,219 | 136,311 | 38,340 | 1,388 | ||||||||
Sales of fund’s shares | 3,034 | 22,713 | 4,098 | 2,121 | ||||||||
Open forward currency contracts | — | — | 19 | 392 | ||||||||
Dividends and interest | 6,391 | 23,180 | 24,729 | 34,881 | ||||||||
3,351,289 | 24,424,547 | 6,649,671 | 2,965,928 | |||||||||
Liabilities: | ||||||||||||
Payables for: | ||||||||||||
Purchases of investments | 2,443 | 70,125 | 147,523 | 40,145 | ||||||||
Repurchases of fund’s shares | 44 | 5,358 | 843 | 17 | ||||||||
Open forward currency contracts | — | — | 98 | 267 | ||||||||
Investment advisory services | 1,338 | 5,694 | 1,536 | 887 | ||||||||
Distribution services | 624 | 4,125 | 1,123 | 554 | ||||||||
Deferred trustees’ compensation | 40 | 625 | 166 | 33 | ||||||||
Other fees and expenses | 622 | 237 | 14 | 11 | ||||||||
5,111 | 86,164 | 151,303 | 41,914 | |||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | ||||
Investment securities at cost | ||||||||||||
Unaffiliated issuers | $ | 2,758,589 | $ | 19,440,548 | $ | 5,618,447 | $ | 2,954,017 | ||||
Affiliated issuers | — | $ | 133,658 | $ | 48,481 | — | ||||||
Cash denominated in non-U.S. currencies at cost | $ | 2,659 | $ | 4,338 | — | — |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Net assets consist of: | |||||||||||||
Capital paid in on shares of beneficial interest | $ | 2,664,757 | $ | 18,351,261 | $ | 5,366,389 | $ | 2,899,532 | |||||
Undistributed (distributions in excess of) net investment income | 33,224 | 103,564 | 77,407 | 69,335 | |||||||||
Undistributed (accumulated) net realized gain (loss) | 72,534 | 1,221,378 | 141,096 | (10,776 | ) | ||||||||
Net unrealized appreciation (depreciation) | 575,663 | 4,662,180 | 913,476 | (34,077 | ) | ||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | |||||
Shares of beneficial interest issued and outstanding - unlimited shares authorized: | |||||||||||||
Class 1: | |||||||||||||
Net assets (total: $11,157,497) | $ | 214,609 | $ | 3,490,659 | $ | 903,248 | $ | 187,817 | |||||
Shares outstanding | 10,399 | 57,813 | 52,575 | 17,074 | |||||||||
Net asset value per share | $ | 20.64 | $ | 60.38 | $ | 17.18 | $ | 11.00 | |||||
Class 2: | |||||||||||||
Net assets (total: $65,221,819) | $ | 3,131,569 | $ | 20,385,930 | $ | 5,519,490 | $ | 2,736,197 | |||||
Shares outstanding | 152,508 | 340,114 | 323,378 | 250,811 | |||||||||
Net asset value per share | $ | 20.53 | $ | 59.94 | $ | 17.07 | $ | 10.91 | |||||
Class 3: | |||||||||||||
Net assets (total: $1,181,927) | — | $ | 461,794 | $ | 75,630 | — | |||||||
Shares outstanding | — | 7,655 | 4,406 | — | |||||||||
Net asset value per share | — | $ | 60.33 | $ | 17.16 | — |
* | Amount less than one thousand |
See Notes to Financial Statements
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Investment income: | ||||||||||||
Income (net of non-U.S. taxes): | ||||||||||||
Dividends | $ | 34,509 | $ | 118,613 | $ | 42,570 | $ | 329 | ||||
Interest | 11,885 | 51,547 | 52,240 | 78,520 | ||||||||
46,394 | 170,160 | 94,810 | 78,849 | |||||||||
Fees and expenses: | ||||||||||||
Investment advisory services | 8,777 | 38,583 | 10,390 | 5,618 | ||||||||
Distribution services - Class 2 | 3,654 | 24,498 | 6,773 | 3,131 | ||||||||
Distribution services - Class 3 | — | 437 | 69 | — | ||||||||
Transfer agent services | 1 | 8 | 2 | 1 | ||||||||
Reports to shareholders | 47 | 358 | 96 | 41 | ||||||||
Registration statement and prospectus | 62 | 479 | 130 | 53 | ||||||||
Postage, stationery and supplies | 8 | 60 | 16 | 7 | ||||||||
Trustees’ compensation | 13 | 132 | 35 | 11 | ||||||||
Auditing and legal | 6 | 21 | 7 | 2 | ||||||||
Custodian | 386 | 725 | 89 | 55 | ||||||||
State and local taxes | 28 | 220 | 60 | 25 | ||||||||
Other | 15 | 48 | 15 | 5 | ||||||||
Total fees and expenses before waiver | 12,997 | 65,569 | 17,682 | 8,949 | ||||||||
Less waiver of fees and expenses: | ||||||||||||
Investment advisory services | 878 | 3,858 | 1,039 | 562 | ||||||||
Total fees and expenses after waiver | 12,119 | 61,711 | 16,643 | 8,387 | ||||||||
Net investment income | 34,275 | 108,449 | 78,167 | 70,462 |
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency: | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | 135,390 | 1,227,220 | 145,831 | (2,595 | ) | ||||||||||
Non-U.S. currency transactions | 5,200 | 261 | (466 | ) | (3,677 | ) | |||||||||
140,590 | 1,227,481 | 145,365 | (6,272 | ) | |||||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 538 | (795,483 | ) | 117,305 | (31,900 | ) | |||||||||
Non-U.S. currency translations | 89 | 208 | (97 | ) | 485 | ||||||||||
627 | (795,275 | ) | 117,208 | (31,415 | ) | ||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency | 141,217 | 432,206 | 262,573 | (37,687 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 175,492 | $ | 540,655 | $ | 340,740 | $ | 32,775 |
See Notes to Financial Statements
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 34,275 | $ | 30,708 | $ | 108,449 | $ | 128,993 | $ | 78,167 | $ | 126,432 | $ | 70,462 | $ | 110,408 | ||||||||||||||||
Net realized gain (loss) on investments and non-U.S. currency transactions | 140,590 | 83,182 | 1,227,481 | 637,504 | 145,365 | 133,120 | (6,272 | ) | 2,178 | |||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and non-U.S. currency translations | 627 | 222,184 | (795,275 | ) | 2,278,471 | 117,208 | 234,416 | (31,415 | ) | (77,663 | ) | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 175,492 | 336,074 | 540,655 | 3,044,968 | 340,740 | 493,968 | 32,775 | 34,923 | ||||||||||||||||||||||||
Dividends and distributions paid to shareholders: | ||||||||||||||||||||||||||||||||
Dividends from net investment income and non-U.S. currency gains: | ||||||||||||||||||||||||||||||||
Class 1 | (2,252 | ) | (1,641 | ) | (5,705 | ) | (31,560 | ) | (3,555 | ) | (20,656 | ) | (7,578 | ) | (7,502 | ) | ||||||||||||||||
Class 2 | (27,641 | ) | (14,177 | ) | (25,853 | ) | (112,734 | ) | (19,628 | ) | (106,102 | ) | (106,551 | ) | (73,453 | ) | ||||||||||||||||
Class 3 | — | — | (605 | ) | (3,387 | ) | (279 | ) | (1,653 | ) | — | — | ||||||||||||||||||||
Total dividends from net investment income and non-U.S. currency gains | (29,893 | ) | (15,818 | ) | (32,163 | ) | (147,681 | ) | (23,462 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) | ||||||||||||||||
Distributions from net realized gain on investments: | ||||||||||||||||||||||||||||||||
Short-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Long-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | (21,900 | ) | — | (11,851 | ) | — | — | — | ||||||||||||||||||||||
Class 2 | — | — | (127,584 | ) | — | (72,811 | ) | — | — | — | ||||||||||||||||||||||
Class 3 | — | — | (2,908 | ) | — | (1,004 | ) | — | — | — | ||||||||||||||||||||||
Total distributions from net realized gain on investments | — | — | (152,392 | ) | — | (85,666 | ) | — | — | — | ||||||||||||||||||||||
Total dividends and distributions paid to shareholders | (29,893 | ) | (15,818 | ) | (184,555 | ) | (147,681 | ) | (109,128 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Capital share transactions: | ||||||||||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||||||||||
Proceeds from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Proceeds from shares sold | 9,129 | 4,184 | 9,292 | 5,159 | 25,104 | 6,110 | 12,562 | 10,970 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 2,252 | 1,641 | 27,605 | 31,560 | 15,406 | 20,656 | 7,578 | 7,502 | ||||||||||||||||||||||||
Cost of shares repurchased | (13,591 | ) | (26,337 | ) | (323,657 | ) | (588,755 | ) | (50,269 | ) | (104,648 | ) | (9,822 | ) | (26,416 | ) | ||||||||||||||||
Net increase (decrease) from Class 1 transactions | (2,210 | ) | (20,512 | ) | (286,760 | ) | (552,036 | ) | (9,759 | ) | (77,882 | ) | 10,318 | (7,944 | ) | |||||||||||||||||
Class 2: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | 373,544 | 541,733 | 1,846,045 | 4,085,834 | 391,458 | 970,962 | 416,369 | 561,561 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 27,641 | 14,177 | 153,437 | 112,734 | 92,439 | 106,102 | 106,551 | 73,453 | ||||||||||||||||||||||||
Cost of shares repurchased | (21,874 | ) | (30,170 | ) | (235,018 | ) | (220,641 | ) | (279,357 | ) | (56,161 | ) | (22,339 | ) | (40,314 | ) | ||||||||||||||||
Net increase from Class 2 transactions | 379,311 | 525,740 | 1,764,464 | 3,977,927 | 204,540 | 1,020,903 | 500,581 | 594,700 | ||||||||||||||||||||||||
Class 3: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | — | — | 5,657 | 16,188 | 1,925 | 2,351 | — | — | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | — | — | 3,513 | 3,387 | 1,283 | 1,653 | — | — | ||||||||||||||||||||||||
Cost of shares repurchased | — | — | (55,454 | ) | (106,454 | ) | (6,411 | ) | (14,040 | ) | — | — | ||||||||||||||||||||
Net increase (decrease) from Class 3 transactions | — | — | (46,284 | ) | (86,879 | ) | (3,203 | ) | (10,036 | ) | — | — | ||||||||||||||||||||
Net increase in net assets resulting from capital share transactions | 377,101 | 505,228 | 1,431,420 | 3,339,012 | 191,578 | 932,985 | 510,899 | 586,756 | ||||||||||||||||||||||||
Total increase (decrease) in net assets | 522,700 | 825,484 | 1,787,520 | 6,236,299 | 423,190 | 1,298,542 | 429,545 | 540,724 | ||||||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||||||
Beginning of period | 2,823,478 | 1,997,994 | 22,550,863 | 16,314,564 | 6,075,178 | 4,776,636 | 2,494,469 | 1,953,745 | ||||||||||||||||||||||||
End of period | $ | 3,346,178 | $ | 2,823,478 | $ | 24,338,383 | $ | 22,550,863 | $ | 6,498,368 | $ | 6,075,178 | $ | 2,924,014 | $ | 2,494,469 | ||||||||||||||||
Undistributed (distributions in excess of) net investment income | $ | 33,224 | $ | 28,842 | $ | 103,564 | $ | 27,278 | $ | 77,407 | $ | 22,702 | $ | 69,335 | $ | 113,002 |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||
Shares of beneficial interest: | ||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||
Shares issued from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||
Shares sold | 438 | 233 | 153 | 94 | 1,454 | 385 | 1,109 | 962 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 114 | 95 | 477 | 549 | 920 | 1,258 | 691 | 670 | ||||||||||||||||
Shares repurchased | (658 | ) | (1,486 | ) | (5,299 | ) | (11,005 | ) | (2,902 | ) | (6,585 | ) | (864 | ) | (2,323 | ) | ||||||||
Net increase (decrease) in shares outstanding | (106 | ) | (1,158 | ) | (4,669 | ) | (10,362 | ) | (528 | ) | (4,942 | ) | 936 | (691 | ) | |||||||||
Class 2: | ||||||||||||||||||||||||
Shares sold | 18,130 | 30,710 | 30,379 | 77,199 | 22,735 | 61,664 | 36,917 | 49,855 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 1,402 | 824 | 2,668 | 1,976 | 5,559 | 6,492 | 9,793 | 6,611 | ||||||||||||||||
Shares repurchased | (1,077 | ) | (1,695 | ) | (3,920 | ) | (4,104 | ) | (15,780 | ) | (3,564 | ) | (1,984 | ) | (3,572 | ) | ||||||||
Net increase in shares outstanding | 18,455 | 29,839 | 29,127 | 75,071 | 12,514 | 64,592 | 44,726 | 52,894 | ||||||||||||||||
Class 3: | ||||||||||||||||||||||||
Shares sold | — | — | 91 | 320 | 111 | 148 | — | — | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | — | — | 61 | 60 | 76 | 101 | — | — | ||||||||||||||||
Shares repurchased | — | — | (912 | ) | (2,009 | ) | (370 | ) | (887 | ) | — | — | ||||||||||||
Net increase (decrease) in shares outstanding | — | — | (760 | ) | (1,629 | ) | (183 | ) | (638 | ) | — | — |
(1) | Unaudited. |
See Notes to Financial Statements
Table of Contents
Financial Highlights (1)
Period | Net asset value, beginning of period | Income (loss) from investment operations (2) | Dividends and distributions | Net asset | Total return | Net assets, end of period (in millions) | Ratio of expenses to average net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of to average | |||||||||||||||||||||||||||||||||||
Net investment income (loss) | Net gains (losses) on | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | |||||||||||||||||||||||||||||||||||||||
Global Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 19.63 | $ | .24 | $ | .99 | $ | 1.23 | $ | (.22 | ) | $ | — | $ | (.22 | ) | $ | 20.64 | 6.31 | % | $ | 215 | .60 | %(6) | .54 | %(6) | 2.37 | %(6) | ||||||||||||||||
12/31/05 | 17.31 | .28 | 2.19 | 2.47 | (.15 | ) | — | (.15 | ) | 19.63 | 14.37 | 206 | .62 | .57 | 1.56 | |||||||||||||||||||||||||||||
12/31/04 | 15.30 | .18 | 1.92 | 2.10 | (.09 | ) | — | (.09 | ) | 17.31 | 13.80 | 202 | .65 | .64 | 1.15 | |||||||||||||||||||||||||||||
12/31/03 | 11.35 | .12 | 3.91 | 4.03 | (.08 | ) | — | (.08 | ) | 15.30 | 35.63 | 188 | .70 | .70 | .94 | |||||||||||||||||||||||||||||
12/31/02 | 13.42 | .09 | (2.02 | ) | (1.93 | ) | (.14 | ) | — | (.14 | ) | 11.35 | (14.46 | ) | 152 | .71 | .71 | .73 | ||||||||||||||||||||||||||
12/31/01 | 17.25 | .18 | (2.50 | ) | (2.32 | ) | (.15 | ) | (1.36 | ) | (1.51 | ) | 13.42 | (13.99 | ) | 215 | .70 | .70 | 1.24 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 19.52 | .22 | .97 | 1.19 | (.18 | ) | $ | — | (.18 | ) | 20.53 | 6.16 | 3,131 | .85 | (6) | .79 | (6) | 2.17 | (6) | |||||||||||||||||||||||||
12/31/05 | 17.23 | .23 | 2.18 | 2.41 | (.12 | ) | — | (.12 | ) | 19.52 | 14.07 | 2,617 | .87 | .82 | 1.30 | |||||||||||||||||||||||||||||
12/31/04 | 15.25 | .14 | 1.91 | 2.05 | (.07 | ) | — | (.07 | ) | 17.23 | 13.49 | 1,796 | .90 | .89 | .92 | |||||||||||||||||||||||||||||
12/31/03 | 11.32 | .09 | 3.89 | 3.98 | (.05 | ) | — | (.05 | ) | 15.25 | 35.27 | 1,082 | .95 | .95 | .68 | |||||||||||||||||||||||||||||
12/31/02 | 13.38 | .06 | (2.01 | ) | (1.95 | ) | (.11 | ) | — | (.11 | ) | 11.32 | (14.64 | ) | 592 | .96 | .96 | .48 | ||||||||||||||||||||||||||
12/31/01 | 17.21 | .13 | (2.49 | ) | (2.36 | ) | (.11 | ) | (1.36 | ) | (1.47 | ) | 13.38 | (14.22 | ) | 600 | .95 | .95 | .88 | |||||||||||||||||||||||||
Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 59.36 | $ | .34 | $ | 1.16 | $ | 1.50 | $ | (.10 | ) | $ | (.38 | ) | $ | (.48 | ) | $ | 60.38 | 2.56 | % | $ | 3,490 | .34 | %(6) | .31 | %(6) | 1.12 | %(6) | |||||||||||||||
12/31/05 | 51.39 | .46 | 8.00 | 8.46 | (.49 | ) | — | (.49 | ) | 59.36 | 16.50 | 3,709 | .35 | .32 | .87 | |||||||||||||||||||||||||||||
12/31/04 | 45.74 | .32 | 5.51 | 5.83 | (.18 | ) | — | (.18 | ) | 51.39 | 12.75 | 3,744 | .36 | .36 | .68 | |||||||||||||||||||||||||||||
12/31/03 | 33.47 | .16 | 12.26 | 12.42 | (.15 | ) | — | (.15 | ) | 45.74 | 37.15 | 3,877 | .39 | .39 | .41 | |||||||||||||||||||||||||||||
12/31/02 | 44.30 | .12 | (10.87 | ) | (10.75 | ) | (.08 | ) | — | (.08 | ) | 33.47 | (24.27 | ) | 3,195 | .40 | .40 | .30 | ||||||||||||||||||||||||||
12/31/01 | 73.51 | .18 | (11.99 | ) | (11.81 | ) | (.41 | ) | (16.99 | ) | (17.40 | ) | 44.30 | (17.93 | ) | 5,207 | .38 | .38 | .34 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 58.98 | .27 | 1.15 | 1.42 | (.08 | ) | (.38 | ) | (.46 | ) | 59.94 | 2.44 | 20,386 | .59 | (6) | .56 | (6) | .88 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.10 | .34 | 7.92 | 8.26 | (.38 | ) | — | (.38 | ) | 58.98 | 16.19 | 18,343 | .60 | .57 | .64 | |||||||||||||||||||||||||||||
12/31/04 | 45.50 | .23 | 5.45 | 5.68 | (.08 | ) | — | (.08 | ) | 51.10 | 12.50 | 12,055 | .61 | .61 | .50 | |||||||||||||||||||||||||||||
12/31/03 | 33.29 | .06 | 12.19 | 12.25 | (.04 | ) | — | (.04 | ) | 45.50 | 36.80 | 7,107 | .64 | .64 | .16 | |||||||||||||||||||||||||||||
12/31/02 | 44.09 | .03 | (10.82 | ) | (10.79 | ) | (.01 | ) | — | (.01 | ) | 33.29 | (24.46 | ) | 3,009 | .65 | .65 | .07 | ||||||||||||||||||||||||||
12/31/01 | 73.28 | .04 | (11.94 | ) | (11.90 | ) | (.30 | ) | (16.99 | ) | (17.29 | ) | 44.09 | (18.15 | ) | 2,937 | .63 | .63 | .07 | |||||||||||||||||||||||||
Class 3 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 59.34 | .28 | 1.17 | 1.45 | (.08 | ) | (.38 | ) | (.46 | ) | 60.33 | 2.48 | 462 | .52 | (6) | .49 | (6) | .94 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.38 | .37 | 7.98 | 8.35 | (.39 | ) | — | (.39 | ) | 59.34 | 16.28 | 499 | .53 | .50 | .69 | |||||||||||||||||||||||||||||
12/31/04 (7) | 47.74 | .24 | 3.50 | 3.74 | (.10 | ) | — | (.10 | ) | 51.38 | 7.85 | 516 | .54 | (6) | .53 | (6) | .54 | (6) | ||||||||||||||||||||||||||
Asset Allocation Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 16.56 | $ | .23 | $ | .69 | $ | .92 | $ | (.07 | ) | $ | (.23 | ) | $ | (.30 | ) | $ | 17.18 | 5.60 | % | $ | 903 | .34 | %(6) | .31 | %(6) | 2.66 | %(6) | |||||||||||||||
12/31/05 | 15.49 | .41 | 1.05 | 1.46 | (.39 | ) | — | (.39 | ) | 16.56 | 9.45 | 879 | .35 | .32 | 2.57 | |||||||||||||||||||||||||||||
12/31/04 | 14.58 | .39 | .84 | 1.23 | (.32 | ) | — | (.32 | ) | 15.49 | 8.50 | 899 | .38 | .37 | 2.64 | |||||||||||||||||||||||||||||
12/31/03 | 12.23 | .41 | 2.29 | 2.70 | (.35 | ) | — | (.35 | ) | 14.58 | 22.14 | 911 | .42 | .42 | 3.12 | |||||||||||||||||||||||||||||
12/31/02 | 14.30 | .45 | (2.19 | ) | (1.74 | ) | (.33 | ) | — | (.33 | ) | 12.23 | (12.19 | ) | 797 | .45 | .45 | 3.31 | ||||||||||||||||||||||||||
12/31/01 | 15.71 | .49 | (.37 | ) | .12 | (.59 | ) | (.94 | ) | (1.53 | ) | 14.30 | .77 | 1,012 | .45 | .45 | 3.30 | |||||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.47 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.07 | 5.46 | 5,519 | .59 | (6) | .56 | (6) | 2.41 | (6) | |||||||||||||||||||||||||
12/31/05 | 15.42 | .37 | 1.04 | 1.41 | (.36 | ) | — | (.36 | ) | 16.47 | 9.14 | 5,120 | .60 | .57 | 2.31 | |||||||||||||||||||||||||||||
12/31/04 | 14.51 | .36 | .84 | 1.20 | (.29 | ) | — | (.29 | ) | 15.42 | 8.34 | 3,797 | .62 | .62 | 2.42 | |||||||||||||||||||||||||||||
12/31/03 | 12.18 | .37 | 2.27 | 2.64 | (.31 | ) | — | (.31 | ) | 14.51 | 21.74 | 2,314 | .67 | .67 | 2.81 | |||||||||||||||||||||||||||||
12/31/02 | 14.25 | .42 | (2.18 | ) | (1.76 | ) | (.31 | ) | — | (.31 | ) | 12.18 | (12.38 | ) | 1,056 | .70 | .70 | 3.11 | ||||||||||||||||||||||||||
12/31/01 | 15.67 | .45 | (.36 | ) | .09 | (.57 | ) | (.94 | ) | (1.51 | ) | 14.25 | .52 | 730 | .70 | .70 | 3.03 |
Table of Contents
Financial Highlights (1)
Period | Net asset value, beginning of period | Income (loss) from investment operations (2) | Dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of expenses to average net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of to average | ||||||||||||||||||||||||||||||||||
Net investment income (loss) | Net gains (losses) on | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | ||||||||||||||||||||||||||||||||||||||
Asset Allocation Fund (Continued) | |||||||||||||||||||||||||||||||||||||||||||
Class 3 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.56 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.16 | 5.44 | 76 | .52 | (6) | .49 | (6) | 2.48 | (6) | ||||||||||||||||||||||||
12/31/05 | 15.49 | .38 | 1.05 | 1.43 | (.36 | ) | — | (.36 | ) | 16.56 | 9.26 | 76 | .53 | .50 | 2.39 | ||||||||||||||||||||||||||||
12/31/04 (7) | 14.85 | .36 | .58 | .94 | (.30 | ) | — | (.30 | ) | 15.49 | 6.38 | 81 | .55 | (6) | .55 | (6) | 2.50 | (6) | |||||||||||||||||||||||||
Bond Fund | |||||||||||||||||||||||||||||||||||||||||||
Class 1 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 11.31 | $ | .31 | $ | (.15 | ) | $ | .16 | $ | (.47 | ) | $ | — | $ | (.47 | ) | $ | 11.00 | 1.41 | % | $ | 188 | .43 | %(6) | .39 | %(6) | 5.48 | %(6) | ||||||||||||||
12/31/05 | 11.57 | .60 | (.40 | ) | .20 | (.46 | ) | — | (.46 | ) | 11.31 | 1.77 | 182 | .44 | .40 | 5.30 | |||||||||||||||||||||||||||
12/31/04 | 11.34 | .56 | .10 | .66 | (.43 | ) | — | (.43 | ) | 11.57 | 6.04 | 195 | .45 | .44 | 4.94 | ||||||||||||||||||||||||||||
12/31/03 | 10.41 | .57 | .78 | 1.35 | (.42 | ) | — | (.42 | ) | 11.34 | 13.07 | 213 | .47 | .47 | 5.19 | ||||||||||||||||||||||||||||
12/31/02 | 10.44 | .67 | (.24 | ) | .43 | (.46 | ) | — | (.46 | ) | 10.41 | 4.26 | 218 | .49 | .49 | 6.60 | |||||||||||||||||||||||||||
12/31/01 | 10.18 | .77 | .08 | .85 | (.59 | ) | — | (.59 | ) | 10.44 | 8.48 | 194 | .49 | .49 | 7.38 | ||||||||||||||||||||||||||||
Class 2 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 11.22 | .29 | (.15 | ) | .14 | (.45 | ) | — | (.45 | ) | 10.91 | 1.23 | 2,736 | .68 | (6) | .64 | (6) | 5.23 | (6) | ||||||||||||||||||||||||
12/31/05 | 11.48 | .57 | (.39 | ) | .18 | (.44 | ) | — | (.44 | ) | 11.22 | 1.59 | 2,312 | .69 | .65 | 5.06 | |||||||||||||||||||||||||||
12/31/04 | 11.27 | .53 | .09 | .62 | (.41 | ) | — | (.41 | ) | 11.48 | 5.72 | 1,759 | .70 | .69 | 4.68 | ||||||||||||||||||||||||||||
12/31/03 | 10.36 | .53 | .78 | 1.31 | (.40 | ) | — | (.40 | ) | 11.27 | 12.80 | 1,280 | .72 | .72 | 4.88 | ||||||||||||||||||||||||||||
12/31/02 | 10.40 | .64 | (.24 | ) | .40 | (.44 | ) | — | (.44 | ) | 10.36 | 4.05 | 697 | .74 | .74 | 6.34 | |||||||||||||||||||||||||||
12/31/01 | 10.16 | .73 | .08 | .81 | (.57 | ) | — | (.57 | ) | 10.40 | 8.15 | 349 | .74 | .74 | 7.06 |
Portfolio turnover rate for all classes of shares
Six months ended June 30, 2006 (5) | Year Ended December 31 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Global Growth Fund | 17 | 26 | 24 | 27 | 30 | 38 | ||||||
Growth Fund | 23 | 29 | 30 | 34 | 34 | 31 | ||||||
Asset Allocation Fund | 21 | 23 | 20 | 20 | 25 | 32 | ||||||
Bond Fund | 29 | 46 | 34 | 20 | 29 | 59 |
(1) | Based on operations for the period shown (unless otherwise noted) and, accordingly, may not be representative of a full year. |
(2) | Based on average shares outstanding. |
(3) | The ratios in this column reflect the impact, if any, of certain waivers by CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. |
(4) | Commenced operations July 5, 2001. |
(5) | Unaudited. |
(6) | Annualized. |
(7) | From January 16, 2004, when Class 3 shares were first issued. |
See Notes to Financial Statements
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Notes to financial statements | unaudited |
1. Organization and significant accounting policies
Organization – American Funds Insurance Series (the “series”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company with 14 different funds. The assets of each fund are segregated, with each fund accounted for separately. The funds’ investment objectives are as follows:
Global Discovery Fund | Long-term growth of capital by investing primarily in stocks of companies in the services and information area of the global economy. | |
Global Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies located around the world. | |
Global Small Capitalization Fund | Long-term growth of capital by investing primarily in stocks of smaller companies located around the world. | |
Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies that offer opportunities for growth of capital. | |
International Fund | Long-term growth of capital by investing primarily in common stocks of companies located outside the U.S. | |
New World Fund | Long-term growth of capital by investing primarily in stocks of companies with significant exposure to countries with developing economies and/or markets. | |
Blue Chip Income and Growth Fund | To produce income exceeding the average yield on U.S. stocks and to provide an opportunity for growth of principal. | |
Global Growth and Income Fund | Long-term growth of capital and current income by investing primarily in stocks of well-established companies located around the world. | |
Growth-Income Fund | Growth of capital and income by investing primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. | |
Asset Allocation Fund | High total return (including income and capital gains) consistent with long-term preservation of capital. | |
Bond Fund | As high a level of current income as is consistent with the preservation of capital by investing primarily in fixed-income securities. | |
High-Income Bond Fund | High current income and, secondarily, capital appreciation by investing primarily in intermediate and long-term corporate obligations, with emphasis on higher yielding, higher risk, lower rated or unrated securities. | |
U.S. Government/AAA-Rated Securities Fund | A high level of current income consistent with prudent investment risk and preservation of capital by investing primarily in a combination of securities guaranteed by the U.S. government and other debt securities rated AAA or Aaa. | |
Cash Management Fund | High current yield while preserving capital by investing in a diversified selection of high-quality money market instruments. |
Each fund offers two or three share classes (1, 2 and 3). Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for certain distribution expenses. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
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Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the series:
Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the funds to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable are fair valued as determined in good faith under procedures adopted by authority of the series’ board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued.
Security transactions and related investment income – Security transactions are recorded by the series as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the series will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations –Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution expenses, are accrued daily and charged directly to the respective share class.
Dividends and distributions to shareholders –Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Non-U.S. currency translation – Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.
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Forward currency contracts – The series may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The series enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the series could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the series values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The series records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Mortgage dollar rolls – The series may enter into mortgage dollar roll transactions in which a fund in the series sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
2. Non-U.S. investments
Investment risk – The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the funds on the sale of securities in certain countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
3. Federal income taxation and distributions
The series complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The series is not subject to income taxes to the extent such distributions are made.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; deferred expenses; paydowns on fixed-income securities; net capital losses; non-U.S. taxes on capital gains; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of December 31, 2005, the funds’ most recent fiscal year end. Tax-basis unrealized appreciation (depreciation) and cost of investments are reported as of June 30, 2006.
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Additional tax basis disclosures are as follows:
(dollars in thousands)
Growth Fund | Global Growth Fund | Asset Allocation | Bond Fund | |||||||||||||
As of December 31, 2005: | ||||||||||||||||
Undistributed ordinary income | $ | 29,555 | $ | 31,502 | $ | 22,899 | $ | 113,791 | ||||||||
Undistributed long-term capital gains | — | 151,590 | 85,106 | — | ||||||||||||
Capital loss carry forwards | (66,686 | ) | — | — | (3,617 | ) | ||||||||||
As of June 30, 2006: | ||||||||||||||||
Gross unrealized appreciation on investment securities | 632,332 | 5,224,347 | 1,067,049 | 30,547 | ||||||||||||
Gross unrealized depreciation on investment securities | (56,728 | ) | (569,283 | ) | (156,712 | ) | (66,148 | ) | ||||||||
Net unrealized appreciation (depreciation) on investment securities | 575,604 | 4,655,064 | 910,337 | (35,601 | ) | |||||||||||
Cost of portfolio securities | 2,759,115 | 19,581,226 | 5,670,140 | 2,955,336 | ||||||||||||
Capital loss carry forwards expire in: | ||||||||||||||||
2006 | $ | — | — | — | $ | — | ||||||||||
2007 | — | — | — | — | ||||||||||||
2008 | — | — | — | — | ||||||||||||
2009 | — | — | — | — | ||||||||||||
2010 | 10,546 | — | — | — | ||||||||||||
2011 | 56,140 | — | — | 3,029 | ||||||||||||
2012 | — | — | — | — | ||||||||||||
2013 | — | — | — | 588 | ||||||||||||
$ | 66,686 | — | — | $ | 3,617 |
* | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
† | Amount less than one thousand. |
4. Fees and transactions with related parties
Capital Research and Management Company (“CRMC”), the series’ investment adviser, is the parent company of American Funds Service Company SM (“AFS”), the series’ transfer agent, and American Funds Distributors, Inc. SM (“AFD”), the principal underwriter of the series’ shares.
Investment advisory services – The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on annual rates that generally decrease as average net asset levels increase.
The board of trustees approved an amended agreement for Growth-Income Fund and Global Small Capitalization Fund, effective April 1, 2006, and July 1, 2006, respectively, that provided for reduced annual rates as reflected in the chart below. During the six months ended June 30, 2006, CRMC voluntarily reduced investment advisory services fees to the rates provided by the amended agreement for Global Small Capitalization Fund. Additionally, CRMC is currently waiving 10% of investment advisory services fees for all funds in the series. During the six months ended June 30, 2006, total aggregate investment advisory services fees waived by CRMC were $13,732,000. As a result, the aggregate fees shown on the accompanying financial statements of $137,318,000 were reduced to $123,586,000. The amended range of rates and asset levels and the current annualized rates of average net assets for the series, before and after the expense waiver, are as follows:
Rates | Net asset level (in billions) | For the six before waiver | For the six after waiver | |||||||||
Fund | Beginning with | Ending with | Up to | In excess of | ||||||||
Global Growth | .690 | .480 | .6 | 3.0 | .56 | .50 | ||||||
Growth | .500 | .285 | .6 | 27.0 | .33 | .29 | ||||||
Asset Allocation | .500 | .250 | .6 | 8.0 | .33 | .29 | ||||||
Bond | .480 | .360 | .6 | 3.0 | .42 | .38 |
* | Results based on activity during the period May 1, 2006, commencement of operations, through June 30, 2006. |
Transfer agent services – The aggregate fee of $25,000 was incurred during the six months ended June 30, 2006, pursuant to an agreement with AFS. Under this agreement, the series compensates AFS for transfer agent services, including shareholder recordkeeping, communications and transaction processing.
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Deferred trustees’ compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the series, are treated as if invested in one or more of the American Funds. These amounts represent general, unsecured liabilities of the series and vary according to the total returns of the selected funds. Trustees’ compensation of $421,000, shown on the accompanying financial statements, includes $244,000 in current fees (either paid in cash or deferred) and a net increase of $177,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the series are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the series.
5. Distribution services
The series has adopted plans of distribution for Class 2 and 3 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares. The plans provide for annual expenses, based on average daily net assets, of 0.25% for Class 2 and 0.18% for Class 3 to pay service fees to firms that have entered into agreements with the series. During the six months ended June 30, 2006, distribution expenses under the plans for the series aggregated $77,715,000 for Class 2 and $1,101,000 for Class 3. Class 1 shares have not adopted a plan of distribution.
6. Investment transactions and other disclosures
As of June 30, 2006, Asset Allocation Fund, Bond Fund and High-Income Bond Fund had outstanding forward currency contracts to sell non-U.S. currencies as follows:
(dollars in thousands)
Contract amount | U.S. valuation | ||||||||||||||
Fund | Non-U.S. currency sale contracts | Non-U.S. | U.S. | Amount | Unrealized (depreciation) appreciation | ||||||||||
Asset Allocation | Euro, expiring 7/19-9/29/2006 | € | 6,710 | $ | 8,520 | $ | 8,599 | $ | (79 | ) | |||||
Bond | Euro, expiring 9/14/2006 | € | 5,585 | 7,078 | 7,173 | (95 | ) | ||||||||
Pound, expiring 7/13-8/23/2006 | £ | 5,780 | 12,125 | 11,905 | 220 |
The following table presents additional information for the six months ended June 30, 2006:
Global Growth | Growth Fund | Asset Allocation | Bond Fund | ||||||||||
Purchases of investment securities (1) | $ | 615,964 | $ | 5,156,655 | $ | 1,231,288 | $ | 886,794 | |||||
Sales of investment securities (1) | 451,141 | 5,061,567 | 1,240,593 | 608,522 | |||||||||
Non-U.S taxes paid on dividend income | 3,333 | 5,318 | 1,139 | — | |||||||||
Non-U.S taxes paid on interest income - | — | — | (3 | ) | 61 | ||||||||
Non-U.S taxes paid on realized gains | 132 | — | — | — | |||||||||
Non-U.S taxes provided on unrealized gains as of June 30, 2006 | 545 | 17 | — | — | |||||||||
Dividends from affiliated issuers | — | — | — | — | |||||||||
Realized gain on affiliated issuers | — | — | 16,897 | — |
(1) | Excludes short-term securities, except for Cash Management Fund. |
(2) | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
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Expense example | unaudited |
The funds in the American Funds Insurance Series serve as the underlying investment vehicle for various insurance products. As an owner of an insurance contract that invests in one of the funds in the series, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. Additional fees are charged by the insurance companies related to the various benefits they provide. This example is intended to help you understand your ongoing costs (in dollars) of investing in the underlying funds only so you can compare these costs with the ongoing costs of investing in other mutual funds that serve a similar function in other annuity products. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006, through June 30, 2006).
Actual expenses:
The first line of each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled “Expenses paid during period” to estimate the expenses you paid on your account during this period. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Hypothetical example for comparison purposes:
The second line of each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. 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 the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 1/1/2006 | Ending account value 6/30/2006 | Expenses paid during period* | Annualized expense ratio | |||||||||
Global Discovery Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.73 | $ | 2.86 | .57 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.97 | 2.86 | .57 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.95 | 4.12 | .82 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.73 | 4.11 | .82 | ||||||||
Global Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,063.06 | $ | 2.76 | .54 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.12 | 2.71 | .54 | ||||||||
Class 2 — actual return | 1,000.00 | 1,061.57 | 4.04 | .79 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.88 | 3.96 | .79 | ||||||||
Global Small Capitalization Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,094.50 | $ | 3.64 | .70 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.32 | 3.51 | .70 | ||||||||
Class 2 — actual return | 1,000.00 | 1,093.52 | 4.93 | .95 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.08 | 4.76 | .95 |
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Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.61 | $ | 1.56 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.37 | 2.81 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,024.77 | 2.46 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
International Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,060.13 | $ | 2.55 | .50 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.32 | 2.51 | .50 | ||||||||
Class 2 — actual return | 1,000.00 | 1,058.33 | 3.83 | .75 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.08 | 3.76 | .75 | ||||||||
Class 3 — actual return | 1,000.00 | 1,058.74 | 3.47 | .68 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.42 | 3.41 | .68 | ||||||||
New World Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,089.69 | $ | 4.20 | .81 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,020.78 | 4.06 | .81 | ||||||||
Class 2 — actual return | 1,000.00 | 1,089.24 | 5.49 | 1.06 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,019.54 | 5.31 | 1.06 | ||||||||
Blue Chip Income and Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,046.45 | $ | 1.98 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,045.57 | 3.25 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 | ||||||||
Global Growth and Income Fund† | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 961.00 | $ | 1.05 | .65 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.57 | 3.26 | .65 | ||||||||
Class 2 — actual return | 1,000.00 | 960.00 | 1.45 | .90 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.33 | 4.51 | .90 | ||||||||
Growth-Income Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,040.86 | $ | 1.32 | .26 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.51 | 1.30 | .26 | ||||||||
Class 2 — actual return | 1,000.00 | 1,039.62 | 2.58 | .51 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.27 | 2.56 | .51 | ||||||||
Class 3 — actual return | 1,000.00 | 1,039.98 | 2.23 | .44 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.61 | 2.21 | .44 | ||||||||
Asset Allocation Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,055.97 | $ | 1.58 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,054.62 | 2.85 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,054.43 | 2.50 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,014.08 | $ | 1.95 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,012.33 | 3.19 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 |
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High-Income Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,033.23 | $ | 2.27 | .45 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.56 | 2.26 | .45 | ||||||||
Class 2 — actual return | 1,000.00 | 1032.38 | 3.53 | .70 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1021.32 | 3.51 | .70 | ||||||||
Class 3 — actual return | 1,000.00 | 1,032.67 | 3.18 | .63 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.67 | 3.16 | .63 | ||||||||
U.S. Government/AAA-Rated Securities Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 993.10 | $ | 2.12 | .43 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.66 | 2.16 | .43 | ||||||||
Class 2 — actual return | 1,000.00 | 992.63 | 3.31 | .67 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.47 | 3.36 | .67 | ||||||||
Class 3 — actual return | 1,000.00 | 992.50 | 3.01 | .61 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.77 | 3.06 | .61 | ||||||||
Cash Management Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,021.95 | $ | 1.50 | .30 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.31 | 1.51 | .30 | ||||||||
Class 2 — actual return | 1,000.00 | 1,021.44 | 2.76 | .55 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.07 | 2.76 | .55 | ||||||||
Class 3 — actual return | 1,000.00 | 1,021.19 | 2.41 | .48 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.41 | 2.41 | .48 |
* | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period). |
† | The annualized expense ratio and the information in the first line of each share class are based on operations for the period May 1, 2006 (when the fund commenced operations), through June 30, 2006, and, accordingly, are not representative of a full period. |
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Board of trustees
“Non-interested” trustees
Name and age | Year first elected a trustee of the series1 | Principal occupation(s) during past five years | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 | ||||
Lee A. Ault III, 70 Chairman of the Board | 1999 | Chairman of the Board, In-Q-Tel, Inc. (an independent technology venture company funded principally by the Central Intelligence Agency); former Chairman of the Board, President and CEO, Telecredit, Inc. | 1 | Anworth Mortgage Asset Corporation; Office Depot, Inc. | ||||
H. Frederick Christie, 73 | 1994 | Private investor; former President and CEO, The Mission Group (non-utility holding company, subsidiary of Southern California Edison Company) | 19 | Ducommun Incorporated; IHOP Corporation; Southwest Water Company | ||||
Joe E. Davis, 72 | 1991 | Private investor; former Chairman of the Board, Linear Corporation (linear motor design and production); former President and CEO, National Health Enterprises, Inc; | 1 | Anworth Mortgage Asset Corporation; Natural Alternatives, Inc. | ||||
Martin Fenton, 71 | 1995 | Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities) | 16 | None | ||||
Leonard R. Fuller, 60 | 1999 | President and CEO, Fuller Consulting (financial management consulting firm) | 14 | None | ||||
Mary Myers Kauppila, 52 | 1994 | Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc. | 5 | None | ||||
Kirk P. Pendleton, 66 | 1996 | Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment) |
“Interested” trustees
Name, age and position with series | Year first elected a trustee or officer | Principal occupations during past five years | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 | ||||
James K. Dunton, 68 Vice Chairman of the Board | 1993 | Senior Vice President and Director, Capital Research and Management Company | 2 | None | ||||
Donald D. O’Neal, 46 President | 1998 | Senior Vice President, Capital Research and Management Company | 3 | None |
The statement of additional information includes additional information about the series’ trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all trustees and officers of the series is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.
