UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-3329
Variable Insurance Products Fund
(Exact name of registrant as specified in charter)
82 Devonshire St., Boston, Massachusetts 02109
(Address of principal executive offices) (Zip code)
Eric D. Roiter, Secretary
82 Devonshire St.
Boston, Massachusetts 02109
(Name and address of agent for service)
Registrant's telephone number, including area code: 617-563-7000
Date of fiscal year end: | December 31 |
| |
Date of reporting period: | June 30, 2003 |
Item 1. Reports to Stockholders
Fidelity® Variable Insurance Products:
Equity-Income Portfolio
Semiannual Report
June 30, 2003
(2_fidelity_logos) (Registered_Trademark)
Contents
Investment Summary | <Click Here> | A summary of the fund's investments at period end. |
Investments | <Click Here> | A complete list of the fund's investments with their
market values. |
Financial Statements | <Click Here> | Statements of assets and liabilities, operations, and
changes in net assets, as well as financial highlights. |
Notes | <Click Here> | Notes to the financial statements. |
Fidelity Variable Insurance Products are separate account options which are purchased through a variable insurance contract.
Third party marks appearing herein are the property of their respective owners.
All other marks appearing herein are registered or unregistered trademarks or service marks of FMR Corp. or an affiliated company.
(Recycle graphic) This report is printed on recycled paper using soy-based inks.
This report and the financial statements contained herein are submitted for the general information of the shareholders of the fund. This report is not authorized for distribution to prospective investors in the fund unless preceded or accompanied by an effective prospectus.
Mutual fund shares are not deposits or obligations of, or guaranteed by, any depository institution. Shares are not insured by the FDIC, Federal Reserve Board or any other agency, and are subject to investment risks, including possible loss of principal amount invested.
Neither the fund nor Fidelity Distributors Corporation is a bank.
Semiannual Report
Fidelity Variable Insurance Products: Equity-Income Portfolio
Investment Summary
Top Five Stocks as of June 30, 2003 |
| % of fund's
net assets |
Citigroup, Inc. | 3.1 |
Exxon Mobil Corp. | 3.0 |
Fannie Mae | 2.5 |
Bank of America Corp. | 2.4 |
Total SA | 2.2 |
| 13.2 |
Top Five Market Sectors as of June 30, 2003 |
| % of fund's
net assets |
Financials | 29.0 |
Consumer Discretionary | 12.4 |
Industrials | 11.8 |
Energy | 11.4 |
Health Care | 7.7 |
Asset Allocation as of June 30, 2003 |
% of fund's net assets * |
 | Stocks | 97.7% | |
 | Bonds | 1.5% | |
 | Short-Term Investments and Net Other Assets | 0.8% | |
* Foreign investments | 9.7% | |
Semiannual Report
Fidelity Variable Insurance Products: Equity-Income Portfolio
Investments June 30, 2003 (Unaudited)
Showing Percentage of Net Assets
Common Stocks - 96.3% |
| Shares | | Value (Note 1) |
CONSUMER DISCRETIONARY - 11.6% |
Automobiles - 0.3% |
General Motors Corp. | 628,100 | | $ 22,611,600 |
Hotels, Restaurants & Leisure - 1.7% |
Hilton Hotels Corp. | 366,700 | | 4,690,093 |
Mandalay Resort Group | 314,500 | | 10,016,825 |
McDonald's Corp. | 2,636,000 | | 58,150,160 |
MGM MIRAGE (a) | 1,243,570 | | 42,505,223 |
Park Place Entertainment Corp. (a) | 2,509,000 | | 22,806,810 |
Six Flags, Inc. (a) | 1,408,356 | | 9,548,654 |
| | 147,717,765 |
Household Durables - 1.3% |
Black & Decker Corp. | 595,500 | | 25,874,475 |
Fortune Brands, Inc. | 84,200 | | 4,395,240 |
Maytag Corp. | 829,320 | | 20,251,994 |
Newell Rubbermaid, Inc. | 1,000,400 | | 28,011,200 |
Snap-On, Inc. | 366,300 | | 10,633,689 |
Whirlpool Corp. | 377,700 | | 24,059,490 |
| | 113,226,088 |
Media - 5.3% |
AOL Time Warner, Inc. (a) | 7,015,850 | | 112,885,027 |
Clear Channel Communications, Inc. (a) | 1,358,300 | | 57,578,337 |
Comcast Corp. Class A (a) | 2,852,091 | | 86,076,106 |
Liberty Media Corp. Class A (a) | 2,193,776 | | 25,360,051 |
News Corp. Ltd.: | | | |