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Other officers
Name, age and position with series | Year first elected a trustee or officer | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | ||
Alan N. Burro, 45 Senior Vice President | 1998 | Vice President, Capital Research and Management Company; Senior Vice President, Capital Research Company5 | ||
Michael J. Downer, 51 Senior Vice President | 1991 | Vice President and Secretary, Capital Research and Management Company; Director, American Funds Distributors, Inc.;5 Director, Capital Bank and Trust Company5 | ||
Abner D. Goldstine, 76 Senior Vice President | 1993 | Senior Vice President and Director, Capital Research and Management Company | ||
John H. Smut, 49 Senior Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, American Funds Distributors, Inc.5 | ||
Claudia P. Huntington, 54 Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5 | ||
Robert W. Lovelace, 43 Vice President | 1997 | Senior Vice President, Capital Research and Management Company; Chairman of the Board, Capital Research Company,5 Director, The Capital Group Companies, Inc.5 | ||
Susan M. Tolson, 44 Vice President | 1999 | Senior Vice President, Capital Research Company5 | ||
Chad L. Norton, 46 Secretary | 1994 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
David A. Pritchett, 40 Treasurer | 1999 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Steven I. Koszalka, 42 Assistant Secretary | 2003 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Karl C. Grauman, 38 Assistant Treasurer | 2006 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Sheryl F. Johnson, 38 Assistant Treasurer | 1997 | Vice President — Fund Business Management Group, Capital Research and Management Company |
1 | Trustees and officers of the series serve until their resignation, removal or retirement. |
2 | Capital Research and Management Company manages the American Funds, consisting of 29 funds, and Endowments, whose shareholders are limited to certain nonprofit organizations. |
3 | This includes all directorships (other than those in the American Funds) that are held by each trustee as a director of a public company or a registered investment company. |
4 | “Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the series’ investment adviser, Capital Research and Management Company, or affiliated entities (including the series’ principal underwriter). |
5 | Company affiliated with Capital Research and Management Company. |
Table of Contents
American Funds GVIT Global Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
2 | Statement of Assets and Liabilities | |
2 | Statement of Operations | |
3 | Statements of Changes in Net Assets | |
4 | Financial Highlights | |
5 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-AGGL (8/06)
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Shareholder
Expense Example | American Funds GVIT Global Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, May 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period | Annualized Expense Ratio | ||||||||||||
American Funds GVIT Global Growth Fund | |||||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 958.80 | $ | 5.83 | (a) | 1.20% | (a) | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,018.85 | $ | 6.02 | (b) | 1.20% | (b) | ||||||
Class VII | Actual | $ | 1,000.00 | $ | 958.00 | $ | 9.13 | (a) | 1.88% | (a) | |||||
Hypothetical1 | $ | 1,000.00 | $ | 1,015.48 | $ | 9.44 | (b) | 1.88% | (b) | ||||||
(a) | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
(b) | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1 | Represents the hypothetical 5% return before expenses. |
1
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GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT GLOBAL GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments in Portfolio (cost $4,325,209) | $ | 4,298,104 | ||
Receivable for capital shares issued | 330,012 | |||
Total Assets | 4,628,116 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 18 | |||
Accrued expenses and other payables: | ||||
Fund administration and transfer agent fees | 939 | |||
Master feeder service provider fee | 250 | |||
Distribution fees | 624 | |||
Administrative servicing fees | 608 | |||
Trustee fees | 64 | |||
Other | 2,049 | |||
Total Liabilities | 4,552 | |||
Net Assets | $ | 4,623,564 | ||
Represented by: | ||||
Capital | $ | 4,651,366 | ||
Accumulated net investment income (loss) | (697 | ) | ||
Net unrealized appreciation (depreciation) | (27,105 | ) | ||
Net Assets | $ | 4,623,564 | ||
Net Assets: | ||||
Class II Shares | $ | 4,622,605 | ||
Class VII Shares | 959 | |||
Total | $ | 4,623,564 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 223,868 | |||
Class VII Shares | 46 | |||
Total | 223,914 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 20.65 | ||
Class VII Shares | $ | 20.65 | (a) |
For the period ended June 30, 2006 (Unaudited)(b)
Investment Income: | ||||
Dividend income | $ | 35,679 | ||
Total Income | 35,679 | |||
Expenses: | ||||
Fund administration and transfer agent fees | 995 | |||
Master feeder service provider fee | 837 | |||
Distribution fees Class II Shares | 836 | |||
Distribution fees Class VII Shares | 1 | |||
Administrative servicing fees Class II Shares | 836 | |||
Administrative servicing fees Class VII Shares | 1 | |||
Professional fees | 2,162 | |||
Printing fees | 469 | |||
Trustee fees | 74 | |||
Other | 660 | |||
Total expenses before waived expenses | 6,871 | |||
Expenses waived | (502 | ) | ||
Total Expenses | 6,369 | |||
Net Investment Income (Loss) | 29,310 | |||
REALIZED/UNREALIZED GAINS | ||||
Net change in unrealized appreciation/depreciation on investments | (27,105 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 2,205 | ||
* | Not subject to a front-end sales charge. |
(a) | Due to rounding, Net Assets divided by shares outstanding does not equal the NAV. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT GLOBAL GROWTH FUND
Statement of Changes in Net Assets
Period Ended June 30, 2006(a) | ||||
(Unaudited) | ||||
From Investment Activities: | ||||
Operations: | ||||
Net investment income (loss) | $ | 29,310 | ||
Net change in unrealized appreciation/depreciation on investments | (27,105 | ) | ||
Change in net assets resulting from operations | 2,205 | |||
Distributions to Class II shareholders from: | ||||
Net investment income | (30,000 | ) | ||
Distributions to Class VII shareholders from: | ||||
Net investment income | (7 | ) | ||
Change in net assets from shareholder distributions | (30,007 | ) | ||
Change in net assets from capital transactions | 4,651,366 | |||
Change in net assets | 4,623,564 | |||
Net Assets: | ||||
Beginning of period | — | |||
End of period | $ | 4,623,564 | ||
Accumulated net investment income (loss) | $ | (697 | ) | |
CAPITAL TRANSACTIONS: | ||||
Class II Shares | ||||
Proceeds from shares issued | $ | 4,693,980 | ||
Dividends reinvested | 30,000 | |||
Cost of shares redeemed | (73,621 | ) | ||
4,650,359 | ||||
Class VII Shares | ||||
Proceeds from shares issued | 1,000 | |||
Dividends reinvested | 7 | |||
1,007 | ||||
Change in net assets from capital transactions | $ | 4,651,366 | ||
SHARE TRANSACTIONS: | ||||
Class II Shares | ||||
Issued | 225,962 | |||
Reinvested | 1,494 | |||
Redeemed | (3,588 | ) | ||
223,868 | ||||
Class VII Shares | ||||
Issued | 46 | |||
Reinvested | — | (b) | ||
46 | ||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(b) | Amount is less than 1 share. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
American Funds GVIT Global Growth Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Average | Ratio of Average Net | Ratio of Net Investment (Prior to Average Net | Portfolio Turnover(a) | |||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, | $ | 21.69 | 0.16 | (1.04 | ) | (0.88 | ) | (0.16 | ) | (0.16 | ) | $ | 20.65 | (4.03% | )(c) | $ | 4,623 | 1.10% | (d) | 5.53% | (d) | 1.20% | (d) | 5.44% | (d) | 17.00% | ||||||||||||||
Class VII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, | $ | 21.69 | 0.16 | (1.05 | ) | (0.89 | ) | (0.15 | ) | (0.15 | ) | $ | 20.65 | (4.11% | )(c) | $ | 1 | 1.88% | (d) | 4.60% | (d) | 1.88% | (d) | 4.60% | (d) | 17.00% |
(a) | Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(c) | Not annualized. |
(d) | Annualized. |
See notes to financial statements.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the American Funds GVIT Global Growth Fund (the “Fund”).
The Fund operates as a “feeder fund” which means that the Fund does not buy individual securities directly. Instead, the Fund invests all of its assets in another mutual fund, the American Global Growth Fund (the “Master Fund”), a series of the American Funds Insurance Series® (“American Funds”), which invests directly in individual securities. The Fund, therefore, has the same investment objective and limitations as the Master Fund in which the Fund invests and the same gross investment returns as the Master Fund.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
The net asset value (“NAV”) per share of each class of the Fund is calculated by taking the NAV of the Master Fund, subtracting the Fund’s liabilities attributable to the Fund, and dividing by the number of shares of that class that are outstanding. The Fund’s NAV is determined at the close of regular trading on the New York Stock Exchange (the “Exchange”) (usually 4 p.m. Eastern Time) (“Close of Trading”) on each day the Exchange is open for trading (“Business Day”). Each Fund may reject any order to buy Fund shares and may suspend the sale of Fund shares at any time.
The Master Fund calculates its NAV at the Close of Trading on each Business Day. Assets held by the Master Fund are valued primarily on the basis of market quotations. The Master Fund, however, has adopted procedures for making “fair value” determinations if market quotations are not readily available. For example, if events occur between the close of markets outside the United States and the close of regular trading on the New York Stock Exchange that, in the opinion of Capital Research and Management Company (“Capital Research”), the Master Fund’s investment adviser, materially affect the value of the portfolio securities of the Master Fund, the securities will be valued in accordance with the Master Fund’s fair value procedures. Use of these procedures is intended to result in more appropriate NAVs. In addition, such use will reduce, if not eliminate, potential arbitrage opportunities otherwise available to short-term investors in the Master Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(b) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(c) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the NAV of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(d) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | ||||||||
$4,325,209 | $ | — | $ | (27,105 | ) | $ | (27,105 | ) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(e) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Master Fund’s Investment Advisory Agreement, Capital Research manages the investment of the assets and supervises the daily business affairs of the Master Fund. Gartmore SA Capital Trust (“GSA”) provides non-investment master-feeder operational support services to the Fund. Under the terms of the Trust’s Master-Feeder Services Agreement with GSA on behalf of the Fund, the Fund pays GSA a fee of 0.25% based on the Fund’s average daily net assets. GSA has entered into a contractual agreement with the Trust under which GSA will waive 0.15% of the fees GSA receives for the providing the Fund with non-investment master-feeder operational support services until May 1, 2007.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, GSA provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all Funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Fund for expenses associated with the distribution of the shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares and Class VII shares of the Fund at an annual rate not to exceed 0.25% of Class II shares and 0.40% of Class VII shares.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the period ended June 30, 2006, Nationwide Financial Services received $873 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the period ended June 30, 2006, (excluding short-term securities) the Master Fund had purchases of $615,964 and sales of $451,141.
5. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging markets instruments that are subject to certain additional credit and market risks. The yields of emerging markets debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
7
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
8
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association - College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
11
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
12
Table of Contents
Financial Statements for
the American Funds Master Fund
AMERICAN FUNDS INSURANCE SERIES
GLOBAL GROWTH FUND
INVESTMENT MIX BY REGION/COUNTRY
Where the fund’s assets were invested
based on total net assets as of
June 30, 2006
Percent of net assets | |||
Europe | 30.6 | % | |
The Americas | 28.9 | ||
Asia/Pacific Basin | 22.7 | ||
Other countries | 0.4 | ||
Short-term securities & other assets less liabilities | 17.4 | ||
100.0 | % | ||
Europe | |||
United Kingdom | 6.1 | % | |
Germany | 4.4 | ||
France | 4.0 | ||
Netherlands | 4.0 | ||
Switzerland | 2.5 | ||
Austria | 2.0 | ||
Spain | 1.9 | ||
Denmark | 1.2 | ||
Finland | 1.4 | ||
Italy | 1.2 | ||
Other | 1.9 | ||
30.6 | |||
The Americas | |||
U.S. | 24.2 | ||
Canada | 2.7 | ||
Mexico | 1.4 | ||
Brazil | 0.6 | ||
28.9 | |||
Asia/Pacific Basin | |||
Japan | 9.7 | ||
Taiwan | 3.0 | ||
Australia | 2.6 | ||
India | 2.3 | ||
South Korea | 2.0 | ||
Hong Kong | 1.4 | ||
Other | 1.7 | ||
22.7 | |||
Other countries | 0.4 | ||
Short-term securities & other assets less liabilities | 17.4 | ||
Total | 100.0 | % |
Table of Contents
AMERICAN FUNDS INSURANCE SERIES
GLOBAL GROWTH FUND
LARGEST INDIVIDUAL EQUITY SECURITIES
As of June 30, 2006
Percent of net assets | |||
Sociéte Générale | 1.8 | % | |
Koninklijke KPN | 1.6 | ||
Reliance Industries | 1.6 | ||
AstraZeneca | 1.4 | ||
Telekom Austria | 1.4 | ||
Macquarie Bank | 1.3 | ||
IBM | 1.3 | ||
Telefónica | 1.3 | ||
Tyco | 1.2 | ||
Novo Nordisk | 1.2 |
Table of Contents
American Funds Insurance Series Global Growth Fund
Investment portfolio, June 30, 2006
unaudited
Common stocks | Shares | Market value | |||
(000) | |||||
International Business Machines Corp. | 550,000 | $ | 42,251 | ||
Murata Manufacturing Co., Ltd. | 530,000 | 34,419 | |||
Cisco Systems, Inc. (1) | 1,646,500 | 32,156 | |||
Samsung Electronics Co., Ltd. | 48,440 | 30,795 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. | 11,731,127 | 21,189 | |||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 709,919 | 6,517 | |||
Rohm Co., Ltd. | 271,800 | 24,303 | |||
Microsoft Corp. | 1,037,000 | 24,162 | |||
Nokia Corp. | 1,075,000 | 21,920 | |||
Motorola, Inc. | 1,050,000 | 21,157 | |||
ASML Holding NV (New York registered) (1) | 771,800 | 15,606 | |||
ASML Holding NV (1) | 125,000 | 2,530 | |||
Powerchip Semiconductor Corp. (1) | 27,350,000 | 17,975 | |||
Molex Inc. | 520,000 | 17,456 | |||
AU Optronics Corp. | 11,935,500 | 16,870 | |||
Hon Hai Precision Industry Co., Ltd. | 2,682,425 | 16,592 | |||
Oracle Corp. (1) | 1,100,000 | 15,939 | |||
Chartered Semiconductor Manufacturing Ltd (1) | 18,250,000 | 15,567 | |||
Chi Mei Optoelectronics Corp. | 13,443,318 | 14,947 | |||
Applied Materials, Inc. | 700,000 | 11,396 | |||
Google Inc., Class A (1) | 25,000 | 10,483 | |||
Xilinx, Inc. | 440,000 | 9,966 | |||
Altera Corp. (1) | 550,000 | 9,652 | |||
Yahoo! Inc. (1) | 275,000 | 9,075 | |||
Citizen Watch Co., Ltd. | 1,000,000 | 9,064 | |||
eBay Inc. (1) | 300,000 | 8,787 | |||
Nintendo Co., Ltd. | 50,000 | 8,391 | |||
Texas Instruments Inc. | 250,000 | 7,572 | |||
Tokyo Electron Ltd. | 96,100 | 6,720 | |||
Venture Corp. Ltd. | 680,000 | 4,554 | |||
Mediatek Incorporation | 489,018 | 4,537 | |||
KLA-Tencor Corp. | 37,921 | 1,576 | |||
Société Générale | 419,400 | 61,620 | |||
Macquarie Bank Ltd. | 856,791 | 43,907 | |||
HSBC Holdings PLC (United Kingdom) | 1,967,769 | 34,582 | |||
Mizuho Financial Group, Inc. | 3,750 | 31,761 | |||
Allianz AG | 192,000 | 30,299 | |||
Mitsubishi UFJ Financial Group, Inc. | 2,023 | 28,291 | |||
Commerzbank U.S. Finance, Inc. | 677,500 | 24,617 | |||
Kookmin Bank | 275,060 | 22,620 | |||
Erste Bank der oesterreichischen Sparkassen AG | 352,480 | 19,814 | |||
Sun Hung Kai Properties Ltd. | 1,750,000 | 17,846 | |||
Hypo Real Estate Holding AG | 285,000 | 17,292 | |||
Shanghai Forte Land Co., Ltd., Class H | 34,776,000 | 14,105 | |||
Hana Financial Holdings | 296,200 | 13,928 | |||
American International Group, Inc. | 225,000 | 13,286 | |||
Westpac Banking Corp. | 690,449 | 11,938 | |||
Willis Group Holdings Ltd. | 350,000 | 11,235 | |||
ING Groep NV | 272,172 | 10,686 |
Table of Contents
Lloyds TSB Group PLC | 1,000,000 | 9,817 | ||
UniCredito Italiano SpA | 1,125,000 | 8,801 | ||
Banco Santander Central Hispano, SA | 503,914 | 7,352 | ||
Citigroup Inc. | 150,000 | 7,236 | ||
Marsh & McLennan Companies, Inc. | 250,000 | 6,722 | ||
Bank of Nova Scotia | 140,000 | 5,547 | ||
Westfield Group | 412,507 | 5,309 | ||
Mitsui Sumitomo Insurance Co., Ltd. | 350,000 | 4,396 | ||
Royal Bank of Canada | 100,000 | 4,061 | ||
News Corp. Inc., Class A | 1,291,757 | 24,776 | ||
News Corp. Inc., Class B | 427,507 | 8,627 | ||
Toyota Motor Corp. | 435,000 | 22,775 | ||
Kohl’s Corp. (1) | 350,000 | 20,692 | ||
Carnival Corp., units | 470,000 | 19,618 | ||
Target Corp. | 370,000 | 18,082 | ||
Esprit Holdings Ltd. | 2,100,500 | 17,148 | ||
Starbucks Corp. (1) | 440,000 | 16,614 | ||
Michaels Stores, Inc. | 390,000 | 16,084 | ||
Mediaset SpA | 1,364,500 | 16,073 | ||
Discovery Holding Co., Class A (1) | 1,080,500 | 15,808 | ||
Time Warner Inc. | 900,000 | 15,570 | ||
GOME Electrical Appliances Holding Ltd. | 17,430,000 | 14,700 | ||
H & M Hennes & Mauritz AB, Class B | 376,000 | 14,567 | ||
Viacom Inc., Class B (1) | 389,500 | 13,960 | ||
Kesa Electricals PLC | 2,473,400 | 13,203 | ||
Lowe’s Companies, Inc. | 190,000 | 11,527 | ||
Kingfisher PLC | 2,349,422 | 10,349 | ||
Limited Brands, Inc. | 370,000 | 9,468 | ||
Grupo Televisa, SA, ordinary participation certificates (ADR) | 460,000 | 8,883 | ||
Honda Motor Co., Ltd. | 268,800 | 8,528 | ||
Cie. Financière Richemont AG, Class A, units | 152,893 | 6,991 | ||
Suzuki Motor Corp. | 313,000 | 6,771 | ||
Greek Organization of Football Prognostics SA | 169,790 | 6,139 | ||
DSG International PLC | 1,691,929 | 5,969 | ||
Swatch Group Ltd, non-registered shares | 11,936 | 2,013 | ||
Swatch Group Ltd | 35,521 | 1,238 | ||
Univision Communications Inc., Class A (1) | 70,000 | 2,345 | ||
IAC/InterActiveCorp (1) | 30,000 | 795 | ||
SET Satellite (Singapore) Pte. Ltd. (1) (2) (3) | 155,973 | 606 | ||
Expedia, Inc. (1) | 30,000 | 449 | ||
SET India Ltd. (1) (2) (3) | 6,400 | 312 | ||
AstraZeneca PLC (United Kingdom) | 443,960 | 26,765 | ||
AstraZeneca PLC (Sweden) | 268,005 | 16,170 | ||
AstraZeneca PLC (ADR) | 73,000 | 4,367 | ||
Novo Nordisk A/S, Class B | 602,600 | 38,360 | ||
WellPoint, Inc. (1) | 436,000 | 31,728 | ||
Roche Holding AG | 168,500 | 27,806 | ||
Shionogi & Co., Ltd. | 1,163,000 | 20,737 | ||
Rhön-Klinikum AG | 427,824 | 19,038 | ||
UCB NV | 343,020 | 18,538 | ||
CIGNA Corp. | 185,000 | 18,224 | ||
Smith & Nephew PLC | 1,630,500 | 12,543 | ||
Chugai Pharmaceutical Co., Ltd. | 596,100 | 12,166 | ||
Synthes, Inc. | 100,500 | 12,104 | ||
Aetna Inc. | 300,000 | 11,979 | ||
Pfizer Inc | 500,000 | 11,735 | ||
Sanofi-Aventis | 84,000 | 8,188 | ||
Forest Laboratories, Inc. (1) | 94,800 | 3,668 |
Table of Contents
Reliance Industries Ltd. | 2,350,298 | 54,305 | ||
Royal Dutch Shell PLC, Class B | 574,666 | 20,071 | ||
Royal Dutch Shell PLC, Class B (ADR) | 139,643 | 9,757 | ||
Canadian Natural Resources, Ltd. | 456,000 | 25,219 | ||
Schlumberger Ltd. | 380,000 | 24,742 | ||
Norsk Hydro ASA | 875,000 | 23,183 | ||
Technip SA | 325,000 | 17,979 | ||
ENI SpA | 550,000 | 16,169 | ||
Halliburton Co. | 140,000 | 10,389 | ||
Baker Hughes Inc. | 125,000 | 10,231 | ||
Imperial Oil Ltd. | 257,928 | 9,425 | ||
Petróleo Brasileiro SA - Petrobras, ordinary nominative (ADR) | 100,000 | 8,931 | ||
Noble Corp. | 95,000 | 7,070 | ||
Koninklijke KPN NV | 4,875,830 | 54,756 | ||
Telekom Austria AG | 2,101,200 | 46,737 | ||
Telefónica, SA | 2,534,081 | 42,153 | ||
Vodafone Group PLC (ADR) | 500,000 | 10,650 | ||
Vodafone Group PLC | 4,550,000 | 9,685 | ||
Qwest Communications International Inc. (1) | 2,500,000 | 20,225 | ||
América Móvil SA de CV, Series L (ADR) | 585,000 | 19,457 | ||
AT&T Inc. | 600,000 | 16,734 | ||
Sprint Nextel Corp., Series 1 | 601,750 | 12,029 | ||
France Télécom, SA | 185,000 | 3,973 | ||
Seven & I Holdings Co., Ltd. | 1,032,000 | 34,006 | ||
Koninklijke Ahold NV (1) | 3,577,000 | 31,030 | ||
Nestlé SA | 83,900 | 26,307 | ||
Avon Products, Inc. | 550,800 | 17,075 | ||
PepsiCo, Inc. | 197,000 | 11,828 | ||
Cia. de Bebidas das Américas - AmBev, preferred nominative (ADR) | 246,000 | 10,148 | ||
Cia. de Bebidas das Américas - AmBev, ordinary nominative (ADR) | 44,000 | 1,610 | ||
METRO AG | 200,000 | 11,325 | ||
Groupe Danone | 72,500 | 9,202 | ||
Altria Group, Inc. | 125,000 | 9,179 | ||
Coca-Cola Co. | 200,000 | 8,604 | ||
Anheuser-Busch Companies, Inc. | 175,000 | 7,978 | ||
Procter & Gamble Co. | 135,000 | 7,506 | ||
Unilever NV | 300,000 | 6,796 | ||
Woolworths Ltd. | 450,040 | 6,735 | ||
Wal-Mart de México, SA de CV, Series V (ADR) | 200,000 | 5,490 | ||
Kimberly-Clark de México, SA de CV, Class A, ordinary participation certificates | 1,540,000 | 4,904 | ||
Unilever PLC | 190,043 | 4,268 | ||
Tyco International Ltd. | 1,465,000 | 40,288 | ||
General Electric Co. | 1,125,455 | 37,095 | ||
Deutsche Post AG | 705,000 | 18,879 | ||
Macquarie Infrastructure Group | 7,326,774 | 18,284 | ||
3M Co. | 160,000 | 12,923 | ||
FANUC LTD | 126,600 | 11,375 | ||
Asahi Glass Co., Ltd. | 826,000 | 10,476 | ||
Bombardier Inc., Class B (1) | 2,500,000 | 6,967 | ||
SMC Corp. | 42,000 | 5,943 | ||
Siemens AG | 50,000 | 4,346 | ||
MISC Berhad | 329,000 | 690 | ||
UPM-Kymmene Corp. | 1,090,000 | 23,465 | ||
Ivanhoe Mines Ltd. (1) | 2,475,000 | 16,766 | ||
Barrick Gold Corp. | 557,174 | 16,461 | ||
Nitto Denko Corp. | 196,400 | 13,991 | ||
Akzo Nobel NV | 258,000 | 13,897 | ||
Galaxy Entertainment Group Ltd. (1) | 13,000,000 | 12,638 |
Table of Contents
Bayer AG | 250,000 | 11,479 | ||||
Holcim Ltd. | 100,000 | 7,651 | ||||
Alcoa Inc. | 183,100 | 5,925 | ||||
Gold Fields Ltd. | 163,100 | 3,711 | ||||
L’Air Liquide | 8,470 | 1,648 | ||||
Weyerhaeuser Co. | 25,000 | 1,556 | ||||
Veolia Environnement | 562,771 | 29,055 | ||||
Endesa, SA | 405,000 | 14,069 | ||||
NTPC Ltd. | 4,951,000 | 11,970 | ||||
E.ON AG | 100,000 | 11,501 | ||||
Scottish Power PLC | 875,397 | 9,426 | ||||
Other common stocks in initial period of acquisition | 97,245 | |||||
Total common stocks (cost: $2,187,460,000) | 2,763,569 | |||||
Short-term securities | Principal amount | Market value | ||||
(000) | (000) | |||||
Amsterdam Funding Corp. 5.01%-5.15% due 7/14-8/4/2006 (2) | $ | 36,200 | $ | 36,068 | ||
American Honda Finance Corp. 5.00% due 7/24/2006 | 27,800 | 27,707 | ||||
BASF AG 5.03%-5.30% due 8/2-8/21/2006 (2) | 27,100 | 26,913 | ||||
Fannie Mae 5.30% due 9/27/2006 | 26,200 | 25,869 | ||||
Old Line Funding, LLC 5.03%-5.07% due 7/7-7/18/2006 (2) | 25,100 | 25,056 | ||||
Toyota Credit de Puerto Rico Corp. 5.10% due 8/15/2006 | 25,200 | 25,034 | ||||
Abbey National North America LLC 5.00% due 7/21/2006 | 25,000 | 24,930 | ||||
Alcon Capital Corp. 5.05% due 8/3/2006 (2) | 25,000 | 24,881 | ||||
International Lease Finance Corp. 5.04%-5.05% due 8/2-8/3/2006 | 23,700 | 23,587 | ||||
Federal Home Loan Bank 4.95%-4.991% due 7/14-7/28/2006 | 22,200 | 22,143 | ||||
Allied Irish Banks N.A. Inc. 5.325% due 8/28/2006 (2) | 22,300 | 22,108 | ||||
Westpac Banking Corp. 5.155% due 9/7/2006 (2) | 22,000 | 21,785 | ||||
Variable Funding Capital Corp. 5.02% due 7/7/2006 (2) | 20,000 | 19,980 | ||||
Freddie Mac 5.02% due 8/22/2006 | 18,800 | 18,654 | ||||
Shell International Finance BV 4.98% due 8/1/2006 | 18,600 | 18,517 | ||||
CAFCO, LLC 5.04% due 7/14/2006 (2) | 18,500 | 18,464 | ||||
Rabobank USA Financial Corp. 5.08% due 8/2/2006 | 18,100 | 18,019 | ||||
Stadshypotek Delaware Inc. 4.98% due 7/25/2006 (2) | 17,400 | 17,340 | ||||
Concentrate Manufacturing Co. of Ireland 5.02% due 7/11/2006 (2) | 17,000 | 16,974 | ||||
Swedish Export Credit Corp. 5.02% due 7/17/2006 | 17,000 | 16,960 | ||||
Three Pillars Funding, LLC 5.28% due 7/3/2006 (2) | 15,600 | 15,593 | ||||
Toronto-Dominion Holdings USA Inc. 5.06% due 7/24/2006 (2) | 15,000 | 14,950 | ||||
Export Development Corp. 4.98%-5.00% due 7/13-7/24/2006 | 13,700 | 13,661 | ||||
Danske Corp. 5.05% due 7/18/2006 (2) | 13,400 | 13,366 | ||||
International Bank for Reconstruction and Development 5.15% due 8/15/2006 | 12,200 | 12,120 | ||||
Total Capital SA 5.13% due 8/14/2006 (2) | 12,000 | 11,923 | ||||
Spintab AB (Swedmortgage) 5.09%-5.29% due 8/4-8/23/2006 | 12,000 | 11,914 | ||||
ING (U.S.) Funding LLC CP 5.30% due 8/30/2006 | 10,000 | 9,910 | ||||
Barton Capital LLC 5.23%-5.32% due 7/3-8/11/2006 (2) | 9,800 | 9,743 | ||||
Medtronic Inc. 5.10% due 7/19/2006 (2) | 7,000 | 6,981 | ||||
Total short-term securities (cost: $571,129,000) | 571,150 | |||||
Total investment securities (cost: $2,758,589,000) | 3,334,719 | |||||
Other assets less liabilities | 11,459 | |||||
Net assets | $ | 3,346,178 |
Table of Contents
“Miscellaneous” securities include holdings in their initial period of acquisition that have not previously been publicly disclosed.
(1) | Security did not produce income during the last 12 months. |
(2) | Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $603,121,000, which represented 9.15% of the net assets of the fund. |
(3) | Valued under fair value procedures adopted by authority of the board of trustees. |
ADR | = American Depositary Receipts |
GDR | = Global Depositary Receipts |
See Notes to Financial Statements
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Assets: | ||||||||||||
Investment securities at market: | ||||||||||||
Unaffiliated issuers | $ | 3,334,719 | $ | 24,093,055 | $ | 6,531,116 | $ | 2,919,735 | ||||
Affiliated issuers | — | 143,235 | 49,361 | — | ||||||||
Cash denominated in non-U.S. currencies | 2,690 | 4,325 | — | — | ||||||||
Cash | 236 | 1,728 | 2,008 | 7,411 | ||||||||
Receivables for: | ||||||||||||
Sales of investments | 4,219 | 136,311 | 38,340 | 1,388 | ||||||||
Sales of fund’s shares | 3,034 | 22,713 | 4,098 | 2,121 | ||||||||
Open forward currency contracts | — | — | 19 | 392 | ||||||||
Dividends and interest | 6,391 | 23,180 | 24,729 | 34,881 | ||||||||
3,351,289 | 24,424,547 | 6,649,671 | 2,965,928 | |||||||||
Liabilities: | ||||||||||||
Payables for: | ||||||||||||
Purchases of investments | 2,443 | 70,125 | 147,523 | 40,145 | ||||||||
Repurchases of fund’s shares | 44 | 5,358 | 843 | 17 | ||||||||
Open forward currency contracts | — | — | 98 | 267 | ||||||||
Investment advisory services | 1,338 | 5,694 | 1,536 | 887 | ||||||||
Distribution services | 624 | 4,125 | 1,123 | 554 | ||||||||
Deferred trustees’ compensation | 40 | 625 | 166 | 33 | ||||||||
Other fees and expenses | 622 | 237 | 14 | 11 | ||||||||
5,111 | 86,164 | 151,303 | 41,914 | |||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | ||||
Investment securities at cost | ||||||||||||
Unaffiliated issuers | $ | 2,758,589 | $ | 19,440,548 | $ | 5,618,447 | $ | 2,954,017 | ||||
Affiliated issuers | — | $ | 133,658 | $ | 48,481 | — | ||||||
Cash denominated in non-U.S. currencies at cost | $ | 2,659 | $ | 4,338 | — | — |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Net assets consist of: | |||||||||||||
Capital paid in on shares of beneficial interest | $ | 2,664,757 | $ | 18,351,261 | $ | 5,366,389 | $ | 2,899,532 | |||||
Undistributed (distributions in excess of) net investment income | 33,224 | 103,564 | 77,407 | 69,335 | |||||||||
Undistributed (accumulated) net realized gain (loss) | 72,534 | 1,221,378 | 141,096 | (10,776 | ) | ||||||||
Net unrealized appreciation (depreciation) | 575,663 | 4,662,180 | 913,476 | (34,077 | ) | ||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | |||||
Shares of beneficial interest issued and outstanding - unlimited shares authorized: | |||||||||||||
Class 1: | |||||||||||||
Net assets (total: $11,157,497) | $ | 214,609 | $ | 3,490,659 | $ | 903,248 | $ | 187,817 | |||||
Shares outstanding | 10,399 | 57,813 | 52,575 | 17,074 | |||||||||
Net asset value per share | $ | 20.64 | $ | 60.38 | $ | 17.18 | $ | 11.00 | |||||
Class 2: | |||||||||||||
Net assets (total: $65,221,819) | $ | 3,131,569 | $ | 20,385,930 | $ | 5,519,490 | $ | 2,736,197 | |||||
Shares outstanding | 152,508 | 340,114 | 323,378 | 250,811 | |||||||||
Net asset value per share | $ | 20.53 | $ | 59.94 | $ | 17.07 | $ | 10.91 | |||||
Class 3: | |||||||||||||
Net assets (total: $1,181,927) | — | $ | 461,794 | $ | 75,630 | — | |||||||
Shares outstanding | — | 7,655 | 4,406 | — | |||||||||
Net asset value per share | — | $ | 60.33 | $ | 17.16 | — |
* | Amount less than one thousand |
See Notes to Financial Statements
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Investment income: | ||||||||||||
Income (net of non-U.S. taxes): | ||||||||||||
Dividends | $ | 34,509 | $ | 118,613 | $ | 42,570 | $ | 329 | ||||
Interest | 11,885 | 51,547 | 52,240 | 78,520 | ||||||||
46,394 | 170,160 | 94,810 | 78,849 | |||||||||
Fees and expenses: | ||||||||||||
Investment advisory services | 8,777 | 38,583 | 10,390 | 5,618 | ||||||||
Distribution services - Class 2 | 3,654 | 24,498 | 6,773 | 3,131 | ||||||||
Distribution services - Class 3 | — | 437 | 69 | — | ||||||||
Transfer agent services | 1 | 8 | 2 | 1 | ||||||||
Reports to shareholders | 47 | 358 | 96 | 41 | ||||||||
Registration statement and prospectus | 62 | 479 | 130 | 53 | ||||||||
Postage, stationery and supplies | 8 | 60 | 16 | 7 | ||||||||
Trustees’ compensation | 13 | 132 | 35 | 11 | ||||||||
Auditing and legal | 6 | 21 | 7 | 2 | ||||||||
Custodian | 386 | 725 | 89 | 55 | ||||||||
State and local taxes | 28 | 220 | 60 | 25 | ||||||||
Other | 15 | 48 | 15 | 5 | ||||||||
Total fees and expenses before waiver | 12,997 | 65,569 | 17,682 | 8,949 | ||||||||
Less waiver of fees and expenses: | ||||||||||||
Investment advisory services | 878 | 3,858 | 1,039 | 562 | ||||||||
Total fees and expenses after waiver | 12,119 | 61,711 | 16,643 | 8,387 | ||||||||
Net investment income | 34,275 | 108,449 | 78,167 | 70,462 |
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency: | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | 135,390 | 1,227,220 | 145,831 | (2,595 | ) | ||||||||||
Non-U.S. currency transactions | 5,200 | 261 | (466 | ) | (3,677 | ) | |||||||||
140,590 | 1,227,481 | 145,365 | (6,272 | ) | |||||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 538 | (795,483 | ) | 117,305 | (31,900 | ) | |||||||||
Non-U.S. currency translations | 89 | 208 | (97 | ) | 485 | ||||||||||
627 | (795,275 | ) | 117,208 | (31,415 | ) | ||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency | 141,217 | 432,206 | 262,573 | (37,687 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 175,492 | $ | 540,655 | $ | 340,740 | $ | 32,775 |
See Notes to Financial Statements
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 34,275 | $ | 30,708 | $ | 108,449 | $ | 128,993 | $ | 78,167 | $ | 126,432 | $ | 70,462 | $ | 110,408 | ||||||||||||||||
Net realized gain (loss) on investments and non-U.S. currency transactions | 140,590 | 83,182 | 1,227,481 | 637,504 | 145,365 | 133,120 | (6,272 | ) | 2,178 | |||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and non-U.S. currency translations | 627 | 222,184 | (795,275 | ) | 2,278,471 | 117,208 | 234,416 | (31,415 | ) | (77,663 | ) | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 175,492 | 336,074 | 540,655 | 3,044,968 | 340,740 | 493,968 | 32,775 | 34,923 | ||||||||||||||||||||||||
Dividends and distributions paid to shareholders: | ||||||||||||||||||||||||||||||||
Dividends from net investment income and non-U.S. currency gains: | ||||||||||||||||||||||||||||||||
Class 1 | (2,252 | ) | (1,641 | ) | (5,705 | ) | (31,560 | ) | (3,555 | ) | (20,656 | ) | (7,578 | ) | (7,502 | ) | ||||||||||||||||
Class 2 | (27,641 | ) | (14,177 | ) | (25,853 | ) | (112,734 | ) | (19,628 | ) | (106,102 | ) | (106,551 | ) | (73,453 | ) | ||||||||||||||||
Class 3 | — | — | (605 | ) | (3,387 | ) | (279 | ) | (1,653 | ) | — | — | ||||||||||||||||||||
Total dividends from net investment income and non-U.S. currency gains | (29,893 | ) | (15,818 | ) | (32,163 | ) | (147,681 | ) | (23,462 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) | ||||||||||||||||
Distributions from net realized gain on investments: | ||||||||||||||||||||||||||||||||
Short-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Long-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | (21,900 | ) | — | (11,851 | ) | — | — | — | ||||||||||||||||||||||
Class 2 | — | — | (127,584 | ) | — | (72,811 | ) | — | — | — | ||||||||||||||||||||||
Class 3 | — | — | (2,908 | ) | — | (1,004 | ) | — | — | — | ||||||||||||||||||||||
Total distributions from net realized gain on investments | — | — | (152,392 | ) | — | (85,666 | ) | — | — | — | ||||||||||||||||||||||
Total dividends and distributions paid to shareholders | (29,893 | ) | (15,818 | ) | (184,555 | ) | (147,681 | ) | (109,128 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Capital share transactions: | ||||||||||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||||||||||
Proceeds from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Proceeds from shares sold | 9,129 | 4,184 | 9,292 | 5,159 | 25,104 | 6,110 | 12,562 | 10,970 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 2,252 | 1,641 | 27,605 | 31,560 | 15,406 | 20,656 | 7,578 | 7,502 | ||||||||||||||||||||||||
Cost of shares repurchased | (13,591 | ) | (26,337 | ) | (323,657 | ) | (588,755 | ) | (50,269 | ) | (104,648 | ) | (9,822 | ) | (26,416 | ) | ||||||||||||||||
Net increase (decrease) from Class 1 transactions | (2,210 | ) | (20,512 | ) | (286,760 | ) | (552,036 | ) | (9,759 | ) | (77,882 | ) | 10,318 | (7,944 | ) | |||||||||||||||||
Class 2: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | 373,544 | 541,733 | 1,846,045 | 4,085,834 | 391,458 | 970,962 | 416,369 | 561,561 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 27,641 | 14,177 | 153,437 | 112,734 | 92,439 | 106,102 | 106,551 | 73,453 | ||||||||||||||||||||||||
Cost of shares repurchased | (21,874 | ) | (30,170 | ) | (235,018 | ) | (220,641 | ) | (279,357 | ) | (56,161 | ) | (22,339 | ) | (40,314 | ) | ||||||||||||||||
Net increase from Class 2 transactions | 379,311 | 525,740 | 1,764,464 | 3,977,927 | 204,540 | 1,020,903 | 500,581 | 594,700 | ||||||||||||||||||||||||
Class 3: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | — | — | 5,657 | 16,188 | 1,925 | 2,351 | — | — | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | — | — | 3,513 | 3,387 | 1,283 | 1,653 | — | — | ||||||||||||||||||||||||
Cost of shares repurchased | — | — | (55,454 | ) | (106,454 | ) | (6,411 | ) | (14,040 | ) | — | — | ||||||||||||||||||||
Net increase (decrease) from Class 3 transactions | — | — | (46,284 | ) | (86,879 | ) | (3,203 | ) | (10,036 | ) | — | — | ||||||||||||||||||||
Net increase in net assets resulting from capital share transactions | 377,101 | 505,228 | 1,431,420 | 3,339,012 | 191,578 | 932,985 | 510,899 | 586,756 | ||||||||||||||||||||||||
Total increase (decrease) in net assets | 522,700 | 825,484 | 1,787,520 | 6,236,299 | 423,190 | 1,298,542 | 429,545 | 540,724 | ||||||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||||||
Beginning of period | 2,823,478 | 1,997,994 | 22,550,863 | 16,314,564 | 6,075,178 | 4,776,636 | 2,494,469 | 1,953,745 | ||||||||||||||||||||||||
End of period | $ | 3,346,178 | $ | 2,823,478 | $ | 24,338,383 | $ | 22,550,863 | $ | 6,498,368 | $ | 6,075,178 | $ | 2,924,014 | $ | 2,494,469 | ||||||||||||||||
Undistributed (distributions in excess of) net investment income | $ | 33,224 | $ | 28,842 | $ | 103,564 | $ | 27,278 | $ | 77,407 | $ | 22,702 | $ | 69,335 | $ | 113,002 |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||
Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | Six months ended June 30, 2006 (1) | Year ended December 31, 2005 | |||||||||||||||||
Shares of beneficial interest: | ||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||
Shares issued from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||
Shares sold | 438 | 233 | 153 | 94 | 1,454 | 385 | 1,109 | 962 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 114 | 95 | 477 | 549 | 920 | 1,258 | 691 | 670 | ||||||||||||||||
Shares repurchased | (658 | ) | (1,486 | ) | (5,299 | ) | (11,005 | ) | (2,902 | ) | (6,585 | ) | (864 | ) | (2,323 | ) | ||||||||
Net increase (decrease) in shares outstanding | (106 | ) | (1,158 | ) | (4,669 | ) | (10,362 | ) | (528 | ) | (4,942 | ) | 936 | (691 | ) | |||||||||
Class 2: | ||||||||||||||||||||||||
Shares sold | 18,130 | 30,710 | 30,379 | 77,199 | 22,735 | 61,664 | 36,917 | 49,855 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 1,402 | 824 | 2,668 | 1,976 | 5,559 | 6,492 | 9,793 | 6,611 | ||||||||||||||||
Shares repurchased | (1,077 | ) | (1,695 | ) | (3,920 | ) | (4,104 | ) | (15,780 | ) | (3,564 | ) | (1,984 | ) | (3,572 | ) | ||||||||
Net increase in shares outstanding | 18,455 | 29,839 | 29,127 | 75,071 | 12,514 | 64,592 | 44,726 | 52,894 | ||||||||||||||||
Class 3: | ||||||||||||||||||||||||
Shares sold | — | — | 91 | 320 | 111 | 148 | — | — | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | — | — | 61 | 60 | 76 | 101 | — | — | ||||||||||||||||
Shares repurchased | — | — | (912 | ) | (2,009 | ) | (370 | ) | (887 | ) | — | — | ||||||||||||
Net increase (decrease) in shares outstanding | — | — | (760 | ) | (1,629 | ) | (183 | ) | (638 | ) | — | — |
(1) | Unaudited. |
See Notes to Financial Statements
Table of Contents
Financial Highlights (1)
Period | Net asset value, beginning of period | Income (loss) from investment operations (2) | Dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of to average | |||||||||||||||||||||||||||||||||||
Net investment income (loss) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | |||||||||||||||||||||||||||||||||||||||
Global Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 19.63 | $ | .24 | $ | .99 | $ | 1.23 | $ | (.22 | ) | $ | — | $ | (.22 | ) | $ | 20.64 | 6.31 | % | $ | 215 | .60 | %(6) | .54 | %(6) | 2.37 | %(6) | ||||||||||||||||
12/31/05 | 17.31 | .28 | 2.19 | 2.47 | (.15 | ) | — | (.15 | ) | 19.63 | 14.37 | 206 | .62 | .57 | 1.56 | |||||||||||||||||||||||||||||
12/31/04 | 15.30 | .18 | 1.92 | 2.10 | (.09 | ) | — | (.09 | ) | 17.31 | 13.80 | 202 | .65 | .64 | 1.15 | |||||||||||||||||||||||||||||
12/31/03 | 11.35 | .12 | 3.91 | 4.03 | (.08 | ) | — | (.08 | ) | 15.30 | 35.63 | 188 | .70 | .70 | .94 | |||||||||||||||||||||||||||||
12/31/02 | 13.42 | .09 | (2.02 | ) | (1.93 | ) | (.14 | ) | — | (.14 | ) | 11.35 | (14.46 | ) | 152 | .71 | .71 | .73 | ||||||||||||||||||||||||||
12/31/01 | 17.25 | .18 | (2.50 | ) | (2.32 | ) | (.15 | ) | (1.36 | ) | (1.51 | ) | 13.42 | (13.99 | ) | 215 | .70 | .70 | 1.24 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 19.52 | .22 | .97 | 1.19 | (.18 | ) | $ | — | (.18 | ) | 20.53 | 6.16 | 3,131 | .85 | (6) | .79 | (6) | 2.17 | (6) | |||||||||||||||||||||||||
12/31/05 | 17.23 | .23 | 2.18 | 2.41 | (.12 | ) | — | (.12 | ) | 19.52 | 14.07 | 2,617 | .87 | .82 | 1.30 | |||||||||||||||||||||||||||||
12/31/04 | 15.25 | .14 | 1.91 | 2.05 | (.07 | ) | — | (.07 | ) | 17.23 | 13.49 | 1,796 | .90 | .89 | .92 | |||||||||||||||||||||||||||||
12/31/03 | 11.32 | .09 | 3.89 | 3.98 | (.05 | ) | — | (.05 | ) | 15.25 | 35.27 | 1,082 | .95 | .95 | .68 | |||||||||||||||||||||||||||||
12/31/02 | 13.38 | .06 | (2.01 | ) | (1.95 | ) | (.11 | ) | — | (.11 | ) | 11.32 | (14.64 | ) | 592 | .96 | .96 | .48 | ||||||||||||||||||||||||||
12/31/01 | 17.21 | .13 | (2.49 | ) | (2.36 | ) | (.11 | ) | (1.36 | ) | (1.47 | ) | 13.38 | (14.22 | ) | 600 | .95 | .95 | .88 | |||||||||||||||||||||||||
Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 59.36 | $ | .34 | $ | 1.16 | $ | 1.50 | $ | (.10 | ) | $ | (.38 | ) | $ | (.48 | ) | $ | 60.38 | 2.56 | % | $ | 3,490 | .34 | %(6) | .31 | %(6) | 1.12 | %(6) | |||||||||||||||
12/31/05 | 51.39 | .46 | 8.00 | 8.46 | (.49 | ) | — | (.49 | ) | 59.36 | 16.50 | 3,709 | .35 | .32 | .87 | |||||||||||||||||||||||||||||
12/31/04 | 45.74 | .32 | 5.51 | 5.83 | (.18 | ) | — | (.18 | ) | 51.39 | 12.75 | 3,744 | .36 | .36 | .68 | |||||||||||||||||||||||||||||
12/31/03 | 33.47 | .16 | 12.26 | 12.42 | (.15 | ) | — | (.15 | ) | 45.74 | 37.15 | 3,877 | .39 | .39 | .41 | |||||||||||||||||||||||||||||
12/31/02 | 44.30 | .12 | (10.87 | ) | (10.75 | ) | (.08 | ) | — | (.08 | ) | 33.47 | (24.27 | ) | 3,195 | .40 | .40 | .30 | ||||||||||||||||||||||||||
12/31/01 | 73.51 | .18 | (11.99 | ) | (11.81 | ) | (.41 | ) | (16.99 | ) | (17.40 | ) | 44.30 | (17.93 | ) | 5,207 | .38 | .38 | .34 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 58.98 | .27 | 1.15 | 1.42 | (.08 | ) | (.38 | ) | (.46 | ) | 59.94 | 2.44 | 20,386 | .59 | (6) | .56 | (6) | .88 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.10 | .34 | 7.92 | 8.26 | (.38 | ) | — | (.38 | ) | 58.98 | 16.19 | 18,343 | .60 | .57 | .64 | |||||||||||||||||||||||||||||
12/31/04 | 45.50 | .23 | 5.45 | 5.68 | (.08 | ) | — | (.08 | ) | 51.10 | 12.50 | 12,055 | .61 | .61 | .50 | |||||||||||||||||||||||||||||
12/31/03 | 33.29 | .06 | 12.19 | 12.25 | (.04 | ) | — | (.04 | ) | 45.50 | 36.80 | 7,107 | .64 | .64 | .16 | |||||||||||||||||||||||||||||
12/31/02 | 44.09 | .03 | (10.82 | ) | (10.79 | ) | (.01 | ) | — | (.01 | ) | 33.29 | (24.46 | ) | 3,009 | .65 | .65 | .07 | ||||||||||||||||||||||||||
12/31/01 | 73.28 | .04 | (11.94 | ) | (11.90 | ) | (.30 | ) | (16.99 | ) | (17.29 | ) | 44.09 | (18.15 | ) | 2,937 | .63 | .63 | .07 | |||||||||||||||||||||||||
Class 3 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 59.34 | .28 | 1.17 | 1.45 | (.08 | ) | (.38 | ) | (.46 | ) | 60.33 | 2.48 | 462 | .52 | (6) | .49 | (6) | .94 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.38 | .37 | 7.98 | 8.35 | (.39 | ) | — | (.39 | ) | 59.34 | 16.28 | 499 | .53 | .50 | .69 | |||||||||||||||||||||||||||||
12/31/04 (7) | 47.74 | .24 | 3.50 | 3.74 | (.10 | ) | — | (.10 | ) | 51.38 | 7.85 | 516 | .54 | (6) | .53 | (6) | .54 | (6) | ||||||||||||||||||||||||||
Asset Allocation Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 16.56 | $ | .23 | $ | .69 | $ | .92 | $ | (.07 | ) | $ | (.23 | ) | $ | (.30 | ) | $ | 17.18 | 5.60 | % | $ | 903 | .34 | %(6) | .31 | %(6) | 2.66 | %(6) | |||||||||||||||
12/31/05 | 15.49 | .41 | 1.05 | 1.46 | (.39 | ) | — | (.39 | ) | 16.56 | 9.45 | 879 | .35 | .32 | 2.57 | |||||||||||||||||||||||||||||
12/31/04 | 14.58 | .39 | .84 | 1.23 | (.32 | ) | — | (.32 | ) | 15.49 | 8.50 | 899 | .38 | .37 | 2.64 | |||||||||||||||||||||||||||||
12/31/03 | 12.23 | .41 | 2.29 | 2.70 | (.35 | ) | — | (.35 | ) | 14.58 | 22.14 | 911 | .42 | .42 | 3.12 | |||||||||||||||||||||||||||||
12/31/02 | 14.30 | .45 | (2.19 | ) | (1.74 | ) | (.33 | ) | — | (.33 | ) | 12.23 | (12.19 | ) | 797 | .45 | .45 | 3.31 | ||||||||||||||||||||||||||
12/31/01 | 15.71 | .49 | (.37 | ) | .12 | (.59 | ) | (.94 | ) | (1.53 | ) | 14.30 | .77 | 1,012 | .45 | .45 | 3.30 | |||||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.47 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.07 | 5.46 | 5,519 | .59 | (6) | .56 | (6) | 2.41 | (6) | |||||||||||||||||||||||||
12/31/05 | 15.42 | .37 | 1.04 | 1.41 | (.36 | ) | — | (.36 | ) | 16.47 | 9.14 | 5,120 | .60 | .57 | 2.31 | |||||||||||||||||||||||||||||
12/31/04 | 14.51 | .36 | .84 | 1.20 | (.29 | ) | — | (.29 | ) | 15.42 | 8.34 | 3,797 | .62 | .62 | 2.42 | |||||||||||||||||||||||||||||
12/31/03 | 12.18 | .37 | 2.27 | 2.64 | (.31 | ) | — | (.31 | ) | 14.51 | 21.74 | 2,314 | .67 | .67 | 2.81 | |||||||||||||||||||||||||||||
12/31/02 | 14.25 | .42 | (2.18 | ) | (1.76 | ) | (.31 | ) | — | (.31 | ) | 12.18 | (12.38 | ) | 1,056 | .70 | .70 | 3.11 | ||||||||||||||||||||||||||
12/31/01 | 15.67 | .45 | (.36 | ) | .09 | (.57 | ) | (.94 | ) | (1.51 | ) | 14.25 | .52 | 730 | .70 | .70 | 3.03 |
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Financial Highlights (1)
Period | Net asset value, beginning of period | Income (loss) from investment operations (2) | Dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of to average | ||||||||||||||||||||||||||||||||||
Net investment income (loss) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | ||||||||||||||||||||||||||||||||||||||
Asset Allocation Fund (Continued) | |||||||||||||||||||||||||||||||||||||||||||
Class 3 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.56 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.16 | 5.44 | 76 | .52 | (6) | .49 | (6) | 2.48 | (6) | ||||||||||||||||||||||||
12/31/05 | 15.49 | .38 | 1.05 | 1.43 | (.36 | ) | — | (.36 | ) | 16.56 | 9.26 | 76 | .53 | .50 | 2.39 | ||||||||||||||||||||||||||||
12/31/04 (7) | 14.85 | .36 | .58 | .94 | (.30 | ) | — | (.30 | ) | 15.49 | 6.38 | 81 | .55 | (6) | .55 | (6) | 2.50 | (6) | |||||||||||||||||||||||||
Bond Fund | |||||||||||||||||||||||||||||||||||||||||||
Class 1 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 11.31 | $ | .31 | $ | (.15 | ) | $ | .16 | $ | (.47 | ) | $ | — | $ | (.47 | ) | $ | 11.00 | 1.41 | % | $ | 188 | .43 | %(6) | .39 | %(6) | 5.48 | %(6) | ||||||||||||||
12/31/05 | 11.57 | .60 | (.40 | ) | .20 | (.46 | ) | — | (.46 | ) | 11.31 | 1.77 | 182 | .44 | .40 | 5.30 | |||||||||||||||||||||||||||
12/31/04 | 11.34 | .56 | .10 | .66 | (.43 | ) | — | (.43 | ) | 11.57 | 6.04 | 195 | .45 | .44 | 4.94 | ||||||||||||||||||||||||||||
12/31/03 | 10.41 | .57 | .78 | 1.35 | (.42 | ) | — | (.42 | ) | 11.34 | 13.07 | 213 | .47 | .47 | 5.19 | ||||||||||||||||||||||||||||
12/31/02 | 10.44 | .67 | (.24 | ) | .43 | (.46 | ) | — | (.46 | ) | 10.41 | 4.26 | 218 | .49 | .49 | 6.60 | |||||||||||||||||||||||||||
12/31/01 | 10.18 | .77 | .08 | .85 | (.59 | ) | — | (.59 | ) | 10.44 | 8.48 | 194 | .49 | .49 | 7.38 | ||||||||||||||||||||||||||||
Class 2 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 11.22 | .29 | (.15 | ) | .14 | (.45 | ) | — | (.45 | ) | 10.91 | 1.23 | 2,736 | .68 | (6) | .64 | (6) | 5.23 | (6) | ||||||||||||||||||||||||
12/31/05 | 11.48 | .57 | (.39 | ) | .18 | (.44 | ) | — | (.44 | ) | 11.22 | 1.59 | 2,312 | .69 | .65 | 5.06 | |||||||||||||||||||||||||||
12/31/04 | 11.27 | .53 | .09 | .62 | (.41 | ) | — | (.41 | ) | 11.48 | 5.72 | 1,759 | .70 | .69 | 4.68 | ||||||||||||||||||||||||||||
12/31/03 | 10.36 | .53 | .78 | 1.31 | (.40 | ) | — | (.40 | ) | 11.27 | 12.80 | 1,280 | .72 | .72 | 4.88 | ||||||||||||||||||||||||||||
12/31/02 | 10.40 | .64 | (.24 | ) | .40 | (.44 | ) | — | (.44 | ) | 10.36 | 4.05 | 697 | .74 | .74 | 6.34 | |||||||||||||||||||||||||||
12/31/01 | 10.16 | .73 | .08 | .81 | (.57 | ) | — | (.57 | ) | 10.40 | 8.15 | 349 | .74 | .74 | 7.06 |
Portfolio turnover rate for all classes of shares
Six months ended June 30, 2006 (5) | Year Ended December 31 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Global Growth Fund | 17 | 26 | 24 | 27 | 30 | 38 | ||||||
Growth Fund | 23 | 29 | 30 | 34 | 34 | 31 | ||||||
Asset Allocation Fund | 21 | 23 | 20 | 20 | 25 | 32 | ||||||
Bond Fund | 29 | 46 | 34 | 20 | 29 | 59 |
(1) | Based on operations for the period shown (unless otherwise noted) and, accordingly, may not be representative of a full year. |
(2) | Based on average shares outstanding. |
(3) | The ratios in this column reflect the impact, if any, of certain waivers by CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. |
(4) | Commenced operations July 5, 2001. |
(5) | Unaudited. |
(6) | Annualized. |
(7) | From January 16, 2004, when Class 3 shares were first issued. |
See Notes to Financial Statements
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Notes to financial statements | unaudited |
1. Organization and significant accounting policies
Organization – American Funds Insurance Series (the “series”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company with 14 different funds. The assets of each fund are segregated, with each fund accounted for separately. The funds’ investment objectives are as follows:
Global Discovery Fund | Long-term growth of capital by investing primarily in stocks of companies in the services and information area of the global economy. | |
Global Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies located around the world. | |
Global Small Capitalization Fund | Long-term growth of capital by investing primarily in stocks of smaller companies located around the world. | |
Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies that offer opportunities for growth of capital. | |
International Fund | Long-term growth of capital by investing primarily in common stocks of companies located outside the U.S. | |
New World Fund | Long-term growth of capital by investing primarily in stocks of companies with significant exposure to countries with developing economies and/or markets. | |
Blue Chip Income and Growth Fund | To produce income exceeding the average yield on U.S. stocks and to provide an opportunity for growth of principal. | |
Global Growth and Income Fund | Long-term growth of capital and current income by investing primarily in stocks of well-established companies located around the world. | |
Growth-Income Fund | Growth of capital and income by investing primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. | |
Asset Allocation Fund | High total return (including income and capital gains) consistent with long-term preservation of capital. | |
Bond Fund | As high a level of current income as is consistent with the preservation of capital by investing primarily in fixed-income securities. | |
High-Income Bond Fund | High current income and, secondarily, capital appreciation by investing primarily in intermediate and long-term corporate obligations, with emphasis on higher yielding, higher risk, lower rated or unrated securities. | |
U.S. Government/AAA-Rated Securities Fund | A high level of current income consistent with prudent investment risk and preservation of capital by investing primarily in a combination of securities guaranteed by the U.S. government and other debt securities rated AAA or Aaa. | |
Cash Management Fund | High current yield while preserving capital by investing in a diversified selection of high-quality money market instruments. |
Each fund offers two or three share classes (1, 2 and 3). Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for certain distribution expenses. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
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Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the series:
Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the funds to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable are fair valued as determined in good faith under procedures adopted by authority of the series’ board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued.