ADR | 234,034 | | 7,084,209 |
sponsored ADR | 303,867 | | 7,602,752 |
Reader's Digest Association, Inc. (non-vtg.) | 1,243,903 | | 16,767,812 |
Viacom, Inc. Class B (non-vtg.) (a) | 2,413,218 | | 105,361,098 |
Vivendi Universal SA sponsored ADR | 717,200 | | 13,225,168 |
Walt Disney Co. | 1,532,100 | | 30,258,975 |
| | 462,199,535 |
Multiline Retail - 0.9% |
Big Lots, Inc. (a) | 1,028,756 | | 15,472,494 |
Federated Department Stores, Inc. | 749,900 | | 27,633,815 |
Target Corp. | 862,300 | | 32,629,432 |
| | 75,735,741 |
Specialty Retail - 2.0% |
Charming Shoppes, Inc. (a) | 1,290,400 | | 6,413,288 |
Gap, Inc. | 2,073,900 | | 38,906,364 |
Home Depot, Inc. | 589,900 | | 19,537,488 |
Limited Brands, Inc. | 2,528,000 | | 39,184,000 |
Office Depot, Inc. (a) | 1,235,500 | | 17,927,105 |
RadioShack Corp. | 1,296,800 | | 34,118,808 |
Staples, Inc. (a) | 1,198,562 | | 21,993,613 |
| | 178,080,666 |
|
| Shares | | Value (Note 1) |
Textiles Apparel & Luxury Goods - 0.1% |
Jones Apparel Group, Inc. (a) | 422,100 | | $ 12,350,646 |
TOTAL CONSUMER DISCRETIONARY | | 1,011,922,041 |
CONSUMER STAPLES - 6.0% |
Beverages - 0.4% |
The Coca-Cola Co. | 746,100 | | 34,626,501 |
Food & Staples Retailing - 0.9% |
Albertson's, Inc. | 1,092,200 | | 20,970,240 |
CVS Corp. | 2,041,100 | | 57,212,033 |
| | 78,182,273 |
Food Products - 1.0% |
Fresh Del Monte Produce, Inc. | 544,388 | | 13,985,328 |
Kraft Foods, Inc. Class A | 752,900 | | 24,506,895 |
Tyson Foods, Inc. Class A | 1,161,000 | | 12,329,820 |
Unilever PLC sponsored ADR | 1,116,200 | | 35,830,020 |
| | 86,652,063 |
Household Products - 1.4% |
Colgate-Palmolive Co. | 466,300 | | 27,022,085 |
Kimberly-Clark Corp. | 1,273,400 | | 66,395,076 |
Procter & Gamble Co. | 319,400 | | 28,484,092 |
The Dial Corp. | 236,600 | | 4,601,870 |
| | 126,503,123 |
Personal Products - 1.2% |
Gillette Co. | 3,227,920 | | 102,841,531 |
Tobacco - 1.1% |
Altria Group, Inc. | 1,980,200 | | 89,980,288 |
Loews Corp. - Carolina Group | 215,200 | | 5,810,400 |
| | 95,790,688 |
TOTAL CONSUMER STAPLES | | 524,596,179 |
ENERGY - 11.4% |
Energy Equipment & Services - 2.5% |
Baker Hughes, Inc. | 1,593,600 | | 53,497,152 |
BJ Services Co. (a) | 520,145 | | 19,432,617 |
Noble Corp. (a) | 511,800 | | 17,554,740 |
Schlumberger Ltd. (NY Shares) | 2,713,900 | | 129,100,223 |
| | 219,584,732 |
Oil & Gas - 8.9% |
Anadarko Petroleum Corp. | 263,400 | | 11,713,398 |
Apache Corp. | 345,240 | | 22,461,314 |
BP PLC sponsored ADR | 2,530,242 | | 106,320,769 |
ChevronTexaco Corp. | 882,171 | | 63,692,746 |
ConocoPhillips | 553,070 | | 30,308,236 |
Exxon Mobil Corp. | 7,261,536 | | 260,761,758 |
Royal Dutch Petroleum Co. (NY Shares) | 1,910,300 | | 89,058,186 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
ENERGY - continued |
Oil & Gas - continued |
Total SA: | | | |
Series B | 391,400 | | $ 59,336,241 |
sponsored ADR | 1,724,096 | | 130,686,477 |
| | 774,339,125 |
TOTAL ENERGY | | 993,923,857 |
FINANCIALS - 28.3% |
Capital Markets - 6.2% |
Bank of New York Co., Inc. | 3,033,500 | | 87,213,125 |
Charles Schwab Corp. | 3,853,600 | | 38,882,824 |
Credit Suisse Group sponsored ADR | 735,200 | | 19,350,464 |
J.P. Morgan Chase & Co. | 3,733,850 | | 127,622,993 |
Janus Capital Group, Inc. | 780,400 | | 12,798,560 |
Lehman Brothers Holdings, Inc. | 380,500 | | 25,295,640 |
Mellon Financial Corp. | 1,716,500 | | 47,632,875 |
Merrill Lynch & Co., Inc. | 1,658,000 | | 77,395,440 |
Morgan Stanley | 1,890,800 | | 80,831,700 |
Nomura Holdings, Inc. | 1,853,000 | | 23,594,052 |
| | 540,617,673 |
Commercial Banks - 8.2% |
Bank of America Corp. | 2,639,390 | | 208,590,992 |
Bank One Corp. | 2,487,438 | | 92,482,945 |
Comerica, Inc. | 926,900 | | 43,100,850 |
FleetBoston Financial Corp. | 1,850,700 | | 54,984,297 |
Huntington Bancshares, Inc. | 510,200 | | 9,959,104 |
PNC Financial Services Group, Inc. | 617,200 | | 30,125,532 |
State Bank of India | 463,175 | | 3,834,342 |
U.S. Bancorp, Delaware | 2,893,738 | | 70,896,581 |
Wachovia Corp. | 2,033,475 | | 81,257,661 |
Wells Fargo & Co. | 2,278,400 | | 114,831,360 |
| | 710,063,664 |
Consumer Finance - 1.4% |
American Express Co. | 2,231,496 | | 93,298,848 |
MBNA Corp. | 1,456,400 | | 30,351,376 |
| | 123,650,224 |
Diversified Financial Services - 3.5% |
CIT Group, Inc. | 1,371,500 | | 33,807,475 |
Citigroup, Inc. | 6,271,419 | | 268,416,726 |
| | 302,224,201 |
Insurance - 5.7% |
ACE Ltd. | 1,631,815 | | 55,954,936 |
Allianz AG sponsored ADR | 567,200 | | 4,690,744 |
Allstate Corp. | 1,459,600 | | 52,034,740 |
American International Group, Inc. | 3,301,250 | | 182,162,975 |
Hartford Financial Services Group, Inc. | 1,334,400 | | 67,200,384 |
Lincoln National Corp. | 95,000 | | 3,384,850 |
Marsh & McLennan Companies, Inc. | 364,500 | | 18,615,015 |
MBIA, Inc. | 241,300 | | 11,763,375 |
The Chubb Corp. | 634,000 | | 38,040,000 |
|
| Shares | | Value (Note 1) |
Travelers Property Casualty Corp.: | | | |
Class A | 2,327,467 | | $ 37,006,725 |
Class B | 622,257 | | 9,812,993 |
UnumProvident Corp. | 1,270,300 | | 17,034,723 |
| | 497,701,460 |
Real Estate - 0.4% |
Equity Office Properties Trust | 317,100 | | 8,564,871 |
Equity Residential (SBI) | 1,127,400 | | 29,256,030 |
| | 37,820,901 |
Thrifts & Mortgage Finance - 2.9% |
Fannie Mae | 3,241,000 | | 218,573,040 |
Freddie Mac | 717,900 | | 36,447,783 |
| | 255,020,823 |
TOTAL FINANCIALS | | 2,467,098,946 |
HEALTH CARE - 7.6% |
Health Care Equipment & Supplies - 0.8% |
Baxter International, Inc. | 1,570,900 | | 40,843,400 |
Becton, Dickinson & Co. | 611,100 | | 23,741,235 |
| | 64,584,635 |
Health Care Providers & Services - 1.2% |
HCA, Inc. | 913,100 | | 29,255,724 |
IMS Health, Inc. | 1,455,099 | | 26,177,231 |
McKesson Corp. | 1,015,700 | | 36,301,118 |
Tenet Healthcare Corp. (a) | 1,266,700 | | 14,757,055 |
| | 106,491,128 |
Pharmaceuticals - 5.6% |
Abbott Laboratories | 857,000 | | 37,502,320 |
Bristol-Myers Squibb Co. | 3,292,400 | | 89,388,660 |
Eli Lilly & Co. | 338,800 | | 23,367,036 |
Johnson & Johnson | 1,137,600 | | 58,813,920 |
Merck & Co., Inc. | 2,458,700 | | 148,874,285 |
Pfizer, Inc. | 959,100 | | 32,753,265 |
Roche Holding AG (participation certificate) | 105,300 | | 8,280,140 |
Schering-Plough Corp. | 2,190,730 | | 40,747,578 |
Wyeth | 1,107,200 | | 50,432,960 |
| | 490,160,164 |
TOTAL HEALTH CARE | | 661,235,927 |
INDUSTRIALS - 11.7% |
Aerospace & Defense - 2.6% |
Boeing Co. | 997,800 | | 34,244,496 |
Bombardier, Inc. Class B (sub. vtg.) | 1,053,500 | | 3,572,114 |
Honeywell International, Inc. | 3,013,825 | | 80,921,201 |
Lockheed Martin Corp. | 546,500 | | 25,997,005 |
Northrop Grumman Corp. | 451,500 | | 38,959,935 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
INDUSTRIALS - continued |
Aerospace & Defense - continued |
Raytheon Co. | 586,400 | | $ 19,257,376 |
United Technologies Corp. | 379,520 | | 26,881,402 |
| | 229,833,529 |
Building Products - 0.5% |
Masco Corp. | 2,041,200 | | 48,682,620 |
Commercial Services & Supplies - 0.6% |
Viad Corp. | 1,061,700 | | 23,771,463 |
Waste Management, Inc. | 1,286,100 | | 30,982,149 |
| | 54,753,612 |
Electrical Equipment - 0.4% |
Emerson Electric Co. | 421,400 | | 21,533,540 |
Rockwell Automation, Inc. | 498,300 | | 11,879,472 |
| | 33,413,012 |
Industrial Conglomerates - 3.2% |
3M Co. | 171,200 | | 22,081,376 |
General Electric Co. | 3,538,440 | | 101,482,459 |
Hutchison Whampoa Ltd. | 2,171,000 | | 13,223,715 |
Siemens AG sponsored ADR | 412,500 | | 20,150,625 |
Textron, Inc. | 879,800 | | 34,329,796 |
Tyco International Ltd. | 4,439,946 | | 84,270,175 |
| | 275,538,146 |
Machinery - 3.1% |
Caterpillar, Inc. | 968,200 | | 53,890,012 |
Cummins, Inc. | 126,500 | | 4,540,085 |
Deere & Co. | 435,050 | | 19,881,785 |
Eaton Corp. | 434,800 | | 34,179,628 |
Illinois Tool Works, Inc. | 353,600 | | 23,284,560 |
Ingersoll-Rand Co. Ltd. Class A | 1,467,444 | | 69,439,450 |
Kennametal, Inc. | 230,039 | | 7,784,520 |
Navistar International Corp. (a) | 265,900 | | 8,676,317 |
Parker Hannifin Corp. | 610,500 | | 25,634,895 |
SPX Corp. (a) | 337,400 | | 14,865,844 |
Timken Co. | 400,600 | | 7,014,506 |