Security transactions and related investment income – Security transactions are recorded by the series as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the series will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations – Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution expenses, are accrued daily and charged directly to the respective share class.
Dividends and distributions to shareholders – Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Non-U.S. currency translation – Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.
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Forward currency contracts – The series may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The series enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the series could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the series values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The series records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Mortgage dollar rolls – The series may enter into mortgage dollar roll transactions in which a fund in the series sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
2. Non-U.S. investments
Investment risk – The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the funds on the sale of securities in certain countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
3. Federal income taxation and distributions
The series complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The series is not subject to income taxes to the extent such distributions are made.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; deferred expenses; paydowns on fixed-income securities; net capital losses; non-U.S. taxes on capital gains; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of December 31, 2005, the funds’ most recent fiscal year end. Tax-basis unrealized appreciation (depreciation) and cost of investments are reported as of June 30, 2006.
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Additional tax basis disclosures are as follows:
(dollars in thousands)
Growth Fund | Global Growth Fund | Asset Global | Bond Fund | |||||||||||||
As of December 31, 2005: | ||||||||||||||||
Undistributed ordinary income | $ | 29,555 | $ | 31,502 | $ | 22,899 | $ | 113,791 | ||||||||
Undistributed long-term capital gains | — | 151,590 | 85,106 | — | ||||||||||||
Capital loss carryforwards | (66,686 | ) | — | — | (3,617 | ) | ||||||||||
As of June 30, 2006: | ||||||||||||||||
Gross unrealized appreciation on investment securities | 632,332 | 5,224,347 | 1,067,049 | 30,547 | ||||||||||||
Gross unrealized depreciation on investment securities | (56,728 | ) | (569,283 | ) | (156,712 | ) | (66,148 | ) | ||||||||
Net unrealized appreciation (depreciation) on investment securities | 575,604 | 4,655,064 | 910,337 | (35,601 | ) | |||||||||||
Cost of portfolio securities | 2,759,115 | 19,581,226 | 5,670,140 | 2,955,336 | ||||||||||||
Capital loss carryforwards expire in: | ||||||||||||||||
2006 | $ | — | — | — | $ | — | ||||||||||
2007 | — | — | — | — | ||||||||||||
2008 | — | — | — | — | ||||||||||||
2009 | — | — | — | — | ||||||||||||
2010 | 10,546 | — | — | — | ||||||||||||
2011 | 56,140 | — | — | 3,029 | ||||||||||||
2012 | — | — | — | — | ||||||||||||
2013 | — | — | — | 588 | ||||||||||||
$ | 66,686 | — | — | $ | 3,617 |
* | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
† | Amount less than one thousand. |
4. Fees and transactions with related parties
Capital Research and Management Company (“CRMC”), the series’ investment adviser, is the parent company of American Funds Service Company SM (“AFS”), the series’ transfer agent, and American Funds Distributors, Inc. SM (“AFD”), the principal underwriter of the series’ shares.
Investment advisory services – The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on annual rates that generally decrease as average net asset levels increase.
The board of trustees approved an amended agreement for Growth-Income Fund and Global Small Capitalization Fund, effective April 1, 2006, and July 1, 2006, respectively, that provided for reduced annual rates as reflected in the chart below. During the six months ended June 30, 2006, CRMC voluntarily reduced investment advisory services fees to the rates provided by the amended agreement for Global Small Capitalization Fund. Additionally, CRMC is currently waiving 10% of investment advisory services fees for all funds in the series. During the six months ended June 30, 2006, total aggregate investment advisory services fees waived by CRMC were $13,732,000. As a result, the aggregate fees shown on the accompanying financial statements of $137,318,000 were reduced to $123,586,000. The amended range of rates and asset levels and the current annualized rates of average net assets for the series, before and after the expense waiver, are as follows:
Fund | Rates | Net asset level (in billions) | For the six months ended before waiver | For the six months ended June 30, 2006, after waiver | ||||||||
Beginning with | Ending with | Up to | In excess of | |||||||||
Global Growth | .690 | .480 | .6 | 3.0 | .56 | .50 | ||||||
Growth | .500 | .285 | .6 | 27.0 | .33 | .29 | ||||||
Asset Allocation | .500 | .250 | .6 | 8.0 | .33 | .29 | ||||||
Bond | .480 | .360 | .6 | 3.0 | .42 | .38 |
* | Results based on activity during the period May 1, 2006, commencement of operations, through June 30, 2006. |
Transfer agent services – The aggregate fee of $25,000 was incurred during the six months ended June 30, 2006, pursuant to an agreement with AFS. Under this agreement, the series compensates AFS for transfer agent services, including shareholder recordkeeping, communications and transaction processing.
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Deferred trustees’ compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the series, are treated as if invested in one or more of the American Funds. These amounts represent general, unsecured liabilities of the series and vary according to the total returns of the selected funds. Trustees’ compensation of $421,000, shown on the accompanying financial statements, includes $244,000 in current fees (either paid in cash or deferred) and a net increase of $177,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the series are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the series.
5. Distribution services
The series has adopted plans of distribution for Class 2 and 3 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares. The plans provide for annual expenses, based on average daily net assets, of 0.25% for Class 2 and 0.18% for Class 3 to pay service fees to firms that have entered into agreements with the series. During the six months ended June 30, 2006, distribution expenses under the plans for the series aggregated $77,715,000 for Class 2 and $1,101,000 for Class 3. Class 1 shares have not adopted a plan of distribution.
6. Investment transactions and other disclosures
As of June 30, 2006, Asset Allocation Fund, Bond Fund and High-Income Bond Fund had outstanding forward currency contracts to sell non-U.S. currencies as follows:
(dollars in thousands)
Contract amount | U.S. valuation | ||||||||||||||
Fund | Non-U.S. currency sale contracts | Non-U.S. | U.S. | Amount | Unrealized (depreciation) appreciation | ||||||||||
Asset Allocation | Euro, expiring 7/19-9/29/2006 | € | 6,710 | $ | 8,520 | $ | 8,599 | $ | (79 | ) | |||||
Bond | Euro, expiring 9/14/2006 | € | 5,585 | 7,078 | 7,173 | (95 | ) | ||||||||
Pound, expiring 7/13-8/23/2006 | £ | 5,780 | 12,125 | 11,905 | 220 |
The following table presents additional information for the six months ended June 30, 2006:
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Purchases of investment securities (1) | $ | 615,964 | $ | 5,156,655 | $ | 1,231,288 | $ | 886,794 | |||||
Sales of investment securities (1) | 451,141 | 5,061,567 | 1,240,593 | 608,522 | |||||||||
Non-U.S taxes paid on dividend income | 3,333 | 5,318 | 1,139 | — | |||||||||
Non-U.S taxes paid on interest income- | — | — | (3 | ) | 61 | ||||||||
Non-U.S taxes paid on realized gains | 132 | — | — | — | |||||||||
Non-U.S taxes provided on unrealized gains as of June 30, 2006 | 545 | 17 | — | — | |||||||||
Dividends from affiliated issuers | — | — | — | — | |||||||||
Realized gain on affiliated issuers | — | — | 16,897 | — |
(1) | Excludes short-term securities, except for Cash Management Fund. |
(2) | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
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Expense example | unaudited |
The funds in the American Funds Insurance Series serve as the underlying investment vehicle for various insurance products. As an owner of an insurance contract that invests in one of the funds in the series, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. Additional fees are charged by the insurance companies related to the various benefits they provide. This example is intended to help you understand your ongoing costs (in dollars) of investing in the underlying funds only so you can compare these costs with the ongoing costs of investing in other mutual funds that serve a similar function in other annuity products. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006, through June 30, 2006).
Actual expenses:
The first line of each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled “Expenses paid during period” to estimate the expenses you paid on your account during this period. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Hypothetical example for comparison purposes:
The second line of each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. 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 the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 1/1/2006 | Ending account value 6/30/2006 | Expenses paid during period* | Annualized expense ratio | |||||||||
Global Discovery Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,025.73 | $ | 2.86 | .57 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,021.97 | 2.86 | .57 | ||||||||
Class 2 – actual return | 1,000.00 | 1,024.95 | 4.12 | .82 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,020.73 | 4.11 | .82 | ||||||||
Global Growth Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,063.06 | $ | 2.76 | .54 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.12 | 2.71 | .54 | ||||||||
Class 2 – actual return | 1,000.00 | 1,061.57 | 4.04 | .79 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,020.88 | 3.96 | .79 | ||||||||
Global Small Capitalization Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,094.50 | $ | 3.64 | .70 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,021.32 | 3.51 | .70 | ||||||||
Class 2 – actual return | 1,000.00 | 1,093.52 | 4.93 | .95 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,020.08 | 4.76 | .95 |
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Growth Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,025.61 | $ | 1.56 | .31 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 – actual return | 1,000.00 | 1,024.37 | 2.81 | .56 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 – actual return | 1,000.00 | 1,024.77 | 2.46 | .49 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
International Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,060.13 | $ | 2.55 | .50 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.32 | 2.51 | .50 | ||||||||
Class 2 – actual return | 1,000.00 | 1,058.33 | 3.83 | .75 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,021.08 | 3.76 | .75 | ||||||||
Class 3 – actual return | 1,000.00 | 1,058.74 | 3.47 | .68 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | �� | 1,021.42 | 3.41 | .68 | |||||||
New World Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,089.69 | $ | 4.20 | .81 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,020.78 | 4.06 | .81 | ||||||||
Class 2 – actual return | 1,000.00 | 1,089.24 | 5.49 | 1.06 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,019.54 | 5.31 | 1.06 | ||||||||
Blue Chip Income and Growth Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,046.45 | $ | 1.98 | .39 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 – actual return | 1,000.00 | 1,045.57 | 3.25 | .64 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 | ||||||||
Global Growth and Income Fund† | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 961.00 | $ | 1.05 | .65 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,021.57 | 3.26 | .65 | ||||||||
Class 2 – actual return | 1,000.00 | 960.00 | 1.45 | .90 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,020.33 | 4.51 | .90 | ||||||||
Growth-Income Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,040.86 | $ | 1.32 | .26 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,023.51 | 1.30 | .26 | ||||||||
Class 2 – actual return | 1,000.00 | 1,039.62 | 2.58 | .51 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,022.27 | 2.56 | .51 | ||||||||
Class 3 – actual return | 1,000.00 | 1,039.98 | 2.23 | .44 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,022.61 | 2.21 | .44 | ||||||||
Asset Allocation Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,055.97 | $ | 1.58 | .31 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 – actual return | 1,000.00 | 1,054.62 | 2.85 | .56 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 – actual return | 1,000.00 | 1,054.43 | 2.50 | .49 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
Bond Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,014.08 | $ | 1.95 | .39 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 – actual return | 1,000.00 | 1,012.33 | 3.19 | .64 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 |
Table of Contents
High-Income Bond Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,033.23 | $ | 2.27 | .45 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.56 | 2.26 | .45 | ||||||||
Class 2 – actual return | 1,000.00 | 1032.38 | 3.53 | .70 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1021.32 | 3.51 | .70 | ||||||||
Class 3 – actual return | 1,000.00 | 1,032.67 | 3.18 | .63 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,021.67 | 3.16 | .63 | ||||||||
U.S. Government/AAA-Rated Securities Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 993.10 | $ | 2.12 | .43 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,022.66 | 2.16 | .43 | ||||||||
Class 2 – actual return | 1,000.00 | 992.63 | 3.31 | .67 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,021.47 | 3.36 | .67 | ||||||||
Class 3 – actual return | 1,000.00 | 992.50 | 3.01 | .61 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,021.77 | 3.06 | .61 | ||||||||
Cash Management Fund | ||||||||||||
Class 1 – actual return | $ | 1,000.00 | $ | 1,021.95 | $ | 1.50 | .30 | % | ||||
Class 1 – assumed 5% return | 1,000.00 | 1,023.31 | 1.51 | .30 | ||||||||
Class 2 – actual return | 1,000.00 | 1,021.44 | 2.76 | .55 | ||||||||
Class 2 – assumed 5% return | 1,000.00 | 1,022.07 | 2.76 | .55 | ||||||||
Class 3 – actual return | 1,000.00 | 1,021.19 | 2.41 | .48 | ||||||||
Class 3 – assumed 5% return | 1,000.00 | 1,022.41 | 2.41 | .48 |
* | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period). |
† | The annualized expense ratio and the information in the first line of each share class are based on operations for the period May 1, 2006 (when the fund commenced operations), through June 30, 2006, and, accordingly, are not representative of a full period. |
Table of Contents
Board of trustees
“Non-interested” trustees
Name and age | Year first a trustee | Principal occupation(s) during past five years | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
Lee A. Ault III, 70 Chairman of the Board | 1999 | Chairman of the Board, In-Q-Tel, Inc. (an independent technology venture company funded principally by the Central Intelligence Agency); former Chairman of the Board, President and CEO, Telecredit, Inc. | 1 | Anworth Mortgage Asset Corporation; Office Depot, Inc. | ||||
H. Frederick Christie, 73 | 1994 | Private investor; former President and CEO, The Mission Group (non-utility holding company, subsidiary of Southern California Edison Company) | 19 | Ducommun Incorporated; IHOP Corporation; Southwest Water Company | ||||
Joe E. Davis, 72 | 1991 | Private investor; former Chairman of the Board, Linear Corporation (linear motor design and production); former President and CEO, National Health Enterprises, Inc; | 1 | Anworth Mortgage Asset Corporation; Natural Alternatives, Inc. | ||||
Martin Fenton, 71 | 1995 | Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities) | 16 | None | ||||
Leonard R. Fuller, 60 | 1999 | President and CEO, Fuller Consulting (financial management consulting firm) | 14 | None | ||||
Mary Myers Kauppila, 52 | 1994 | Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc. | 5 | None | ||||
Kirk P. Pendleton, 66 | 1996 | Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment) | ||||||
“Interested” trustees | ||||||||
Name, age and position with series | Year first elected a trustee or officer of the series1 | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
James K. Dunton, 68 Vice Chairman of the Board | 1993 | Senior Vice President and Director, Capital Research and Management Company | 2 | None | ||||
Donald D. O’Neal, 46 President | 1998 | Senior Vice President, Capital Research and Management Company | 3 | None |
The statement of additional information includes additional information about the series’ trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all trustees and officers of the series is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.
Table of Contents
Other officers
Name, age and position with series | Year first elected a trustee or officer | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | ||
Alan N. Burro, 45 Senior Vice President | 1998 | Vice President, Capital Research and Management Company; Senior Vice President, Capital Research Company5 | ||
Michael J. Downer, 51 Senior Vice President | 1991 | Vice President and Secretary, Capital Research and Management Company; Director, American Funds Distributors, Inc.; 5 Director, Capital Bank and Trust Company5 | ||
Abner D. Goldstine, 76 Senior Vice President | 1993 | Senior Vice President and Director, Capital Research and Management Company | ||
John H. Smut, 49 Senior Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, American Funds Distributors, Inc. 5 | ||
Claudia P. Huntington, 54 Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, The Capital Group Companies, Inc. 5 | ||
Robert W. Lovelace, 43 Vice President | 1997 | Senior Vice President, Capital Research and Management Company; Chairman of the Board, Capital Research Company, 5 Director, The Capital Group Companies, Inc. 5 | ||
Susan M. Tolson, 44 Vice President | 1999 | Senior Vice President, Capital Research Company5 | ||
Chad L. Norton, 46 Secretary | 1994 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
David A. Pritchett, 40 Treasurer | 1999 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Steven I. Koszalka, 42 Assistant Secretary | 2003 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Karl C. Grauman, 38 Assistant Treasurer | 2006 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Sheryl F. Johnson, 38 Assistant Treasurer | 1997 | Vice President — Fund Business Management Group, Capital Research and Management Company |
1 | Trustees and officers of the series serve until their resignation, removal or retirement. |
2 | Capital Research and Management Company manages the American Funds, consisting of 29 funds, and Endowments, whose shareholders are limited to certain nonprofit organizations. |
3 | This includes all directorships (other than those in the American Funds) that are held by each trustee as a director of a public company or a registered investment company. |
4 | “Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the series’ investment adviser, Capital Research and Management Company, or affiliated entities (including the series’ principal underwriter). |
5 | Company affiliated with Capital Research and Management Company. |
Table of Contents
American Funds GVIT Growth Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
2 | Statement of Assets and Liabilities | |
2 | Statement of Operations | |
3 | Statements of Changes in Net Assets | |
4 | Financial Highlights | |
5 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-AGGR (8/06)
Table of Contents
Shareholder
Expense Example | American Funds GVIT Growth Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, May 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period | Annualized Expense Ratio | |||||||||||||
American Funds GVIT Growth Fund | ||||||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 965.70 | $ | 4.19 | (a) | 0.86% | (a) | ||||||
Hypothetical1 | $ | 1,000.00 | $ | 1,020.54 | $ | 4.32 | (b) | 0.86% | (b) | |||||||
Class VII | Actual | $ | 1,000.00 | $ | 965.20 | $ | 6.72 | (a) | 1.38% | (a) | ||||||
Hypothetical1 | $ | 1,000.00 | $ | 1,017.96 | $ | 6.93 | (b) | 1.38% | (a) |
(a) | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
(b) | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT GROWTH FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments in Portfolio (cost $7,559,383) | $ | 7,569,255 | ||
Receivable for capital shares issued | 223,657 | |||
Total Assets | 7,792,912 | |||
Liabilities: | ||||
Payable for capital shares redeemed | 39 | |||
Accrued expenses and other payables: | ||||
Fund administration and transfer agent fees | 1,060 | |||
Master feeder service provider fee | 459 | |||
Distribution fees | 1,147 | |||
Administrative servicing fees | 1,115 | |||
Trustee fees | 55 | |||
Other | 2,048 | |||
Total Liabilities | 5,923 | |||
Net Assets | $ | 7,786,989 | ||
Represented by: | ||||
Capital | $ | 7,767,023 | ||
Accumulated net investment income (loss) | 37,080 | |||
Accumulated net realized gains (losses) from investments | (26,986 | ) | ||
Net unrealized appreciation (depreciation) on investments | 9,872 | |||
Net Assets | $ | 7,786,989 | ||
Net Assets: | ||||
Class II Shares | $ | 7,786,023 | ||
Class VII Shares | 966 | |||
Total | $ | 7,786,989 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 128,170 | |||
Class VII Shares | 16 | |||
Total | 128,186 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 60.75 | ||
Class VII Shares | $ | 60.74 | (a) |
For the period ended June 30, 2006 (Unaudited) (b)
Investment Income: | ||||
Dividend income | $ | 47,922 | ||
Total Income | 47,922 | |||
Expenses: | ||||
Fund administration and transfer agent fees | 1,170 | |||
Master feeder service provider fee | 1,567 | |||
Distribution fees Class II Shares | 1,567 | |||
Distribution fees Class VII Shares | 1 | |||
Administrative servicing fees Class II Shares | 1,567 | |||
Administrative servicing fees Class VII Shares | 1 | |||
Professional fees | 2,162 | |||
Printing fees | 469 | |||
Trustee fees | 74 | |||
Other | 660 | |||
Total expenses before waived expenses | 9,238 | |||
Expenses waived | (940 | ) | ||
Total Expenses | 8,298 | |||
Net Investment Income (Loss) | 39,624 | |||
REALIZED/UNREALIZED GAINS | ||||
Net realized gains (losses) on investment transactions | (26,986 | ) | ||
Net change in unrealized appreciation/depreciation on investments | 9,872 | |||
Net realized/unrealized gains (losses) on investments | (17,114 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | 22,510 | ||
* | Not subject to a front-end sales charge. |
(a) | Due to rounding, Net Assets divided by shares outstanding does not equal the NAV. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
AMERICAN FUNDS GVIT GROWTH FUND
Statement of Changes in Net Assets
Period Ended June 30, 2006(a) | ||||
(Unaudited) | ||||
From Investment Activities: | ||||
Operations: | ||||
Net investment income (loss) | $ | 39,624 | ||
Net realized gains (losses) on investment transactions | (26,986 | ) | ||
Net change in unrealized appreciation/depreciation on investments | 9,872 | |||
Change in net assets resulting from operations | 22,510 | |||
Distributions to Class II shareholders from: | ||||
Net investment income | (2,544 | ) | ||
Change in net assets from shareholder distributions | (2,544 | ) | ||
Change in net assets from capital transactions | 7,767,023 | |||
Change in net assets | 7,786,989 | |||
Net Assets: | ||||
Beginning of period | — | |||
End of period | $ | 7,786,989 | ||
Accumulated net investment income (loss) | $ | 37,080 | ||
CAPITAL TRANSACTIONS: | ||||
Class II Shares | ||||
Proceeds from shares issued | $ | 8,489,912 | ||
Dividends reinvested | 2,545 | |||
Cost of shares redeemed | (726,434 | ) | ||
7,766,023 | ||||
Class VII Shares | ||||
Proceeds from shares issued | 1,000 | |||
1,000 | ||||
Change in net assets from capital transactions | $ | 7,767,023 | ||
SHARE TRANSACTIONS: | ||||
Class II Shares | ||||
Issued | 140,131 | |||
Reinvested | 43 | |||
Redeemed | (12,004 | ) | ||
128,170 | ||||
Class VII Shares | ||||
Issued | 16 | |||
16 | ||||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
American Funds GVIT Growth Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets | Portfolio Turnover(a) | |||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b) | $ | 62.91 | 0.31 | (2.45 | ) | (2.14 | ) | (0.02 | ) | (0.02 | ) | $ | 60.75 | (3.40% | )(c) | $ | 7,786 | 0.77% | (d) | 4.13% | (d) | 0.86% | (d) | 4.03% | (d) | 23.00% | ||||||||||||||
Class VII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(b) | $ | 62.91 | 0.34 | (2.51 | ) | (2.17 | ) | — | — | $ | 60.74 | (3.45% | )(c) | $ | 1 | 1.38% | (d) | 3.48% | (d) | 1.38% | (d) | 3.48% | (d) | 23.00% |
(a) | Portfolio turnover is calculated on the basis of the respective Portfolio in which the Fund invests all of its investable assets. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(c) | Not annualized. |
(d) | Annualized. |
See notes to financial statements.
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the American Funds GVIT Growth Fund (the “Fund”).
The Fund operates as a “feeder fund” which means that the Fund does not buy individual securities directly. Instead, the Fund invests all of its assets in another mutual fund, the American Growth Fund (the “Master Fund”), a series of the American Funds Insurance Series® (“American Funds”), which invests directly in individual securities. The Fund, therefore, has the same investment objective and limitations as the Master Fund in which the Fund invests and the same gross investment returns as the Master Fund.
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
The net asset value (“NAV”) per share of each class of the Fund is calculated by taking the NAV of the Master Fund, subtracting the Fund’s liabilities attributable to the Fund, and dividing by the number of shares of that class that are outstanding. The Fund’s NAV is determined at the close of regular trading on the New York Stock Exchange (the “Exchange”) (usually 4 p.m. Eastern Time) (“Close of Trading”) on each day the Exchange is open for trading (“Business Day”). Each Fund may reject any order to buy Fund shares and may suspend the sale of Fund shares at any time.
The Master Fund calculates its NAV at the Close of Trading on each Business Day. Assets held by the Master Fund are valued primarily on the basis of market quotations. The Master Fund, however, has adopted procedures for making “fair value” determinations if market quotations are not readily available. For example, if events occur between the close of markets outside the United States and the close of regular trading on the New York Stock Exchange that, in the opinion of Capital Research and Management Company (“Capital Research”), the Master Fund’s investment adviser, materially affect the value of the portfolio securities of the Master Fund, the securities will be valued in accordance with the Master Fund’s fair value procedures. Use of these procedures is intended to result in more appropriate NAVs. In addition, such use will reduce, if not eliminate, potential arbitrage opportunities otherwise available to short-term investors in the Master Fund.
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
(b) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(c) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the NAV of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(d) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$7,586,368 | $9,872 | $(26,985) | $(17,113) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(e) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
3. Transactions with Affiliates
Under the terms of the Master Fund’s Investment Advisory Agreement, Capital Research manages the investment of the assets and supervises the daily business affairs of the Master Fund. Gartmore SA Capital Trust (“GSA”) provides non-investment master-feeder operational support services to the Fund. Under the terms of the Trust’s Master-Feeder Services Agreement with GSA on behalf of the Fund, the Fund pays GSA a fee of 0.25% based on the Fund’s average daily net assets. GSA has entered into a contractual agreement with the Trust under which GSA will waive 0.15% of the fees GSA receives for the providing the Fund with non-investment master-feeder operational support services until May 1, 2007.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, GSA provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all Funds within the Trust in relation to the average daily net assets of each Fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Funds’ Distributor, is compensated by the Fund for expenses associated with the distribution of the shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II shares and Class VII shares of the Fund at an annual rate not to exceed 0.25% of Class II shares and 0.40% of Class VII shares.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of the Fund. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of each class of shares of the Fund.
For the period ended June 30, 2006, Nationwide Financial Services received $1,627 in Administrative Services Fees from the Fund.
4. Investment Transactions
For the period ended June 30, 2006, (excluding short-term securities) the Master Fund had purchases of $5,156,655 and sales of $5,061,567.