| | 269,191,602 |
Road & Rail - 1.3% |
Burlington Northern Santa Fe Corp. | 2,245,600 | | 63,864,864 |
Union Pacific Corp. | 807,900 | | 46,874,358 |
| | 110,739,222 |
TOTAL INDUSTRIALS | | 1,022,151,743 |
INFORMATION TECHNOLOGY - 5.9% |
Communications Equipment - 0.3% |
Motorola, Inc. | 2,536,200 | | 23,916,366 |
Computers & Peripherals - 1.6% |
Hewlett-Packard Co. | 3,622,911 | | 77,168,004 |
|
| Shares | | Value (Note 1) |
International Business Machines Corp. | 640,900 | | $ 52,874,250 |
Sun Microsystems, Inc. (a) | 2,455,800 | | 11,296,680 |
| | 141,338,934 |
Electronic Equipment & Instruments - 1.7% |
Agilent Technologies, Inc. (a) | 945,300 | | 18,480,615 |
Arrow Electronics, Inc. (a) | 799,100 | | 12,178,284 |
Avnet, Inc. (a) | 1,317,330 | | 16,703,744 |
PerkinElmer, Inc. | 2,206,000 | | 30,464,860 |
Sanmina-SCI Corp. (a) | 1,101,200 | | 6,948,572 |
Tektronix, Inc. (a) | 1,310,800 | | 28,313,280 |
Thermo Electron Corp. (a) | 1,539,600 | | 32,362,392 |
| | 145,451,747 |
IT Services - 0.5% |
Ceridian Corp. (a) | 1,582,200 | | 26,849,934 |
Electronic Data Systems Corp. | 416,800 | | 8,940,360 |
First Data Corp. | 252,700 | | 10,471,888 |
| | 46,262,182 |
Semiconductors & Semiconductor Equipment - 1.0% |
Intel Corp. | 2,173,600 | | 45,176,102 |
Micron Technology, Inc. (a) | 1,484,400 | | 17,263,572 |
National Semiconductor Corp. (a) | 440,975 | | 8,696,027 |
Rohm Co. Ltd. | 63,100 | | 6,900,986 |
Teradyne, Inc. (a) | 421,971 | | 7,304,318 |
| | 85,341,005 |
Software - 0.8% |
Microsoft Corp. | 2,642,800 | | 67,682,108 |
TOTAL INFORMATION TECHNOLOGY | | 509,992,342 |
MATERIALS - 6.4% |
Chemicals - 2.6% |
Arch Chemicals, Inc. | 442,400 | | 8,449,840 |
BOC Group PLC | 423,497 | | 5,449,895 |
Dow Chemical Co. | 2,262,600 | | 70,050,096 |
Hercules Trust II unit | 15,700 | | 9,086,375 |
Hercules, Inc. (a) | 649,700 | | 6,432,030 |
LG Chemical Ltd. | 216,900 | | 8,712,300 |
Lyondell Chemical Co. | 1,202,700 | | 16,272,531 |
Millennium Chemicals, Inc. | 853,650 | | 8,118,212 |
Olin Corp. | 572,700 | | 9,793,170 |
PolyOne Corp. | 1,239,100 | | 5,513,995 |
PPG Industries, Inc. | 390,300 | | 19,803,822 |
Praxair, Inc. | 821,212 | | 49,354,841 |
Solutia, Inc. | 2,067,100 | | 4,506,278 |
| | 221,543,385 |
Containers & Packaging - 0.4% |
Owens-Illinois, Inc. (a) | 349,500 | | 4,812,615 |
Smurfit-Stone Container Corp. (a) | 2,375,253 | | 30,949,547 |
| | 35,762,162 |
Metals & Mining - 2.3% |
Alcan, Inc. | 955,100 | | 29,769,811 |
Alcoa, Inc. | 3,000,416 | | 76,510,608 |
Common Stocks - continued |
| Shares | | Value (Note 1) |
MATERIALS - continued |
Metals & Mining - continued |
Dofasco, Inc. | 926,300 | | $ 17,875,844 |
Nucor Corp. | 283,400 | | 13,844,090 |
Pechiney SA (a) | 706,090 | | 25,414,131 |
Phelps Dodge Corp. (a) | 994,700 | | 38,136,798 |
| | 201,551,282 |
Paper & Forest Products - 1.1% |
Bowater, Inc. | 474,100 | | 17,755,045 |
Georgia-Pacific Corp. | 1,646,101 | | 31,193,614 |
International Paper Co. | 368,200 | | 13,155,786 |
Weyerhaeuser Co. | 645,900 | | 34,878,600 |
| | 96,983,045 |
TOTAL MATERIALS | | 555,839,874 |
TELECOMMUNICATION SERVICES - 4.4% |
Diversified Telecommunication Services - 4.4% |
BellSouth Corp. | 4,818,499 | | 128,316,628 |
SBC Communications, Inc. | 4,711,593 | | 120,381,201 |
Verizon Communications, Inc. | 3,435,902 | | 135,546,334 |
| | 384,244,163 |
UTILITIES - 3.0% |
Electric Utilities - 2.5% |
Cinergy Corp. | 475,200 | | 17,482,608 |
Dominion Resources, Inc. | 584,600 | | 37,572,242 |
DPL, Inc. | 1,010,054 | | 16,100,261 |
Entergy Corp. | 1,008,200 | | 53,212,796 |
FirstEnergy Corp. | 1,020,000 | | 39,219,000 |
Northeast Utilities | 1,648,400 | | 27,594,216 |
TXU Corp. | 1,059,220 | | 23,779,489 |
| | 214,960,612 |
Gas Utilities - 0.1% |
NiSource, Inc. | 568,730 | | 10,805,870 |
Multi-Utilities & Unregulated Power - 0.4% |
SCANA Corp. | 911,600 | | 31,249,648 |
TOTAL UTILITIES | | 257,016,130 |
TOTAL COMMON STOCKS (Cost $7,597,732,395) | 8,388,021,202 |
Preferred Stocks - 1.4% |
| Shares | | Value (Note 1) |