5. Portfolio Investment Risks
Credit and Market Risk. The Fund invests in emerging markets instruments that are subject to certain additional credit and market risks. The yields of emerging markets debt obligations reflect, among other things, perceived credit risk. The Fund’s investment in securities rated below investment grade typically involve risks not associated with higher rated securities including, among others, greater risk of not receiving timely and/or ultimate payment of interest and principal, greater market price volatility, and less liquid secondary market trading. The consequences of political, social, economic, or diplomatic changes may have disruptive effects on the market prices of emerging markets investments held by the Fund.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Financial Statements
for the American Funds Master Fund
AMERICAN FUNDS INSURANCE SERIES
Growth Fund
TOP 5 INDUSTRY SECTORS* | |||
Where the fund’s assets were invested based on total net assets as of June 30, 2006 | |||
Percent of net assets | |||
Information technology | 16.5 | % | |
Energy | 15.8 | ||
Consumer discretionary | 14.2 | ||
Health care | 12.3 | ||
Consumer staples | 6.8 | ||
Other industries | 20.4 | ||
Short-term securities & other assets less liabilities | 14.0 | ||
100.0 | % | ||
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AMERICAN FUNDS INSURANCE SERIES
Growth Fund
LARGEST INDIVIDUAL EQUITY SECURITIES | |||
As of June 30, 2006 | |||
Percent of net assets | |||
3.8 | % | ||
Altria Group | 2.5 | ||
Roche Holding | 2.3 | ||
Microsoft | 2.2 | ||
Lowe’s Companies | 2.1 | ||
Schlumberger | 1.9 | ||
Target | 1.6 | ||
Cisco Systems | 1.5 | ||
Qwest Communications International | 1.4 | ||
Kohl’s | 1.3 |
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American Funds Insurance Series Growth Fund
Investment portfolio, June 30, 2006
unaudited | |||||
Common stocks | Shares | Market value | |||
(000) | |||||
3M Co. | 395,000 | $ | 31,904 | ||
Abraxis BioScience, Inc. (1) | 667,900 | 15,923 | |||
Allergan, Inc. | 160,000 | 17,162 | |||
Allied Waste Industries, Inc. (1) | 4,100,000 | 46,576 | |||
Altera Corp. (1) | 3,750,000 | 65,813 | |||
Altria Group, Inc. | 8,380,000 | 615,343 | |||
American International Group, Inc. | 2,600,000 | 153,530 | |||
Amgen Inc. (1) | 1,300,000 | 84,799 | |||
Anheuser-Busch Companies, Inc. | 525,000 | 23,935 | |||
Apollo Group, Inc., Class A (1) | 695,000 | 35,911 | |||
Applied Materials, Inc. | 1,605,000 | 26,129 | |||
Arch Coal, Inc. | 2,000,000 | 84,740 | |||
AstraZeneca PLC (ADR) | 2,715,000 | 162,411 | |||
AstraZeneca PLC (Sweden) | 1,200,000 | 72,402 | |||
AU Optronics Corp. | 31,944,120 | 45,150 | |||
Automatic Data Processing, Inc. | 400,000 | 18,140 | |||
Aveta, Inc. (1) (3) (4) | 3,918,000 | 62,688 | |||
Avon Products, Inc. | 775,000 | 24,025 | |||
Banco Bradesco SA, preferred nominative (ADR) | 5,646,700 | 175,556 | |||
Bank of New York Co., Inc. | 1,529,300 | 49,243 | |||
Barrick Gold Corp. | 6,300,000 | 186,480 | |||
Best Buy Co., Inc. | 4,490,400 | 246,254 | |||
BG Group PLC | 3,050,000 | 40,701 | |||
Bharti Airtel Ltd. (1) | 7,499,800 | 60,495 | |||
Bill Barrett Corp. (1) | 1,933,000 | 57,236 | |||
Biogen Idec Inc. (1) | 1,335,000 | 61,851 | |||
Boeing Co. | 2,565,000 | 210,099 | |||
Boston Scientific Corp. (1) | 2,314,398 | 38,974 | |||
Bunge Ltd. | 1,961,000 | 98,540 | |||
Caltex Australia Ltd. | 1,484,030 | 26,012 | |||
Cameco Corp. | 2,150,000 | 85,935 | |||
Canadian Natural Resources, Ltd. | 4,625,700 | 255,823 | |||
Cardinal Health, Inc. | 2,150,000 | 138,310 | |||
Carnival Corp., units | 6,905,000 | 288,215 | |||
CDW Corp. | 765,000 | 41,807 | |||
Ceridian Corp. (1) | 1,100,000 | 26,884 | |||
Cisco Systems, Inc. (1) | 18,433,000 | 359,996 | |||
Clear Channel Communications, Inc. | 1,375,000 | 42,556 | |||
Coca-Cola Co. | 2,645,000 | 113,788 | |||
Commerce Bancorp, Inc. | 1,100,000 | 39,237 | |||
ConocoPhillips | 1,298,520 | 85,092 | |||
Constellation Brands, Inc., Class A (1) | 2,624,000 | 65,600 | |||
Core Laboratories NV (1) | 1,197,700 | 73,108 | |||
Corning Inc. (1) | 6,959,200 | 168,343 | |||
CRH PLC | 1,716,565 | 55,748 | |||
DataPath, Inc. (1) (2) (3) (4) | 2,819,968 | 31,020 | |||
Dell Inc. (1) | 1,270,000 | 31,001 | |||
Denbury Resources Inc. (1) | 1,400,000 | 44,338 | |||
Devon Energy Corp. | 3,409,072 | 205,942 | |||
Diageo PLC | 2,650,000 | 44,516 | |||
Diamond Offshore Drilling, Inc. | 1,025,000 | 86,028 | |||
eBay Inc. (1) | 4,000,000 | 117,160 | |||
Eli Lilly and Co. | 970,000 | 53,612 |
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Endo Pharmaceuticals Holdings Inc. (1) | 2,500,000 | 82,450 | ||
Energy XXI Acquisition Corp. (Bermuda) Ltd. (1) (4) | 2,390,758 | 12,073 | ||
ENSCO International Inc. | 725,000 | 33,364 | ||
EOG Resources, Inc. | 3,265,000 | 226,395 | ||
Exxon Mobil Corp. | 550,000 | 33,742 | ||
Fannie Mae | 5,530,000 | 265,993 | ||
FMC Technologies, Inc. (1) | 850,000 | 57,341 | ||
Forest Laboratories, Inc. (1) | 2,710,000 | 104,850 | ||
Freddie Mac | 2,297,700 | 130,992 | ||
Freeport-McMoRan Copper & Gold Inc., Class B | 1,404,500 | 77,823 | ||
Garmin Ltd. | 1,432,000 | 150,990 | ||
General Dynamics Corp. | 1,300,000 | 85,098 | ||
General Electric Co. | 5,270,000 | 173,699 | ||
General Mills, Inc. | 265,000 | 13,690 | ||
Gentex Corp. | 2,700,000 | 37,800 | ||
Getty Images, Inc. (1) | 1,000,000 | 63,510 | ||
Gilead Sciences, Inc. (1) | 1,120,000 | 66,259 | ||
Google Inc., Class A (1) | 2,231,400 | 935,693 | ||
Halliburton Co. | 3,480,000 | 258,251 | ||
Harrah’s Entertainment, Inc. | 2,644,000 | 188,200 | ||
HDFC Bank Ltd. | 1,296,700 | 22,501 | ||
Hess Corp. | 2,640,000 | 139,524 | ||
Hon Hai Precision Industry Co., Ltd. | 3,919,135 | 24,242 | ||
Hudson City Bancorp. Inc. | 3,000,000 | 39,990 | ||
Hynix Semiconductor Inc. (1) | 2,000,000 | 64,840 | ||
Illinois Tool Works Inc. | 949,200 | 45,087 | ||
International Business Machines Corp. | 500,000 | 38,410 | ||
International Game Technology | 1,881,000 | 71,365 | ||
Iron Mountain Inc. (1) | 1,100,000 | 41,118 | ||
Johnson Controls, Inc. | 2,250,000 | 184,995 | ||
KLA-Tencor Corp. | 1,705,000 | 70,877 | ||
Kohl’s Corp. (1) | 5,540,000 | 327,525 | ||
LG.Philips LCD Co., Ltd. (ADR) (1) | 1,400,000 | 25,368 | ||
Liberty Global, Inc., Class A (1) | 257,731 | 5,541 | ||
Liberty Media Holding Corp., Liberty Capital, Series A (1) | 500,000 | 41,885 | ||
Liberty Media Holding Corp., Liberty Interactive, Series A (1) | 2,500,000 | 43,150 | ||
Limited Brands, Inc. | 1,087,457 | 27,828 | ||
Linear Technology Corp. | 2,895,000 | 96,954 | ||
Lockheed Martin Corp. | 1,150,000 | 82,501 | ||
Lowe’s Companies, Inc. | 8,263,000 | 501,316 | ||
Magna International Inc., Class A | 725,000 | 52,178 | ||
Marsh & McLennan Companies, Inc. | 253,600 | 6,819 | ||
Martek Biosciences Corp. (1) | 1,000,000 | 28,950 | ||
Maxim Integrated Products, Inc. | 4,005,000 | 128,601 | ||
McKesson Corp. | 665,000 | 31,441 | ||
Medco Health Solutions, Inc. (1) | 1,419,000 | 81,280 | ||
Mediatek Incorporation | 2,965,000 | 27,511 | ||
MedImmune, Inc. (1) | 1,765,000 | 47,831 | ||
Medtronic, Inc. | 3,500,000 | 164,220 | ||
Mellon Financial Corp. | 3,520,700 | 121,218 | ||
Michaels Stores, Inc. | 4,070,000 | 167,847 | ||
Microchip Technology Inc. | 122,475 | 4,109 | ||
Micron Technology, Inc. (1) | 1,600,000 | 24,096 | ||
Microsoft Corp. | 23,155,000 | 539,511 | ||
Mitsubishi Heavy Industries, Ltd. | 16,100,000 | 69,517 | ||
Mitsubishi UFJ Financial Group, Inc. | 1,457 | 20,376 | ||
Mitsui Trust Holdings, Inc. | 5,443,000 | 65,415 | ||
Monsanto Co. | 858,100 | 72,244 | ||
Monster Worldwide Inc. (1) | 2,202,300 | 93,950 | ||
MSC Industrial Direct Co., Inc., Class A | 1,000,000 | 47,570 | ||
Murphy Oil Corp. | 2,698,800 | 150,755 | ||
Newcrest Mining Ltd. | 2,740,000 | 42,898 |
Table of Contents
Newfield Exploration Co. (1) | 3,917,200 | 191,708 | ||
Newmont Mining Corp. | 1,015,000 | 53,724 | ||
News Corp., Class A | 6,500,000 | 124,670 | ||
Nokia Corp. (ADR) | 2,000,000 | 40,520 | ||
Norsk Hydro ASA | 2,450,000 | 64,914 | ||
Northrop Grumman Corp. | 1,150,000 | 73,669 | ||
Novell, Inc. (1) | 9,500,000 | 62,985 | ||
Novellus Systems, Inc. (1) | 1,990,000 | 49,153 | ||
OPTI Canada Inc. (1) | 4,280,000 | 87,633 | ||
Oracle Corp. (1) | 14,622,800 | 211,884 | ||
OSI Restaurant Partners, Inc. | 600,000 | 20,760 | ||
Peabody Energy Corp. | 2,653,000 | 147,905 | ||
PepsiCo, Inc. | 1,845,000 | 110,774 | ||
Petro-Canada | 2,660,300 | 126,245 | ||
Potash Corp. of Saskatchewan Inc. | 1,500,000 | 128,955 | ||
Procter & Gamble Co. | 380,000 | 21,128 | ||
Questar Corp. | 400,000 | 32,196 | ||
Quicksilver Resources Inc. (1) | 1,974,150 | 72,668 | ||
Qwest Communications International Inc. (1) | 43,050,000 | 348,275 | ||
Raytheon Co. | 246,000 | 10,964 | ||
Reliant Energy, Inc. (1) | 9,240,000 | 110,695 | ||
Rio Tinto PLC | 1,437,852 | 75,927 | ||
Robert Half International Inc. | 800,000 | 33,600 | ||
Roche Holding AG | 3,460,000 | 570,969 | ||
Rosetta Resources Inc. (1) (3) (4) | 2,980,000 | 49,528 | ||
Royal Caribbean Cruises Ltd. | 1,000,000 | 38,250 | ||
Saipem SpA, Class S | 4,035,000 | 91,601 | ||
Samsung Electronics Co., Ltd. | 235,000 | 149,401 | ||
Sanmina-SCI Corp. (1) | 1,430,000 | 6,578 | ||
Sanofi-Aventis | 2,023,900 | 197,292 | ||
Schering-Plough Corp. | 2,000,000 | 38,060 | ||
Schlumberger Ltd. | 7,219,600 | 470,068 | ||
Seagate Technology (1) | 5,000,000 | 113,200 | ||
Sepracor Inc. (1) | 1,500,000 | 85,710 | ||
Seven & I Holdings Co., Ltd. | 3,942,000 | 129,896 | ||
Shangri-La Asia Ltd. | 18,000,000 | 34,649 | ||
Shire PLC (ADR) | 2,000,000 | 88,460 | ||
Southwest Airlines Co. | 7,670,300 | 125,563 | ||
Southwestern Energy Co. (1) | 3,081,200 | 96,010 | ||
Sprint Nextel Corp., Series 1 | 3,850,000 | 76,961 | ||
Starbucks Corp. (1) | 6,920,000 | 261,299 | ||
Suncor Energy Inc. | 3,002,076 | 243,018 | ||
SUPERVALU INC. | 1,300,000 | 39,910 | ||
Taiwan Semiconductor Manufacturing Co. Ltd. | 81,019,112 | 146,337 | ||
Taiwan Semiconductor Manufacturing Co. Ltd. (ADR) | 7,158,433 | 65,714 | ||
Takashimaya Co., Ltd. | 339,000 | 4,255 | ||
Talisman Energy Inc. | 2,400,000 | 41,952 | ||
Target Corp. | 7,890,000 | 385,584 | ||
Telephone and Data Systems, Inc. | 320,000 | 13,248 | ||
Telephone and Data Systems, Inc., Special Common Shares | 1,190,000 | 46,291 | ||
Texas Instruments Inc. | 3,151,000 | 95,444 | ||
Time Warner Inc. | 3,750,000 | 64,875 | ||
Toyota Motor Corp. | 765,000 | 40,052 | ||
Transocean Inc. (1) | 2,731,400 | 219,386 | ||
Triad Hospitals, Inc. (1) | 1,480,000 | 58,578 | ||
Tyco International Ltd. | 2,396,500 | 65,904 | ||
UAL Corp. (1) | 2,000,000 | 62,040 | ||
UnitedHealth Group Inc. | 2,115,000 | 94,710 | ||
Vertex Pharmaceuticals Inc. (1) | 3,000,000 | 110,130 | ||
Walgreen Co. | 6,000,000 | 269,040 | ||
WellPoint, Inc. (1) | 3,040,000 | 221,221 | ||
Wells Fargo & Co. | 1,400,000 | 93,912 | ||
Wm. Wrigley Jr. Co. | 1,916,500 | 86,932 | ||
Xilinx, Inc. | 3,200,900 | 72,500 | ||
Yahoo! Inc. (1) | 1,750,000 | 57,750 | ||
Zimmer Holdings, Inc. (1) | 3,610,000 | 204,759 | ||
Other common stocks in initial period of acquisition | 1,139,265 | |||
Total common stocks (cost: $16,278,780,000) | 20,940,902 |
Table of Contents
Short-term securities | Principal amount | Market value | |||
(000) | (000) | ||||
3M Co. 5.09%-5.18% due 8/28/2006 | 59,800 | $ | 59,288 | ||
Anheuser-Busch Companies, Inc. 4.89% due 7/17/2006 (4) | 25,000 | 24,941 | |||
AT&T Inc. 5.12% due 7/13/2006 (4) | 22,500 | 22,458 | |||
Atlantic Industries 5.22% due 8/14/2006 (4) | 8,700 | 8,643 | |||
Bank of America Corp. 5.23%-5.325% due 9/12-9/22/2006 | 131,800 | 130,315 | |||
BellSouth Corp. 5.12% due 7/13/2006 (4) | 20,000 | 19,963 | |||
CAFCO, LLC 5.03%-5.37% due 7/14-9/13/2006 (4) | 194,700 | 193,383 | |||
Caterpillar Financial Services Corp. 5.11% due 7/31/2006 | 50,000 | 49,780 | |||
Chevron Funding Corp. 5.06% due 7/27/2006 | 25,000 | 24,905 | |||
Ciesco LLC 5.02% due 7/14/2006 (4) | 26,000 | 25,951 | |||
Clipper Receivables Co., LLC 5.00%-5.22% due 7/7-8/28/2006 (4) | 230,864 | 229,943 | |||
Coca-Cola Co. 4.95%-5.00% due 7/24-8/7/2006 | 61,400 | 61,131 | |||
Concentrate Manufacturing Co. of Ireland 5.02%-5.17% due 7/11-7/21/2006 (4) | 64,400 | 64,259 | |||
Edison Asset Securitization LLC 5.02%-5.25% due 7/24-8/18/2006 (4) | 100,450 | 99,958 | |||
Fannie Mae 4.84%-5.23% due 7/12-9/13/2006 | 371,200 | 368,477 | |||
FCAR Owner Trust I 5.04% due 7/17/2006 | 50,000 | 49,882 | |||
FCAR Owner Trust II 4.97% due 7/10/2006 | 27,300 | 27,262 | |||
Federal Home Loan Bank 4.905%-5.29% due 7/5-9/27/2006 | 509,500 | 506,061 | |||
Freddie Mac 4.91%-5.285% due 7/25-9/26/2006 | 179,400 | 178,007 | |||
Gannett Co. 5.01% due 7/14/2006 (4) | 15,800 | 15,769 | |||
General Dynamics Corp. 5.10% due 8/9/2006 (4) | 50,000 | 49,726 | |||
General Electric Capital Services, Inc. 5.18% due 8/9/2006 | 50,000 | 49,712 | |||
Hershey Co. 5.00%-5.01% due 7/10-8/11/2006 (4) | 32,100 | 32,020 | |||
Hewlett-Packard Co. 5.20%-5.21% due 7/28-7/31/2006 (4) | 50,000 | 49,787 | |||
HSBC Finance Corp. 5.32% due 9/14/2006 | 32,300 | 31,948 | |||
IBM Capital Inc. 5.14% due 9/11/2006 (4) | 42,400 | 41,957 | |||
International Bank for Reconstruction and Development 5.15% due 8/15-8/24/2006 | 73,700 | 73,168 | |||
International Lease Finance Corp. 5.08%-5.28% due 8/3-8/31/2006 | 97,600 | 96,915 | |||
Medtronic Inc. 5.10% due 7/19/2006 (4) | 22,000 | 21,941 | |||
Park Avenue Receivables Co., LLC 5.08%-5.25% due 7/11-8/3/2006 (4) | 57,200 | 56,944 | |||
Preferred Receivables Funding Corp. 5.19%-5.28% due 7/18-8/4/2006 (4) | 75,000 | 74,742 | |||
Ranger Funding Co. LLC 5.03%-5.10% due 7/12-8/28/2006 (4) | 99,000 | 98,464 | |||
Three Pillars Funding, LLC 5.06% due 7/3/2006 (4) | 54,900 | 54,877 | |||
Triple-A One Funding Corp. 5.08% due 8/22/2006 (4) | 17,672 | 17,535 | |||
UnionBanCal Commercial Funding Corp. 5.00%-5.30% due 7/25-8/25/2006 | 59,500 | 59,426 | |||
Variable Funding Capital Corp. 5.025%-5.23% due 7/12-7/28/2006 (4) | 216,700 | 216,032 | |||
Wal-Mart Stores Inc. 4.96%-5.01% due 7/11-8/22/2006 (4) | 110,300 | 109,818 | |||
Total short-term securities (cost: $3,295,426,000) | 3,295,388 | ||||
Total investment securities (cost: $19,574,206,000) | 24,236,290 | ||||
Other assets less liabilities | 102,093 | ||||
Net assets | $ | 24,338,383 |
(1) | Security did not produce income during the last 12 months. |
(2) | Valued under fair value procedures adopted by authority of the Board of Trustees. |
(3) | Represents an affiliated company as defined under the Investment Company Act of 1940. |
(4) | Purchased in a private placement transaction; resale may be limited to qualified institutional buyers; resale to the public may require registration. The total value of all such restricted securities was $1,684,420,000 which represented 6.92% of the net assets of the fund. |
ADR | = American Depositary Receipts |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Assets: | ||||||||||||
Investment securities at market: | ||||||||||||
Unaffiliated issuers | $ | 3,334,719 | $ | 24,093,055 | $ | 6,531,116 | $ | 2,919,735 | ||||
Affiliated issuers | — | 143,235 | 49,361 | — | ||||||||
Cash denominated in non-U.S. currencies | 2,690 | 4,325 | — | — | ||||||||
Cash | 236 | 1,728 | 2,008 | 7,411 | ||||||||
Receivables for: | ||||||||||||
Sales of investments | 4,219 | 136,311 | 38,340 | 1,388 | ||||||||
Sales of fund’s shares | 3,034 | 22,713 | 4,098 | 2,121 | ||||||||
Open forward currency contracts | — | — | 19 | 392 | ||||||||
Dividends and interest | 6,391 | 23,180 | 24,729 | 34,881 | ||||||||
3,351,289 | 24,424,547 | 6,649,671 | 2,965,928 | |||||||||
Liabilities: | ||||||||||||
Payables for: | ||||||||||||
Purchases of investments | 2,443 | 70,125 | 147,523 | 40,145 | ||||||||
Repurchases of fund’s shares | 44 | 5,358 | 843 | 17 | ||||||||
Open forward currency contracts | — | — | 98 | 267 | ||||||||
Investment advisory services | 1,338 | 5,694 | 1,536 | 887 | ||||||||
Distribution services | 624 | 4,125 | 1,123 | 554 | ||||||||
Deferred trustees’ compensation | 40 | 625 | 166 | 33 | ||||||||
Other fees and expenses | 622 | 237 | 14 | 11 | ||||||||
5,111 | 86,164 | 151,303 | 41,914 | |||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | ||||
Investment securities at cost | ||||||||||||
Unaffiliated issuers | $ | 2,758,589 | $ | 19,440,548 | $ | 5,618,447 | $ | 2,954,017 | ||||
Affiliated issuers | — | $ | 133,658 | $ | 48,481 | — | ||||||
Cash denominated in non-U.S. currencies at cost | $ | 2,659 | $ | 4,338 | — | — |
Table of Contents
Statements of assets and liabilities
at June 30, 2006
unaudited
(dollars and shares in thousands, except per-share amounts)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Net assets consist of: | |||||||||||||
Capital paid in on shares of beneficial interest | $ | 2,664,757 | $ | 18,351,261 | $ | 5,366,389 | $ | 2,899,532 | |||||
Undistributed (distributions in excess of) net investment income | 33,224 | 103,564 | 77,407 | 69,335 | |||||||||
Undistributed (accumulated) net realized gain (loss) | 72,534 | 1,221,378 | 141,096 | (10,776 | ) | ||||||||
Net unrealized appreciation (depreciation) | 575,663 | 4,662,180 | 913,476 | (34,077 | ) | ||||||||
Net assets at June 30, 2006 | $ | 3,346,178 | $ | 24,338,383 | $ | 6,498,368 | $ | 2,924,014 | |||||
Shares of beneficial interest issued and outstanding—unlimited shares authorized: | |||||||||||||
Class 1: | |||||||||||||
Net assets (total: $11,157,497) | $ | 214,609 | $ | 3,490,659 | $ | 903,248 | $ | 187,817 | |||||
Shares outstanding | 10,399 | 57,813 | 52,575 | 17,074 | |||||||||
Net asset value per share | $ | 20.64 | $ | 60.38 | $ | 17.18 | $ | 11.00 | |||||
Class 2: | |||||||||||||
Net assets (total: $65,221,819) | $ | 3,131,569 | $ | 20,385,930 | $ | 5,519,490 | $ | 2,736,197 | |||||
Shares outstanding | 152,508 | 340,114 | 323,378 | 250,811 | |||||||||
Net asset value per share | $ | 20.53 | $ | 59.94 | $ | 17.07 | $ | 10.91 | |||||
Class 3: | |||||||||||||
Net assets (total: $1,181,927) | — | $ | 461,794 | $ | 75,630 | — | |||||||
Shares outstanding | — | 7,655 | 4,406 | — | |||||||||
Net asset value per share | — | $ | 60.33 | $ | 17.16 | — |
* | Amount less than one thousand |
See Notes to Financial Statements
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||
Investment income: | ||||||||||||
Income (net of non-U.S. taxes): | ||||||||||||
Dividends | $ | 34,509 | $ | 118,613 | $ | 42,570 | $ | 329 | ||||
Interest | 11,885 | 51,547 | 52,240 | 78,520 | ||||||||
46,394 | 170,160 | 94,810 | 78,849 | |||||||||
Fees and expenses: | ||||||||||||
Investment advisory services | 8,777 | 38,583 | 10,390 | 5,618 | ||||||||
Distribution services - Class 2 | 3,654 | 24,498 | 6,773 | 3,131 | ||||||||
Distribution services - Class 3 | — | 437 | 69 | — | ||||||||
Transfer agent services | 1 | 8 | 2 | 1 | ||||||||
Reports to shareholders | 47 | 358 | 96 | 41 | ||||||||
Registration statement and prospectus | 62 | 479 | 130 | 53 | ||||||||
Postage, stationery and supplies | 8 | 60 | 16 | 7 | ||||||||
Trustees’ compensation | 13 | 132 | 35 | 11 | ||||||||
Auditing and legal | 6 | 21 | 7 | 2 | ||||||||
Custodian | 386 | 725 | 89 | 55 | ||||||||
State and local taxes | 28 | 220 | 60 | 25 | ||||||||
Other | 15 | 48 | 15 | 5 | ||||||||
Total fees and expenses before waiver | 12,997 | 65,569 | 17,682 | 8,949 | ||||||||
Less waiver of fees and expenses: | ||||||||||||
Investment advisory services | 878 | 3,858 | 1,039 | 562 | ||||||||
Total fees and expenses after waiver | 12,119 | 61,711 | 16,643 | 8,387 | ||||||||
Net investment income | 34,275 | 108,449 | 78,167 | 70,462 |
Table of Contents
Statements of operations
for the six months ended June 30, 2006
unaudited
(dollars in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency: | |||||||||||||||
Net realized gain (loss) on: | |||||||||||||||
Investments | 135,390 | 1,227,220 | 145,831 | (2,595 | ) | ||||||||||
Non-U.S. currency transactions | 5,200 | 261 | (466 | ) | (3,677 | ) | |||||||||
140,590 | 1,227,481 | 145,365 | (6,272 | ) | |||||||||||
Net unrealized appreciation (depreciation) on: | |||||||||||||||
Investments | 538 | (795,483 | ) | 117,305 | (31,900 | ) | |||||||||
Non-U.S. currency translations | 89 | 208 | (97 | ) | 485 | ||||||||||
627 | (795,275 | ) | 117,208 | (31,415 | ) | ||||||||||
Net realized gain (loss) and unrealized appreciation (depreciation) on investments and non-U.S. currency | 141,217 | 432,206 | 262,573 | (37,687 | ) | ||||||||||
Net increase (decrease) in net assets resulting from operations | $ | 175,492 | $ | 540,655 | $ | 340,740 | $ | 32,775 |
See Notes to Financial Statements
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Operations: | ||||||||||||||||||||||||||||||||
Net investment income | $ | 34,275 | $ | 30,708 | $ | 108,449 | $ | 128,993 | $ | 78,167 | $ | 126,432 | $ | 70,462 | $ | 110,408 | ||||||||||||||||
Net realized gain (loss) on investments and non-U.S. currency transactions | 140,590 | 83,182 | 1,227,481 | 637,504 | 145,365 | 133,120 | (6,272 | ) | 2,178 | |||||||||||||||||||||||
Net unrealized appreciation (depreciation) on investments and non-U.S. currency translations | 627 | 222,184 | (795,275 | ) | 2,278,471 | 117,208 | 234,416 | (31,415 | ) | (77,663 | ) | |||||||||||||||||||||
Net increase (decrease) in net assets resulting from operations | 175,492 | 336,074 | 540,655 | 3,044,968 | 340,740 | 493,968 | 32,775 | 34,923 | ||||||||||||||||||||||||
Dividends and distributions paid to shareholders: | ||||||||||||||||||||||||||||||||
Dividends from net investment income and non-U.S. currency gains: | ||||||||||||||||||||||||||||||||
Class 1 | (2,252 | ) | (1,641 | ) | (5,705 | ) | (31,560 | ) | (3,555 | ) | (20,656 | ) | (7,578 | ) | (7,502 | ) | ||||||||||||||||
Class 2 | (27,641 | ) | (14,177 | ) | (25,853 | ) | (112,734 | ) | (19,628 | ) | (106,102 | ) | (106,551 | ) | (73,453 | ) | ||||||||||||||||
Class 3 | — | — | (605 | ) | (3,387 | ) | (279 | ) | (1,653 | ) | — | — | ||||||||||||||||||||
Total dividends from net investment income and non-U.S. currency gains | (29,893 | ) | (15,818 | ) | (32,163 | ) | (147,681 | ) | (23,462 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) | ||||||||||||||||
Distributions from net realized gain on investments: | ||||||||||||||||||||||||||||||||
Short-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 2 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Class 3 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Long-term net realized gains: | ||||||||||||||||||||||||||||||||
Class 1 | — | — | (21,900 | ) | — | (11,851 | ) | — | — | — | ||||||||||||||||||||||
Class 2 | — | — | (127,584 | ) | — | (72,811 | ) | — | — | — | ||||||||||||||||||||||
Class 3 | — | — | (2,908 | ) | — | (1,004 | ) | — | — | — | ||||||||||||||||||||||
Total distributions from net realized gain on investments | — | — | (152,392 | ) | — | (85,666 | ) | — | — | — | ||||||||||||||||||||||
Total dividends and distributions paid to shareholders | (29,893 | ) | (15,818 | ) | (184,555 | ) | (147,681 | ) | (109,128 | ) | (128,411 | ) | (114,129 | ) | (80,955 | ) |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||||||||||
Capital share transactions: | ||||||||||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||||||||||
Proceeds from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||
Proceeds from shares sold | 9,129 | 4,184 | 9,292 | 5,159 | 25,104 | 6,110 | 12,562 | 10,970 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 2,252 | 1,641 | 27,605 | 31,560 | 15,406 | 20,656 | 7,578 | 7,502 | ||||||||||||||||||||||||
Cost of shares repurchased | (13,591 | ) | (26,337 | ) | (323,657 | ) | (588,755 | ) | (50,269 | ) | (104,648 | ) | (9,822 | ) | (26,416 | ) | ||||||||||||||||
Net increase (decrease) from Class 1 transactions | (2,210 | ) | (20,512 | ) | (286,760 | ) | (552,036 | ) | (9,759 | ) | (77,882 | ) | 10,318 | (7,944 | ) | |||||||||||||||||
Class 2: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | 373,544 | 541,733 | 1,846,045 | 4,085,834 | 391,458 | 970,962 | 416,369 | 561,561 | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | 27,641 | 14,177 | 153,437 | 112,734 | 92,439 | 106,102 | 106,551 | 73,453 | ||||||||||||||||||||||||
Cost of shares repurchased | (21,874 | ) | (30,170 | ) | (235,018 | ) | (220,641 | ) | (279,357 | ) | (56,161 | ) | (22,339 | ) | (40,314 | ) | ||||||||||||||||
Net increase from Class 2 transactions | 379,311 | 525,740 | 1,764,464 | 3,977,927 | 204,540 | 1,020,903 | 500,581 | 594,700 | ||||||||||||||||||||||||
Class 3: | ||||||||||||||||||||||||||||||||
Proceeds from shares sold | — | — | 5,657 | 16,188 | 1,925 | 2,351 | — | — | ||||||||||||||||||||||||
Proceeds from reinvestment of dividends and distributions | — | — | 3,513 | 3,387 | 1,283 | 1,653 | — | — | ||||||||||||||||||||||||
Cost of shares repurchased | — | — | (55,454 | ) | (106,454 | ) | (6,411 | ) | (14,040 | ) | — | — | ||||||||||||||||||||
Net increase (decrease) from Class 3 transactions | — | — | (46,284 | ) | (86,879 | ) | (3,203 | ) | (10,036 | ) | — | — | ||||||||||||||||||||
Net increase in net assets resulting from capital share transactions | 377,101 | 505,228 | 1,431,420 | 3,339,012 | 191,578 | 932,985 | 510,899 | 586,756 | ||||||||||||||||||||||||
Total increase (decrease) in net assets | 522,700 | 825,484 | 1,787,520 | 6,236,299 | 423,190 | 1,298,542 | 429,545 | 540,724 | ||||||||||||||||||||||||
Net assets: | ||||||||||||||||||||||||||||||||
Beginning of period | 2,823,478 | 1,997,994 | 22,550,863 | 16,314,564 | 6,075,178 | 4,776,636 | 2,494,469 | 1,953,745 | ||||||||||||||||||||||||
End of period | $ | 3,346,178 | $ | 2,823,478 | $ | 24,338,383 | $ | 22,550,863 | $ | 6,498,368 | $ | 6,075,178 | $ | 2,924,014 | $ | 2,494,469 | ||||||||||||||||
Undistributed (distributions in excess of) net investment income | $ | 33,224 | $ | 28,842 | $ | 103,564 | $ | 27,278 | $ | 77,407 | $ | 22,702 | $ | 69,335 | $ | 113,002 |
Table of Contents
Statements of changes in net assets
(dollars and shares in thousands)
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | |||||||||||||||||||||
Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | Six months ended June 30, 2006(1) | Year ended December 31, 2005 | |||||||||||||||||
Shares of beneficial interest: | ||||||||||||||||||||||||
Class 1: | ||||||||||||||||||||||||
Shares issued from initial capitalization | — | — | — | — | — | — | — | — | ||||||||||||||||
Shares sold | 438 | 233 | 153 | 94 | 1,454 | 385 | 1,109 | 962 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 114 | 95 | 477 | 549 | 920 | 1,258 | 691 | 670 | ||||||||||||||||
Shares repurchased | (658 | ) | (1,486 | ) | (5,299 | ) | (11,005 | ) | (2,902 | ) | (6,585 | ) | (864 | ) | (2,323 | ) | ||||||||
Net increase (decrease) in shares outstanding | (106 | ) | (1,158 | ) | (4,669 | ) | (10,362 | ) | (528 | ) | (4,942 | ) | 936 | (691 | ) | |||||||||
Class 2: | ||||||||||||||||||||||||
Shares sold | 18,130 | 30,710 | 30,379 | 77,199 | 22,735 | 61,664 | 36,917 | 49,855 | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | 1,402 | 824 | 2,668 | 1,976 | 5,559 | 6,492 | 9,793 | 6,611 | ||||||||||||||||
Shares repurchased | (1,077 | ) | (1,695 | ) | (3,920 | ) | (4,104 | ) | (15,780 | ) | (3,564 | ) | (1,984 | ) | (3,572 | ) | ||||||||
Net increase in shares outstanding | 18,455 | 29,839 | 29,127 | 75,071 | 12,514 | 64,592 | 44,726 | 52,894 | ||||||||||||||||
Class 3: | ||||||||||||||||||||||||
Shares sold | — | — | 91 | 320 | 111 | 148 | — | — | ||||||||||||||||
Shares issued on reinvestment of dividends and distributions | — | — | 61 | 60 | 76 | 101 | — | — | ||||||||||||||||
Shares repurchased | — | — | (912 | ) | (2,009 | ) | (370 | ) | (887 | ) | — | — | ||||||||||||
Net increase (decrease) in shares outstanding | — | — | (760 | ) | (1,629 | ) | (183 | ) | (638 | ) | — | — |
(1) | Unaudited. |
See Notes to Financial Statements
Table of Contents
Financial Highlights (1)
Income (loss) from investment operations (2) | Dividends and distributions | |||||||||||||||||||||||||||||||||||||||||||
Period | Net asset value, beginning of period | Net investment income (loss) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of expenses to avearge net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of net income (loss) to average net assets | |||||||||||||||||||||||||||||||
Global Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 19.63 | $ | .24 | $ | .99 | $ | 1.23 | $ | (.22 | ) | $ | — | $ | (.22 | ) | $ | 20.64 | 6.31 | % | $ | 215 | .60 | %(6) | .54 | %(6) | 2.37 | %(6) | ||||||||||||||||
12/31/05 | 17.31 | .28 | 2.19 | 2.47 | (.15 | ) | — | (.15 | ) | 19.63 | 14.37 | 206 | .62 | .57 | 1.56 | |||||||||||||||||||||||||||||
12/31/04 | 15.30 | .18 | 1.92 | 2.10 | (.09 | ) | — | (.09 | ) | 17.31 | 13.80 | 202 | .65 | .64 | 1.15 | |||||||||||||||||||||||||||||
12/31/03 | 11.35 | .12 | 3.91 | 4.03 | (.08 | ) | — | (.08 | ) | 15.30 | 35.63 | 188 | .70 | .70 | .94 | |||||||||||||||||||||||||||||
12/31/02 | 13.42 | .09 | (2.02 | ) | (1.93 | ) | (.14 | ) | — | (.14 | ) | 11.35 | (14.46 | ) | 152 | .71 | .71 | .73 | ||||||||||||||||||||||||||
12/31/01 | 17.25 | .18 | (2.50 | ) | (2.32 | ) | (.15 | ) | (1.36 | ) | (1.51 | ) | 13.42 | (13.99 | ) | 215 | .70 | .70 | 1.24 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 19.52 | .22 | .97 | 1.19 | (.18 | ) | $ | — | (.18 | ) | 20.53 | 6.16 | 3,131 | .85 | (6) | .79 | (6) | 2.17 | (6) | |||||||||||||||||||||||||
12/31/05 | 17.23 | .23 | 2.18 | 2.41 | (.12 | ) | — | (.12 | ) | 19.52 | 14.07 | 2,617 | .87 | .82 | 1.30 | |||||||||||||||||||||||||||||
12/31/04 | 15.25 | .14 | 1.91 | 2.05 | (.07 | ) | — | (.07 | ) | 17.23 | 13.49 | 1,796 | .90 | .89 | .92 | |||||||||||||||||||||||||||||
12/31/03 | 11.32 | .09 | 3.89 | 3.98 | (.05 | ) | — | (.05 | ) | 15.25 | 35.27 | 1,082 | .95 | .95 | .68 | |||||||||||||||||||||||||||||
12/31/02 | 13.38 | .06 | (2.01 | ) | (1.95 | ) | (.11 | ) | — | (.11 | ) | 11.32 | (14.64 | ) | 592 | .96 | .96 | .48 | ||||||||||||||||||||||||||
12/31/01 | 17.21 | .13 | (2.49 | ) | (2.36 | ) | (.11 | ) | (1.36 | ) | (1.47 | ) | 13.38 | (14.22 | ) | 600 | .95 | .95 | .88 | |||||||||||||||||||||||||
Growth Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 59.36 | $ | .34 | $ | 1.16 | $ | 1.50 | $ | (.10 | ) | $ | (.38 | ) | $ | (.48 | ) | $ | 60.38 | 2.56 | % | $ | 3,490 | .34 | %(6) | .31 | %(6) | 1.12 | %(6) | |||||||||||||||
12/31/05 | 51.39 | .46 | 8.00 | 8.46 | (.49 | ) | — | (.49 | ) | 59.36 | 16.50 | 3,709 | .35 | .32 | .87 | |||||||||||||||||||||||||||||
12/31/04 | 45.74 | .32 | 5.51 | 5.83 | (.18 | ) | — | (.18 | ) | 51.39 | 12.75 | 3,744 | .36 | .36 | .68 | |||||||||||||||||||||||||||||
12/31/03 | 33.47 | .16 | 12.26 | 12.42 | (.15 | ) | — | (.15 | ) | 45.74 | 37.15 | 3,877 | .39 | .39 | .41 | |||||||||||||||||||||||||||||
12/31/02 | 44.30 | .12 | (10.87 | ) | (10.75 | ) | (.08 | ) | — | (.08 | ) | 33.47 | (24.27 | ) | 3,195 | .40 | .40 | .30 | ||||||||||||||||||||||||||
12/31/01 | 73.51 | .18 | (11.99 | ) | (11.81 | ) | (.41 | ) | (16.99 | ) | (17.40 | ) | 44.30 | (17.93 | ) | 5,207 | .38 | .38 | .34 | |||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 58.98 | .27 | 1.15 | 1.42 | (.08 | ) | (.38 | ) | (.46 | ) | 59.94 | 2.44 | 20,386 | .59 | (6) | .56 | (6) | .88 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.10 | .34 | 7.92 | 8.26 | (.38 | ) | — | (.38 | ) | 58.98 | 16.19 | 18,343 | .60 | .57 | .64 | |||||||||||||||||||||||||||||
12/31/04 | 45.50 | .23 | 5.45 | 5.68 | (.08 | ) | — | (.08 | ) | 51.10 | 12.50 | 12,055 | .61 | .61 | .50 | |||||||||||||||||||||||||||||
12/31/03 | 33.29 | .06 | 12.19 | 12.25 | (.04 | ) | — | (.04 | ) | 45.50 | 36.80 | 7,107 | .64 | .64 | .16 | |||||||||||||||||||||||||||||
12/31/02 | 44.09 | .03 | (10.82 | ) | (10.79 | ) | (.01 | ) | — | (.01 | ) | 33.29 | (24.46 | ) | 3,009 | .65 | .65 | .07 | ||||||||||||||||||||||||||
12/31/01 | 73.28 | .04 | (11.94 | ) | (11.90 | ) | (.30 | ) | (16.99 | ) | (17.29 | ) | 44.09 | (18.15 | ) | 2,937 | .63 | .63 | .07 | |||||||||||||||||||||||||
Class 3 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 59.34 | .28 | 1.17 | 1.45 | (.08 | ) | (.38 | ) | (.46 | ) | 60.33 | 2.48 | 462 | .52 | (6) | .49 | (6) | .94 | (6) | |||||||||||||||||||||||||
12/31/05 | 51.38 | .37 | 7.98 | 8.35 | (.39 | ) | — | (.39 | ) | 59.34 | 16.28 | 499 | .53 | .50 | .69 | |||||||||||||||||||||||||||||
12/31/04 (7) | 47.74 | .24 | 3.50 | 3.74 | (.10 | ) | — | (.10 | ) | 51.38 | 7.85 | 516 | .54 | (6) | .53 | (6) | .54 | (6) | ||||||||||||||||||||||||||
Asset Allocation Fund | ||||||||||||||||||||||||||||||||||||||||||||
Class 1 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | $ | 16.56 | $ | .23 | $ | .69 | $ | .92 | $ | (.07 | ) | $ | (.23 | ) | $ | (.30 | ) | $ | 17.18 | 5.60 | % | $ | 903 | .34 | %(6) | .31 | %(6) | 2.66 | %(6) | |||||||||||||||
12/31/05 | 15.49 | .41 | 1.05 | 1.46 | (.39 | ) | — | (.39 | ) | 16.56 | 9.45 | 879 | .35 | .32 | 2.57 | |||||||||||||||||||||||||||||
12/31/04 | 14.58 | .39 | .84 | 1.23 | (.32 | ) | — | (.32 | ) | 15.49 | 8.50 | 899 | .38 | .37 | 2.64 | |||||||||||||||||||||||||||||
12/31/03 | 12.23 | .41 | 2.29 | 2.70 | (.35 | ) | — | (.35 | ) | 14.58 | 22.14 | 911 | .42 | .42 | 3.12 | |||||||||||||||||||||||||||||
12/31/02 | 14.30 | .45 | (2.19 | ) | (1.74 | ) | (.33 | ) | — | (.33 | ) | 12.23 | (12.19 | ) | 797 | .45 | .45 | 3.31 | ||||||||||||||||||||||||||
12/31/01 | 15.71 | .49 | (.37 | ) | .12 | (.59 | ) | (.94 | ) | (1.53 | ) | 14.30 | .77 | 1,012 | .45 | .45 | 3.30 | |||||||||||||||||||||||||||
Class 2 | ||||||||||||||||||||||||||||||||||||||||||||
6/30/06 (5) | 16.47 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.07 | 5.46 | 5,519 | .59 | (6) | .56 | (6) | 2.41 | (6) | |||||||||||||||||||||||||
12/31/05 | 15.42 | .37 | 1.04 | 1.41 | (.36 | ) | — | (.36 | ) | 16.47 | 9.14 | 5,120 | .60 | .57 | 2.31 | |||||||||||||||||||||||||||||
12/31/04 | 14.51 | .36 | .84 | 1.20 | (.29 | ) | — | (.29 | ) | 15.42 | 8.34 | 3,797 | .62 | .62 | 2.42 | |||||||||||||||||||||||||||||
12/31/03 | 12.18 | .37 | 2.27 | 2.64 | (.31 | ) | — | (.31 | ) | 14.51 | 21.74 | 2,314 | .67 | .67 | 2.81 | |||||||||||||||||||||||||||||
12/31/02 | 14.25 | .42 | (2.18 | ) | (1.76 | ) | (.31 | ) | — | (.31 | ) | 12.18 | (12.38 | ) | 1,056 | .70 | .70 | 3.11 | ||||||||||||||||||||||||||
12/31/01 | 15.67 | .45 | (.36 | ) | .09 | (.57 | ) | (.94 | ) | (1.51 | ) | 14.25 | .52 | 730 | .70 | .70 | 3.03 |
Table of Contents
Financial Highlights (1)
Income (loss) from investment operations (2) | Dividends and distributions | ||||||||||||||||||||||||||||||||||||||||||
Period | Net asset value, beginning of period | Net investment income (loss) | Net gains (losses) on securities (both realized and unrealized) | Total from investment operations | Dividends (from net investment income) | Distributions (from capital gains) | Total dividends and distributions | Net asset value, end of period | Total return | Net assets, end of period (in millions) | Ratio of expenses to average net assets before waiver | Ratio of expenses to average net assets after waiver (3) | Ratio of net income (loss) to average net assets | ||||||||||||||||||||||||||||||
Asset Allocation Fund (Continued) | |||||||||||||||||||||||||||||||||||||||||||
Class 3 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06(5) | 16.56 | .21 | .68 | .89 | (.06 | ) | (.23 | ) | (.29 | ) | 17.16 | 5.44 | 76 | .52 | (6) | .49 | (6) | 2.48 | (6) | ||||||||||||||||||||||||
12/31/05 | 15.49 | .38 | 1.05 | 1.43 | (.36 | ) | — | (.36 | ) | 16.56 | 9.26 | 76 | .53 | .50 | 2.39 | ||||||||||||||||||||||||||||
12/31/04(7) | 14.85 | .36 | .58 | .94 | (.30 | ) | — | (.30 | ) | 15.49 | 6.38 | 81 | .55 | (6) | .55 | (6) | 2.50 | (6) | |||||||||||||||||||||||||
Bond Fund | |||||||||||||||||||||||||||||||||||||||||||
Class 1 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06(5) | $ | 11.31 | $ | .31 | $ | (.15 | ) | $ | .16 | $ | (.47 | ) | $ | — | $ | (.47 | ) | $ | 11.00 | 1.41 | % | $ | 188 | .43 | %(6) | .39 | %(6) | 5.48 | %(6) | ||||||||||||||
12/31/05 | 11.57 | .60 | (.40 | ) | .20 | (.46 | ) | — | (.46 | ) | 11.31 | 1.77 | 182 | .44 | .40 | 5.30 | |||||||||||||||||||||||||||
12/31/04 | 11.34 | .56 | .10 | .66 | (.43 | ) | — | (.43 | ) | 11.57 | 6.04 | 195 | .45 | .44 | 4.94 | ||||||||||||||||||||||||||||
12/31/03 | 10.41 | .57 | .78 | 1.35 | (.42 | ) | — | (.42 | ) | 11.34 | 13.07 | 213 | .47 | .47 | 5.19 | ||||||||||||||||||||||||||||
12/31/02 | 10.44 | .67 | (.24 | ) | .43 | (.46 | ) | — | (.46 | ) | 10.41 | 4.26 | 218 | .49 | .49 | 6.60 | |||||||||||||||||||||||||||
12/31/01 | 10.18 | .77 | .08 | .85 | (.59 | ) | — | (.59 | ) | 10.44 | 8.48 | 194 | .49 | .49 | 7.38 | ||||||||||||||||||||||||||||
Class 2 | |||||||||||||||||||||||||||||||||||||||||||
6/30/06(5) | 11.22 | .29 | (.15 | ) | .14 | (.45 | ) | — | (.45 | ) | 10.91 | 1.23 | 2,736 | .68 | (6) | .64 | (6) | 5.23 | (6) | ||||||||||||||||||||||||
12/31/05 | 11.48 | .57 | (.39 | ) | .18 | (.44 | ) | — | (.44 | ) | 11.22 | 1.59 | 2,312 | .69 | .65 | 5.06 | |||||||||||||||||||||||||||
12/31/04 | 11.27 | .53 | .09 | .62 | (.41 | ) | — | (.41 | ) | 11.48 | 5.72 | 1,759 | .70 | .69 | 4.68 | ||||||||||||||||||||||||||||
12/31/03 | 10.36 | .53 | .78 | 1.31 | (.40 | ) | — | (.40 | ) | 11.27 | 12.80 | 1,280 | .72 | .72 | 4.88 | ||||||||||||||||||||||||||||
12/31/02 | 10.40 | .64 | (.24 | ) | .40 | (.44 | ) | — | (.44 | ) | 10.36 | 4.05 | 697 | .74 | .74 | 6.34 | |||||||||||||||||||||||||||
12/31/01 | 10.16 | .73 | .08 | .81 | (.57 | ) | — | (.57 | ) | 10.40 | 8.15 | 349 | .74 | .74 | 7.06 |
Portfolio turnover rate for all classes of shares | ||||||||||||
Six months ended June 30, 2006 (5) | Year Ended December 31 2005 | 2004 | 2003 | 2002 | 2001 | |||||||
Global Growth Fund | 17 | 26 | 24 | 27 | 30 | 38 | ||||||
Growth Fund | 23 | 29 | 30 | 34 | 34 | 31 | ||||||
Asset Allocation Fund | 21 | 23 | 20 | 20 | 25 | 32 | ||||||
Bond Fund | 29 | 46 | 34 | 20 | 29 | 59 |
(1) | Based on operations for the period shown (unless otherwise noted) and, accordingly, may not be representative of a full year. |
(2) | Based on average shares outstanding. |
(3) | The ratios in this column reflect the impact, if any, of certain waivers by CRMC. During some of the periods shown, CRMC reduced fees for investment advisory services for all share classes. |
(4) | Commenced operations July 5, 2001. |
(5) | Unaudited. |
(6) | Annualized. |
(7) | From January 16, 2004, when Class 3 shares were first issued. |
See Notes to Financial Statements
Table of Contents
Notes to financial statements | unaudited |
1. | Organization and significant accounting policies |
Organization – American Funds Insurance Series (the “series”) is registered under the Investment Company Act of 1940 as an open-end, diversified management investment company with 14 different funds. The assets of each fund are segregated, with each fund accounted for separately. The funds’ investment objectives are as follows:
Global Discovery Fund | Long-term growth of capital by investing primarily in stocks of companies in the services and information area of the global economy. | |
Global Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies located around the world. | |
Global Small Capitalization Fund | Long-term growth of capital by investing primarily in stocks of smaller companies located around the world. | |
Growth Fund | Long-term growth of capital by investing primarily in common stocks of companies that offer opportunities for growth of capital. | |
International Fund | Long-term growth of capital by investing primarily in common stocks of companies located outside the U.S. | |
New World Fund | Long-term growth of capital by investing primarily in stocks of companies with significant exposure to countries with developing economies and/or markets. | |
Blue Chip Income and Growth Fund | To produce income exceeding the average yield on U.S. stocks and to provide an opportunity for growth of principal. | |
Global Growth and Income Fund | Long-term growth of capital and current income by investing primarily in stocks of well-established companies located around the world. | |
Growth-Income Fund | Growth of capital and income by investing primarily in common stocks or other securities that demonstrate the potential for appreciation and/or dividends. | |
Asset Allocation Fund | High total return (including income and capital gains) consistent with long-term preservation of capital. | |
Bond Fund | As high a level of current income as is consistent with the preservation of capital by investing primarily in fixed-income securities. | |
High-Income Bond Fund | High current income and, secondarily, capital appreciation by investing primarily in intermediate and long-term corporate obligations, with emphasis on higher yielding, higher risk, lower rated or unrated securities. | |
U.S. Government/AAA-Rated Securities Fund | A high level of current income consistent with prudent investment risk and preservation of capital by investing primarily in a combination of securities guaranteed by the U.S. government and other debt securities rated AAA or Aaa. | |
Cash Management Fund | High current yield while preserving capital by investing in a diversified selection of high-quality money market instruments. |
Each fund offers two or three share classes (1, 2 and 3). Holders of all share classes have equal pro rata rights to assets, dividends and liquidation proceeds. Each share class has identical voting rights, except for the exclusive right to vote on matters affecting only its class. Share classes have different fees and expenses (“class-specific fees and expenses”), primarily due to different arrangements for certain distribution expenses. Differences in class-specific fees and expenses will result in differences in net investment income and, therefore, the payment of different per-share dividends by each class.
Table of Contents
Significant accounting policies – The financial statements have been prepared to comply with accounting principles generally accepted in the United States of America. These principles require management to make estimates and assumptions that affect reported amounts and disclosures. Actual results could differ from those estimates. The following is a summary of the significant accounting policies followed by the series:
Security valuation – Equity securities are valued at the official closing price of, or the last reported sale price on, the exchange or market on which such securities are traded, as of the close of business on the day the securities are being valued or, lacking any sales, at the last available bid price. Prices for each security are taken from the principal exchange or market in which the security trades. Fixed-income securities, including short-term securities purchased with more than 60 days left to maturity, are valued at prices obtained from an independent pricing service when such prices are available. However, where the investment adviser deems it appropriate, such securities will be valued at the mean quoted bid and asked prices (or bid prices, if asked prices are not available) or at prices for securities of comparable maturity, quality and type. Securities with both fixed-income and equity characteristics, or equity securities traded principally among fixed-income dealers, are valued in the manner described above for either equity or fixed-income securities, depending on which method is deemed most appropriate by the investment adviser. Short-term securities purchased within 60 days to maturity are valued at amortized cost, which approximates market value. The value of short-term securities originally purchased with maturities greater than 60 days is determined based on an amortized value to par when they reach 60 days or less remaining to maturity. The ability of the issuers of the debt securities held by the funds to meet their obligations may be affected by economic developments in a specific industry, state or region. Forward currency contracts are valued at the mean of representative quoted bid and asked prices. Securities and other assets for which representative market quotations are not readily available or are considered unreliable are fair valued as determined in good faith under procedures adopted by authority of the series’ board of trustees. Various factors may be reviewed in order to make a good faith determination of a security’s fair value. These factors include, but are not limited to, the type and cost of the security; contractual or legal restrictions on resale of the security; relevant financial or business developments of the issuer; actively traded similar or related securities; conversion or exchange rights on the security; related corporate actions; significant events occurring after the close of trading in the security; and changes in overall market conditions. If events occur that materially affect the value of securities (particularly non-U.S. securities) between the close of trading in those securities and the close of regular trading on the New York Stock Exchange, the securities are fair valued.
Security transactions and related investment income – Security transactions are recorded by the series as of the date the trades are executed with brokers. Realized gains and losses from security transactions are determined based on the specific identified cost of the securities. In the event a security is purchased with a delayed payment date, the series will segregate liquid assets sufficient to meet its payment obligations. Dividend income is recognized on the ex-dividend date and interest income is recognized on an accrual basis. Market discounts, premiums and original issue discounts on fixed-income securities are amortized daily over the expected life of the security.
Class allocations – Income, fees and expenses (other than class-specific fees and expenses) and realized and unrealized gains and losses are allocated daily among the various share classes based on their relative net assets. Class-specific fees and expenses, such as distribution expenses, are accrued daily and charged directly to the respective share class.
Dividends and distributions to shareholders –Dividends and distributions paid to shareholders are recorded on the ex-dividend date.
Non-U.S. currency translation – Assets and liabilities, including investment securities, denominated in non-U.S. currencies are translated into U.S. dollars at the exchange rates in effect on the valuation date. Purchases and sales of investment securities and income and expenses are translated into U.S. dollars at the exchange rates on the dates of such transactions. In the accompanying financial statements, the effects of changes in non-U.S. exchange rates on investment securities are included with the net realized gain or loss and net unrealized appreciation or depreciation on investments. The realized gain or loss and unrealized appreciation or depreciation resulting from all other transactions denominated in non-U.S. currencies are disclosed separately.
Table of Contents
Forward currency contracts – The series may enter into forward currency contracts, which represent agreements to exchange non-U.S. currencies on specific future dates at predetermined rates. The series enters into these contracts to manage its exposure to changes in non-U.S. exchange rates arising from investments denominated in non-U.S. currencies. Upon entering into these contracts, risks may arise from the potential inability of counterparties to meet the terms of their contracts and from possible movements in non-U.S. exchange rates. Due to these risks, the series could incur losses up to the entire contract amount, which may exceed the net unrealized value shown on the accompanying financial statements. On a daily basis, the series values forward currency contracts based on the applicable exchange rates and records unrealized gains or losses. The series records realized gains or losses at the time the forward contract is closed or offset by another contract with the same broker for the same settlement date and currency.
Mortgage dollar rolls – The series may enter into mortgage dollar roll transactions in which a fund in the series sells a mortgage-backed security to a counterparty and simultaneously enters into an agreement with the same counterparty to buy back a similar security on a specific future date at a predetermined price. Each mortgage dollar roll is treated as a financing transaction; therefore, any gain or loss is considered unrealized until the roll reaches completion. Risks may arise due to the delayed payment date and the potential inability of counterparties to complete the transaction. Income is generated as consideration for entering into these transactions and is included in interest income on the accompanying financial statements.
2. | Non-U.S. investments |
Investment risk – The risks of investing in securities of non-U.S. issuers may include, but are not limited to, investment and repatriation restrictions; revaluation of currencies; adverse political, social and economic developments; government involvement in the private sector; limited and less reliable investor information; lack of liquidity; certain local tax law considerations; and limited regulation of the securities markets.
Taxation – Dividend and interest income is recorded net of non-U.S. taxes paid. Gains realized by the funds on the sale of securities in certain countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
3. | Federal income taxation and distributions |
The series complies with the requirements under Subchapter M of the Internal Revenue Code applicable to mutual funds and intends to distribute substantially all of its net taxable income and net capital gains each year. The series is not subject to income taxes to the extent such distributions are made.
Distributions – Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses; short-term capital gains and losses; capital losses related to sales of certain securities within 30 days of purchase; unrealized appreciation of certain investments in non-U.S. securities; deferred expenses; paydowns on fixed-income securities; net capital losses; non-U.S. taxes on capital gains; and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes.
The components of distributable earnings on a tax basis are reported as of December 31, 2005, the funds’ most recent fiscal year end. Tax-basis unrealized appreciation (depreciation) and cost of investments are reported as of June 30, 2006.
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Additional tax basis disclosures are as follows:
(dollars in thousands)
Growth Fund | Global Growth Fund | Asset Allocation | Bond Fund | |||||||||||||
As of December 31, 2005: | ||||||||||||||||
Undistributed ordinary income | $ | 29,555 | $ | 31,502 | $ | 22,899 | $ | 113,791 | ||||||||
Undistributed long-term capital gains | — | 151,590 | 85,106 | — | ||||||||||||
Capital loss carryforwards | (66,686 | ) | — | — | (3,617 | ) | ||||||||||
As of June 30, 2006: | ||||||||||||||||
Gross unrealized appreciation on investment securities | 632,332 | 5,224,347 | 1,067,049 | 30,547 | ||||||||||||
Gross unrealized depreciation on investment securities | (56,728 | ) | (569,283 | ) | (156,712 | ) | (66,148 | ) | ||||||||
Net unrealized appreciation (depreciation) on investment securities | 575,604 | 4,655,064 | 910,337 | (35,601 | ) | |||||||||||
Cost of portfolio securities | 2,759,115 | 19,581,226 | 5,670,140 | 2,955,336 | ||||||||||||
Capital loss carryforwards expire in: | ||||||||||||||||
2006 | $ | — | — | — | $ | — | ||||||||||
2007 | — | — | — | — | ||||||||||||
2008 | — | — | — | — | ||||||||||||
2009 | — | — | — | — | ||||||||||||
2010 | 10,546 | — | — | — | ||||||||||||
2011 | 56,140 | — | — | 3,029 | ||||||||||||
2012 | — | — | — | — | ||||||||||||
2013 | — | — | — | 588 | ||||||||||||
$ | 66,686 | — | — | $ | 3,617 |
* | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
† | Amount less than one thousand. |
4. | Fees and transactions with related parties |
Capital Research and Management Company (“CRMC”), the series’ investment adviser, is the parent company of American Funds Service Company SM (“AFS”), the series’ transfer agent, and American Funds Distributors, Inc. SM (“AFD”), the principal underwriter of the series’ shares.
Investment advisory services – The Investment Advisory and Service Agreement with CRMC provides for monthly fees accrued daily. These fees are based on annual rates that generally decrease as average net asset levels increase.
The board of trustees approved an amended agreement for Growth-Income Fund and Global Small Capitalization Fund, effective April 1, 2006, and July 1, 2006, respectively, that provided for reduced annual rates as reflected in the chart below. During the six months ended June 30, 2006, CRMC voluntarily reduced investment advisory services fees to the rates provided by the amended agreement for Global Small Capitalization Fund. Additionally, CRMC is currently waiving 10% of investment advisory services fees for all funds in the series. During the six months ended June 30, 2006, total aggregate investment advisory services fees waived by CRMC were $13,732,000. As a result, the aggregate fees shown on the accompanying financial statements of $137,318,000 were reduced to $123,586,000. The amended range of rates and asset levels and the current annualized rates of average net assets for the series, before and after the expense waiver, are as follows:
Rates | Net asset level (in billions) | For the six months ended June 30, 2006, before waiver | For the six months ended June 30, 2006, after waiver | |||||||||
Fund | Beginning with | Ending with | Up to | In excess of | ||||||||
Global Growth | .690 | .480 | .6 | 3.0 | .56 | .50 | ||||||
Growth | .500 | .285 | .6 | 27.0 | .33 | .29 | ||||||
Asset Allocation | .500 | .250 | .6 | 8.0 | .33 | .29 | ||||||
Bond | .480 | .360 | .6 | 3.0 | .42 | .38 |
* | Results based on activity during the period May 1, 2006, commencement of operations, through June 30, 2006. |
Transfer agent services – The aggregate fee of $25,000 was incurred during the six months ended June 30, 2006, pursuant to an agreement with AFS. Under this agreement, the series compensates AFS for transfer agent services, including shareholder recordkeeping, communications and transaction processing.
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Deferred trustees’ compensation – Since the adoption of the deferred compensation plan in 1993, trustees who are unaffiliated with CRMC may elect to defer the cash payment of part or all of their compensation. These deferred amounts, which remain as liabilities of the series, are treated as if invested in one or more of the American Funds. These amounts represent general, unsecured liabilities of the series and vary according to the total returns of the selected funds. Trustees’ compensation of $421,000, shown on the accompanying financial statements, includes $244,000 in current fees (either paid in cash or deferred) and a net increase of $177,000 in the value of the deferred amounts.
Affiliated officers and trustees – Officers and certain trustees of the series are or may be considered to be affiliated with CRMC, AFS and AFD. No affiliated officers or trustees received any compensation directly from the series.
5. | Distribution services |
The series has adopted plans of distribution for Class 2 and 3 shares. Under the plans, the board of trustees approves certain categories of expenses that are used to finance activities primarily intended to sell fund shares. The plans provide for annual expenses, based on average daily net assets, of 0.25% for Class 2 and 0.18% for Class 3 to pay service fees to firms that have entered into agreements with the series. During the six months ended June 30, 2006, distribution expenses under the plans for the series aggregated $77,715,000 for Class 2 and $1,101,000 for Class 3. Class 1 shares have not adopted a plan of distribution.
6. | Investment transactions and other disclosures |
As of June 30, 2006, Asset Allocation Fund, Bond Fund and High-Income Bond Fund had outstanding forward currency contracts to sell non-U.S. currencies as follows:
(dollars in thousands)
Contract amount | U.S. valuation | ||||||||||||||
Fund | Non-U.S. currency sale contracts | Non-U.S. | U.S. | Amount | Unrealized (depreciation) appreciation | ||||||||||
Asset Allocation | Euro, expiring 7/19-9/29/2006 | € | 6,710 | $ | 8,520 | $ | 8,599 | ($ | 79 | ) | |||||
Bond | Euro, expiring 9/14/2006 | € | 5,585 | 7,078 | 7,173 | (95 | ) | ||||||||
Pound, expiring 7/13-8/23/2006 | £ | 5,780 | 12,125 | 11,905 | 220 |
The following table presents additional information for the six months ended June 30, 2006:
Global Growth Fund | Growth Fund | Asset Allocation Fund | Bond Fund | ||||||||||
Purchases of investment securities (1) | $ | 615,964 | $ | 5,156,655 | $ | 1,231,288 | $ | 886,794 | |||||
Sales of investment securities (1) | 451,141 | 5,061,567 | 1,240,593 | 608,522 | |||||||||
Non-U.S taxes paid on dividend income | 3,333 | 5,318 | 1,139 | — | |||||||||
Non-U.S taxes paid on interest income— | — | — | (3 | ) | 61 | ||||||||
Non-U.S taxes paid on realized gains | 132 | — | — | — | |||||||||
Non-U.S taxes provided on unrealized gains as of June 30, 2006 | 545 | 17 | — | — | |||||||||
Dividends from affiliated issuers | — | — | — | — | |||||||||
Realized gain on affiliated issuers | — | — | 16,897 | — |
(1) | Excludes short-term securities, except for Cash Management Fund. |
(2) | For the period May 1, 2006, commencement of operations, through June 30, 2006. |
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Expense example | unaudited |
The funds in the American Funds Insurance Series serve as the underlying investment vehicle for various insurance products. As an owner of an insurance contract that invests in one of the funds in the series, you incur two types of costs: (1) transaction costs such as initial sales charges on purchase payments and contingent deferred sales charges on redemptions (loads); and (2) ongoing costs, including management fees; distribution and service (12b-1) fees; and other expenses. Additional fees are charged by the insurance companies related to the various benefits they provide. This example is intended to help you understand your ongoing costs (in dollars) of investing in the underlying funds only so you can compare these costs with the ongoing costs of investing in other mutual funds that serve a similar function in other annuity products. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period (January 1, 2006, through June 30, 2006).
Actual expenses:
The first line of each share class in the table below provides information about actual account values and actual expenses. You may use the information in this line, 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 first line under the heading entitled “Expenses paid during period” to estimate the expenses you paid on your account during this period. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees.
Hypothetical example for comparison purposes:
The second line of each share class in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio for the share class and an assumed rate of return of 5.00% per year before expenses, which is not the actual return of the share class. 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 the fund and other funds. To do so, compare this 5.00% hypothetical example with the 5.00% hypothetical examples that appear in the shareholder reports of the other funds. Additional fees are charged by the insurance companies related to the various benefits they provide. You can estimate the impact of these fees by adding the amount of the fees to the total estimated expenses you paid on your account during the period as calculated above. In addition, your ending account value would also be lower by the amount of these fees. Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second line of each share class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.
Beginning account value 1/1/2006 | Ending account value 6/30/2006 | Expenses paid during period* | Annualized expense ratio | |||||||||
Global Discovery Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.73 | $ | 2.86 | .57 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.97 | 2.86 | .57 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.95 | 4.12 | .82 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.73 | 4.11 | .82 | ||||||||
Global Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,063.06 | $ | 2.76 | .54 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.12 | 2.71 | .54 | ||||||||
Class 2 — actual return | 1,000.00 | 1,061.57 | 4.04 | .79 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.88 | 3.96 | .79 | ||||||||
Global Small Capitalization Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,094.50 | $ | 3.64 | .70 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.32 | 3.51 | .70 | ||||||||
Class 2 — actual return | 1,000.00 | 1,093.52 | 4.93 | .95 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.08 | 4.76 | .95 |
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Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,025.61 | $ | 1.56 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,024.37 | 2.81 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,024.77 | 2.46 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
International Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,060.13 | $ | 2.55 | .50 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.32 | 2.51 | .50 | ||||||||
Class 2 — actual return | 1,000.00 | 1,058.33 | 3.83 | .75 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.08 | 3.76 | .75 | ||||||||
Class 3 — actual return | 1,000.00 | 1,058.74 | 3.47 | .68 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.42 | 3.41 | .68 | ||||||||
New World Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,089.69 | $ | 4.20 | .81 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,020.78 | 4.06 | .81 | ||||||||
Class 2 — actual return | 1,000.00 | 1,089.24 | 5.49 | 1.06 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,019.54 | 5.31 | 1.06 | ||||||||
Blue Chip Income and Growth Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,046.45 | $ | 1.98 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,045.57 | 3.25 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 | ||||||||
Global Growth and Income Fund† | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 961.00 | $ | 1.05 | .65 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,021.57 | 3.26 | .65 | ||||||||
Class 2 — actual return | 1,000.00 | 960.00 | 1.45 | .90 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,020.33 | 4.51 | .90 | ||||||||
Growth-Income Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,040.86 | $ | 1.32 | .26 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.51 | 1.30 | .26 | ||||||||
Class 2 — actual return | 1,000.00 | 1,039.62 | 2.58 | .51 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.27 | 2.56 | .51 | ||||||||
Class 3 — actual return | 1,000.00 | 1,039.98 | 2.23 | .44 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.61 | 2.21 | .44 | ||||||||
Asset Allocation Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,055.97 | $ | 1.58 | .31 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.26 | 1.56 | .31 | ||||||||
Class 2 — actual return | 1,000.00 | 1,054.62 | 2.85 | .56 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.02 | 2.81 | .56 | ||||||||
Class 3 — actual return | 1,000.00 | 1,054.43 | 2.50 | .49 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.36 | 2.46 | .49 | ||||||||
Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,014.08 | $ | 1.95 | .39 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.86 | 1.96 | .39 | ||||||||
Class 2 — actual return | 1,000.00 | 1,012.33 | 3.19 | .64 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.62 | 3.21 | .64 |
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High-Income Bond Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,033.23 | $ | 2.27 | .45 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.56 | 2.26 | .45 | ||||||||
Class 2 — actual return | 1,000.00 | 1032.38 | 3.53 | .70 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1021.32 | 3.51 | .70 | ||||||||
Class 3 — actual return | 1,000.00 | 1,032.67 | 3.18 | .63 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.67 | 3.16 | .63 | ||||||||
U.S. Government/AAA-Rated Securities Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 993.10 | $ | 2.12 | .43 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,022.66 | 2.16 | .43 | ||||||||
Class 2 — actual return | 1,000.00 | 992.63 | 3.31 | .67 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,021.47 | 3.36 | .67 | ||||||||
Class 3 — actual return | 1,000.00 | 992.50 | 3.01 | .61 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,021.77 | 3.06 | .61 | ||||||||
Cash Management Fund | ||||||||||||
Class 1 — actual return | $ | 1,000.00 | $ | 1,021.95 | $ | 1.50 | .30 | % | ||||
Class 1 — assumed 5% return | 1,000.00 | 1,023.31 | 1.51 | .30 | ||||||||
Class 2 — actual return | 1,000.00 | 1,021.44 | 2.76 | .55 | ||||||||
Class 2 — assumed 5% return | 1,000.00 | 1,022.07 | 2.76 | .55 | ||||||||
Class 3 — actual return | 1,000.00 | 1,021.19 | 2.41 | .48 | ||||||||
Class 3 — assumed 5% return | 1,000.00 | 1,022.41 | 2.41 | .48 |
* | Expenses are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by the number of days in the period (181), and divided by 365 (to reflect the one-half year period). |
† | The annualized expense ratio and the information in the first line of each share class are based on operations for the period May 1, 2006 (when the fund commenced operations), through June 30, 2006, and, accordingly, are not representative of a full period. |
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Board of trustees
“Non-interested” trustees
Name and age | Year first elected a trustee of the series1 | Principal occupation(s) during past five years | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
Lee A. Ault III, 70 Chairman of the Board | 1999 | Chairman of the Board, In-Q-Tel, Inc. (an independent technology venture company funded principally by the Central Intelligence Agency); former Chairman of the Board, President and CEO, Telecredit, Inc. | 1 | Anworth Mortgage Asset Corporation; Office Depot, Inc. | ||||
H. Frederick Christie, 73 | 1994 | Private investor; former President and CEO, The Mission Group (non-utility holding company, subsidiary of Southern California Edison Company) | 19 | Ducommun Incorporated; IHOP Corporation; Southwest Water Company | ||||
Joe E. Davis, 72 | 1991 | Private investor; former Chairman of the Board, Linear Corporation (linear motor design and production); former President and CEO, National Health Enterprises, Inc; | 1 | Anworth Mortgage Asset Corporation; Natural Alternatives, Inc. | ||||
Martin Fenton, 71 | 1995 | Chairman of the Board, Senior Resource Group LLC (development and management of senior living communities) | 16 | None | ||||
Leonard R. Fuller, 60 | 1999 | President and CEO, Fuller Consulting (financial management consulting firm) | 14 | None | ||||
Mary Myers Kauppila, 52 | 1994 | Private investor; Chairman of the Board and CEO, Ladera Management Company (venture capital and agriculture); former owner and President, Energy Investment, Inc. | 5 | None | ||||
Kirk P. Pendleton, 66 | 1996 | Chairman of the Board and CEO, Cairnwood, Inc. (venture capital investment) |
“Interested” trustees
Name, age and position with series | Year first elected a trustee or officer of the series1 | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | Number of portfolios in fund complex2 overseen by trustee | Other directorships3 held by trustee | ||||
James K. Dunton, 68 Vice Chairman of the Board | 1993 | Senior Vice President and Director, Capital Research and Management Company | 2 | None | ||||
Donald D. O’Neal, 46 President | 1998 | Senior Vice President, Capital Research and Management Company | 3 | None |
The statement of additional information includes additional information about the series’ trustees and is available without charge upon request by calling American Funds Service Company at 800/421-0180. The address for all trustees and officers of the series is 333 South Hope Street, Los Angeles, CA 90071, Attention: Fund Secretary.
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Other officers
Name, age and position with series | Year first elected a trustee or officer of the series1 | Principal occupations during past five years and positions held with affiliated entities or the principal underwriter of the series | ||
Alan N. Burro, 45 Senior Vice President | 1998 | Vice President, Capital Research and Management Company; Senior Vice President, Capital Research Company5 | ||
Michael J. Downer, 51 Senior Vice President | 1991 | Vice President and Secretary, Capital Research and Management Company; Director, American Funds Distributors, Inc.;5 Director, Capital Bank and Trust Company5 | ||
Abner D. Goldstine, 76 Senior Vice President | 1993 | Senior Vice President and Director, Capital Research and Management Company | ||
John H. Smut, 49 Senior Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, American Funds Distributors, Inc.5 | ||
Claudia P. Huntington, 54 Vice President | 1994 | Senior Vice President, Capital Research and Management Company; Director, The Capital Group Companies, Inc.5 | ||
Robert W. Lovelace, 43 Vice President | 1997 | Senior Vice President, Capital Research and Management Company; Chairman of the Board, Capital Research Company,5 Director, The Capital Group Companies, Inc.5 | ||
Susan M. Tolson, 44 Vice President | 1999 | Senior Vice President, Capital Research Company5 | ||
Chad L. Norton, 46 Secretary | 1994 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
David A. Pritchett, 40 Treasurer | 1999 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Steven I. Koszalka, 42 Assistant Secretary | 2003 | Assistant Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Karl C. Grauman, 38 Assistant Treasurer | 2006 | Vice President — Fund Business Management Group, Capital Research and Management Company | ||
Sheryl F. Johnson, 38 Assistant Treasurer | 1997 | Vice President — Fund Business Management Group, Capital Research and Management Company |
1 | Trustees and officers of the series serve until their resignation, removal or retirement. |
2 | Capital Research and Management Company manages the American Funds, consisting of 29 funds, and Endowments, whose shareholders are limited to certain nonprofit organizations. |
3 | This includes all directorships (other than those in the American Funds) that are held by each trustee as a director of a public company or a registered investment company. |
4 | “Interested persons” within the meaning of the 1940 Act, on the basis of their affiliation with the series’ investment adviser, Capital Research and Management Company, or affiliated entities (including the series’ principal underwriter). |
5 | Company affiliated with Capital Research and Management Company. |
Table of Contents
GVIT International Index Fund
SemiannualReport
| June 30, 2006 (Unaudited) |
Contents | ||
3 | Statement of Investments | |
27 | Statement of Assets and Liabilities | |
27 | Statement of Operations | |
28 | Statement of Changes in Net Assets | |
30 | Financial Highlights | |
31 | Notes to Financial Statements |
Statement Regarding Availability of Quarterly Portfolio Schedule.
The Gartmore Variable Insurance Trust files complete schedules of portfolio holdings for each Fund with the Securities and Exchange Commission (the “Commission”) for the first and third quarters of each fiscal year on Form N-Q. The Funds’ Forms N-Q are available on the Commission’s website at http://www.sec.gov. The Funds’ Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, DC, and information on the operation of the Public Reference Room may be obtained by calling 800-SEC-0330; and the Funds make the information on Form N-Q available to shareholders upon request without charge.
Statement Regarding Availability of Proxy Voting Record.
Information regarding how the Fund voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2006 is available without charge, upon request, by calling 800-848-0920, and on the Commission’s website at http://www.sec.gov.
SAR-GIIX (8/06)
Table of Contents
Shareholder
Expense Example | GVIT International Index Fund |
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) paid on purchase payments and redemption fees; and (2) ongoing costs, including investment advisory fees, administration fees, distribution fees and other Fund expenses. The examples below are intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. Per SEC requirements, the examples assume that you had a $1,000 investment in the Class at the beginning of the reporting period, May 1, 2006, and continued to hold your shares at the end of the reporting period, June 30, 2006.
Actual Expenses
For each Class of the Fund in the table below, the first line provides information about actual account values and actual expenses. You may use the information in this line, 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 first line of each Class under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second line of each Class in the table below provides information about hypothetical account values and hypothetical expenses based on the Class’ actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Class’ actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Class of the Fund and 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.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) or redemption fees. Therefore, the second line for each Class in the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher. The examples also assume all dividends and distributions have been reinvested.
Schedule | of Shareholder Expenses |
Expense | Analysis of a $1,000 Investment |
(June 30, 2006)
Beginning Account Value, May 1, 2006 | Ending Account Value, June 30, 2006 | Expenses Paid During Period | Annualized Expense Ratio | |||||||||||||
Gartmore GVIT International Index Fund | ||||||||||||||||
Class II | Actual | $ | 1,000.00 | $ | 784.90 | $ | 3.27 | (a) | 0.74% | (a) | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,021.13 | $ | 3.72 | (b) | 0.74% | (b) | ||||||
Class VI | Actual | $ | 1,000.00 | $ | 780.30 | $ | 3.66 | (a) | 0.83% | (a) | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,020.68 | $ | 4.17 | (b) | 0.83% | (b) | ||||||
Class VII | Actual | $ | 1,000.00 | $ | 782.10 | $ | 5.08 | (a) | 1.15% | (a) | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,019.10 | $ | 5.77 | (b) | 1.15% | (b) | ||||||
Class VIII | Actual | $ | 1,000.00 | $ | 780.50 | $ | 4.19 | (a) | 0.95% | (a) | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,020.09 | $ | 4.77 | (b) | 0.95% | (b) | ||||||
Class ID | Actual | $ | 1,000.00 | $ | 787.60 | $ | 1.64 | (a) | 0.37% | (a) | ||||||
Hypothetical | 1 | $ | 1,000.00 | $ | 1,022.97 | $ | 1.86 | (b) | 0.37% | (b) |
(a) | Information shown reflects values using the expense ratios and rates of return for the period May 1, 2006 (commencement of operations) to June 30, 2006. |
(b) | Information shown reflects values using the expense ratios from May 1, 2006 (commencement of operations) to June 30, 2006 and has been annualized to reflect for the period from May 1, 2006 to June 30, 2006. |
1 | Represents the hypothetical 5% return before expenses. |
1
Table of Contents
Portfolio Summary
June 30, 2006 (Unaudited) | GVIT International Index Fund |
The SEC adopted a requirement that Funds present their portfolio holdings in a table, chart or graph format in their annual and semiannual reports to shareholders, whether or not a statement of investments is utilized. The following tables, which present portfolio holdings as a percentage of net assets, are provided in compliance with this requirement.
Asset Allocation | ||
Common Stocks | 97.7% | |
Mutual Fund | 2.1% | |
Cash Equivalents | 0.0% | |
Preferred Stock | 0.0% | |
Rights | 0.0% | |
Other assets in excess of liabilities | 0.2% | |
100.0% | ||
Top Holdings* | ||
iShares MSCI EAFE Index Fund | 2.1% | |
BP PLC | 2.1% | |
HSBC Holdings PLC | 1.7% | |
GlaxoSmithKline PLC | 1.4% | |
Toyota Motor Corp. | 1.3% | |
Total SA | 1.2% | |
Royal Dutch Shell PLC | 1.1% | |
Vodafone Group PLC | 1.1% | |
Novartis AG | 1.1% | |
Nestle SA | 1.1% | |
Other Assets | 85.8% | |
100.0% | ||
Top Industries | ||
Banks | 17.0% | |
Oil & Gas | 7.6% | |
Pharmaceuticals | 6.9% | |
Telecommunications | 6.3% | |
Insurance | 5.3% | |
Food | 4.0% | |
Electric | 4.0% | |
Financial Services | 3.8% | |
Auto Manufacturers | 2.9% | |
Mining | 2.7% | |
Other Assets | 39.5% | |
100.0% | ||
Top Countries | ||
Japan | 23.9% | |
United Kingdom | 22.6% | |
France | 9.2% | |
Germany | 6.8% | |
Switzerland | 6.7% | |
Australia | 5.0% | |
Netherlands | 4.6% | |
Spain | 3.8% | |