Convertible Preferred Stocks - 1.4% |
CONSUMER DISCRETIONARY - 0.2% |
Automobiles - 0.1% |
General Motors Corp.: | | | |
Series B, 5.25% | 412,200 | | $ 9,175,572 |
Series C, 6.25% | 253,100 | | 6,243,977 |
| | 15,419,549 |
Hotels, Restaurants & Leisure - 0.1% |
Six Flags, Inc. 7.25% PIERS | 388,400 | | 7,612,640 |
TOTAL CONSUMER DISCRETIONARY | | 23,032,189 |
FINANCIALS - 0.5% |
Capital Markets - 0.1% |
State Street Corp. 6.75% | 24,900 | | 5,132,562 |
Consumer Finance - 0.2% |
Ford Motor Co. Capital Trust II 6.5% | 461,500 | | 19,983,873 |
Insurance - 0.2% |
Hartford Financial Services Group, Inc. 6% | 54,300 | | 2,843,691 |
The Chubb Corp.: | | | |
7% | 167,700 | | 4,342,424 |
Series B, 7% | 120,100 | | 3,086,570 |
Travelers Property Casualty Corp. 4.50% | 240,200 | | 5,807,796 |
| | 16,080,481 |
TOTAL FINANCIALS | | 41,196,916 |
HEALTH CARE - 0.1% |
Health Care Equipment & Supplies - 0.1% |
Baxter International, Inc. 7% | 156,900 | | 7,688,100 |
INDUSTRIALS - 0.1% |
Aerospace & Defense - 0.1% |
Raytheon Co. 8.25% | 177,700 | | 10,028,944 |
INFORMATION TECHNOLOGY - 0.3% |
Communications Equipment - 0.2% |
Motorola, Inc. 7% | 441,100 | | 14,165,485 |
IT Services - 0.1% |
Electronic Data Systems Corp. 7.625% PRIDES | 475,600 | | 10,486,980 |
Office Electronics - 0.0% |
Xerox Corp. 6.25% | 25,300 | | 2,657,689 |
TOTAL INFORMATION TECHNOLOGY | | 27,310,154 |
Preferred Stocks - continued |
| Shares | | Value (Note 1) |
Convertible Preferred Stocks - continued |
UTILITIES - 0.2% |
Electric Utilities - 0.2% |
Cinergy Corp. 9.5% PRIDES | 105,900 | | $ 6,273,516 |
TXU Corp. 8.75% | 226,400 | | 7,386,300 |
| | 13,659,816 |
Multi-Utilities & Unregulated Power - 0.0% |
El Paso Corp. 9% | 133,400 | | 4,002,000 |
TOTAL UTILITIES | | 17,661,816 |
TOTAL CONVERTIBLE PREFERRED STOCKS | | 126,918,119 |
Nonconvertible Preferred Stocks - 0.0% |
CONSUMER DISCRETIONARY - 0.0% |
Media - 0.0% |
CSC Holdings, Inc.: | | | |
Series H, 11.75% | 1,110 | | 114,053 |
Series M, 11.125% | 400 | | 40,900 |
| | 154,953 |
TOTAL PREFERRED STOCKS (Cost $157,279,838) | 127,073,072 |
Corporate Bonds - 1.5% |
| Principal
Amount | | |
Convertible Bonds - 1.0% |
CONSUMER DISCRETIONARY - 0.5% |
Hotels, Restaurants & Leisure - 0.1% |
Royal Caribbean Cruises Ltd. liquid yield option note 0% 2/2/21 | $ 15,369,000 | | 6,627,881 |
Media - 0.4% |
Cox Communications, Inc. 0.4259% 4/19/20 | 26,600,000 | | 13,333,250 |
Liberty Media Corp.3.5% 1/15/31 (d) | 11,400,000 | | 8,550,000 |
News America, Inc. liquid yield option note 0% 2/28/21 (d) | 22,670,000 | | 12,638,525 |
| | 34,521,775 |
Multiline Retail - 0.0% |
JCPenney Co., Inc. 5% 10/15/08 (d) | 2,670,000 | | 2,588,245 |
TOTAL CONSUMER DISCRETIONARY | | 43,737,901 |
FINANCIALS - 0.1% |
Diversified Financial Services - 0.0% |
Navistar Financial Corp. 4.75% 4/1/09 (d) | 2,760,000 | | 2,612,257 |
Insurance - 0.1% |
Loews Corp. 3.125% 9/15/07 | 5,340,000 | | 5,019,600 |
TOTAL FINANCIALS | | 7,631,857 |
|
| Principal
Amount | | Value (Note 1) |
INFORMATION TECHNOLOGY - 0.3% |
Communications Equipment - 0.2% |
Corning, Inc. 3.5% 11/1/08 | $ 13,700,000 | | $ 14,805,316 |
Computers & Peripherals - 0.0% |
Quantum Corp. 7% 8/1/04 | 5,350,000 | | 5,376,750 |
Electronic Equipment & Instruments - 0.1% |
Agilent Technologies, Inc. 3% 12/1/21 | 6,670,000 | | 6,537,667 |
Celestica, Inc. liquid yield option note 0% 8/1/20 | 620,000 | | 322,400 |
| | 6,860,067 |
TOTAL INFORMATION TECHNOLOGY | | 27,042,133 |
MATERIALS - 0.1% |
Metals & Mining - 0.1% |
Freeport-McMoRan Copper & Gold, Inc. 8.25% 1/31/06 (d) | 4,220,000 | | 7,543,250 |
TOTAL CONVERTIBLE BONDS | | 85,955,141 |
Nonconvertible Bonds - 0.5% |
CONSUMER DISCRETIONARY - 0.1% |
Auto Components - 0.0% |
ArvinMeritor, Inc. 8.75% 3/1/12 | 35,000 | | 38,850 |
Dana Corp.: | | | |
6.25% 3/1/04 | 80,000 | | 80,400 |
6.5% 3/1/09 | 45,000 | | 43,650 |
9% 8/15/11 | 125,000 | | 134,375 |
Navistar International Corp. 8% 2/1/08 | 55,000 | | 54,725 |
Stoneridge, Inc. 11.5% 5/1/12 | 25,000 | | 28,000 |
United Components, Inc. 9.375% 6/15/13 (d) | 40,000 | | 41,200 |