Italy | 3.7% | |
Sweden | 2.3% | |
Other Assets | 11.4% | |
100.0% | ||
* | For purpose of listing top holdings, repurchase agreements are considered cash equivalents and are included as part of Other Assets. |
2
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (97.7%) | |||||
AUSTRALIA (5.0%) | |||||
Airlines (0.0%) | |||||
Qantas Airways Ltd. (c) | 4,620 | $ | 10,152 | ||
Apparel (0.0%) | |||||
Billabong International Ltd. (c) | 219 | 2,496 | |||
Banks (1.3%) | |||||
Australia & New Zealand Banking Group Ltd. (c) | 5,968 | 117,961 | |||
Commonwealth Bank of Australia (c) | 4,237 | 139,540 | |||
National Australia Bank Ltd. (c) | 5,251 | 136,595 | |||
Westpac Banking Corp. (c) | 6,430 | 110,795 | |||
504,891 | |||||
Beverages (0.1%) | |||||
Coca-Cola Amatil Ltd. (c) | 2,629 | 13,843 | |||
Foster’s Group Ltd. (c) | 7,879 | 31,980 | |||
Lion Nathan Ltd. (c) | 249 | 1,441 | |||
47,264 | |||||
Building Materials (0.2%) | |||||
Boral Ltd. (c) | 1,323 | 8,008 | |||
CSR Ltd. (c) | 4,558 | 11,342 | |||
Rinker Group Ltd. (c) | 3,410 | 41,287 | |||
60,637 | |||||
Commercial Services (0.1%) | |||||
ABC Learning Centres Ltd. (c) | 1,660 | 7,885 | |||
Brambles Industries Ltd. (c) | 3,712 | 30,339 | |||
Transurban Group (c) | 3,562 | 18,387 | |||
56,611 | |||||
Computers (0.0%) | |||||
Computershare Ltd. (c) | 985 | 5,739 | |||
Engineering & Construction (0.1%) | |||||
Downer EDI Ltd. (c) | 492 | 2,718 | |||
Leighton Holdings Ltd. (c) | 208 | 2,680 | |||
Macquarie Airports (c) | 3,411 | 7,774 | |||
Multiplex Group (c) | 2,807 | 6,813 | |||
WorleyParsons Ltd. (c) | 358 | 5,352 | |||
25,337 | |||||
Entertainment (0.1%) | |||||
Aristocrat Leisure Ltd. (c) | 886 | 8,469 | |||
TABCorp. Holdings Ltd. (c) | 1,644 | 18,553 | |||
UNiTAB Ltd. (c) | 817 | 8,960 | |||
35,982 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
AUSTRALIA (continued) | |||||
Financial Services (0.2%) | |||||
Australian Stock Exchange Ltd. (c) | 536 | $ | 12,976 | ||
Babcock & Brown Ltd. (c) | 682 | 10,941 | |||
Challenger Financial Services Group Ltd. (c) | 2,908 | 6,812 | |||
Macquarie Bank Ltd. (c) | 873 | 44,676 | |||
Perpetual Ltd. (c) | 50 | 2,711 | |||
SFE Corp., Ltd. (c) | 737 | 9,081 | |||
87,197 | |||||
Food (0.1%) | |||||
Goodman Fielder Ltd. (c) | 1,597 | 2,535 | |||
Woolworths Ltd. (c) | 3,616 | 54,118 | |||
56,653 | |||||
Forest Products & Paper (0.0%) | |||||
PaperlinX Ltd. (c) | 262 | 607 | |||
Gas (0.1%) | |||||
Alinta Ltd. (c) | 1,422 | 11,015 | |||
Australian Gas Light Co., Ltd. (c) | 1,221 | 15,886 | |||
26,901 | |||||
Healthcare—Products (0.0%) | |||||
Cochlear Ltd. (c) | 107 | 4,342 | |||
Healthcare—Services (0.0%) | |||||
Sonic Healthcare Ltd. (c) | 475 | 5,010 | |||
Insurance (0.3%) | |||||
AMP Ltd. (c) | 5,879 | 39,767 | |||
AXA Asia Pacific Holdings Ltd. (c) | 1,946 | 9,026 | |||
Insurance Australia Group Ltd. (c) | 6,521 | 25,906 | |||
QBE Insurance Group Ltd. (c) | 2,465 | 37,465 | |||
112,164 | |||||
Investment Companies (0.1%) | |||||
Macquarie Communications | 243 | 1,066 | |||
Infrastructure Group (c) | |||||
Macquarie Infrastructure Group (c) | 9,894 | 24,679 | |||
25,745 | |||||
Iron/Steel (0.1%) | |||||
BlueScope Steel Ltd. (c) | 2,997 | 17,713 | |||
OneSteel Ltd. (c) | 714 | 2,159 | |||
19,872 | |||||
Media (0.0%) | |||||
John Fairfax Holdings Ltd. (c) | 1,559 | 4,345 | |||
Publishing & Broadcasting Ltd. (c) | 773 | 10,447 | |||
14,792 | |||||
3
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
AUSTRALIA (continued) | |||||
Mining (1.0%) | |||||
Alumina Ltd. (c) | 4,460 | $ | 22,365 | ||
BHP Billiton Ltd. (c) | 11,531 | 249,333 | |||
Iluka Resources Ltd. (c) | 790 | 3,844 | |||
Newcrest Mining Ltd. (c) | 1,310 | 20,569 | |||
Paladin Resources Ltd. (c) | 2,488 | 7,610 | |||
Rio Tinto Ltd. (c) | 1,040 | 60,174 | |||
Zinifex Ltd. (c) | 1,220 | 9,146 | |||
373,041 | |||||
Miscellaneous Manufacturing (0.1%) | |||||
Ansell Ltd. (c) | 5 | 36 | |||
Orica Ltd. (c) | 830 | 14,736 | |||
Wesfarmers Ltd. (c) | 1,447 | 37,962 | |||
52,734 | |||||
Oil & Gas (0.3%) | |||||
Caltex Australia Ltd. (c) | 662 | 11,614 | |||
Origin Energy Ltd. (c) | 1,810 | 9,894 | |||
Santos Ltd. (c) | 2,540 | 22,852 | |||
Woodside Petroleum Ltd. (c) | 1,712 | 55,995 | |||
100,355 | |||||
Packaging & Containers (0.0%) | |||||
AmCor Ltd. (c) | 2,110 | 10,461 | |||
Pharmaceuticals (0.1%) | |||||
CSL Ltd. (c) | 689 | 27,469 | |||
Mayne Pharma Ltd. (b) (c) | 3,520 | 6,780 | |||
Symbion Health Ltd. (c) | 3,405 | 7,732 | |||
41,981 | |||||
Real Estate (0.5%) | |||||
Centro Properties Group (c) | 1,810 | 8,994 | |||
CFS Retail Property Trust (c) | 1,767 | 2,437 | |||
Commonwealth Property Office Fund (c) | 539 | 557 | |||
DB RREEF Trust (c) | 4,677 | 5,088 | |||
GPT Group (c) | 7,643 | 24,613 | |||
ING Industrial Fund (c) | 5,640 | 9,319 | |||
Investa Property Group (c) | 7,985 | 12,985 | |||
Lend Lease Corp. Ltd. (c) | 792 | 8,225 | |||
Macquarie Goodman Group (c) | 3,016 | 13,439 | |||
Macquarie Office Trust (c) | 1,864 | 1,908 | |||
Mirvac Group (c) | 4,366 | 14,083 | |||
Stockland (c) | 5,414 | 28,233 | |||
Westfield Group (c) | 5,374 | 69,168 | |||
199,049 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
AUSTRALIA (continued) | |||||
Retail (0.1%) | |||||
Coles Myer Ltd. (c) | 4,531 | $ | 38,240 | ||
Harvey Norman Holdings Ltd. (c) | 942 | 2,755 | |||
40,995 | |||||
Telecommunications (0.1%) | |||||
Telstra Corp. Ltd. (c) | 8,721 | 23,825 | |||
Transportation (0.0%) | |||||
Toll Holdings Ltd. (c) | 1,185 | 12,357 | |||
1,957,190 | |||||
AUSTRIA (0.5%) | |||||
Banks (0.1%) | |||||
Erste Bank der Oesterreichischen Sparkassen AG (c) | 552 | 31,029 | |||
Raiffeisen International Bank Holding AG (b) (c) | 78 | 6,758 | |||
37,787 | |||||
Building Materials (0.0%) | |||||
Wienerberger AG (c) | 300 | 14,235 | |||
Electric (0.0%) | |||||
Verbund-Oesterreichische Elektrizitaetswirtschafts AG (c) | 170 | 8,172 | |||
Entertainment (0.0%) | |||||
BetandWin.Com Interactive Entertainment AG (c) | 43 | 3,404 | |||
Insurance (0.0%) | |||||
Wiener Staedtische Versicherung AG (c) | 32 | 1,882 | |||
Iron/Steel (0.1%) | |||||
Boehler-Uddeholm AG (c) | 220 | 12,014 | |||
Voestalpine AG (c) | 88 | 13,350 | |||
25,364 | |||||
Machinery—Diversified (0.0%) | |||||
Andritz AG (c) | 54 | 8,913 | |||
Miscellaneous Manufacturing (0.0%) | |||||
RHI AG (b) (c) | 186 | 6,019 | |||
Oil & Gas (0.1%) | |||||
OMV AG (c) | 525 | 31,218 | |||
4
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
AUSTRIA (continued) | |||||
Real Estate (0.1%) | |||||
IMMOFINANZ Immobilien Anlagen AG (b) (c) | 1,079 | $ | 11,981 | ||
Meinl European Land Ltd. (b) (c) | 714 | 14,550 | |||
26,531 | |||||
Telecommunications (0.1%) | |||||
Telekom Austria AG (c) | 1,386 | 30,855 | |||
194,380 | |||||
BELGIUM (1.1%) | |||||
Banks (0.5%) | |||||
Dexia (c) | 1,686 | 40,542 | |||
Fortis (c) | 3,845 | 130,894 | |||
KBC Groep NV (c) | 659 | 70,719 | |||
242,155 | |||||
Beverages (0.1%) | |||||
InBev NV (c) | 522 | 25,584 | |||
Chemicals (0.1%) | |||||
Solvay SA (c) | 197 | 22,633 | |||
Umicore (c) | 113 | 15,085 | |||
37,718 | |||||
Electrical Components & Equipment (0.0%) | |||||
Bekaert SA (c) | 6 | 576 | |||
Electronics (0.0%) | |||||
BarCo NV (c) | 28 | 2,587 | |||
Food (0.1%) | |||||
Colruyt SA (c) | 23 | 3,591 | |||
Delhaize Group (c) | 285 | 19,744 | |||
23,335 | |||||
Holding Companies-Diversified (0.1%) | |||||
Groupe Bruxelles Lambert SA (c) | 290 | 30,353 | |||
Miscellaneous Manufacturing (0.0%) | |||||
AGFA-Gevaert NV (c) | 509 | 12,323 | |||
Pharmaceuticals (0.1%) | |||||
Omega Pharma SA (c) | 21 | 1,466 | |||
UCB SA (c) | 365 | 19,737 | |||
21,203 | |||||
Telecommunications (0.1%) | |||||
BelgaCom SA (c) | 692 | 22,948 | |||
Mobistar SA (c) | 136 | 10,778 | |||
33,726 | |||||
429,560 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
DENMARK (0.7%) | |||||
Banks (0.2%) | |||||
Danske Bank (c) | 1,400 | $ | 53,173 | ||
Sydbank (c) | 147 | 4,876 | |||
58,049 | |||||
Beverages (0.0%) | |||||
Carlsberg (c) | 50 | 3,653 | |||
Biotechnology (0.0%) | |||||
Novozymes (c) | 100 | 6,753 | |||
Building Materials (0.0%) | |||||
FLSmidth & Co. (c) | 100 | 3,784 | |||
Electrical Components & Equipment (0.1%) | |||||
Vestas Wind Systems (b) (c) | 800 | 21,919 | |||
Food (0.1%) | |||||
Danisco A/S (c) | 200 | 14,565 | |||
East Asiatic Co., Ltd. (c) | 150 | 5,662 | |||
20,227 | |||||
Healthcare—Products (0.1%) | |||||
Coloplast (c) | 150 | 11,128 | |||
GN Store Nord (c) | 800 | 9,182 | |||
William Demant Holding (b) (c) | 50 | 3,734 | |||
24,044 | |||||
Home Furnishings (0.0%) | |||||
Bang & Olufsen (c) | 60 | 6,630 | |||
Insurance (0.0%) | |||||
Topdanmark (b) (c) | 50 | 6,951 | |||
TrygVesta AS (c) | 153 | 9,538 | |||
16,489 | |||||
Pharmaceuticals (0.1%) | |||||
Novo-Nordisk (c) | 750 | 47,691 | |||
Transportation (0.1%) | |||||
AP Moller — Maersk A/S (c) | 4 | 31,209 | |||
DSV (c) | 100 | 16,740 | |||
47,949 | |||||
257,188 | |||||
FINLAND (1.5%) | |||||
Auto Parts & Equipment (0.0%) | |||||
Nokian Renkaat OYJ (c) | 550 | 7,218 | |||
Banks (0.0%) | |||||
OKO Bank PLC (c) | 22 | 323 | |||
5
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FINLAND (continued) | |||||
Computers (0.0%) | |||||
Tietoenator Oyj (c) | 380 | $ | 10,964 | ||
Electric (0.1%) | |||||
Fortum Oyj (c) | 1,600 | 40,872 | |||
Engineering & Construction (0.0%) | |||||
YIT OYJ (c) | 578 | 14,145 | |||
Financial Services (0.1%) | |||||
Sampo Oyj (c) | 1,600 | 30,512 | |||
Food (0.0%) | |||||
Kesko OYJ (c) | 100 | 3,837 | |||
Forest Products & Paper (0.3%) | |||||
Stora Enso Oyj (c) | 2,300 | 32,102 | |||
UPM-Kymmene Oyj (c) | 1,900 | 40,822 | |||
72,924 | |||||
Hand/Machine Tools (0.0%) | |||||
KCI Konecranes Oyj (c) | 380 | 6,829 | |||
Iron/Steel (0.0%) | |||||
Outokumpu OYJ (c) | 400 | 9,349 | |||
Rautaruukki OYJ (c) | 200 | 6,021 | |||
15,370 | |||||
Leisure (0.0%) | |||||
Amer Sports OYJ (c) | 250 | 5,216 | |||
Machinery—Diversified (0.1%) | |||||
Kone OYJ (c) | 340 | 14,129 | |||
Metso Oyj (c) | 500 | 18,104 | |||
32,233 | |||||
Media (0.0%) | |||||
Sanoma-WSOY Oyj (c) | 30 | 721 | |||
Miscellaneous Manufacturing (0.0%) | |||||
Uponor Oyj (c) | 100 | 2,700 | |||
Wartsila Oyj (c) | 100 | 4,208 | |||
6,908 | |||||
Oil & Gas (0.0%) | |||||
Neste Oil OYJ (c) | 550 | 19,327 | |||
Pharmaceuticals (0.0%) | |||||
Orion OYJ (c) | 100 | 1,986 | |||
Telecommunications (0.9%) | |||||
Elisa OYJ (c) | 700 | 13,307 | |||
Nokia OYJ (c) | 14,000 | 283,787 | |||
297,094 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FINLAND (continued) | |||||
Transportation (0.0%) | |||||
Cargotec Corp. (c) | 80 | $ | 3,499 | ||
569,978 | |||||
FRANCE (9.2%) | |||||
Advertising (0.1%) | |||||
PagesJaunes Groupe SA (b) (c) | 272 | 8,537 | |||
Publicis Groupe | 568 | 21,938 | |||
30,475 | |||||
Aerospace/Defense (0.1%) | |||||
Safran SA (c) | 425 | 9,247 | |||
Thales SA (c) | 368 | 14,348 | |||
Zodiac SA (c) | 196 | 10,996 | |||
34,591 | |||||
Airlines (0.0%) | |||||
Air France-KLM (c) | 548 | 12,868 | |||
Apparel (0.0%) | |||||
Hermes International (c) | 165 | 14,587 | |||
Auto Manufacturers (0.3%) | |||||
Peugeot SA (c) | 583 | 36,204 | |||
Renault SA (c) | 601 | 64,484 | |||
100,688 | |||||
Auto Parts & Equipment (0.1%) | |||||
Compagnie Generale des Etablissements Michelin (c) | 546 | 32,801 | |||
Valeo SA (c) | 328 | 11,673 | |||
44,474 | |||||
Banks (1.4%) | |||||
BNP Paribas (c) | 2,765 | 264,371 | |||
Credit Agricole SA (c) | 1,913 | 72,590 | |||
Societe Generale (c) | 1,165 | 171,033 | |||
507,994 | |||||
Beverages (0.1%) | |||||
Pernod-Ricard SA (c) | 276 | 54,658 | |||
Building Materials (0.4%) | |||||
Cie de Saint-Gobain (c) | 1,054 | 75,203 | |||
Imerys SA (c) | 53 | 4,234 | |||
Lafarge SA (c) | 542 | 67,929 | |||
147,366 | |||||
Chemicals (0.2%) | |||||
Air Liquide (c) | 430 | 83,717 | |||
6
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Commercial Services (0.0%) | |||||
Societe Des Autoroutes Paris-Rhin-Rhone (c) | 133 | $ | 9,138 | ||
Computers (0.1%) | |||||
Atos Origin SA (b) (c) | 271 | 17,714 | |||
Capgemini SA (b) (c) | 477 | 27,200 | |||
44,914 | |||||
Cosmetics/Personal Care (0.2%) | |||||
L’Oreal SA (c) | 955 | 90,138 | |||
Electric (0.4%) | |||||
Suez SA (c) | 3,326 | 138,106 | |||
Electrical Components & Equipment (0.2%) | |||||
Schneider Electric SA (c) | 796 | 82,839 | |||
Engineering & Construction (0.3%) | |||||
Bouygues (c) | 703 | 36,094 | |||
Vinci SA (c) | 724 | 74,444 | |||
110,538 | |||||
Food (0.7%) | |||||
Carrefour SA (b) (c) | 1,939 | 113,554 | |||
Casino Guichard Perrachon SA (c) | 191 | 14,511 | |||
Groupe Danone (c) | 838 | 106,399 | |||
234,464 | |||||
Food Service (0.0%) | |||||
Sodexho Alliance SA (c) | 245 | 11,756 | |||
Gas (0.0%) | |||||
Gaz de France (b) (c) | 549 | 18,406 | |||
Healthcare—Products (0.1%) | |||||
Cie Generale d’Optique Essilor International SA (c) | 376 | 37,815 | |||
Holding Companies—Diversified (0.2%) | |||||
LVMH Moet Hennessy Louis Vuitton SA (c) | 787 | 77,996 | |||
Home Furnishings (0.0%) | |||||
Thomson (c) | 1,034 | 17,084 | |||
Household Products (0.0%) | |||||
Societe BIC SA (c) | 35 | 2,266 | |||
Insurance (0.5%) | |||||
AXA SA (c) | 5,499 | 177,969 | |||
CNP Assurances (c) | 91 | 8,637 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Insurance (continued) | |||||
Scor (c) | 2,811 | $ | 6,139 | ||
192,745 | |||||
Lodging (0.1%) | |||||
Accor SA (c) | 739 | 44,952 | |||
Machinery—Diversified (0.1%) | |||||
Alstom RGPT (b) (c) | 337 | 30,801 | |||
Media (0.5%) | |||||
Lagardere SCA (c) | 466 | 34,346 | |||
M6-Metropole Television (c) | 120 | 3,752 | |||
Societe Television Francaise 1 (c) | 504 | 16,419 | |||
Vivendi SA (c) | 3,813 | 133,183 | |||
187,700 | |||||
Metal Fabricate/Hardware (0.1%) | |||||
Vallourec (c) | 22 | 26,476 | |||
Office/Business Equipment (0.0%) | |||||
Neopost SA (c) | 78 | 8,880 | |||
Oil & Gas (1.3%) | |||||
Total SA (c) | 7,369 | 484,028 | |||
Oil & Gas Services (0.0%) | |||||
Technip SA (c) | 342 | 18,842 | |||
Pharmaceuticals (0.9%) | |||||
Sanofi-Aventis (c) | 3,371 | 328,400 | |||
Real Estate Investment Trusts (0.1%) | |||||
Gecina SA (c) | 5 | 655 | |||
Klepierre (c) | 74 | 8,567 | |||
Unibail (c) | 182 | 31,705 | |||
40,927 | |||||
Retail (0.1%) | |||||
PPR SA (c) | 191 | 24,333 | |||
Semiconductors (0.1%) | |||||
STMicroelectronics NV (c) | 2,343 | 37,622 | |||
Software (0.0%) | |||||
Business Objects SA (b) (c) | 416 | 11,306 | |||
Dassault Systemes SA (c) | 135 | 7,216 | |||
18,522 | |||||
Telecommunications (0.4%) | |||||
Alcatel SA (b) (c) | 4,336 | 54,688 | |||
France TeleCom SA (c) | 5,545 | 118,300 | |||
172,988 | |||||
7
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
FRANCE (continued) | |||||
Water (0.1%) | |||||
Veolia Environnement (c) | 1,036 | $ | 53,449 | ||
3,577,543 | |||||
GERMANY (6.8%) | |||||
Airlines (0.0%) | |||||
Deutsche Lufthansa AG (c) | 995 | 18,326 | |||
Apparel (0.1%) | |||||
Adidas AG (c) | 776 | 37,318 | |||
Puma AG Rudolf Dassler Sport (c) | 48 | 18,648 | |||
55,966 | |||||
Auto Manufacturers (0.6%) | |||||
DaimlerChrysler AG (c) | 3,011 | 148,287 | |||
Porsche AG (c) | 31 | 29,985 | |||
Volkswagen AG (b) (c) | 621 | 43,439 | |||
Volkswagen AG (b) (c) | 291 | 14,567 | |||
236,278 | |||||
Auto Parts & Equipment (0.1%) | |||||
Continental AG (c) | 482 | 49,241 | |||
Banks (0.9%) | |||||
Commerzbank AG (c) | 2,096 | 75,886 | |||
Deutsche Bank AG (c) | 1,692 | 190,044 | |||
Deutsche Postbank AG (c) | 143 | 10,267 | |||
Hypo Real Estate Holding AG (c) | 523 | 31,665 | |||
Jyske Bank (c) | 125 | 7,214 | |||
315,076 | |||||
Chemicals (0.6%) | |||||
BASF AG (b) (c) | 1,717 | 137,642 | |||
Bayer AG (c) | 2,238 | 102,836 | |||
240,478 | |||||
Computers (0.0%) | |||||
Wincor Nixdorf AG (c) | 35 | 4,434 | |||
Cosmetics/Personal Care (0.0%) | |||||
Beiersdorf AG (c) | 27 | 4,074 | |||
Electric (1.1%) | |||||
E.ON AG (b) (c) | 2,113 | 242,808 | |||
RWE AG (c) | 73 | 5,482 | |||
RWE AG (c) | 1,475 | 122,489 | |||
370,779 | |||||
Energy (0.0%) | |||||
Solarworld AG (c) | 172 | 10,790 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
GERMANY (continued) | |||||
Engineering & Construction (0.1%) | |||||
Bilfinger Berger AG (b) (c) | 56 | $ | 3,041 | ||
Hochtief AG (c) | 195 | 10,863 | |||
Linde AG (c) | 336 | 25,870 | |||
39,774 | |||||
Financial Services (0.1%) | |||||
Deutsche Boerse AG (c) | 374 | 50,958 | |||
MLP AG (c) | 88 | 1,804 | |||
52,762 | |||||
Food (0.1%) | |||||
Metro AG (c) | 523 | 29,624 | |||
Suedzucker AG (c) | 51 | 1,131 | |||
30,755 | |||||
Healthcare—Services (0.1%) | |||||
Fresenius Medical Care AG (c) | 238 | 27,220 | |||
Household Products (0.1%) | |||||
Henkel KGaA (c) | 196 | 22,374 | |||
Insurance (0.9%) | |||||
Allianz AG (c) | 1,341 | 211,002 | |||
Muenchener Rueckversicherungs AG (c) | 681 | 92,916 | |||
303,918 | |||||
Iron/Steel (0.1%) | |||||
Salzgitter AG (c) | 95 | 7,974 | |||
ThyssenKrupp AG (c) | 1,334 | 45,474 | |||
53,448 | |||||
Leisure (0.0%) | |||||
TUI AG (c) | 884 | 17,541 | |||
Machinery—Diversified (0.1%) | |||||
Heidelberger Druckmaschinen (c) | 243 | 11,129 | |||
MAN AG (c) | 478 | 34,592 | |||
Rheinmetall AG (c) | 155 | 10,752 | |||
56,473 | |||||
Media (0.0%) | |||||
Premiere AG (b) (c) | 428 | 4,169 | |||
Miscellaneous Manufacturing (0.6%) | |||||
Siemens AG (c) | 2,797 | 243,012 | |||
Pharmaceuticals (0.1%) | |||||
Altana AG (c) | 289 | 16,082 | |||
Celesio AG (c) | 94 | 8,535 |
8
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
GERMANY (continued) | |||||
Pharmaceuticals (continued) | |||||
Merck KGaA (b) (c) | 198 | $ | 17,997 | ||
42,614 | |||||
Real Estate (0.0%) | |||||
IVG Immobilien AG (c) | 301 | 9,223 | |||
Retail (0.0%) | |||||
Douglas Holding AG (c) | 15 | 692 | |||
KarstadtQuelle AG (b) (c) | 320 | 8,410 | |||
9,102 | |||||
Semiconductors (0.1%) | |||||
Infineon Technologies AG (b) (c) | 2,420 | 26,896 | |||
Software (0.4%) | |||||
SAP AG (c) | 735 | 154,419 | |||
Telecommunications (0.4%) | |||||
Deutsche Telekom AG (b) (c) | 9,070 | 145,551 | |||
Transportation (0.2%) | |||||
Deutsche Post AG (c) | 2,578 | 69,234 | |||
Frontline Ltd. (c) | 250 | 9,334 | |||
78,568 | |||||
2,623,261 | |||||
GREECE (0.6%) | |||||
Banks (0.4%) | |||||
Alpha Bank AE (c) | 1,486 | 37,071 | |||
EFG Eurobank Ergasias SA (c) | 636 | 17,707 | |||
Emporiki Bank of Greece SA (b) (c) | 194 | 6,723 | |||
National Bank of Greece SA (c) | 1,425 | 54,997 | |||
Piraeus Bank SA (c) | 914 | 21,699 | |||
138,197 | |||||
Beverages (0.0%) | |||||
Coca Cola Hellenic Bottling Co. SA (c) | 221 | 6,580 | |||
Building Materials (0.0%) | |||||
Titan Cement Co. SA (c) | 100 | 4,695 | |||
Electric (0.0%) | |||||
Public Power Corp. (c) | 533 | 12,608 | |||
Engineering & Construction (0.0%) | |||||
Hellenic Technodomiki Tev SA (c) | 560 | 5,385 | |||
Entertainment (0.1%) | |||||
OPAP SA (c) | 812 | 29,506 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
GREECE (continued) | |||||
Financial Services (0.0%) | |||||
Hellenic Exchanges Holding SA (c) | 326 | $ | 5,236 | ||
Holding Companies—Diversified (0.0%) | |||||
ViohalCo (c) | 41 | 375 | |||
Oil & Gas (0.0%) | |||||
Hellenic Petroleum SA (c) | 122 | 1,618 | |||
Motor Oil Hellas Corinth Refineries SA (c) | 2 | 53 | |||
1,671 | |||||
Retail (0.0%) | |||||
Germanos SA (c) | 36 | 861 | |||
Telecommunications (0.1%) | |||||
Cosmote Mobile TeleCommunications SA (c) | 489 | 11,041 | |||
Hellenic TeleCommunications Organization SA (b) (c) | 1,061 | 23,368 | |||
34,409 | |||||
239,523 | |||||
HONG KONG (1.7%) | |||||
Airlines (0.0%) | |||||
Cathay Pacific Airways Ltd. (c) | 1,000 | 1,750 | |||
Apparel (0.0%) | |||||
Yue Yuen Industrial Holdings (c) | 500 | 1,376 | |||
Banks (0.3%) | |||||
Bank of East Asia Ltd. (c) | 5,800 | 23,892 | |||
BOC Hong Kong Holdings Ltd. (c) | 15,500 | 30,348 | |||
Hang Seng Bank Ltd. (c) | 2,200 | 27,861 | |||
SunCorp. — Metway Ltd. (c) | 2,184 | 31,324 | |||
113,425 | |||||
Chemicals (0.0%) | |||||
Kingboard Chemical Holdings Ltd. (c) | 500 | 1,409 | |||
Distribution/Wholesale (0.1%) | |||||
Esprit Holdings Ltd. (c) | 3,500 | 28,607 | |||
Li & Fung Ltd. (c) | 8,800 | 17,836 | |||
46,443 | |||||
Electric (0.1%) | |||||
CLP Holdings Ltd. (c) | 5,500 | 32,184 | |||
HongKong Electric Holdings (c) | 3,500 | 15,855 | |||
48,039 | |||||
9
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
HONG KONG (continued) | |||||
Electrical Components & Equipment (0.0%) | |||||
Johnson Electric Holdings Ltd. (c) | 500 | $ | 364 | ||
Financial Services (0.1%) | |||||
Hong Kong Exchanges & Clearing Ltd. (c) | 4,000 | 25,756 | |||
Gas (0.1%) | |||||
Hong Kong & China Gas (c) | 14,000 | 30,769 | |||
Xinao Gas Holdings Ltd. (c) | 4,000 | 3,810 | |||
34,579 | |||||
Hand/Machine Tools (0.0%) | |||||
Techtronic Industries Co. (c) | 3,500 | 4,735 | |||
Holding Companies—Diversified (0.4%) | |||||
Hutchison Whampoa Ltd. (c) | 8,000 | 73,048 | |||
MelCo International Development (c) | 3,000 | 7,546 | |||
Swire Pacific Ltd. (c) | 3,500 | 36,125 | |||
Wharf Holdings Ltd. (c) | 3,000 | 10,673 | |||
127,392 | |||||
Lodging (0.0%) | |||||
ShanGri-La Asia Ltd. (c) | 2,000 | 3,856 | |||
Real Estate (0.5%) | |||||
Cheung Kong Holdings Ltd. (c) | 5,000 | 54,247 | |||
Hang Lung Properties Ltd. (c) | 4,000 | 7,185 | |||
Henderson Land Development Co., Ltd. (c) | 3,000 | 15,601 | |||
Hopewell Holdings (c) | 1,000 | 2,822 | |||
Hysan Development Co., Ltd. (c) | 1,000 | 2,822 | |||
Kerry Properties Ltd. (c) | 500 | 1,708 | |||
New World Development Ltd. (c) | 10,000 | 16,517 | |||
Shun TAK Holdings Ltd. (b) (c) | 2,000 | 2,620 | |||
Sino Land Co. (c) | 8,000 | 12,796 | |||
Sun Hung Kai Properties Ltd. (c) | 5,000 | 51,042 | |||
167,360 | |||||
Real Estate Investment Trusts (0.0%) | |||||
Link REIT(The) (b) (c) | 9,500 | 19,028 | |||
Retail (0.0%) | |||||
Giordano International Ltd. (c) | 14,000 | 6,629 | |||
Semiconductors (0.0%) | |||||
Solomon Systech International Ltd. (c) | 18,000 | 4,556 | |||
Telecommunications (0.1%) | |||||
FoxConn International Holdings Ltd. (c) | 5,730 | 12,279 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
HONG KONG (continued) | |||||
Telecommunications (continued) | |||||
Hutchison TeleCommunications International Ltd. (b) (c) | 3,000 | $ | 4,840 | ||
PCCW Ltd. (c) | 8,000 | 5,718 | |||
22,837 | |||||
Transportation (0.0%) | |||||
MTR Corp. (c) | 6,500 | 15,736 | |||
645,270 | |||||
IRELAND (0.8%) | |||||
Banks (0.4%) | |||||
Allied Irish Banks PLC (c) | 3,138 | 75,085 | |||
Bank of Ireland (c) | 3,089 | 54,904 | |||
Depfa Bank PLC (c) | 1,368 | 22,723 | |||
152,712 | |||||
Beverages (0.0%) | |||||
C&C Group PLC (c) | 1,341 | 11,645 | |||
Building Materials (0.2%) | |||||
CRH PLC (c) | 1,804 | 58,722 | |||
Kingspan Group PLC (c) | 419 | 7,316 | |||
66,038 | |||||
Financial Services (0.1%) | |||||
Irish Life & Permanent PLC (c) | 1,103 | 26,240 | |||
Food (0.0%) | |||||
GreenCore Group PLC (c) | 1,424 | 6,710 | |||
Iaws Group PLC (c) | 100 | 1,767 | |||
Kerry Group PLC (c) | 255 | 5,481 | |||
13,958 | |||||
Holding Companies—Diversified (0.0%) | |||||
DCC PLC (c) | 75 | 1,803 | |||
Media (0.0%) | |||||
Independent News & Media PLC (c) | 3,172 | 9,283 | |||
Pharmaceuticals (0.1%) | |||||
Elan Corp. PLC (b) (c) | 1,261 | 20,970 | |||
Retail (0.0%) | |||||
Grafton Group PLC (b) (c) | 1,055 | 13,290 | |||
Telecommunications (0.0%) | |||||
EirCom Group PLC (c) | 1,372 | 3,814 | |||
319,753 | |||||
10
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
ITALY (3.7%) | |||||
Aerospace/Defense (0.1%) | |||||
Finmeccanica SpA (c) | 1,199 | $ | 26,597 | ||
Auto Manufacturers (0.1%) | |||||
Fiat SpA (b) (c) | 2,096 | 27,817 | |||
Auto Parts & Equipment (0.0%) | |||||
Pirelli & C SpA (c) | 6,104 | 5,306 | |||
Banks (1.3%) | |||||
Banca Intesa SpA (c) | 2,406 | 13,023 | |||
Banca Intesa SpA (c) | 13,637 | 79,559 | |||
Banca Monte dei Paschi di Siena SpA (c) | 2,931 | 17,626 | |||
Banca Popolare di Milano SCRL (c) | 1,712 | 21,792 | |||
Banca Popolare di Verona e Novara | 1,427 | 38,227 | |||
SCRL (c) | |||||
Banche Popolari Unite Scpa (c) | 1,344 | 34,798 | |||
Capitalia SpA (c) | 6,037 | 49,444 | |||
Sanpaolo IMI SpA (c) | 3,996 | 70,638 | |||
UniCredito Italiano SpA (c) | 25,749 | 201,362 | |||
526,469 | |||||
Building Materials (0.0%) | |||||
Italcementi SpA (c) | 59 | 1,491 | |||
Commercial Services (0.1%) | |||||
Autostrade SpA (c) | 924 | 25,968 | |||
Electric (0.4%) | |||||
Enel SpA (c) | 14,066 | 120,997 | |||
Terna SpA (c) | 5,635 | 15,019 | |||
136,016 | |||||
Entertainment (0.0%) | |||||
Lottomatica SpA (c) | 264 | 10,002 | |||
Financial Services (0.1%) | |||||
Banca Fideuram SpA (c) | 333 | 1,937 | |||
Mediobanca SpA (c) | 1,837 | 35,931 | |||
37,868 | |||||
Gas (0.0%) | |||||
Snam Rete Gas SpA (c) | 4,326 | 19,006 | |||
Healthcare—Products (0.0%) | |||||
Luxottica Group SpA (c) | 321 | 8,700 | |||
Insurance (0.4%) | |||||
Alleanza Assicurazioni SpA (c) | 1,822 | 20,655 | |||
Assicurazioni Generali SpA (c) | 3,171 | 115,298 | |||
Fondiaria-Sai SpA (c) | 150 | 6,125 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
ITALY (continued) | |||||
Insurance (continued) | |||||
Mediolanum SpA (c) | 423 | $ | 2,968 | ||
Unipol SpA (c) | 1,368 | 3,977 | |||
149,023 | |||||
Media (0.1%) | |||||
Gruppo Editoriale L’Espresso SpA (c) | 10 | 53 | |||
Mediaset SpA (c) | 2,969 | 34,976 | |||
Seat Pagine Gialle SpA (b) (c) | 20,997 | 9,762 | |||
44,791 | |||||
Oil & Gas (0.7%) | |||||
ENI SpA (c) | 8,609 | 252,843 | |||
Retail (0.0%) | |||||
Autogrill SpA (c) | 224 | 3,450 | |||
Bulgari SpA (c) | 846 | 9,582 | |||
13,032 | |||||
Telecommunications (0.4%) | |||||
TeleCom Italia SpA (c) | 18,538 | 47,839 | |||
TeleCom Italia SpA (c) | 37,603 | 104,640 | |||
Tiscali SpA (b) (c) | 1,731 | 5,135 | |||
157,614 | |||||
1,442,543 | |||||
JAPAN (23.9%) | |||||
Advertising (0.0%) | |||||
Dentsu, Inc. (c) | 5 | 13,838 | |||
Agriculture (0.2%) | |||||
Japan Tobacco, Inc. (c) | 16 | 58,442 | |||
Airlines (0.0%) | |||||
All Nippon Airways Co., Ltd. (c) | 3,000 | 11,542 | |||
Japan Airlines Corp. (c) | 1,000 | 2,509 | |||
14,051 | |||||
Apparel (0.1%) | |||||
Asics Corp. (c) | 1,000 | 10,217 | |||
Onward Kashiyama Co., Ltd. (c) | 1,000 | 15,391 | |||
25,608 | |||||
Auto Manufacturers (1.9%) | |||||
Hino Motors Ltd. (c) | 1,000 | 5,823 | |||
Honda Motor Co., Ltd. (c) | 5,200 | 165,202 | |||
Nissan Motor Co., Ltd. (c) | 7,300 | 79,728 | |||
Toyota Motor Corp. (c) | 9,600 | 501,824 | |||
752,577 | |||||
11
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Auto Parts & Equipment (0.4%) | |||||
Aisin Seiki Co., Ltd. (c) | 700 | $ | 20,832 | ||
Bridgestone Corp. (c) | 2,000 | 38,587 | |||
Denso Corp. (c) | 1,700 | 55,663 | |||
JTEKT Corp. (c) | 400 | 7,737 | |||
NGK Spark Plug Co., Ltd. (c) | 1,000 | 20,119 | |||
NOK Corp. (c) | 400 | 11,617 | |||
Sumitomo Rubber Industries, Inc. (c) | 700 | 7,711 | |||
Toyoda Gosei Co., Ltd. (c) | 100 | 2,010 | |||
164,276 | |||||
Banks (3.1%) | |||||
77 Bank Ltd. (The) (c) | 1,000 | 6,949 | |||
Bank of Fukuoka Ltd. (The) (c) | 2,000 | 15,218 | |||
Bank of Yokohama Ltd. (The) (c) | 5,000 | 38,638 | |||
Chiba Bank Ltd. (The) (c) | 3,000 | 28,061 | |||
Gunma Bank Ltd. (The) (c) | 1,000 | 7,443 | |||
Hokuhoku Financial Group, Inc. (c) | 3,000 | 12,521 | |||
Joyo Bank Ltd. (The) (c) | 2,000 | 12,162 | |||
Mitsubishi UFJ Financial Group, Inc. (c) | 29 | 406,591 | |||
Mitsui Trust Holdings, Inc. (c) | 2,000 | 23,963 | |||
Mizuho Financial Group, Inc. (c) | 32 | 271,435 | |||
Nishi-Nippon City Bank Ltd. (The) (c) | 2,000 | 9,588 | |||
Resona Holdings, Inc. (b) (c) | 15 | 47,381 | |||
Sapporo Hokuyo Holdings, Inc. (c) | 1 | 10,562 | |||
Shinsei Bank Ltd. (c) | 4,000 | 25,356 | |||
Shizuoka Bank Ltd. (The) (c) | 2,000 | 21,585 | |||
Sumitomo Mitsui Financial Group, Inc. (c) | 20 | 211,834 | |||
Sumitomo Trust & Banking Co., Ltd. (The) (c) | 4,000 | 43,800 | |||
Suruga Bank Ltd. (c) | 1,000 | 13,543 | |||
1,206,630 | |||||
Beverages (0.2%) | |||||
Asahi Breweries Ltd. (c) | 1,500 | 21,057 | |||
Ito En Ltd. (c) | 300 | 10,969 | |||
Kirin Brewery Co., Ltd. (c) | 3,000 | 47,202 | |||
79,228 | |||||
Building Materials (0.3%) | |||||
Asahi Glass Co., Ltd. (c) | 3,000 | 38,083 | |||
Daikin Industries Ltd. (c) | 700 | 24,270 | |||
JS Group Corp. (c) | 700 | 14,718 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Building Materials (continued) | |||||
Matsushita Electric Works Ltd. (c) | 1,000 | $ | 11,126 | ||
Nippon Sheet Glass Co., Ltd. (c) | 2,000 | 11,131 | |||
Sanwa Shutter Corp. (c) | 1,000 | 5,893 | |||
Sumitomo Osaka Cement Co., Ltd. (c) | 2,000 | 6,160 | |||
Taiheiyo Cement Corp. (c) | 4,000 | 14,765 | |||
126,146 | |||||
Chemicals (0.9%) | |||||
Asahi Kasei Corp. (c) | 4,000 | 26,163 | |||
Dainippon Ink & Chemicals, Inc. (c) | 3,000 | 11,281 | |||
Denki Kagaku Kogyo KK (c) | 1,000 | 4,165 | |||
Hitachi Chemical Co., Ltd. (c) | 200 | 5,247 | |||
JSR Corp. (c) | 700 | 17,722 | |||
Kaneka Corp. (c) | 1,000 | 9,094 | |||
Mitsubishi Chemical Holdings Corp. (b) (c) | 3,500 | 21,886 | |||
Mitsubishi Gas Chemical Co., Inc. (c) | 1,000 | 11,505 | |||
Mitsui Chemicals, Inc. (c) | 3,000 | 19,609 | |||
Nippon Shokubai Co., Ltd. (c) | 1,000 | 12,249 | |||
Nissan Chemical Industries Ltd. (c) | 1,000 | 12,498 | |||
Nitto Denko Corp. (c) | 500 | 35,629 | |||
Shin-Etsu Chemical Co., Ltd. (c) | 1,200 | 65,280 | |||
Showa Denko KK (c) | 4,000 | 17,808 | |||
Sumitomo Chemical Co., Ltd. (c) | 5,000 | 41,728 | |||
Tokuyama Corp. (c) | 1,000 | 14,882 | |||
Tosoh Corp. (c) | 2,000 | 7,977 | |||
Ube Industries Ltd. (c) | 4,000 | 11,581 | |||
Zeon Corp. (c) | 1,000 | 11,931 | |||
358,235 | |||||
Commercial Services (0.3%) | |||||
Benesse Corp. (c) | 100 | 3,452 | |||
Dai Nippon Printing Co., Ltd. (c) | 2,000 | 30,929 | |||
Goodwill Group, Inc. (The) (c) | 7 | 5,180 | |||
KK Davinci Advisors (c) | 5 | 4,951 | |||
Meitec Corp. (c) | 200 | 6,522 | |||
Park24 Co., Ltd. (c) | 300 | 8,862 | |||
Secom Co., Ltd. (c) | 1,000 | 47,278 | |||
TIS, Inc. (c) | 200 | 5,597 | |||
Toppan Printing Co., Ltd. (c) | 2,000 | 22,586 | |||
135,357 | |||||
Computers (0.2%) | |||||
CSK Holdings Corp. (c) | 200 | 9,132 | |||
Fujitsu Ltd. (c) | 6,000 | 46,509 |
12
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Computers (continued) | |||||
NET One Systems Co., Ltd. (c) | 3 | $ | 5,597 | ||
Obic Co., Ltd. (c) | 10 | 2,020 | |||
TDK Corp. (c) | 400 | 30,334 | |||
93,592 | |||||
Cosmetics/Personal Care (0.2%) | |||||
Aderans Co., Ltd. (c) | 200 | 5,397 | |||
Kao Corp. (c) | 2,000 | 52,360 | |||
Shiseido Co., Ltd. (c) | 1,000 | 19,624 | |||
Uni-Charm Corp. (c) | 200 | 11,059 | |||
88,440 | |||||
Distribution/Wholesale (0.8%) | |||||
Hitachi High — Technologies Corp. (c) | 100 | 3,047 | |||
Itochu Corp. (c) | 5,000 | 44,012 | |||
Marubeni Corp. (c) | 5,000 | 26,723 | |||
Mitsubishi Corp. (c) | 4,500 | 90,144 | |||
Mitsui & Co., Ltd. (c) | 6,000 | 84,848 | |||
Sojitz Corp. (b) (c) | 1,800 | 7,119 | |||
Sumitomo Corp. (c) | 3,000 | 39,668 | |||
Toyota Tsusho Corp. (c) | 1,000 | 24,035 | |||
319,596 | |||||
Electric (0.8%) | |||||
Chubu Electric Power Co., Inc. (c) | 2,200 | 59,433 | |||
Electric Power Development Co (c) | 600 | 22,872 | |||
Hokkaido Electric Power Co, Inc. (c) | 400 | 9,499 | |||
Kansai Electric Power Co., Inc. (The) (c) | 2,400 | 53,713 | |||
Kyushu Electric Power Co., Inc. (c) | 1,100 | 25,583 | |||
Tohoku Electric Power Co., Inc. (c) | 1,200 | 26,317 | |||
Tokyo Electric Power Co., Inc. (The) (c) | 3,900 | 107,775 | |||
305,192 | |||||
Electrical Components & Equipment (0.9%) | |||||
Casio Computer Co., Ltd. (c) | 800 | 15,293 | |||
Fujikura Ltd. (c) | 1,000 | 11,041 | |||
Furukawa Electric Co., Ltd. (c) | 3,000 | 19,428 | |||
Hitachi Ltd. (c) | 11,000 | 72,686 | |||
Mitsubishi Electric Corp. (c) | 6,000 | 48,105 | |||
Sanyo Electric Co., Ltd. (b) (c) | 6,000 | 12,900 | |||
Sharp Corp. (c) | 3,000 | 47,435 | |||
Stanley Electric Co., Ltd. (c) | 300 | 6,204 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Electrical Components & Equipment (continued) | |||||
Sumitomo Electric Industries Ltd. (c) | 2,000 | $ | 29,300 | ||
Toshiba Corp. (c) | 10,000 | 65,306 | |||
Ushio, Inc. (c) | 200 | 4,229 | |||
331,927 | |||||
Electronics (1.2%) | |||||
Advantest Corp. (c) | 300 | 30,685 | |||
Alps Electric Co., Ltd. (c) | 700 | 8,753 | |||
Dainippon Screen Manufacturing Co., Ltd. (c) | 1,000 | 9,154 | |||
Fanuc Ltd. (c) | 700 | 62,888 | |||
Hirose Electric Co., Ltd. (c) | 100 | 12,156 | |||
Hoya Corp. (c) | 1,600 | 56,970 | |||
Ibiden Co., Ltd. (c) | 500 | 24,064 | |||
Keyence Corp. (c) | 100 | 25,520 | |||
Kyocera Corp. (c) | 600 | 46,545 | |||
Minebea Co., Ltd. (c) | 2,000 | 10,908 | |||
Mitsumi Electric Co., Ltd. (c) | 500 | 5,917 | |||
Murata Manufacturing Co., Ltd. (c) | 700 | 45,491 | |||
NEC Corp. (c) | 7,000 | 37,341 | |||
NGK Insulators Ltd. (c) | 1,000 | 11,711 | |||
Nippon Electric Glass Co., Ltd. (c) | 1,000 | 20,038 | |||
Omron Corp. (c) | 600 | 15,271 | |||
Taiyo Yuden Co., Ltd. (c) | 1,000 | 12,693 | |||
Tokyo Seimitsu Co., Ltd. (c) | 100 | 5,192 | |||
Yaskawa Electric Corp. (c) | 1,000 | 11,655 | |||
Yokogawa Electric Corp. (c) | 800 | 11,429 | |||
464,381 | |||||
Engineering & Construction (0.3%) | |||||
Chiyoda Corp. (c) | 1,000 | 20,463 | |||
JGC Corp. (c) | 1,000 | 17,219 | |||
Kajima Corp. (c) | 4,000 | 18,359 | |||
Nishimatsu Construction Co., Ltd. (c) | 2,000 | 7,461 | |||
Obayashi Corp. (c) | 3,000 | 20,635 | |||
Shimizu Corp. (c) | 2,000 | 11,197 | |||
Taisei Corp. (c) | 4,000 | 14,616 | |||
109,950 | |||||
Entertainment (0.2%) | |||||
Nintendo Co., Ltd. (c) | 400 | 67,221 | |||
Oriental Land Co., Ltd. (c) | 100 | 5,631 | |||
Toho Co., Ltd. (c) | 200 | 4,004 | |||
76,856 | |||||
13
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Environmental Control (0.0%) | |||||
Kurita Water Industries Ltd. (c) | 200 | $ | 4,110 | ||
Financial Services (1.0%) | |||||
Acom Co., Ltd. (c) | 180 | 9,770 | |||
Aeon Credit Service Co., Ltd. (c) | 400 | 9,741 | |||
Aiful Corp. (c) | 250 | 13,339 | |||
Credit Saison Co., Ltd. (c) | 600 | 28,434 | |||
Daiwa Securities Group, Inc. (c) | 5,000 | 59,589 | |||
Mitsubishi UFJ Securities Co. (c) | 1,000 | 12,972 | |||
Nikko Cordial Corp. (c) | 2,500 | 31,945 | |||
Nomura Holdings, Inc. (c) | 5,700 | 107,067 | |||
ORIX Corp. (c) | 270 | 65,895 | |||
Promise Co., Ltd. (c) | 300 | 17,385 | |||
Shinko Securities Co., Ltd. (c) | 1,000 | 4,237 | |||
Takefuji Corp. (c) | 420 | 25,039 | |||
385,413 | |||||
Food (0.3%) | |||||
Ajinomoto Co., Inc. (c) | 2,000 | 22,173 | |||
Katokichi Co., Ltd. (c) | 900 | 9,062 | |||
Kikkoman Corp. (c) | 1,000 | 12,465 | |||
Meiji Dairies Corp. (b) (c) | 1,000 | 6,984 | |||
Nichirei Corp. (c) | 2,000 | 10,710 | |||
Nippon Meat Packers, Inc. (c) | 1,000 | 11,596 | |||
Nisshin Seifun Group, Inc. (c) | 1,000 | 11,162 | |||
Nissin Food Products Co., Ltd. (c) | 200 | 7,065 | |||
Toyo Suisan Kaisha Ltd. (c) | 1,000 | 15,668 | |||
Yakult Honsha Co., Ltd. (c) | 200 | 5,432 | |||
112,317 | |||||
Forest Products & Paper (0.1%) | |||||
Nippon Paper Group, Inc. (c) | 4 | 16,361 | |||
OJI Paper Co., Ltd. (c) | 3,000 | 17,071 | |||
33,432 | |||||
Gas (0.2%) | |||||
Osaka Gas Co., Ltd. (c) | 8,000 | 25,730 | |||
Tokyo Gas Co., Ltd. (c) | 8,000 | 37,709 | |||
63,439 | |||||
Hand/Machine Tools (0.2%) | |||||
Fuji Electric Holdings Co., Ltd. (c) | 1,000 | 5,238 | |||
Makita Corp. (c) | 200 | 6,308 | |||
Nidec Corp. (c) | 300 | 21,527 | |||
OSG Corp. (c) | 100 | 1,685 | |||