| | 421,200 |
Hotels, Restaurants & Leisure - 0.0% |
Bally Total Fitness Holding Corp.: | | | |
9.875% 10/15/07 | 325,000 | | 297,375 |
10.5% 7/15/11 (d) | 220,000 | | 221,100 |
Domino's, Inc. 8.25% 7/1/11 (d) | 70,000 | | 71,925 |
Florida Panthers Holdings, Inc. 9.875% 4/15/09 | 35,000 | | 37,625 |
Friendly Ice Cream Corp. 10.5% 12/1/07 | 135,000 | | 138,038 |
Mohegan Tribal Gaming Authority 8.375% 7/1/11 | 30,000 | | 32,250 |
Morton's Restaurant Group, Inc. 7.5% 7/1/10 (d)(e) | 40,000 | | 34,600 |
MTR Gaming Group, Inc. 9.75% 4/1/10 (d) | 60,000 | | 62,100 |
Premier Parks, Inc. 9.75% 6/15/07 | 65,000 | | 64,675 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
CONSUMER DISCRETIONARY - continued |
Hotels, Restaurants & Leisure - continued |
Sun International Hotels Ltd./Sun International North America, Inc. 8.875% 8/15/11 | $ 95,000 | | $ 102,363 |
Town Sports International, Inc. 9.625% 4/15/11 (d) | 70,000 | | 73,325 |
Tricon Global Restaurants, Inc. 7.65% 5/15/08 | 65,000 | | 73,450 |
Waterford Gaming LLC/Waterford Gaming Finance Corp. 8.625% 9/15/12 (d) | 50,000 | | 52,000 |
Wheeling Island Gaming, Inc. 10.125% 12/15/09 | 670,000 | | 664,975 |
| | 1,925,801 |
Household Durables - 0.0% |
Beazer Homes USA, Inc. 8.375% 4/15/12 | 30,000 | | 33,150 |
D.R. Horton, Inc.: | | | |
8% 2/1/09 | 310,000 | | 342,550 |
8.5% 4/15/12 | 30,000 | | 33,600 |
Juno Lighting, Inc. 11.875% 7/1/09 | 135,000 | | 145,800 |
K. Hovnanian Enterprises, Inc. 8.875% 4/1/12 | 40,000 | | 43,200 |
Lyon William Homes, Inc. 10.75% 4/1/13 | 165,000 | | 174,900 |
Ryland Group, Inc.: | | | |
8.25% 4/1/08 | 65,000 | | 67,600 |
9.125% 6/15/11 | 95,000 | | 107,825 |
Standard Pacific Corp. 7.75% 3/15/13 | 280,000 | | 296,800 |
| | 1,245,425 |
Leisure Equipment & Products - 0.0% |
The Hockey Co. 11.25% 4/15/09 | 45,000 | | 49,950 |
Media - 0.1% |
AMC Entertainment, Inc.: | | | |
9.5% 3/15/09 | 60,000 | | 61,500 |
9.875% 2/1/12 | 60,000 | | 64,200 |
CBD Media LLC/ CBD Finance, Inc. 8.625% 6/1/11 (d) | 30,000 | | 30,825 |
Comcast UK Cable Partners Ltd. yankee 11.2% 11/15/07 | 160,000 | | 154,400 |
Corus Entertainment, Inc. 8.75% 3/1/12 | 790,000 | | 847,275 |
CSC Holdings, Inc.: | | | |
7.875% 2/15/18 | 125,000 | | 129,375 |
9.875% 2/15/13 | 100,000 | | 103,000 |
Diamond Holdings PLC yankee 9.125% 2/1/08 | 80,000 | | 74,000 |
EchoStar DBS Corp. 10.375% 10/1/07 | 900,000 | | 996,750 |
Lamar Media Corp. 7.25% 1/1/13 (d) | 110,000 | | 116,050 |
LBI Media, Inc. 10.125% 7/15/12 | 925,000 | | 1,017,500 |
LodgeNet Entertainment Corp. 9.5% 6/15/13 | 30,000 | | 30,750 |
|
| Principal
Amount | | Value (Note 1) |
Nextmedia Operating, Inc. 10.75% 7/1/11 | $ 720,000 | | $ 806,400 |
PEI Holdings, Inc. 11% 3/15/10 (d) | 70,000 | | 77,350 |
PRIMEDIA, Inc.: | | | |
7.625% 4/1/08 | 25,000 | | 25,375 |
8.875% 5/15/11 | 25,000 | | 26,500 |
Rogers Cablesystems Ltd. yankee 11% 12/1/15 | 15,000 | | 16,950 |
Rogers Communications, Inc. yankee 8.875% 7/15/07 | 65,000 | | 66,950 |
Shaw Communications, Inc. yankee 7.2% 12/15/11 | 35,000 | | 37,713 |
XM Satellite Radio, Inc. 12% 6/15/10 (d) | 95,000 | | 94,288 |
| | 4,777,151 |
Multiline Retail - 0.0% |
Barneys, Inc. 9% 4/1/08 unit (d) | 200,000 | | 180,000 |
Specialty Retail - 0.0% |
Asbury Automotive Group, Inc. 9% 6/15/12 | 80,000 | | 78,400 |
Gap, Inc. 10.55% 12/15/08 | 20,000 | | 24,200 |
Toys 'R' US, Inc. 7.875% 4/15/13 | 110,000 | | 117,700 |
United Auto Group, Inc. 9.625% 3/15/12 | 295,000 | | 315,650 |
| | 535,950 |
Textiles Apparel & Luxury Goods - 0.0% |
Dan River, Inc. 12.75% 4/15/09 (d) | 205,000 | | 184,500 |
Levi Strauss & Co.: | | | |
7% 11/1/06 | 45,000 | | 36,000 |
11.625% 1/15/08 | 25,000 | | 21,375 |
12.25% 12/15/12 | 40,000 | | 33,200 |
| | 275,075 |
TOTAL CONSUMER DISCRETIONARY | | 9,410,552 |
CONSUMER STAPLES - 0.0% |
Beverages - 0.0% |
Canandaigua Brands, Inc. 8.5% 3/1/09 | 315,000 | | 331,538 |
Food & Staples Retailing - 0.0% |
Rite Aid Corp.: | | | |
6% 12/15/05 (d) | 115,000 | | 108,100 |
6.875% 8/15/13 | 90,000 | | 77,850 |