SMC Corp. (c) | 200 | 28,339 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Hand/Machine Tools (continued) | |||||
THK Co., Ltd. (c) | 300 | $ | 8,960 | ||
72,057 | |||||
Healthcare—Products (0.1%) | |||||
Terumo Corp. (c) | 700 | 23,384 | |||
Home Builders (0.2%) | |||||
Daiwa House Industry Co., Ltd. (c) | 2,000 | 31,988 | |||
Haseko Corp. (b) (c) | 1,500 | 5,103 | |||
Sekisui Chemical Co., Ltd. (c) | 1,000 | 8,641 | |||
Sekisui House Ltd. (c) | 2,000 | 27,450 | |||
73,182 | |||||
Home Furnishings (0.8%) | |||||
Matsushita Electric Industrial Co., Ltd. (c) | 7,000 | 147,817 | |||
Pioneer Corp. (c) | 700 | 11,279 | |||
Sony Corp. (c) | 3,400 | 149,932 | |||
Yamaha Corp. (c) | 400 | 7,522 | |||
316,550 | |||||
Household Products (0.0%) | |||||
TOTO Ltd. (c) | 1,000 | 9,548 | |||
Insurance (0.6%) | |||||
Millea Holdings, Inc. (c) | 5 | 93,091 | |||
Mitsui Sumitomo Insurance Co., Ltd. (c) | 4,000 | 50,182 | |||
Sompo Japan Insurance, Inc. (c) | 3,000 | 41,873 | |||
T&D Holdings, Inc. (c) | 750 | 60,474 | |||
245,620 | |||||
Internet (0.4%) | |||||
eAccess Ltd. (c) | 8 | 5,243 | |||
Index Holdings (c) | 5 | 4,950 | |||
Matsui Securities Co., Ltd. (c) | 500 | 4,744 | |||
Rakuten, Inc. (c) | 18 | 10,726 | |||
SBI E*trade Securities Co., Ltd. (c) | 4 | 5,343 | |||
SBI Holdings, Inc. (c) | 31 | 13,709 | |||
Softbank Corp. (c) | 2,400 | 53,824 | |||
Trend Micro, Inc. (c) | 500 | 16,883 | |||
Yahoo! Japan Corp. (c) | 45 | 23,853 | |||
139,275 | |||||
Iron/Steel (0.7%) | |||||
Daido Steel Co., Ltd. (c) | 1,000 | 7,860 | |||
JFE Holdings, Inc. (c) | 1,800 | 76,437 |
14
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Iron/Steel (continued) | |||||
Kobe Steel Ltd. (c) | 8,000 | $ | 25,050 | ||
Nippon Steel Corp. (c) | 22,000 | 83,383 | |||
Nisshin Steel Co., Ltd. (c) | 2,000 | 6,440 | |||
Sumitomo Metal Industries Ltd. (c) | 13,000 | 53,720 | |||
Tokyo Steel Manufacturing Co., Ltd. (c) | 300 | 6,575 | |||
259,465 | |||||
Leisure (0.2%) | |||||
Namco Bandai Holdings, Inc. (b) (c) | 800 | 12,189 | |||
Round One Corp. (c) | 1 | 3,574 | |||
Sankyo Co., Ltd. (c) | 100 | 6,348 | |||
Sega Sammy Holdings, Inc. (c) | 500 | 18,542 | |||
Shimano , Inc. (c) | 100 | 3,059 | |||
Yamaha Motor Co., Ltd. (c) | 700 | 18,344 | |||
62,056 | |||||
Machinery—Construction & Mining (0.2%) | |||||
Hitachi Construction Machinery Co., Ltd. (c) | 400 | 9,652 | |||
Komatsu Ltd. (c) | 3,000 | 59,707 | |||
69,359 | |||||
Machinery—Diversified (0.3%) | |||||
Amada Co., Ltd. (c) | 1,000 | 10,502 | |||
Daifuku Co., Ltd. (b) (c) | 500 | 8,260 | |||
Ebara Corp. (c) | 2,000 | 8,548 | |||
Japan Steel Works Ltd. (The) (c) | 2,000 | 13,718 | |||
Kubota Corp. (c) | 3,000 | 28,547 | |||
Sumitomo Heavy Industries Ltd. (c) | 2,000 | 18,483 | |||
Toyota Industries Corp. (c) | 600 | 23,723 | |||
111,781 | |||||
Media (0.0%) | |||||
Fuji Television Network, Inc. (c) | 1 | 2,221 | |||
Metal Fabricate/Hardware (0.1%) | |||||
NSK Ltd. (c) | 2,000 | 16,607 | |||
NTN Corp. (c) | 2,000 | 15,847 | |||
32,454 | |||||
Mining (0.2%) | |||||
Dowa Mining Co., Ltd. (c) | 1,000 | 8,890 | |||
Mitsubishi Materials Corp. (c) | 4,000 | 17,112 | |||
Mitsui Mining & Smelting Co., Ltd. (c) | 2,000 | 11,837 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Mining (continued) | |||||
Sumitomo Metal Mining Co., Ltd. (c) | 2,000 | $ | 26,212 | ||
Toho Titanium Co., Ltd. (c) | 41 | 2,220 | |||
66,271 | |||||
Miscellaneous Manufacturing (0.5%) | |||||
Amano Corp. (c) | 500 | 7,439 | |||
Arrk Corp. (c) | 200 | 4,714 | |||
Fuji Photo Film Co., Ltd. (c) | 1,700 | 57,081 | |||
Ishikawajima-Harima Heavy Industries Co., Ltd. (c) | 4,000 | 12,672 | |||
Kawasaki Heavy Industries Ltd. (c) | 5,000 | 16,850 | |||
Konica Minolta Holdings, Inc. (c) | 2,000 | 25,311 | |||
Mitsubishi Heavy Industries Ltd. (c) | 10,000 | 43,213 | |||
Nikon Corp. (c) | 1,000 | 17,498 | |||
Olympus Corp. (c) | 1,000 | 26,747 | |||
211,525 | |||||
Office/Business Equipment (0.6%) | |||||
Canon , Inc. (c) | 3,750 | 183,817 | |||
Ricoh Co., Ltd. (c) | 2,000 | 39,241 | |||
Seiko Epson Corp. (c) | 500 | 13,617 | |||
236,675 | |||||
Oil & Gas (0.3%) | |||||
Inpex Holdings , Inc. (b) | 3 | 26,481 | |||
Nippon Mining Holdings, Inc. (c) | 3,000 | 25,327 | |||
Nippon Oil Corp. (c) | 5,000 | 36,592 | |||
Showa Shell Sekiyu KK (c) | 800 | 9,400 | |||
TonenGeneral Sekiyu KK (c) | 1,000 | 10,287 | |||
108,087 | |||||
Packaging & Containers (0.0%) | |||||
Toyo Seikan Kaisha Ltd. (c) | 300 | 5,448 | |||
Pharmaceuticals (1.1%) | |||||
Astellas Pharma, Inc. (c) | 1,900 | 69,856 | |||
Chugai Pharmaceutical Co., Ltd. (c) | 1,000 | 20,423 | |||
Daiichi Sankyo Co., Ltd. (b) (c) | 2,400 | 66,063 | |||
Eisai Co., Ltd. (c) | 900 | 40,546 | |||
Kaken Pharmaceutical Co., Ltd. (c) | 1,000 | 7,507 | |||
Kyowa Hakko Kogyo Co., Ltd. (c) | 2,000 | 13,484 | |||
Mediceo Paltac Holdings Co., Ltd. (c) | 400 | 7,144 | |||
Santen Pharmaceutical Co., Ltd. (c) | 100 | 2,378 | |||
Shionogi & Co., Ltd. (c) | 1,000 | 17,858 |
15
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Pharmaceuticals (continued) | |||||
Suzuken Co., Ltd. (c) | 200 | $ | 7,936 | ||
Takeda Pharmaceutical Co., Ltd. (c) | 3,100 | 193,001 | |||
446,196 | |||||
Real Estate (0.6%) | |||||
Daito Trust Construction Co., Ltd. (c) | 200 | 11,097 | |||
Leopalace21 Corp. (c) | 300 | 10,336 | |||
Mitsubishi Estate Co., Ltd. (c) | 4,000 | 85,140 | |||
Mitsui Fudosan Co., Ltd. (c) | 3,000 | 65,210 | |||
Sumitomo Realty & Development Co., Ltd. (c) | 1,000 | 24,680 | |||
Tokyo Tatemono Co., Ltd. (c) | 1,000 | 10,727 | |||
Tokyu Land Corp. (c) | 2,000 | 15,584 | |||
222,774 | |||||
Real Estate Investment Trusts (0.1%) | |||||
Japan Real Estate Investment Corp. (c) | 2 | 17,823 | |||
Nippon Building Fund, Inc. (c) | 2 | 19,382 | |||
37,205 | |||||
Retail (0.9%) | |||||
Aeon Co., Ltd. (c) | 2,100 | 46,144 | |||
Aoyama Trading Co., Ltd. (c) | 100 | 3,133 | |||
Citizen Watch Co., Ltd. (c) | 1,500 | 13,576 | |||
Daimaru, Inc. (c) | 1,000 | 13,241 | |||
EDION Corp. (c) | 100 | 1,989 | |||
FamilyMart Co., Ltd. (c) | 300 | 8,652 | |||
Fast Retailing Co., Ltd. (c) | 100 | 8,186 | |||
Isetan Co., Ltd. (c) | 700 | 11,924 | |||
Lawson, Inc. (c) | 300 | 10,935 | |||
Marui Co., Ltd. (c) | 1,200 | 18,719 | |||
Mitsukoshi Ltd. (c) | 2,000 | 9,152 | |||
Nitori Co., Ltd. (c) | 150 | 7,301 | |||
Ryohin Keikaku Co., Ltd. (c) | 100 | 8,224 | |||
Seven & I Holdings Co., Ltd. (c) | 2,600 | 85,740 | |||
Shimachu Co., Ltd. (c) | 300 | 7,845 | |||
Shimamura Co., Ltd. (c) | 100 | 10,974 | |||
Skylark Co., Ltd. (c) | 100 | 2,189 | |||
Takashimaya Co., Ltd. (c) | 1,000 | 12,560 | |||
UNY Co., Ltd. (c) | 1,000 | 14,751 | |||
USS Co., Ltd. (c) | 130 | 8,592 | |||
Yamada Denki Co., Ltd. (c) | 300 | 30,571 | |||
334,398 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Semiconductors (0.3%) | |||||
Elpida Memory, Inc. (b) (c) | 200 | $ | 7,527 | ||
Rohm Co., Ltd. (c) | 300 | 26,853 | |||
Sanken Electric Co., Ltd. (c) | 1,000 | 12,715 | |||
Shinko Electric Industries (c) | 100 | 2,901 | |||
Sumco Corp. (c) | 200 | 11,413 | |||
Tokyo Electron Ltd. (c) | 600 | 41,934 | |||
103,343 | |||||
Shipbuilding (0.0%) | |||||
Mitsui Engineering & Shipbuilding Co., Ltd. (c) | 3,000 | 9,195 | |||
Software (0.1%) | |||||
FUJI SOFT , Inc. (c) | 200 | 6,615 | |||
Konami Corp. (c) | 400 | 8,834 | |||
Nomura Research Institute Ltd. (c) | 100 | 12,373 | |||
27,822 | |||||
Storage & Warehousing (0.0%) | |||||
Mitsubishi Logistics Corp. (c) | 1,000 | 15,637 | |||
Telecommunications (0.6%) | |||||
KDDI Corp. (c) | 9 | 55,399 | |||
Nippon TeleGraph & Telephone Corp. (c) | 17 | 83,018 | |||
NTT Data Corp. (c) | 4 | 17,358 | |||
NTT DoCoMo, Inc. (c) | 61 | 89,261 | |||
Oki Electric Industry Co., Ltd. (c) | 3,000 | 7,070 | |||
252,106 | |||||
Textiles (0.3%) | |||||
Kuraray Co., Ltd. (c) | 1,500 | 16,793 | |||
Mitsubishi Rayon Co., Ltd. (c) | 2,000 | 16,299 | |||
Nisshinbo Industries, Inc. (c) | 1,000 | 10,944 | |||
Teijin Ltd. (c) | 3,000 | 19,067 | |||
Toray Industries, Inc. (c) | 5,000 | 43,399 | |||
Toyobo Co., Ltd. (c) | 3,000 | 8,505 | |||
115,007 | |||||
Transportation (0.9%) | |||||
Central Japan Railway Co. (c) | 6 | 59,788 | |||
East Japan Railway Co. (c) | 11 | 81,795 | |||
Kawasaki Kisen Kaisha Ltd. (c) | 2,000 | 11,578 | |||
Keihin Electric Express Railway Co., Ltd. (c) | 1,000 | 7,081 | |||
Keio Corp. (c) | 1,000 | 6,482 | |||
Kintetsu Corp. (c) | 4,000 | 13,343 |
16
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
JAPAN (continued) | |||||
Transportation (continued) | |||||
Mitsui OSK Lines Ltd. (c) | 4,000 | $ | 27,243 | ||
Nippon Express Co., Ltd. (c) | 2,000 | 10,823 | |||
Nippon Yusen KK (c) | 4,000 | 26,037 | |||
Odakyu Electric Railway Co., Ltd. (c) | 1,000 | 6,448 | |||
Tobu Railway Co., Ltd. (c) | 4,000 | 19,082 | |||
Tokyu Corp. (c) | 4,000 | 23,402 | |||
West Japan Railway Co. (c) | 7 | 29,031 | |||
Yamato Holdings Co., Ltd. (c) | 2,000 | 35,496 | |||
357,629 | |||||
Venture Capital (0.0%) | |||||
Jafco Co., Ltd. (c) | 100 | 6,017 | |||
9,295,320 | |||||
LUXEMBURG (0.2%) | |||||
Iron/Steel (0.2%) | |||||
Arcelor (c) | 1,838 | 88,943 | |||
NETHERLANDS (4.6%) | |||||
Aerospace/Defense (0.1%) | |||||
European Aeronautic Defence and Space Co NV (c) | 1,012 | 29,027 | |||
Banks (0.4%) | |||||
ABN AMRO Holding NV (c) | 5,942 | 162,708 | |||
Beverages (0.1%) | |||||
Heineken NV (c) | 711 | 30,122 | |||
Biotechnology (0.0%) | |||||
Qiagen NV (b) (c) | 447 | 6,054 | |||
Building Materials (0.0%) | |||||
James Hardie Industries NV (c) | 1,163 | 6,636 | |||
Chemicals (0.2%) | |||||
Akzo Nobel NV (c) | 999 | 53,804 | |||
Koninklijke DSM NV (c) | 617 | 25,667 | |||
79,471 | |||||
Commercial Services (0.1%) | |||||
Randstad Holdings NV (c) | 109 | 6,386 | |||
Vedior NV (c) | 716 | 15,025 | |||
21,411 | |||||
Computers (0.0%) | |||||
Getronics NV (c) | 680 | 7,303 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NETHERLANDS (continued) | |||||
Distribution/Wholesale (0.0%) | |||||
Buhrmann NV (c) | 228 | $ | 3,305 | ||
Hagemeyer NV (b) (c) | 2,321 | 10,691 | |||
13,996 | |||||
Electronics (0.3%) | |||||
Koninklijke Philips Electronics NV (c) | 4,163 | 129,675 | |||
Financial Services (0.1%) | |||||
Euronext NV (c) | 333 | 31,243 | |||
Food (0.5%) | |||||
Koninklijke Ahold NV (b) (c) | 5,621 | 48,671 | |||
Royal NumiCo NV (b) (c) | 644 | 28,883 | |||
Unilever NV (c) | 5,619 | 127,238 | |||
204,792 | |||||
Insurance (0.8%) | |||||
Aegon NV (c) | 4,679 | 79,867 | |||
ING GRDoep NV (c) | 6,191 | 243,016 | |||
322,883 | |||||
Media (0.2%) | |||||
Reed Elsevier NV (c) | 2,690 | 40,314 | |||
Wolters Kluwer NV (c) | 1,127 | 26,602 | |||
66,916 | |||||
Office/Business Equipment (0.0%) | |||||
OCE NV (c) | 62 | 910 | |||
Oil & Gas (1.2%) | |||||
Royal Dutch Shell PLC (c) | 13,109 | 440,551 | |||
Oil & Gas Services (0.1%) | |||||
FuGro NV (c) | 107 | 4,609 | |||
SBM Offshore NV (c) | 612 | 16,286 | |||
20,895 | |||||
Real Estate Investment Trusts (0.1%) | |||||
Corio NV (c) | 67 | 4,167 | |||
RodamCo Europe NV (c) | 197 | 19,303 | |||
Wereldhave NV (c) | 69 | 6,702 | |||
30,172 | |||||
Semiconductors (0.1%) | |||||
ASML Holding NV (b) (c) | 1,782 | 36,029 | |||
Telecommunications (0.2%) | |||||
Royal KPN NV (c) | 6,568 | 73,802 | |||
17
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NETHERLANDS (continued) | |||||
Transportation (0.1%) | |||||
TNT NV (c) | 1,478 | $ | 52,874 | ||
1,767,470 | |||||
NEW ZEALAND (0.1%) | |||||
Building Materials (0.0%) | |||||
Fletcher Building Ltd. (c) | 1,431 | 7,974 | |||
Electric (0.0%) | |||||
Contact Energy Ltd. (c) | 48 | 208 | |||
Financial Services (0.0%) | |||||
Tower Ltd. (b) (c) | 683 | 1,431 | |||
Healthcare—Products (0.0%) | |||||
Fisher & Paykel Healthcare Corp. (c) | 1,642 | 4,316 | |||
Lodging (0.0%) | |||||
Sky City Entertainment Group Ltd. (c) | 68 | 224 | |||
Real Estate (0.0%) | |||||
Kiwi Income Property Trust (c) | 7,834 | 6,532 | |||
Telecommunications (0.1%) | |||||
TeleCom Corp. of New Zealand Ltd. (c) | 7,976 | 19,643 | |||
40,328 | |||||
NORWAY (0.8%) | |||||
Banks (0.1%) | |||||
DNB NOR ASA (c) | 2,200 | 27,358 | |||
Chemicals (0.0%) | |||||
Yara International ASA (c) | 400 | 5,334 | |||
Engineering & Construction (0.0%) | |||||
Aker Kvaerner ASA (c) | 41 | 3,850 | |||
Environmental Control (0.0%) | |||||
Tomra Systems ASA (c) | 800 | 6,491 | |||
Food (0.1%) | |||||
Orkla ASA (c) | 750 | 34,731 | |||
Forest Products & Paper (0.0%) | |||||
Norske Skogindustrier ASA (c) | 300 | 4,397 | |||
Insurance (0.0%) | |||||
Storebrand ASA (c) | 1,000 | 10,326 | |||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
NORWAY (continued) | |||||
Oil & Gas (0.4%) | |||||
DET Norske Oljeselskap (c) | 4,240 | $ | 8,517 | ||
Norsk Hydro ASA (c) | 2,570 | 68,191 | |||
SeaDrill Ltd. (c) | 445 | 5,873 | |||
Statoil ASA (c) | 2,100 | 59,887 | |||
142,468 | |||||
Oil & Gas Services (0.1%) | |||||
Ocean RIG ASA (c) | 1,068 | 7,505 | |||
Petroleum Geo-Services ASA (b) (c) | 250 | 15,152 | |||
ProSafe ASA (c) | 200 | 12,220 | |||
TGS Nopec Geophysical Co ASA (c) | 304 | 5,390 | |||
40,267 | |||||
Telecommunications (0.1%) | |||||
Tandberg ASA (c) | 700 | 5,787 | |||
Tandberg Television ASA (b) (c) | 400 | 6,633 | |||
Telenor ASA (c) | 2,200 | 26,591 | |||
39,011 | |||||
Transportation (0.0%) | |||||
Petrojarl ASA | 250 | 1,647 | |||
315,880 | |||||
PORTUGAL (0.3%) | |||||
Banks (0.1%) | |||||
Banco BPI SA (c) | 1,680 | 12,775 | |||
Banco Comercial Portugues SA (c) | 8,180 | 23,236 | |||
Banco Espirito Santo SA (c) | 348 | 4,690 | |||
40,701 | |||||
Building Materials (0.0%) | |||||
Cimpor Cimentos de Portugal SA (c) | 114 | 759 | |||
Sonae Industria SGPS SA (b) (c) | 236 | 2,031 | |||
2,790 | |||||
Commercial Services (0.0%) | |||||
Brisa-Auto Estradas de Portugal SA (c) | 904 | 9,418 | |||
Electric (0.1%) | |||||
Energias de Portugal SA (c) | 7,398 | 29,094 | |||
Retail (0.0%) | |||||
Sonae SGPS SA (c) | 3,052 | 4,564 | |||
18
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
PORTUGAL (continued) | |||||
Telecommunications (0.1%) | |||||
Portugal TeleCom SGPS SA (c) | 2,303 | $ | 27,790 | ||
PT Multimedia Servicos SA (c) | 4 | 46 | |||
27,836 | |||||
114,403 | |||||
SINGAPORE (0.8%) | |||||
Airlines (0.0%) | |||||
Singapore Airlines Ltd. (c) | 1,000 | 8,025 | |||
Banks (0.4%) | |||||
DBS Group Holdings Ltd. (c) | 4,000 | 45,712 | |||
Oversea — Chinese Banking Corp. (c) | 10,000 | 41,719 | |||
United Overseas Bank Ltd. (c) | 4,000 | 39,393 | |||
126,824 | |||||
Engineering & Construction (0.0%) | |||||
Sembcorp. Industries Ltd. (c) | 2,000 | 4,101 | |||
Singapore Technologies Engineering Ltd. (c) | 3,000 | 5,489 | |||
9,590 | |||||
Financial Services (0.0%) | |||||
Singapore Exchange Ltd. (c) | 4,000 | 8,878 | |||
Food (0.0%) | |||||
Olam International Ltd. (c) | 5,000 | 4,558 | |||
Holding Companies—Diversified (0.0%) | |||||
Keppel Corp. Ltd. (c) | 2,000 | 18,606 | |||
Media (0.0%) | |||||
Singapore Press Holdings Ltd. (c) | 7,000 | 18,232 | |||
Oil & Gas (0.0%) | |||||
Singapore Petroleum Co., Ltd. (c) | 1,000 | 3,198 | |||
Real Estate (0.2%) | |||||
CapitaLand Ltd. (c) | 5,000 | 14,271 | |||
City Developments Ltd. (c) | 1,000 | 5,932 | |||
Keppel Land Ltd. (c) | 2,000 | 5,124 | |||
UOL Group Ltd. (c) | 4,000 | 7,247 | |||
Wing Tai Holdings Ltd. (c) | 5,000 | 4,499 | |||
37,073 | |||||
Semiconductors (0.0%) | |||||
Chartered SemiConductor Manufacturing Ltd. (b) (c) | 7,000 | 6,070 | |||
STATS ChipPAC Ltd. (b) (c) | 8,000 | 5,085 | |||
11,155 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SINGAPORE (continued) | |||||
Shipbuilding (0.0%) | |||||
Sembcorp. Marine Ltd. (c) | 4,000 | $ | 7,601 | ||
Telecommunications (0.2%) | |||||
Singapore TeleCommunications Ltd. (c) | 23,000 | 36,953 | |||
Transportation (0.0%) | |||||
ComfortDelGro Corp. Ltd. (c) | 3,000 | 2,903 | |||
CosCo Corp. Singapore Ltd. (c) | 8,000 | 6,390 | |||
9,293 | |||||
299,986 | |||||
SPAIN (3.8%) | |||||
Advertising (0.0%) | |||||
Telefonica Publicidad e Informacion SA (c) | 166 | 1,796 | |||
Agriculture (0.1%) | |||||
Altadis SA (c) | 1,004 | 47,403 | |||
Airlines (0.0%) | |||||
Iberia Lineas Aereas de Espana (c) | 2,795 | 7,210 | |||
Banks (1.6%) | |||||
Banco Bilbao Vizcaya Argentaria SA (c) | 11,638 | 239,451 | |||
Banco Popular Espanol SA (c) | 3,177 | 47,365 | |||
Banco Santander Central Hispano SA (c) | 19,815 | 289,511 | |||
576,327 | |||||
Biotechnology (0.0%) | |||||
Zeltia SA (b) (c) | 548 | 4,026 | |||
Commercial Services (0.1%) | |||||
Abertis Infraestructuras SA (c) | 581 | 13,598 | |||
Cintra Concesiones de Infraestructuras de Transporte SA (c) | 1,011 | 13,198 | |||
26,796 | |||||
Computers (0.0%) | |||||
Indra Sistemas SA (c) | 651 | 12,771 | |||
Electric (0.7%) | |||||
Endesa SA (c) | 3,089 | 107,315 | |||
Iberdrola SA (c) | 2,875 | 98,931 | |||
Union Fenosa SA (c) | 389 | 15,060 | |||
221,306 | |||||
19
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SPAIN (continued) | |||||
Electrical Components & Equipment (0.0%) | |||||
Gamesa Corp. Tecnologica SA (c) | 742 | $ | 15,879 | ||
Engineering & Construction (0.2%) | |||||
Acciona SA (c) | 94 | 14,583 | |||
ACS, Actividades de Construccion y Servicios SA (c) | 950 | 39,583 | |||
Fomento de Construcciones y Contratas SA (c) | 96 | 7,294 | |||
Grupo Ferrovial SA (c) | 273 | 20,817 | |||
Sacyr Vallehermoso SA (c) | 251 | 8,381 | |||
90,658 | |||||
Food (0.0%) | |||||
Ebro Puleva SA (c) | 519 | 10,648 | |||
Gas (0.0%) | |||||
Gas Natural SDG SA (c) | 451 | 13,771 | |||
Insurance (0.0%) | |||||
Corp. Mapfre SA (c) | 148 | 2,733 | |||
Iron & Steel (0.0%) | |||||
Acerinox SA (c) | 886 | 15,363 | |||
Lodging (0.0%) | |||||
NH Hoteles SA (c) | 497 | 8,907 | |||
Media (0.0%) | |||||
Antena 3 Television SA (c) | 405 | 9,250 | |||
Promotora de Informaciones SA (c) | 113 | 1,812 | |||
Sogecable SA (b) (c) | 219 | 6,294 | |||
17,356 | |||||
Oil & Gas (0.3%) | |||||
Repsol YPF SA | 3,247 | 92,977 | |||
Real Estate (0.0%) | |||||
Fadesa Inmobiliaria SA (c) | 70 | 2,397 | |||
Inmobiliaria Colonial (c) | 40 | 3,176 | |||
Metrovacesa SA (c) | 145 | 13,092 | |||
18,665 | |||||
Retail (0.1%) | |||||
Inditex SA (c) | 632 | 26,641 | |||
Telecommunications (0.7%) | |||||
Telefonica SA (c) | 14,719 | 244,641 | |||
Water (0.0%) | |||||
Sociedad General de Aguas de Barcelona SA (c) | 28 | 777 | |||
1,456,651 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWEDEN (2.3%) | |||||
Agriculture (0.1%) | |||||
Swedish Match AB (c) | 1,400 | $ | 22,558 | ||
Auto Manufacturers (0.0%) | |||||
Scania AB (c) | 200 | 9,086 | |||
Banks (0.6%) | |||||
Nordea Bank AB (c) | 7,500 | 89,460 | |||
Skandinaviska Enskilda Banken AB (c) | 1,800 | 42,888 | |||
Svenska Handelsbanken (c) | 1,900 | 48,963 | |||
181,311 | |||||
Commercial Services (0.1%) | |||||
Securitas AB (c) | 1,200 | 23,021 | |||
Cosmetics/Personal Care (0.0%) | |||||
Oriflame Cosmetics SA (c) | 50 | 1,664 | |||
Engineering & Construction (0.1%) | |||||
Skanska AB (c) | 1,600 | 24,675 | |||
Financial Services (0.0%) | |||||
D Carnegie AB (c) | 400 | 7,323 | |||
OMX AB (c) | 200 | 3,574 | |||
10,897 | |||||
Forest Products & Paper (0.1%) | |||||
Holmen AB (c) | 100 | 4,036 | |||
Svenska Cellulosa AB (c) | 700 | 28,910 | |||
32,946 | |||||
Hand/Machine Tools (0.1%) | |||||
Sandvik AB (c) | 4,000 | 46,562 | |||
Healthcare—Products (0.0%) | |||||
Elekta AB (c) | 200 | 3,387 | |||
Getinge AB (c) | 400 | 6,806 | |||
10,193 | |||||
Healthcare—Services (0.0%) | |||||
Capio AB (b) (c) | 100 | 1,795 | |||
Home Furnishings (0.0%) | |||||
Electrolux AB (c) | 1,100 | 15,873 | |||
Nobia AB (c) | 45 | 1,462 | |||
17,335 | |||||
Household Products (0.0%) | |||||
Husqvarna AB | 1,100 | 13,264 | |||
Iron/Steel (0.0%) | |||||
Ssab Svenskt Stal AB (c) | 900 | 17,918 | |||
20
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWEDEN (continued) | |||||
Machinery—Construction & Mining (0.1%) | |||||
Atlas Copco AB (c) | 1,200 | $ | 33,427 | ||
Atlas Copco AB (c) | 600 | 15,619 | |||
49,046 | |||||
Machinery—Diversified (0.1%) | |||||
Volvo AB (c) | 200 | 9,649 | |||
Volvo AB (c) | 800 | 39,325 | |||
48,974 | |||||
Media (0.0%) | |||||
Eniro AB (c) | 800 | 8,414 | |||
Modern Times Group AB (c) | 100 | 5,590 | |||
14,004 | |||||
Metal Fabricate/Hardware (0.1%) | |||||
Assa Abloy AB (c) | 1,200 | 20,187 | |||
SKF AB (c) | 1,600 | 25,242 | |||
45,429 | |||||
Mining (0.0%) | |||||
Boliden AB (c) | 938 | 17,254 | |||
Miscellaneous Manufacturing (0.0%) | |||||
Alfa Laval AB (c) | 200 | 6,014 | |||
Oil & Gas (0.0%) | |||||
Lundin Petroleum AB (b) (c) | 800 | 9,686 | |||
Real Estate (0.0%) | |||||
Castellum AB (c) | 33 | 338 | |||
Fabege AB (c) | 500 | 9,313 | |||
Kungsleden AB (c) | 150 | 1,759 | |||
Wihlborgs Fastigheter AB (c) | 317 | 5,455 | |||
16,865 | |||||
Real Estate Investment Trusts (0.0%) | |||||
Suntec Real Estate Investment Trust (c) | 8,000 | 6,268 | |||
Retail (0.3%) | |||||
Hennes & Mauritz AB (c) | 1,700 | 65,848 | |||
Software (0.0%) | |||||
Telelogic AB (c) | 2,000 | 4,438 | |||
Telecommunications (0.6%) | |||||
Tele2 AB (c) | 1,300 | 13,139 | |||
Telefonaktiebolaget LM Ericsson (c) | 50,000 | 165,065 | |||
TeliaSonera AB (c) | 6,000 | 34,043 | |||
212,247 | |||||
909,298 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITZERLAND (6.7%) | |||||
Building Materials (0.2%) | |||||
Geberit AG (b) (c) | 10 | $ | 11,561 | ||
Holcim Ltd. (c) | 736 | 56,438 | |||
67,999 | |||||
Chemicals (0.3%) | |||||
Ciba Specialty Chemicals AG (c) | 305 | 17,008 | |||
Clariant AG (b) (c) | 577 | 8,172 | |||
Givaudan (c) | 24 | 18,877 | |||
Lonza Group AG (c) | 196 | 13,421 | |||
Syngenta AG (b) (c) | 394 | 52,181 | |||
109,659 | |||||
Commercial Services (0.1%) | |||||
Adecco SA (c) | 491 | 29,012 | |||
SGS SA (c) | 11 | 10,443 | |||
39,455 | |||||
Computers (0.0%) | |||||
Logitech International SA (b) (c) | 213 | 8,237 | |||
Engineering & Construction (0.2%) | |||||
ABB Ltd. (b) (c) | 6,587 | 85,550 | |||
Financial Services (1.6%) | |||||
Credit Suisse Group (c) | 4,073 | 227,306 | |||
UBS AG (c) | 3,464 | 379,296 | |||
606,602 | |||||
Food (1.1%) | |||||
Nestle SA (c) | 1,358 | 425,870 | |||
Hand/Machine Tools (0.0%) | |||||
Schindler Holding AG (c) | 92 | 4,759 | |||
Healthcare—Products (0.1%) | |||||
Nobel Biocare Holding AG (c) | 94 | 22,287 | |||
Phonak Holding AG (c) | 101 | 6,311 | |||
Straumann Holding AG (c) | 13 | 3,319 | |||
Synthes, Inc. (c) | 192 | 23,125 | |||
55,042 | |||||
Insurance (0.5%) | |||||
Swiss Reinsurance (c) | 1,158 | 80,816 | |||
Zurich Financial Services AG (b) (c) | 493 | 107,960 | |||
188,776 | |||||
Leisure (0.0%) | |||||
Kuoni Reisen Holding (b) (c) | 4 | 2,242 | |||
21
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GARTMORE VARIABLE INSURANCE TRUST
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Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
SWITERLAND (continued) | |||||
Machinery—Diversified (0.0%) | |||||
Rieter Holding AG (c) | 4 | $ | 1,537 | ||
SIG Holding AG (b) (c) | 39 | 8,578 | |||
10,115 | |||||
Miscellaneous Manufacturing (0.0%) | |||||
Sulzer AG (c) | 8 | 5,993 | |||
Pharmaceuticals (2.2%) | |||||
Novartis AG (c) | 7,921 | 427,592 | |||
Roche Holding AG (c) | 2,391 | 394,658 | |||
Serono SA (c) | 23 | 15,835 | |||
838,085 | |||||
Real Estate (0.0%) | |||||
PSP Swiss Property AG (b) (c) | 66 | 3,410 | |||
Retail (0.3%) | |||||
Compagnie Financiere Richemont AG (c) | 1,682 | 76,875 | |||
Swatch Group AG (c) | 52 | 1,813 | |||
Swatch Group AG (c) | 139 | 23,431 | |||
102,119 | |||||
Semiconductors (0.0%) | |||||
Micronas SemiConductor Hold (b) (c) | 5 | 135 | |||
Unaxis Holding AG (b) (c) | 29 | 8,053 | |||
8,188 | |||||
Telecommunications (0.1%) | |||||
Kudelski SA (c) | 2 | 48 | |||
SwissCom AG (c) | 76 | 25,004 | |||
25,052 | |||||
Transportation (0.0%) | |||||
Kuehne & Nagel International AG (c) | 134 | 9,776 | |||
2,596,929 | |||||
UNITED KINGDOM (22.6%) | |||||
Advertising (0.1%) | |||||
Aegis Group PLC (c) | 1,008 | 2,422 | |||
WPP Group PLC (c) | 4,321 | 52,227 | |||
54,649 | |||||
Aerospace/Defense (0.3%) | |||||
BAE Systems PLC (c) | 11,375 | 77,701 | |||
Cobham PLC (c) | 2,409 | 7,427 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Aerospace/Defense (continued) | |||||
Meggitt PLC (c) | 710 | $ | 4,184 | ||
Rolls-Royce Group PLC (c) | 5,729 | 43,812 | |||
133,124 | |||||
Agriculture (0.6%) | |||||
British American Tobacco PLC (c) | 5,164 | 130,001 | |||
Gallaher Group PLC (c) | 2,451 | 38,281 | |||
Imperial Tobacco Group PLC (c) | 2,368 | 73,027 | |||
241,309 | |||||
Airlines (0.0%) | |||||
British Airways PLC (b) (c) | 2,433 | 15,411 | |||
Apparel (0.0%) | |||||
Burberry Group PLC (c) | 1,042 | 8,276 | |||
Auto Parts & Equipment (0.0%) | |||||
GKN PLC (c) | 3,145 | 15,848 | |||
Banks (4.3%) | |||||
Barclays PLC (c) | 21,532 | 244,066 | |||
HBOS PLC (c) | 12,748 | 221,206 | |||
HSBC Holdings PLC (c) | 38,054 | 669,496 | |||
Lloyds TSB Group PLC (c) | 18,859 | 184,724 | |||
Royal Bank of Scotland Group PLC (c) | 10,651 | 349,583 | |||
1,669,075 | |||||
Beverages (0.6%) | |||||
Diageo PLC (c) | 9,509 | 159,698 | |||
SABMiller PLC (c) | 2,819 | 50,743 | |||
Scottish & Newcastle PLC (c) | 3,180 | 29,939 | |||
240,380 | |||||
Building Materials (0.1%) | |||||
Hanson PLC (c) | 2,794 | 33,910 | |||
Travis Perkins PLC (c) | 226 | 6,316 | |||
40,226 | |||||
Chemicals (0.2%) | |||||
BOC Group PLC (c) | 1,569 | 45,867 | |||
Imperial Chemical Industries PLC (c) | 4,268 | 28,573 | |||
Johnson Matthey PLC (c) | 566 | 13,865 | |||
88,305 | |||||
Commercial Services (0.3%) | |||||
AgGreko PLC (c) | 5 | 27 | |||
Brambles Industries PLC (c) | 2,892 | 22,983 |
22
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Commercial Services (continued) | |||||
Bunzl PLC (c) | 789 | $ | 8,992 | ||
Capita Group PLC (c) | 2,702 | 23,035 | |||
Davis Service Group PLC (c) | 25 | 218 | |||
De La Rue PLC (c) | 249 | 2,512 | |||
Group 4 Securicor PLC (c) | 2,950 | 9,135 | |||
Hays PLC (c) | 6,209 | 15,478 | |||
Intertek Group PLC (c) | 203 | 2,623 | |||
Michael Page International PLC (c) | 447 | 2,894 | |||
Rank Group PLC (c) | 3,105 | 11,439 | |||
Rentokil Initial PLC (c) | 7,761 | 22,367 | |||
Serco Group PLC (c) | 795 | 4,698 | |||
126,401 | |||||
Computers (0.0%) | |||||
LogicaCMG PLC (c) | 2,457 | 7,918 | |||
Distribution/Wholesale (0.2%) | |||||
Inchcape PLC (c) | 1,548 | 13,498 | |||
Wolseley PLC (c) | 2,194 | 48,294 | |||
61,792 | |||||
Electric (0.6%) | |||||
International Power PLC (c) | 5,716 | 30,018 | |||
National Grid PLC (c) | 8,722 | 94,231 | |||
Scottish & Southern Energy PLC (c) | 2,682 | 57,034 | |||
Scottish Power PLC (c) | 5,403 | 58,196 | |||
239,479 | |||||
Electronics (0.0%) | |||||
ElectroComponents PLC (c) | 504 | 2,155 | |||
Engineering & Construction (0.2%) | |||||
Amec PLC (c) | 1,521 | 8,938 | |||
BAA PLC (c) | 3,945 | 68,196 | |||
Balfour Beatty PLC (c) | 734 | 4,652 | |||
81,786 | |||||
Entertainment (0.2%) | |||||
EMI Group PLC (c) | 3,302 | 18,510 | |||
Ladbrokes PLC (c) | 2,525 | 19,034 | |||
PartyGaming PLC (c) | 1,672 | 3,575 | |||
Sportingbet PLC (c) | 832 | 6,049 | |||
William Hill PLC (c) | 1,669 | 19,320 | |||
66,488 | |||||
Financial Services (0.4%) | |||||
Amvescap PLC (c) | 2,787 | 25,495 | |||
Cattles PLC (c) | 1,790 | 10,881 |
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Financial Services (continued) | |||||
Close Brothers Group PLC (c) | 200 | $ | 3,363 | ||
Collins Stewart Tullett PLC (c) | 360 | 5,043 | |||
ICAP PLC (c) | 2,057 | 18,903 | |||
Investec PLC (c) | 136 | 6,473 | |||
London Stock Exchange Group PLC (c) | 861 | 18,091 | |||
Man Group PLC (c) | 1,070 | 50,366 | |||
Provident Financial PLC (c) | 458 | 5,199 | |||
Schroders PLC (c) | 195 | 3,636 | |||
147,450 | |||||
Food (1.0%) | |||||
Cadbury Schweppes PLC (c) | 7,499 | 72,206 | |||
J Sainsbury PLC (c) | 5,408 | 33,396 | |||
Tate & Lyle PLC (c) | 2,063 | 23,077 | |||
Tesco PLC (c) | 25,807 | 159,290 | |||
Unilever PLC (c) | 3,945 | 88,557 | |||
376,526 | |||||
Food Service (0.1%) | |||||
Compass Group PLC (c) | 6,224 | 30,151 | |||
Gas (0.2%) | |||||
Centrica PLC (c) | 13,076 | 68,848 | |||
Healthcare—Products (0.1%) | |||||
Smith & Nephew PLC (c) | 3,667 | 28,139 | |||
Holding Companies—Diversified (0.0%) | |||||
Tomkins PLC (c) | 1,848 | 9,821 | |||
Home Builders (0.2%) | |||||
Barratt Developments PLC (c) | 1,052 | 18,401 | |||
Bellway PLC (c) | 165 | 3,534 | |||
Berkeley Group Holdings PLC (b) (c) | 197 | 4,414 | |||
Bovis Homes Group PLC (c) | 113 | 1,675 | |||
George Wimpey PLC (c) | 1,694 | 14,224 | |||
Persimmon PLC (c) | 1,040 | 23,700 | |||
Taylor Woodrow PLC (c) | 2,530 | 15,601 | |||
81,549 | |||||
Household Products (0.2%) | |||||
Reckitt Benckiser PLC (c) | 1,969 | 73,462 | |||
Insurance (1.0%) | |||||
Aviva PLC (c) | 7,789 | 110,224 | |||
Friends Provident PLC (c) | 7,036 | 23,263 | |||
Legal & General Group PLC (c) | 23,819 | 56,373 |
23
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Insurance (continued) | |||||
Old Mutual PLC (c) | 18,963 | $ | 57,254 | ||
Prudential PLC (c) | 8,498 | 96,084 | |||
Resolution PLC (c) | 306 | 3,792 | |||
Royal & Sun Alliance Insurance Group (c) | 11,057 | 27,486 | |||
374,476 | |||||
Iron/Steel (0.1%) | |||||
Corus Group PLC (c) | 3,017 | 25,401 | |||
Leisure (0.1%) | |||||
Carnival PLC (c) | 642 | 26,100 | |||
First Choice Holidays PLC (c) | 521 | 2,200 | |||
28,300 | |||||
Lodging (0.1%) | |||||
InterContinental Hotels Group PLC (c) | 1,479 | 25,832 | |||
Media (0.7%) | |||||
British Sky Broadcasting PLC (c) | 4,436 | 46,873 | |||
Daily Mail & General Trust (c) | 644 | 7,296 | |||
Emap PLC (c) | 1,161 | 18,247 | |||
ITV PLC (c) | 15,452 | 30,818 | |||
Pearson PLC (c) | 3,043 | 41,376 | |||
Reed Elsevier PLC (c) | 4,767 | 48,046 | |||
Reuters Group PLC (c) | 5,179 | 36,803 | |||
Trinity Mirror PLC (c) | 1,456 | 13,123 | |||
United Business Media PLC (c) | 1,199 | 14,336 | |||
Yell Group PLC (c) | 2,113 | 19,967 | |||
276,885 | |||||
Mining (1.5%) | |||||
Anglo American PLC (c) | 4,705 | 191,933 | |||
BHP Billiton PLC (c) | 8,147 | 158,487 | |||
Rio Tinto PLC (c) | 3,545 | 186,645 | |||
Xstrata PLC (c) | 1,415 | 53,852 | |||
590,917 | |||||
Miscellaneous Manufacturing (0.2%) | |||||
BBA Group PLC (c) | 2,447 | 12,004 | |||
Charter PLC (b) (c) | 225 | 3,359 | |||
Cookson Group PLC (b) (c) | 965 | 9,357 | |||
IMI PLC (c) | 699 | 6,445 | |||
Invensys PLC (b) (c) | 8,007 | 2,846 | |||
Smiths Group PLC (c) | 2,169 | 35,699 | |||
69,710 | |||||
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Oil & Gas (3.3%) | |||||
BG Group PLC (c) | 11,688 | $ | 155,992 | ||
BP PLC (c) | 69,532 | 806,120 | |||
Royal Dutch Shell PLC (c) | 9,155 | 319,746 | |||
1,281,858 | |||||
Oil & Gas Services (0.0%) | |||||
Acergy SA (b) (c) | 500 | 7,644 | |||
Packaging & Containers (0.1%) | |||||
Rexam PLC (c) | 2,351 | 22,897 | |||
Pharmaceuticals (2.3%) | |||||
Alliance UniChem PLC (c) | 587 | 11,080 | |||
AstraZeneca PLC (c) | 5,287 | 317,880 | |||
GlaxoSmithKline PLC (c) | 19,587 | 546,559 | |||
875,519 | |||||
Real Estate (0.4%) | |||||
British Land Co PLC (c) | 1,946 | 45,383 | |||
Brixton PLC (c) | 353 | 3,123 | |||
Great Portland Estates PLC (c) | 12 | 111 | |||
Hammerson PLC (c) | 1,177 | 25,727 | |||
Land Securities Group PLC (c) | 1,716 | 56,857 | |||
Liberty International PLC (c) | 616 | 12,116 | |||
Slough Estates PLC (c) | 1,521 | 17,173 | |||
160,490 | |||||
Retail (0.9%) | |||||
Boots Group PLC (c) | 1,972 | 28,029 | |||
Carphone Warehouse Group PLC (c) | 555 | 3,251 | |||
DSG International PLC (c) | 7,338 | 25,885 | |||
Enterprise Inns PLC (c) | 1,378 | 24,132 | |||
GUS PLC (c) | 3,209 | 57,274 | |||
HMV Group PLC (c) | 2,505 | 7,942 | |||
Kesa Electricals PLC (c) | 2,599 | 13,865 | |||
Kingfisher PLC (c) | 8,973 | 39,546 | |||
Marks & Spencer Group PLC (c) | 6,038 | 65,476 | |||
Mitchells & Butlers PLC (c) | 2,145 | 20,418 | |||
Next PLC (c) | 968 | 29,169 | |||
Punch Taverns PLC (c) | 1,017 | 16,432 | |||
Signet Group PLC (c) | 3,434 | 6,089 | |||
Whitbread PLC (c) | 939 | 20,225 | |||
357,733 | |||||
Semiconductors (0.0%) | |||||
ARM Holdings PLC (c) | 5,645 | 11,791 | |||
CSR PLC (c) | 303 | 7,045 | |||
18,836 | |||||
24
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
Shares or Principal Amount | Value | ||||
COMMON STOCKS (continued) | |||||
UNITED KINGDOM (continued) | |||||
Software (0.1%) | |||||
Misys PLC (c) | 2,470 | $ | 9,802 | ||
Sage Group PLC (c) | 3,357 | 14,310 | |||
24,112 | |||||
Telecommunications (1.5%) | |||||
BT Group PLC (c) | 28,147 | 124,341 | |||
Cable & Wireless PLC (c) | 9,602 | 20,389 | |||
Vodafone Group PLC (c) | 203,210 | 432,456 | |||
577,186 | |||||
Transportation (0.1%) | |||||
Arriva PLC (c) | 1,121 | 12,344 | |||
Associated British Ports Holdings PLC (c) | 1,336 | 22,386 | |||
FirstGroup PLC (c) | 707 | 6,120 | |||
National Express Group PLC (c) | 160 | 2,621 | |||
StageCoach Group PLC (c) | 1,307 | 2,782 | |||
46,253 | |||||
Venture Capital (0.1%) | |||||
3i Group PLC (c) | 1,597 | 26,585 | |||
Water (0.2%) | |||||
Kelda Group PLC (c) | 1,585 | 22,401 | |||
Severn Trent PLC (c) | 1,388 | 30,007 | |||
United Utilities PLC (c) | 3,313 | 39,228 | |||
91,636 | |||||
8,790,838 | |||||
Total Common Stocks | 37,932,235 | ||||
MUTUAL FUND (2.1%) | |||||
UNITED STATES (2.1%) | |||||
iShares MSCI EAFE Index Fund | 12,740 | 833,069 | |||
Total Mutual Fund | 833,069 | ||||
Shares or Principal Amount | Value | ||||
PREFERRED STOCK (0.0%) | |||||
GERMANY (0.0%) | |||||
Media (0.0%) | |||||
ProSiebenSat.1 Media AG | 162 | $ | 4,043 | ||
Total Preferred Stock | 4,043 | ||||
RIGHTS (0.0%) | |||||
GERMANY (0.0%) | |||||
Engineering & Construction (0.0%) | |||||
Linde AG (b) | 336 | 1,298 | |||
UNITED KINGDOM (0.0%) | |||||
Miscellaneous Manufacturing (0.0%) | |||||
Invensys PLC (b) | 3,202 | 240 | |||
Total Rights | 1,538 | ||||
CASH EQUIVALENTS (0.0%) | |||||
Investments in repurchase agreements (Collateralized by U.S. Government Agency Mortgages, in a joint trading account at 5.17%, dated 06/30/06, due 07/03/06, repurchase price $772) | 772 | 772 | |||
Total Cash Equivalents | 772 | ||||
Total Investments (Cost $40,778,925) (a) — 99.8% | 38,771,657 | ||||
Other assets in excess of liabilities — 0.2% | 67,148 | ||||
NET ASSETS — 100.0% | $ | 38,838,805 | |||
(a) | See notes to financial statements for tax unrealized appreciation (depreciation) of securities. |
(b) | Denotes a non-income producing security. |
(c) | Fair Valued Security |
ADR | American Depositary Receipt |
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Investments — June 30, 2006 (Unaudited) (continued)
At June 30, 2006, the Fund’s open forward foreign currency contracts were as follows:
Currency | Delivery Date | Contract Value | Market Value | Unrealized Appreciation/ (Depreciation) | ||||||||
Short Contracts: | ||||||||||||
Swiss Franc | 07/03/06 | $ | 4,966 | $ | 5,075 | $ | (109 | ) | ||||
Danish Kroner | 07/03/06 | 622 | 635 | (13 | ) | |||||||
Euro | 07/03/06 | 29,099 | 29,677 | (578 | ) | |||||||
Hong Kong Dollar | 07/03/06 | 1,455 | 1,455 | 0 | ||||||||
Japanese Yen | 07/03/06 | 23,764 | 24,133 | (369 | ) | |||||||
Norwegian Krone | 07/03/06 | 808 | 820 | (12 | ) | |||||||
Swedish Krone | 07/03/06 | 2,755 | 2,822 | (67 | ) | |||||||
Singapore Dollars | 07/03/06 | 814 | 822 | (8 | ) | |||||||
Total Short Contracts | $ | 64,283 | $ | 65,439 | $ | (1,156 | ) |
See notes to financial statements.
26
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Assets and Liabilities
June 30, 2006 (Unaudited)
Assets: | ||||
Investments, at value (cost $40,778,153) | $ | 38,770,885 | ||
Repurchase agreements, at cost and value | 772 | |||
Total Investments | 38,771,657 | |||
Foreign currency, at value (cost $91,113) | 92,398 | |||
Interest and dividends receivable | 61,230 | |||
Receivable for capital shares issued | 38,649 | |||
Reclaims receivable | 8,509 | |||
Total Assets | 38,972,443 | |||
Liabilities: | ||||
Payable for investments purchased | 110,553 | |||
Unrealized depreciation on forward foreign currency contracts | 1,156 | |||
Payable to adviser | 9,085 | |||
Accrued expenses and other payables: | ||||
Investment advisory fees | 8,289 | |||
Fund administration and transfer agent fees | 2,502 | |||
Distribution fees | 100 | |||
Administrative servicing fees | 99 | |||
Other | 1,854 | |||
Total Liabilities | 133,638 | |||
Net Assets | $ | 38,838,805 | ||
Represented by: | ||||
Capital | $ | 40,646,666 | ||
Accumulated net investment income (loss) | 141,980 | |||
Accumulated net realized gains (losses) from investment and foreign currency transactions | 57,455 | |||
Net unrealized appreciation (depreciation) on investments and translation of assets and liabilities denominated in foreign Currencies | (2,007,296 | ) | ||
Net Assets | $ | 38,838,805 | ||
Net Assets: | ||||
Class II Shares | $ | 958 | ||
Class VI Shares | 86,441 | |||
Class VII Shares | 957 | |||
Class VIII Shares | 413,578 | |||
Class ID Shares | 38,336,871 | |||
Total | $ | 38,838,805 | ||
Shares outstanding (unlimited number of shares authorized): | ||||
Class II Shares | 100 | |||
Class VI Shares | 9,061 | |||
Class VII Shares | 100 | |||
Class VIII Shares | 43,363 | |||
Class ID Shares | 4,015,309 | |||
Total | 4,067,933 | |||
Net asset value and offering price per share:* | ||||
Class II Shares | $ | 9.55 | (a) | |
Class VI Shares | $ | 9.54 | ||
Class VII Shares | $ | 9.55 | (a) | |
Class VIII Shares | $ | 9.54 | ||
Class ID Shares | $ | 9.55 |
For the period ended June 30, 2006 (Unaudited) (b)
Investment Income: | ||||
Interest income | $ | 22,313 | ||
Dividend income (net of foreign withholding tax of $42,115) | 284,728 | |||
Total Income | 307,041 | |||
Expenses: | ||||
Investment advisory fees | 17,414 | |||
Fund administration and transfer agent fees | 4,663 | |||
Distribution fees Class II Shares | 1 | |||
Distribution fees Class VI Shares | 25 | |||
Distribution fees Class VII Shares | 1 | |||
Distribution fees Class VIII Shares | 116 | |||
Administrative servicing fees Class VI Shares | 25 | |||
Administrative servicing fees Class VII Shares | 1 | |||
Administrative servicing fees Class VIII Shares | 73 | |||
Professional fees | 2,162 | |||
Trustee fees | 74 | |||
Other | 400 | |||
Total expenses before waived or reimbursed expenses | 24,955 | |||
Expenses waived or reimbursed | (849 | ) | ||
Total Expenses | 24,106 | |||
Net Investment Income (Loss) | 282,935 | |||
REALIZED/UNREALIZED GAINS (LOSSES) ON INVESTMENTS: | ||||
Net realized gains (losses) on investment transactions | (21,810 | ) | ||
Net realized gains (losses) on foreign currency transactions | 79,265 | |||
Net realized gains (losses) on investment and foreign currency transactions | 57,455 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (2,007,296 | ) | ||
Net realized/unrealized gains (losses) on investments and foreign currencies | (1,949,841 | ) | ||
CHANGE IN NET ASSETS RESULTING FROM OPERATIONS | $ | (1,666,906 | ) | |
* | Not subject to a front-end sales charge. |
(a) | Due to rounding, Net Assets divided by shares outstanding does not equal the NAV. |
(b) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
See notes to financial statements.
27
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Changes in Net Assets
Period Ended June 30, 2006(a) | ||||
(Unaudited) | ||||
From Investment Activities: | ||||
Operations: | ||||
Net investment income (loss) | $ | 282,935 | ||
Net realized gains (losses) on investment and foreign currency transactions | 57,455 | |||
Net change in unrealized appreciation/depreciation on investments and translation of assets and liabilities denominated in foreign currencies | (2,007,296 | ) | ||
Change in net assets resulting from operations | (1,666,906 | ) | ||
Distributions to Class II shareholders from: | ||||
Net investment income | (3 | ) | ||
Distributions to Class VI shareholders from: | ||||
Net investment income | (274 | ) | ||
Distributions to Class VII shareholders from: | ||||
Net investment income | (2 | ) | ||
Distributions to Class VIII shareholders from: | ||||
Net investment income | (1,057 | ) | ||
Distributions to Class ID shareholders from: | ||||
Net investment income | (139,619 | ) | ||
Change in net assets from shareholder distributions | (140,955 | ) | ||
Change in net assets from capital transactions | 40,646,666 | |||
Change in net assets | 38,838,805 | |||
Net Assets: | ||||
Beginning of period | — | |||
End of period | $ | 38,838,805 | ||
Accumulated net investment income (loss) | $ | 141,980 | ||
CAPITAL TRANSACTIONS: | ||||
Class II Shares | ||||
Proceeds from shares issued | $ | 1,000 | ||
Dividends reinvested | 3 | |||
1,003 | ||||
Class VI Shares | ||||
Proceeds from shares issued | 89,924 | |||
Dividends reinvested | 274 | |||
Cost of shares redeemed | (1,722 | ) | ||
88,476 | ||||
Class VII Shares | ||||
Proceeds from shares issued | 1,000 | |||
Dividends reinvested | 2 | |||
1,002 | ||||
Class VIII Shares | ||||
Proceeds from shares issued | 481,004 | |||
Dividends reinvested | 1,057 | |||
Cost of shares redeemed | (67,378 | ) | ||
414,683 | ||||
Class ID Shares | ||||
Proceeds from shares issued | 40,001,883 | |||
Dividends reinvested | 139,619 | |||
40,141,502 | ||||
Change in net assets from capital transactions | $ | 40,646,666 | ||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
28
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GARTMORE VARIABLE INSURANCE TRUST
GVIT INTERNATIONAL INDEX FUND
Statement of Changes in Net Assets (continued)
Period Ended June 30, 2006(a) | |||
(Unaudited) | |||
SHARE TRANSACTIONS: | |||
Class II Shares | |||
Issued | 100 | ||
Reinvested | — | (b) | |
100 | |||
Class VI Shares | |||
Issued | 9,216 | ||
Reinvested | 30 | ||
Redeemed | (185 | ) | |
9,061 | |||
Class VII Shares | |||
Issued | 100 | ||
Reinvested | — | (b) | |
100 | |||
Class VIII Shares | |||
Issued | 50,838 | ||
Reinvested | 115 | ||
Redeemed | (7,590 | ) | |
43,363 | |||
Class ID Shares | |||
Issued | 4,000,100 | ||
Reinvested | 15,209 | ||
4,015,309 | |||
(a) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(b) | Amount is less than 1 share. |
See notes to financial statements.
29
Table of Contents
GARTMORE VARIABLE INSURANCE TRUST
FINANCIAL HIGHLIGHTS
Selected Data for Each Share of Capital Outstanding
GVIT International Index Fund
Investment Activities | Distributions | Ratios/Supplemental Data | ||||||||||||||||||||||||||||||||||||||
Net Asset Value, Beginning of Period | Net Investment Income (Loss) | Net Realized and Unrealized Gains (Losses) on Investments | Total from Investment Activities | Net Investment Income | Total Distributions | Net Asset Value, End of Period | Total Return | Net Assets at End of Period (000s) | Ratio of Expenses to Average Net Assets | Ratio of Net Investment Income (Loss) to Average Net Assets | Ratio of Expenses (Prior to Reimbursements) to Average Net Assets(a) | Ratio of Net Investment Income (Loss) (Prior to Reimbursements) to Average Net Assets(a) | Portfolio Turnover(b) | |||||||||||||||||||||||||||
Class II Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(c) | $ | 10.00 | 0.06 | (0.48 | ) | (0.42 | ) | (0.03 | ) | (0.03 | ) | $ | 9.55 | (4.19% | )(d) | $ | 1 | 0.74% | (e) | 3.99% | (e) | 0.82% | (e) | 3.91% | (e) | 2.45% | ||||||||||||||
Class VI Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(c)(f) | $ | 10.00 | 0.04 | (0.47 | ) | (0.43 | ) | (0.03 | ) | (0.03 | ) | $ | 9.54 | (4.28% | )(d) | $ | 86 | 0.83% | (e) | 2.66% | (e) | 0.83% | (e) | 2.66% | (e) | 2.45% | ||||||||||||||
Class VII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(c)(f) | $ | 10.00 | 0.06 | (0.49 | ) | (0.43 | ) | (0.02 | ) | (0.02 | ) | $ | 9.55 | (4.25% | )(d) | $ | 1 | 1.15% | (e) | 3.65% | (e) | 1.18% | (e) | 3.58% | (e) | 2.45% | ||||||||||||||
Class VIII Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(c)(f) | $ | 10.00 | 0.03 | (0.46 | ) | (0.43 | ) | (0.03 | ) | (0.03 | ) | $ | 9.54 | (4.28% | )(d) | $ | 414 | 0.95% | (e) | 2.14% | (e) | 0.95% | (e) | 2.14% | (e) | 2.45% | ||||||||||||||
Class ID Shares | ||||||||||||||||||||||||||||||||||||||||
Period Ended June 30, 2006 (Unaudited)(c) | $ | 10.00 | 0.07 | (0.49 | ) | (0.42 | ) | (0.03 | ) | (0.03 | ) | $ | 9.55 | (4.14% | )(d) | $ | 38,337 | 0.37% | (e) | 4.40% | (e) | 0.38% | (e) | 4.39% | (e) | 2.45% |
(a) | During the period, certain fees were waived and/or reimbursed. If such waivers/reimbursements had not occurred, the ratios would have been as indicated. |
(b) | Portfolio turnover is calculated on the basis of the Fund as whole without distinguishing among the classes of shares. |
(c) | For the period from May 1, 2006 (commencement of operations) through June 30, 2006. |
(d) | Not annualized. |
(e) | Annualized. |
(f) | Net investment income (loss) is calculated based on average shares outstanding during the period. |
See notes to financial statements.
30
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS
June 30, 2006 (Unaudited)
1. Organization
Gartmore Variable Insurance Trust (“GVIT” or the “Trust”) is an open-end management investment company, organized under the laws of Delaware by an amended and restated Agreement and Declaration of Trust, dated October 28, 2004, as amended to date. The Trust, originally created under the laws of Massachusetts as a Massachusetts business trust pursuant to a Declaration of Trust dated, as of June 30, 1981, and as subsequently amended, redomesticated as a Delaware Statutory Trust after the close of trading on April 29, 2005, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The redomestication was a change in statutory status and did not affect the operations of the Trust. As of June 30, 2006, the Trust had authorized an unlimited number of shares of beneficial interest, without par value (“shares”). The Trust currently offers shares to life insurance company separate accounts to fund the benefits under variable life insurance or annuity policies. To date, only the separate accounts of Nationwide Life Insurance Company and Nationwide Life and Annuity Insurance Company (collectively, “Nationwide”) have purchased shares of the Trust’s series. The Trust currently operates thirty-six (36) separate series, or mutual funds, each with its own investment objectives and strategies. This report contains the financial statements and financial highlights of the GVIT International Index Fund (the “Fund”).
Under the Trust’s organizational documents, the Trust’s Officers and Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Trust. In addition, the Trust has entered into Indemnification Agreements with the Trust’s trustees and certain officers covering similar liabilities. Trust Officers receive no compensation from the Trust for serving as the Trust’s Officers. In addition, in the normal course of business, the Trust enters into contracts with its vendors and others that provide for general indemnifications. The Trust’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Trust. Based on experience, however, the Trust expects that risk of loss to be remote.
2. Summary of Significant Accounting Policies
The following is a summary of significant accounting policies followed by the Fund in the preparation of its financial statements. The policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses for the period. Actual results could differ from those estimates.
(a) | Security Valuation |
Securities for which market quotations are readily available are valued at current market value as of “Valuation Time.” Valuation Time is as of the close of regular trading on the New York Stock Exchange (usually 4 p.m. Eastern time). Equity securities are valued at the last quoted sale price or, if there is no sale price, the last quoted bid price provided by an independent pricing service approved by the Trust’s Board of Trustees. Securities traded on NASDAQ are valued at the NASDAQ official closing price. Prices are taken from the primary market or exchange in which each security trades.
Most securities listed on a foreign exchange are valued either at fair value (see description below) or at the last sale price at the close of the exchange on which the security is principally traded. Foreign securities, currencies, and other assets and liabilities denominated in foreign currencies are translated into U.S. dollars at the exchange rate of said currencies against the U.S. dollar, as of Valuation Time, as provided by an independent pricing service approved by the Board of Trustees.
Securities for which market quotations are not readily available, or for which an independent pricing service does not provide a value or provides a value that does not represent fair value in the judgment of the Fund’s investment adviser or designee, are valued at fair value under procedures approved by the Trust’s Board of Trustees. The “Fair Value” of these securities is determined in good faith by taking into account relevant factors and surrounding circumstances. Methods utilized to obtain a “Fair Value” may include the following non-exclusive list of acceptable methods: (i) a multiple of earnings; (ii) the discount from market value of a similar, freely traded security; (iii) the yield-to-maturity for debt issues; or (iv) a consolidation of the methods. The Gartmore Fair Value Committee considers a non-exclusive list of factors to arrive at the appropriate method upon determining “Fair Value.” For example, fair value determinations are required for securities whose value is affected by
31
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GARTMORE VARIABLE INSURANCE TRUST
NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
a “significant” event that materially affects the value of a domestic or foreign security which occurs subsequent to the time of the close of the principal market on which such domestic or foreign security trades and before the Valuation Time (i.e., a “subsequent event”). Typically, this will involve events occurring after the close of a foreign market on which a security trades and before the next Valuation Time.
The Fund values foreign securities at fair value in the circumstances described below. Generally, trading in foreign securities markets is completed each day at various times prior to the Valuation Time. Due to the time differences between the closings of the relevant foreign securities exchanges and the Valuation Time for the Fund, the Fund will fair value its foreign investments when it is determined that the market quotations for the foreign investments either are not readily available or are unreliable and, therefore, do not represent fair value. When the fair value prices are utilized, these prices will attempt to reflect the impact of the U.S. financial markets’ perceptions and trading activities on the Fund’s foreign investments since the last closing prices of the foreign investments were calculated on their primary foreign securities markets or exchanges. For these purposes, the Board of Trustees of the Trust has determined that movements in relevant indices or other appropriate market indicators, after the close of the foreign securities exchanges, may demonstrate that market quotations are unreliable, and may trigger fair value pricing for certain securities. Consequently, fair valuation of portfolio securities may occur on a daily basis.
(b) | Repurchase Agreements |
The Fund may enter into repurchase agreements with an entity which is a member of the Federal Reserve System or which is a “primary dealer” (as designated by the Federal Reserve Bank of New York) in U.S. Government obligations. The repurchase price generally equals the price paid by the Fund plus interest negotiated on the basis of current short-term rates, which may be more or less than the rate on the underlying portfolio securities. The seller under a repurchase agreement is required to maintain the value of the collateral held pursuant to the agreement at a market value equal to or greater than the repurchase price (including accrued interest). Collateral subject to repurchase agreements is held by the Fund’s custodian or another qualified sub-custodian or in the Federal Reserve/Treasury book-entry system. If the counterparty defaults and the fair value of the collateral declines, realization of the collateral by the Fund may be delayed or limited. The Fund may transfer uninvested cash balances into a pooled cash account. These balances are invested in one or more repurchase agreements, with the counterparties of Credit Suisse First Boston, Lehman Brothers, and Nomura Securities, which are fully collateralized by U.S. Government Agency Mortgages.
(c) | Foreign Currency Transactions |
The accounting records of the Fund are maintained in U.S. dollars. Foreign currency amounts are translated into U.S. dollars at the current rate of exchange to determine the value of investments, assets and liabilities. The Fund may enter into foreign currency contracts in connection with purchases or sales of securities denominated in a foreign currency. Purchases and sales of securities, and income and expenses, are translated at the prevailing rate of exchange on the respective date of these transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from fluctuations arising from changes in market prices of securities held. These fluctuations are included with the net realized and unrealized gain or loss from investments and foreign currencies.
(d) | Forward Foreign Currency Contracts |
The Fund may enter into forward foreign currency contracts in connection with planned purchases or sales of securities or to hedge the U.S. dollar value of portfolio securities denominated in a particular currency. The Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts and from unanticipated movements in the value of a foreign currency relative to the U.S. dollar. Forward foreign currency contracts are valued at the current cost of covering these contracts, as provided by an independent pricing service approved by the Board of Trustees. The forward foreign currency contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded for financial statement purposes as unrealized gains or losses until the contract settlement date.
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June 30, 2006 (Unaudited)
(e) | Risks Associated with Foreign Securities and Currencies |
Investments in securities of foreign issuers carry certain risks not ordinarily associated with investments in securities of U.S. issuers. These risks include future political and economic developments, and the possible imposition of exchange controls or other foreign governmental laws and restrictions. In addition, with respect to certain countries, there is the possibility of expropriation of assets, confiscatory taxation, political or social instability, or diplomatic developments, which could adversely affect investments in those countries.
Certain countries also may impose substantial restrictions on investments in their capital markets by foreign entities, including restrictions on investments in issuers of industries deemed sensitive to relevant national interests. These factors may limit the investment opportunities available and result in a lack of liquidity and high price volatility with respect to securities of issuers from developing countries.
(f) | Futures Contracts |
The Fund may invest in financial futures contracts (“futures contracts”) for the purpose of hedging its existing portfolio securities or securities that the Fund intends to purchase against fluctuations in value caused by changes in prevailing market interest rates or prices. Futures contracts may also be entered into for non-hedging purposes.
Upon entering into a futures contract, the Fund is required to pledge to the broker an amount of cash and/or other assets equal to a certain percentage of the contract amount (initial margin deposit). Subsequent payments, known as “variation margin,” are made each day, depending on the daily fluctuations in the fair value/market value of the underlying assets. A gain or loss equal to the daily variation margin is recognized on a daily basis. Futures contracts are valued daily at their last quoted sale price.
A “sale” of a futures contract means the creation of a contractual obligation to deliver the securities or foreign currency called for by the contract at a fixed price at a specified time in the future. A “purchase” of a futures contract means the creation of a contractual obligation to acquire the securities or foreign currency at a fixed price at a specified time in the future.
Should market conditions change unexpectedly, the Fund may not achieve the anticipated benefits of the futures contracts and may realize a loss. The use of futures transactions for hedging purposes involves the risk if imperfect correlation in movements in the price of futures contracts, interest rates, and the value of the underlying hedged assets.
(g) | Written Options Contracts |
The Fund may write options contracts. A written option obligates the Fund to deliver (written call) or to receive (written put) a specified quantity of an underlying asset at the contract amount upon exercise by the holder of the option. The value of the option contract is recorded as a liability and unrealized gain or loss is measured by the difference between the current value and the premium received. Options traded on an exchange are valued at the last quoted sale price, or in the absence of a sale, the bid price provided by an independent pricing service approved by the Board of Trustees. Non-exchange traded options are valued using dealer supplied quotes.
(h) | Security Transactions and Investment Income |
Security transactions are accounted for on the date the security is purchased or sold (“trade date”). Securities gains and losses are calculated on the identified cost basis. Interest income is recognized on the accrual basis and includes, where applicable, the amortization or accretion of premium or discount. Dividend income is recorded on the ex-dividend date.
(i) | Securities Lending |
To generate additional income, the Fund may lend their respective portfolio securities, up to 33 1/3% of the Fund, to brokers, dealers and other financial institutions provided that (1) the borrower delivers cash or securities as collateral with respect to each new loan of U.S. securities, equal to at least 102% of the value of the portfolio securities loaned, and with respect to
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
each new loan on non-U.S. securities, collateral of at least 105% of the value of the portfolio securities loaned; and (2) at all times thereafter shall require the borrower to mark-to-market the collateral on a daily basis so that the market value of such collateral does not fall below 100% of the value of securities loaned. The Fund receives payments from borrowers equivalent to the dividends and interest that would have been earned on securities loaned while simultaneously seeking to earn income on the investment of cash collateral. There may be risks of delay in recovery of the securities should the borrower of the securities fail financially. Loans will be made, however, only to borrowers deemed by the Fund’s investment adviser to be of good standing and creditworthy under guidelines established by the Board of Trustees and when, in judgment of the adviser, the consideration which can be earned currently from these securities loans justifies the attendant risks. Loans are subject to termination by the Fund or the borrower at any time, and, therefore, are not considered to be illiquid investments. JPMorgan Chase Bank serves as custodian for the securities lending program of the Fund. JPMorgan Chase Bank receives a fee based on the value of the collateral received from borrowers. The Fund did not have securities on loan as of June 30, 2006.
(j) | Distributions to Shareholders |
The Fund’s dividends from net investment income, if any, are declared and paid quarterly. The Fund’s distributable net realized capital gains, if any, are declared and distributed at least annually.
Dividends and distributions to shareholders are determined in accordance with federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either permanent or temporary in nature. In accordance with the American Institute of Certified Public Accountants Statement of Position 93-2, permanent differences (i.e., reclassification of market discounts, gain/loss, paydowns, and distributions) are reclassified within the capital accounts based on their nature for federal income tax purposes; temporary differences do not require reclassification. These reclassifications have no effect upon the net asset value of the Fund. To the extent distributions exceed current and accumulated earnings and profits for federal income tax purposes, these distributions are reported as distributions of paid-in-capital.
(k) | Federal Income Taxes |
It is the policy of the Fund to qualify or to continue to qualify as a “regulated investment company” by complying with the provisions available to certain investment companies, as defined in applicable sections of the U.S. Internal Revenue Code, and to make distributions of net investment income and net realized capital gains sufficient to relieve the Fund from all, or substantially all, federal income taxes.
As of June 30, 2006, the tax cost of securities and the breakdown of unrealized appreciation (depreciation) for the Fund was as follows:
Tax Cost of Securities | Unrealized Appreciation | Unrealized Depreciation | Net Unrealized Appreciation (Depreciation)* | |||
$40,793,160 | $343,460 | $(2,364,963) | $(2,021,503) |
* | The differences between the book-basis and tax-basis unrealized appreciation (depreciation) is attributable primarily to tax deferral of losses on wash sales. |
(l) | Allocation of Expenses, Income, and Gains and Losses |
Expenses directly attributable to the Fund are charged to the Fund. Expenses not directly attributable to the Fund are allocated proportionately among various or all funds within the Trust. The method used by the Fund for allocating income, fund level expenses, and realized and unrealized gains or losses is based on the fair value of shares outstanding relative to net assets. Under this method, each class of shares participates based on the total net asset value of that class’s shares in proportion to the total net assets of the Fund. Expenses specific to a class (such as Rule 12b-1 and administrative services fees) are charged to that class.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
3. | Transactions with Affiliates |
Under the terms of the Trust’s Investment Advisory Agreement, Gartmore Mutual Fund Capital Trust (“GMF”) manages the investment of the assets and supervises the daily business affairs of the Fund. GMF is a wholly-owned subsidiary of Nationwide Corporation. All of the common stock of Nationwide Corporation is held by Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%), each of which is a mutual company owned by the mutual company’s policyholders. In addition, GMF provides investment management evaluation services in initially selecting and monitoring, on an ongoing basis, the performance of the subadviser, for the Fund that GMF advises. Fund Asset Management, L.P. (the “subadviser”), manages all of the Fund’s investments and has the responsibility for making all investment decisions for the Fund. Under the terms of the Investment Advisory Agreement, the Fund pays the Fund’s adviser an investment advisory fee based on the Fund’s average daily net assets. From such fees, pursuant to the subadvisory agreements, the adviser pays fees to the subadviser. Additional information regarding investment advisory fees and subadvisory fees for GMF and the subadviser is as follows for the period ended June 30, 2006:
Fee Schedule | Total Fees | Fees Retained | Paid to Sub-adviser | |||||
$0 up to $1.5 billion | 0.27% | 0.160% | 0.110% | |||||
$1.5 billion up to $3 billion | 0.26% | 0.175% | 0.085% | |||||
$3 billion or more | 0.25% | 0.175% | 0.075% |
GMF and the Fund have entered into a written contract (“Expense Limitation Agreement”) that limits operating expenses (excluding any taxes, interest, brokerage fees, extraordinary expenses, short sale dividend expenses, Rule 12b-1 fees, and administrative service fees) from exceeding 0.37% until at least May 1, 2007.
GMF may request and receive reimbursement from the Fund of the advisory fees waived and other expenses reimbursed by GMF, respectively, pursuant to the Expense Limitation Agreement at a later date not to exceed three years from the fiscal year in which the corresponding reimbursement to the Fund was made, (as described below), if the Fund has reached a sufficient asset size to permit reimbursement to be made without causing the total annual operating expense ratio of the Fund to exceed the limits set forth above. No reimbursement will be made unless: (i) the Fund’s assets exceed $100 million; (ii) the total annual expense ratio of the Class making such reimbursement is less than the limit set forth above; and (iii) the payment of such reimbursement is approved by the Board of Trustees on a quarterly basis. Except as provided for in the Expense Limitation Agreement, reimbursement of amounts previously waived or assumed by GMF is not permitted.
As of the period ended June 30, 2006, the cumulative potential reimbursements for all classes of the Fund, based on reimbursements which expire within three years from the fiscal year in which the corresponding reimbursement to the Fund was made for expenses reimbursed by GMF, would be:
Period ended | ||||
$849 |
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
Under the terms of a Fund Administration and Transfer Agency Agreement, Gartmore SA Capital Trust (“GSA”) provides the Fund with various administrative and accounting services, and Gartmore Investors Services, Inc. (“GISI”), an indirect subsidiary of GSA, serves as Transfer and Dividend Disbursing Agent for the Fund. The fees for the services provided under this Agreement are calculated based on the Trust’s average daily net assets according to the fee schedule below. The fees are then allocated proportionately among all funds within the Trust in relation to the average daily net assets of each fund and are paid to GSA. GSA pays GISI from these fees for GISI’s services.
Combined Fee Schedule* | ||
Up to $1 billion | 0.15% | |
$1 billion up to $3 billion | 0.10% | |
$3 billion up to $8 billion | 0.05% | |
$8 billion up to $10 billion | 0.04% | |
$10 billion up to $12 billion | 0.02% | |
$12 billion or more | 0.01% |
* | The assets of the Gartmore GVIT Investor Destinations Aggressive Fund, the Gartmore GVIT Investor Destinations Moderately Aggressive Fund, the Gartmore GVIT Investor Destinations Moderate Fund, the Gartmore GVIT Investor Destinations Moderately Conservative Fund, and the Gartmore GVIT Investor Destinations Conservative Fund (collectively, the “Investor Destinations Funds”) are excluded from the Trust asset level amount in order to calculate this asset-based fee. The Investor Destinations Funds do not pay any part of this fee. |
GSA and GISI have entered into agreements with BISYS Fund Services Ohio, Inc. (“BISYS”), pursuant to which BISYS provides sub-administration and sub-transfer agency services, respectively, to the Fund.
Under the terms of a Distribution Plan under Rule 12b-1 of the 1940 Act, Gartmore Distribution Services, Inc. (“GDSI”), the Fund’s Distributor, is compensated by the Fund for expenses associated with the distribution of the Class II, Class VI, Class VII and Class VIII shares of the Fund. GDSI is a majority-owned subsidiary of GGAMT. These fees are based on average daily net assets of Class II, Class VI, Class VII and Class VIII shares of the Fund at an annual rate not to exceed 0.25% for Class II and Class VI shares and 0.40% for Class VII and Class VIII shares.
Under the terms of an Administrative Services Plan, the Fund may pay fees to servicing organizations, such as broker-dealers, including Nationwide Financial Services, Inc. (“Nationwide Financial Services”), an affiliate of GGAMT, and financial institutions, which agree to provide administrative support services to the shareholders of certain classes. These services include, but are not limited, to the following: establishing and maintaining shareholder accounts; processing purchase and redemption transactions; arranging bank wires; performing shareholder sub-accounting; answering inquires regarding the Fund; and other such services. These fees are based on an annual rate of up to 0.25% of the average daily net assets of Class II, Class VI Class VII and Class VIII of shares of the Fund.
4. | Short-Term Trading Fees |
The Fund reserves the right to assess a short-term trading fee on certain transactions out of Class VI shares and Class VIII that a separate account makes on behalf of a variable insurance contract owner (the “contract owner”). A separate account that redeems Class VI shares and Class VIII shares on behalf of a contract owner may be subject to a 1.00% short-term trading fee if the separate account held the Class VI shares and Class VIII on behalf of the contract owner for 60 calendar days or less, unless an exception applies as disclosed in the Fund’s prospectus. The short-term trading fee is paid directly to the Fund and is intended to offset the cost to the Fund of excess brokerage commissions and other costs associated with fluctuations in Fund asset levels and cash flow caused by short-term trading. For purposes of determining whether the short-term trading fee applies, the Class VI shares and Class VIII shares that were held on behalf of the contract owner the longest will be treated as being redeemed first.
For the period ended June 30, 2006, the Fund had contributions to capital due to collection of redemption fees in the amount of $891.
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NOTES TO FINANCIAL STATEMENTS (Continued)
June 30, 2006 (Unaudited)
5. | Investment Transactions |
For the period ended June 30, 2006, (excluding short-term securities) the Fund had purchases of $41,745,921 and sales of $945,810.
6. | Bank Loans and Earnings Credit |
The Trust has a credit agreement with JPMorgan Chase & Co., the Fund’s custodian bank, permitting the Trust to borrow up to $100,000,000. Borrowings under this arrangement bear interest at the Federal Funds rate plus 0.50%. The interest costs, if any, would be included in other fees in the Statement of Operations. No compensating balances were required under the terms of the line of credit. There were no borrowings outstanding under this line of credit as of June 30, 2006.
The Trust’s custodian bank has agreed to reduce the bank’s fees (earnings credit) when the Funds of the Trust maintain cash on deposit in non-interest-bearing custody and Demand Deposit Accounts.
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Supplemental Information (Unaudited)
June 30, 2006
1. Approval of Investment Advisory Contract
The Board of Trustees (the “Board”) met on December 8, 2005 to preliminarily review the information the Board had requested, and which the Fund’s adviser had provided, including reports from Lipper, Inc. (“Lipper”), in connection with the Fund’s annual contract renewal process pursuant to Section 15(c) of the Investment Company Act of 1940, as amended, and to have an opportunity to request and review any additional information the Board may deem useful in considering whether to renew the investment advisory agreements on behalf of the Fund in advance of its annual Section 15(c) contract renewal meeting on January 12, 2006. The Independent Trustees received assistance and advice from, and met separately with, independent counsel regarding their legal duties and responsibilities in considering the Fund’s investment advisory and sub-advisory agreements. Following receipt and review of all of the preliminary information and such additional information as they had requested, the Board met on January 12, 2006 to consider all relevant information they had received about the Fund in connection with the annual Section 15(c) contract renewal process as well as other relevant information the Board had received at its regular meetings throughout the year.
In considering whether to approve the investment advisory and sub advisory agreements for the Fund, the Board considered among others, the following specific factors (to the extent each is applicable to new funds) with respect to the new Fund:
1. | the Fund’s advisory fee and ancillary benefits; |
2. | the Fund’s advisory fee (including any breakpoints) compared to the advisory fees of the Fund’s peer group of funds; |
3. | the Fund’s projected total expenses (and any expense limitations/fee waivers by the adviser) compared to those of the Fund’s peer group of funds; |
4. | the performance of the Fund’s proposed adviser in managing the Fund compared to its benchmark and its peer group of funds; and |
5. | the projected profitability (or lack thereof) to the Fund’s adviser. |
Additionally, where the adviser manages accounts for other institutional clients (other than the Fund), the Board also considered the advisory fees charged to those clients compared to the Fund’s advisory fees. Following its review and discussions, a majority of the Board, including a majority of the Independent Trustees, determined that it was appropriate to renew the Fund’s advisory (and, if applicable, sub-advisory) agreement for the following reasons:
In particular, the Board reviewed the memorandum and related information management had provided in connection with management’s proposal to create several new insurance- dedicated funds, including the Fund, that will be sold through various Nationwide variable annuity and variable life products. The Board considered that the Fund will be managed by the same adviser and subadviser who currently manage the Gartmore International Index Fund, an affiliated retail mutual fund. Management represented that the Fund will receive the same nature and quality of services that the investment adviser and subadviser provide to the retail fund at the same contractual advisory fee (including the subadvisory fee) and breakpoint levels as the retail fund. While the Board could not consider or evaluate the investment performance of the Fund, as it did not commence operations until May 1, 2006, the Board considered the adviser’s and subadviser’s performance in managing substantially similar products, including the retail fund, relative to the Fund’s benchmark index, the MSCI EAFE Index. The Board also considered the adviser’s and subadviser’s performance as compared to the performance of other funds in the Fund’s Lipper International Multi-Cap Core Funds category.
Next, the Board considered the Fund’s proposed contractual advisory fee (including subadvisory fee) and noted that this fee is the same as the contractual advisory fee (and subadvisory fee) of the Fund’s retail counterpart, the Gartmore International Index Fund, a retail fund. The Board considered comparative fee and expense information for the retail fund in approving the advisory contract for the retail fund. As a new Fund, the Board had no adviser profitability to analyze at this juncture.
Having considered all of the information the Board deemed relevant and being satisfied with the adviser’s responses to its questions, the Board determined to approve the investment advisory (and sub-advisory) agreements for the Fund for an initial two year period which commenced on May 1, 2006.
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Management Information
June 30, 2006 (Unaudited)
Trustees who are not Interested Persons (as defined in the 1940 Act) and Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Charles E. Allen
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Allen is Chairman, Chief Executive Officer and President of the Graimark Realty Advisors, Inc. (real estate development, investment and asset management). | 92 | None | ||||
Paula H.J. Cholmondeley
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since July 2000 | Ms. Cholmondeley is an independent strategy consultant. Ms. Cholmondeley was Vice President and General Manager of Sappi Fine Paper North America from April 2000 through December 2003. | 92 | Director of Dentsply International, Inc., Ultralife Batteries, Inc., Terex Corporation, Minerals Technology, Inc. and Albany International Corp. | ||||
C. Brent DeVore3
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1940 | Trustee since 1990 | Dr. DeVore is President of Otterbein College. | 92 | None | ||||
Phyllis K. Dryden
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1947 | Trustee since December 2004 | Beginning in February 2006 Ms. Dryden is employed by Mitchell Madison, a management consulting company. Ms. Dryden was a former Managing Partner of marchFIRST, a global management consulting firm prior to February 2002. | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
Barbara L. Hennigar
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1935 | Trustee since July 2000 | Retired. | 92 | None | ||||
Barbara I. Jacobs
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1950 | Trustee since December 2004 | Ms. Jacobs has served as Chairman of the Board of Directors of KICAP Network Fund, a European (United Kingdom) hedge fund, since December 2000. Prior to 2004, Ms. Jacobs was also a Managing Director and European Portfolio Manager with Teachers Insurance Annuity Association–College Retirement Equity Fund. | 92 | None | ||||
Douglas F. Kridler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1955 | Trustee since September 1997 | Mr. Kridler has served as the President and Chief Executive Officer of the Columbus Foundation (a Columbus, OH-based foundation which manages over 1,300 individual endowment funds) since February 2002. Prior to January 31, 2002, Mr. Kridler was the President of the Columbus Association for the Performing Arts and Chairman of the Greater Columbus Convention and Visitors Bureau. | 92 | None | ||||
Michael D. McCarthy c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1947 | Trustee since December 2004 | Retired. Mr. McCarthy was Chairman of VMAC (commodity swaps) from October 2002 until June 2005; and a partner of Pineville Properties LLC (a commercial real estate development firm). | 92 | None |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee or Nominee2 | ||||
David C. Wetmore
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since 1995 and Chairman since February 2005 | Retired. | 92 | None |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | Mr. DeVore has served as President of Otterbein College since 1984. Mark Thresher, President and Chief Operating Officer of Nationwide Financial Services, Inc. (“NFS”) has served as a member of the Board of Trustees of Otterbein College since 2000, currently serves as one of 30 of its trustees, and is currently one of two Vice Chairmen of the Board. NFS is under common control with each of the Gartmore companies that serve as investment advisers and principal underwriter to the Trust, as each is a majority-owned subsidiary of Nationwide Corporation (“NC”) and, through NC, of Nationwide Mutual Insurance Company (95.2%) and Nationwide Mutual Fire Insurance Company (4.8%). |
Additional information regarding the Trustees and Officers may be found in the Trust’s statement of additional information, which is available without charge upon request, by calling 800-848-0920.
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GARTMORE VARIABLE INSURANCE TRUST
Management Information (Continued)
June 30, 2006 (Unaudited)
Trustees who are Interested Persons (as defined in the 1940 Act) and/or Officers of the Trust as of June 30, 2006
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Paul J. Hondros
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1948 | Trustee since July 2000 | Mr. Hondros has been President and Chief Executive Officer of various Gartmore entities, including Gartmore Distribution Services, Inc. (“GDSI”),3 Gartmore Investor Services, Inc. (“GISI”),3 Gartmore Morley Capital Management, Inc. (“GMCM”),3 Gartmore Morley Financial Services, Inc. (“GMFS”), 3 NorthPointe Capital, LLC (“NorthPointe”),3 Gartmore Global Asset Management Trust (“GGAMT”),3 Gartmore Global Investments, Inc. (“GGI”),3 Gartmore Mutual Fund Capital Trust (“GMFCT”)3 and Gartmore SA Capital Trust (“GSA”)3; and a Director of Nationwide Securities, Inc.,3 as well as several entities within Nationwide Financial Services, Inc. | 92 | None | ||||
Arden L. Shisler
c/o Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1941 | Trustee since February 2000 | Retired. Mr. Shisler is the former President and Chief Executive Officer of K&B Transport, Inc., a trucking firm (2000 through 2002). He served as a consultant to K&B from January 2003 through December 2004. Since 1992, Mr. Shisler has also been Chairman of the Board for Nationwide Mutual Insurance Company.3 | 92 | Director of Nationwide Financial Services, Inc. | ||||
Gerald J. Holland Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428 1951 | Treasurer since March 2001 | Mr. Holland is Senior Vice President - Operations for GGI,3 GMFCT,3 and GSA.3 | N/A | N/A |
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Management Information (Continued)
June 30, 2006 (Unaudited)
Name, Address and Year of Birth | Position(s) Held with the Trust and Length of Time Served1 | Principal Occupation(s) During Past 5 Years | Number of Portfolios in the Gartmore Fund Complex Overseen by Trustee | Other Directorships Held by Trustee2 | ||||
Michael A. Krulikowski
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1959 | Chief Compliance Officer since June 2004 | Since November 1999, Mr. Krulikowski has served as a Vice President and Chief Compliance Officer of GGI3. Since June 2004, Mr. Krulikowski has also served as Chief Compliance Officer of the Trust. | N/A | N/A | ||||
Eric E. Miller
Gartmore Global Investments, Inc. 1200 River Road, Suite 1000 Conshohocken, PA 19428
1953 | Secretary since December 2002 | Mr. Miller is Senior Vice President, Chief Counsel for GGI,3 GMFCT3 and GSA3 since August 2002. From August 2000 to August 2002, Mr. Miller was a Partner with Stradley Ronan Stevens & Young, LLP. | N/A | N/A |
1 | Length of time served includes time served with the Trust’s predecessors. |
2 | Directorships held in (1) any other investment companies registered under the 1940 Act, (2) any company with a class of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or (3) any company subject to the requirements of Section 15(d) of the Exchange Act. |
3 | This position is held with an affiliated person or principal underwriter of the Trust. |
Federal law requires the Trust, each of its investment advisers and sub-advisers to adopt procedures for voting proxies (“Proxy Voting Guidelines”) and to provide a summary of those Proxy Voting Guidelines used to vote the securities held by the Funds. The Funds’ proxy voting policies and procedures are available without charge (i) upon request, by calling 800-848-0920, (ii) on the Fund’s website at www.gartmorefunds.com, or (iii) on the Securities and Exchange Commission’s website at www.sec.gov.
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Item 2. Code of Ethics.
Disclose whether, as of the end of the period covered by the report, the registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. If the registrant has not adopted such a code of ethics, explain why it has not done so.
Not applicable – The information required by this item is required only in an annual report on the Form N-CSR.
Item 3. Audit Committee Financial Expert.
(a) (1) Disclose that the registrant’s board of directors has determined that the registrant either:
(i) Has at least one audit committee financial expert serving on its audit committee; or
(ii) Does not have an audit committee financial expert serving on its audit committee.
(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or
(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert.
Not applicable – The information required by this item is required only in an annual report on the Form N-CSR.
Item 4. Principal Accountant Fees and Services. (FROM PwC)
(a) Disclose, under the caption Audit Fees, the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of the registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years.
(b) Disclose, under the caption Audit-Related Fees, the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of the registrant’s financial statements and are not reported under paragraph (a) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
(c) Disclose, under the caption Tax Fees, the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
(d) Disclose, under the caption All Other Fees, the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) of this Item. Registrants shall describe the nature of the services comprising the fees disclosed under this category.
(e) (1) Disclose the audit committee’s pre-approval policies and procedures described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) Disclose the percentage of services described in each of paragraphs (b) through (d) of this Item that were approved by the audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
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(f) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.
(g) Disclose the aggregate non-audit fees billed by the registrant’s accountant for services rendered to the registrant, and rendered to the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant for each of the last two fiscal years of the registrant.
(h) Disclose whether the registrant’s audit committee of the board of directors has considered whether the provision of non-audit services that were rendered to the registrant’s investment adviser (not including any subadviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X is compatible with maintaining the principal accountant’s independence.
Not applicable – The information required by this item is required only in an annual report on the Form N-CSR.
Item 5. Audit Committee of Listed Registrants.
(a) | If the registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act (17CFR 240.10A-3), state whether or not the registrant has a separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act (15 U.S.C. 78c(a)(58)(A)). If the registrant has such a committee, however designated, identify each committee member. If the entire board of directors is acting as the registrant’s audit committee as specified in Section 3(a)(58)(B) of the Exchange Act (15 U.S.C. 78c(a)(58)(B)), so state. |
Not applicable.
(b) | If applicable, provide the disclosure required by Rule 10A-3(d) under the Exchange Act (17CFR 240.10A-3(d)) regarding an exemption from the listing standards for all audit committees. |
Not applicable.
Item 6. Schedule of Investments.
File Schedule I – Investments in securities of unaffiliated issuers as of the close of the reporting period as set forth in § 210.12-12 of Regulation S-X, unless the schedule is included as part of the report to shareholders filed under Item 1 of this Form.
This schedule is 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.
A closed-end management investment company that is filing an annual report on this Form N-CSR must, unless it invests exclusively in non-voting securities, describe the policies and procedures that it uses to determine how to vote proxies relating to portfolio securities, including the procedures that the company uses when a vote presents a conflict between the interests of its shareholders, on the one hand, and those of the company’s investment adviser; principal underwriter; or any affiliated person (as defined in Section 2(a)(3) of the Investment Company Act of 1940 (15 U.S.C. 80a-2(a)(3)) and the rules thereunder) of the company, its investment adviser, or its principal underwriter, on the other. Include any policies and procedures of the company’s investment adviser, or any other third party, that the company uses, or that are used on the company’s behalf, to determine how to vote proxies relating to portfolio securities.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Company.
If the registrant is a closed-end management investment company that is filing an annual report on this Form N-CSR, provide the information specified in paragraphs (a) and (b) of this Item with respect to portfolio managers.
Not applicable.
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Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
If the registrant is a closed-end management investment company, provide the information specified in paragraph (b) of this Item with respect to any purchase made by or on behalf of the registrant or any “affiliated purchaser,” as defined in Rule 10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or other units of any class of the registrant’s equity securities that is registered by the registrant pursuant to Section 12 of the Exchange Act (15 U.S.C. 781).
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Describe any material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of directors, where those changes were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR 240.14a-101), or this Item.
The Independent Trustees and the Board of Trustees of the registrant adopted a formal, written “Policy Regarding Shareholder Submission of Trustee Candidates,” as well as a formal, written “Statement of Policy On Criteria For Selecting Trustees,” on June 9, 2004, and June 10, 2004, respectively. Neither this policy nor this statement of policy has been materially changed since the Board of Trustees adoption of the policy and the statement of policy, respectively. The Nominating and Fund Governance Committee of the Board of Trustees (the “NFGC”) and the Board of Trustees, however, on November 11, 2005, and January 12, 2006, respectively, approved amendments to this policy; these amendments to this policy, though, concern the criteria for selecting candidates for Trustees and the characteristics expected of candidates for Trustees, as set forth in the Exhibit A, “Statement of Policy On Criteria For Selecting Trustees,” to the policy and, arguably, may not be deemed to be material changes to the policy.
Item 11. Controls and Procedures.
(a) Disclose the conclusions of the registrant’s principal executive and principal financial officers, or persons performing similar functions, regarding the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Act (17 CFR 270.30a-3(c))) as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on the evaluation of these controls and procedures required by Rule 30a-3(b) under the Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
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 ninety (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 the investment company’s 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) Disclose any change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.
There were no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits.
(a) File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit.
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Not applicable – The information required by this item is required only in an annual report on the Form N-CSR.
(a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2).
Certifications executed pursuant to Rule 30a-2(a) are attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons.
Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by rule 30a-2(b) under the Act as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant incorporates it by reference.
Certifications executed pursuant to Rule 30a-2(b) are attached hereto.
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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) | GARTMORE VARIABLE INSURANCE TRUST | |||
By (Signature and Title) | /s/ GERALD J. HOLLAND | |||
Name: | Gerald J. Holland | |||
Title: | Treasurer & Principal Financial Officer | |||
Date: | September 5, 2006 |
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/ PAUL J. HONDROS | |||
Name: | Paul J. Hondros | |||
Title: | Principal Executive Officer | |||
Date: | September 5, 2006 | |||
By (Signature and Title) | /s/ GERALD J. HOLLAND | |||
Name: | Gerald J. Holland | |||
Title: | Treasurer & Principal Financial Officer | |||
Date: | September 5, 2006 |