7.625% 4/15/05 | 25,000 | | 24,875 |
8.125% 5/1/10 (d) | 110,000 | | 114,400 |
9.5% 2/15/11 (d) | 110,000 | | 118,250 |
The Great Atlantic & Pacific Tea Co.: | | | |
7.75% 4/15/07 | 340,000 | | 317,900 |
9.125% 12/15/11 | 115,000 | | 107,525 |
| | 868,900 |
Food Products - 0.0% |
Corn Products International, Inc. 8.25% 7/15/07 | 605,000 | | 677,600 |
Del Monte Corp. 9.25% 5/15/11 | 45,000 | | 49,050 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
CONSUMER STAPLES - continued |
Food Products - continued |
Doane Pet Care Co. 9.75% 5/15/07 | $ 205,000 | | $ 194,750 |
Dole Food Co., Inc. 7.25% 6/15/10 (d) | 100,000 | | 100,750 |
| | 1,022,150 |
Household Products - 0.0% |
Fort James Corp. 6.875% 9/15/07 | 35,000 | | 35,525 |
Personal Products - 0.0% |
Jafra Cosmetics International, Inc./Distribuidora Comercial Jafra SA de CV 10.75% 5/15/11 (d) | 60,000 | | 62,400 |
TOTAL CONSUMER STAPLES | | 2,320,513 |
ENERGY - 0.0% |
Energy Equipment & Services - 0.0% |
Grant Prideco, Inc. 9% 12/15/09 | 40,000 | | 44,700 |
Universal Compression, Inc. 7.25% 5/15/10 (d) | 320,000 | | 334,400 |
| | 379,100 |
Oil & Gas - 0.0% |
Chesapeake Energy Corp. 7.5% 9/15/13 (d) | 110,000 | | 117,150 |
General Maritime Corp. 10% 3/15/13 (d) | 210,000 | | 229,950 |
GulfTerra Energy Partners LP/GulfTerra Energy Finance Corp. 10.625% 12/1/12 | 50,000 | | 58,000 |
Houston Exploration Co. 7% 6/15/13 (d) | 50,000 | | 51,625 |
NGC Corp. 6.75% 12/15/05 | 80,000 | | 75,600 |
Nuevo Energy Co.: | | | |
9.375% 10/1/10 | 30,000 | | 32,325 |
9.5% 6/1/08 | 31,000 | | 32,473 |
Overseas Shipholding Group, Inc. 8.25% 3/15/13 (d) | 205,000 | | 213,200 |
Plains Exploration & Production Co. LP 8.75% 7/1/12 (d) | 80,000 | | 85,600 |
Tesoro Petroleum Corp. 8% 4/15/08 (d) | 40,000 | | 41,000 |
The Coastal Corp.: | | | |
6.375% 2/1/09 | 10,000 | | 8,750 |
6.5% 5/15/06 | 40,000 | | 37,400 |
6.5% 6/1/08 | 30,000 | | 26,850 |
6.95% 6/1/28 | 65,000 | | 51,675 |
7.5% 8/15/06 | 120,000 | | 115,800 |
7.75% 6/15/10 | 65,000 | | 60,613 |
7.75% 10/15/35 | 40,000 | | 33,600 |
| | 1,271,611 |
TOTAL ENERGY | | 1,650,711 |
FINANCIALS - 0.1% |
Consumer Finance - 0.0% |
AmeriCredit Corp. 9.875% 4/15/06 | 45,000 | | 42,750 |
|
| Principal
Amount | | Value (Note 1) |
Capital One Financial Corp.: | | | |
7.25% 12/1/03 | $ 40,000 | | $ 40,800 |
8.75% 2/1/07 | 80,000 | | 88,800 |
| | 172,350 |
Diversified Financial Services - 0.1% |
Ahold Finance USA, Inc.: | | | |
6.25% 5/1/09 | 100,000 | | 93,000 |
6.875% 5/1/29 | 75,000 | | 63,375 |
8.25% 7/15/10 | 260,000 | | 262,600 |
Arch Western Finance LLC 6.75% 7/1/13 (d) | 215,000 | | 219,300 |
BRL Universal Equipment 2001 A LP/BRL Universal Equipment Corp. 8.875% 2/15/08 | 650,000 | | 702,000 |
CMS Energy X-TRAS pass thru trust I 7% 1/15/05 | 40,000 | | 39,700 |
Continental Airlines, Inc. pass thru trust certificates: | | | |
6.748% 9/15/18 | 11,889 | | 9,036 |
6.9% 1/2/17 | 23,773 | | 18,068 |
7.73% 9/15/12 | 24,669 | | 18,502 |
8.321% 11/1/06 | 10,000 | | 8,400 |
Delta Air Lines, Inc. pass thru trust certificates: | | | |
7.299% 9/18/06 | 35,000 | | 29,400 |
7.779% 1/2/12 | 751,351 | | 601,080 |
El Paso Energy Partners LP/El Paso Energy Partners Finance Corp. 8.5% 6/1/11 | 45,000 | | 48,150 |
FIMEP SA 10.5% 2/15/13 (d) | 120,000 | | 134,400 |
Gemstone Investor Ltd./Gemstone Investor, Inc. 7.71% 10/31/04 (d) | 235,000 | | 232,650 |
Gerdau AmeriSteel Corp./GUSAP Partners 10.375% 7/15/11 (d) | 160,000 | | 156,000 |
Huntsman Advanced Materials LLC 11% 7/15/10 (d) | 60,000 | | 62,400 |
IOS Capital LLC 7.25% 6/30/08 | 110,000 | | 108,350 |
Leucadia National Corp. 7% 8/15/13 (d) | 130,000 | | 130,325 |
Moore North America Finance, Inc. 7.875% 1/15/11 (d) | 90,000 | | 94,050 |
MSW Energy Holding LLC/MSW Energy Finance Co., Inc. 8.5% 9/1/10 (d) | 30,000 | | 30,900 |
Northern Telecom Capital Corp. 7.875% 6/15/26 | 75,000 | | 68,250 |
Northwest Airlines, Inc. pass thru trust certificates: | | | |
7.068% 7/2/17 | 37,818 | | 29,498 |
7.67% 1/2/15 | 39,608 | | 32,875 |
7.691% 4/1/17 | 126,559 | | 99,981 |
Qwest Capital Funding, Inc.: | | | |
5.875% 8/3/04 | 220,000 | | 212,300 |
7% 8/3/09 | 100,000 | | 82,000 |
7.25% 2/15/11 | 115,000 | | 93,150 |
7.625% 8/3/21 | 70,000 | | 55,300 |
7.75% 8/15/06 | 310,000 | | 288,300 |
7.75% 2/15/31 | 120,000 | | 93,600 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
FINANCIALS - continued |
Diversified Financial Services - continued |
TRW Automotive Acquisition Corp.: | | | |
9.375% 2/15/13 (d) | $ 130,000 | | $ 141,375 |
11% 2/15/13 (d) | 30,000 | | 32,850 |
U.S. West Capital Funding, Inc. 6.375% 7/15/08 | 85,000 | | 69,275 |
Universal City Development Partners Ltd./UCDP Finance, Inc. 11.75% 4/1/10 (d) | 190,000 | | 209,000 |
Western Financial Bank 9.625% 5/15/12 | 40,000 | | 43,200 |
| | 4,612,640 |
Insurance - 0.0% |
Crum & Forster Holdings Corp. 10.375% 6/15/13 (d) | 130,000 | | 131,950 |
Real Estate - 0.0% |
CBRE Escrow, Inc. 9.75% 5/15/10 (d) | 265,000 | | 280,900 |
LNR Property Corp.: | | | |
7.625% 7/15/13 (d) | 90,000 | | 90,900 |
9.375% 3/15/08 | 10,000 | | 10,400 |
10.5% 1/15/09 | 40,000 | | 42,400 |
Senior Housing Properties Trust 7.875% 4/15/15 | 60,000 | | 61,200 |
| | 485,800 |
TOTAL FINANCIALS | | 5,402,740 |
HEALTH CARE - 0.0% |
Health Care Providers & Services - 0.0% |
AmeriPath, Inc. 10.5% 4/1/13 (d) | 100,000 | | 107,000 |
PacifiCare Health Systems, Inc. 10.75% 6/1/09 | 620,000 | | 708,350 |
Psychiatric Solutions, Inc. 10.625% 6/15/13 (d) | 40,000 | | 41,100 |
Rotech Healthcare, Inc. 9.5% 4/1/12 | 120,000 | | 123,000 |
Tenet Healthcare Corp.: | | | |
6.375% 12/1/11 | 75,000 | | 69,375 |
6.5% 6/1/12 | 10,000 | | 9,250 |
7.375% 2/1/13 | 215,000 | | 207,475 |
| | 1,265,550 |
Pharmaceuticals - 0.0% |
aaiPharma, Inc. 11% 4/1/10 | 515,000 | | 566,500 |
TOTAL HEALTH CARE | | 1,832,050 |
INDUSTRIALS - 0.0% |
Aerospace & Defense - 0.0% |
Aviall, Inc. 7.625% 7/1/11 (d) | 110,000 | | 110,550 |
Esterline Technologies Corp. 7.75% 6/15/13 (d) | 30,000 | | 31,050 |
| | 141,600 |
Airlines - 0.0% |
Delta Air Lines, Inc. 7.9% 12/15/09 | 25,000 | | 19,750 |
|
| Principal
Amount | | Value (Note 1) |
Northwest Airlines, Inc.: | | | |
7.875% 3/15/08 | $ 25,000 | | $ 19,250 |
9.875% 3/15/07 | 45,000 | | 35,550 |
| | 74,550 |
Building Products - 0.0% |
FastenTech, Inc. 11.5% 5/1/11 (d) | 80,000 | | 80,600 |
Jacuzzi Brands, Inc. 9.625% 7/1/10 (d)(e) | 40,000 | | 40,000 |
Nortek, Inc.: | | | |
9.125% 9/1/07 | 20,000 | | 20,600 |
9.25% 3/15/07 | 30,000 | | 30,825 |
| | 172,025 |
Commercial Services & Supplies - 0.0% |
Allied Waste North America, Inc.: | | | |
7.875% 4/15/13 | 140,000 | | 146,475 |
9.25% 9/1/12 (d) | 115,000 | | 127,075 |
10% 8/1/09 | 15,000 | | 16,013 |
American Color Graphics, Inc. 10% 6/15/10 (d)(e) | 130,000 | | 130,650 |
Mobile Mini, Inc. 9.5% 7/1/13 (d) | 120,000 | | 124,200 |
National Waterworks, Inc. 10.5% 12/1/12 | 60,000 | | 66,600 |
| | 611,013 |
Construction & Engineering - 0.0% |
Shaw Group, Inc. 10.75% 3/15/10 (d) | 140,000 | | 140,700 |
Industrial Conglomerates - 0.0% |
Tyco International Group SA yankee: | | | |
5.8% 8/1/06 | 5,000 | | 5,163 |
6.375% 2/15/06 | 120,000 | | 125,100 |
7% 6/15/28 | 85,000 | | 85,850 |
| | 216,113 |
Machinery - 0.0% |
Cummins, Inc.: | | | |
5.65% 3/1/98 | 110,000 | | 74,800 |
9.5% 12/1/10 (d) | 75,000 | | 84,375 |
Dresser, Inc. 9.375% 4/15/11 | 125,000 | | 128,750 |
Dunlop Standard Aerospace Holdings PLC yankee 11.875% 5/15/09 | 170,000 | | 183,600 |
JLG Industries, Inc. 8.25% 5/1/08 (d) | 110,000 | | 112,200 |
Terex Corp. 8.875% 4/1/08 | 60,000 | | 62,400 |
TriMas Corp. 9.875% 6/15/12 (d) | 90,000 | | 91,800 |
| | 737,925 |
TOTAL INDUSTRIALS | | 2,093,926 |
INFORMATION TECHNOLOGY - 0.0% |
Communications Equipment - 0.0% |
Nortel Networks Corp. 6.125% 2/15/06 | 130,000 | | 125,450 |
Northern Telecom Ltd. yankee 6.875% 9/1/23 | 70,000 | | 59,500 |
Qwest Services Corp.: | | | |
13% 12/15/07 (d) | 75,000 | | 82,500 |
13.5% 12/15/10 (d) | 130,000 | | 146,900 |
14% 12/15/14 (d) | 472,000 | | 549,880 |
| | 964,230 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
INFORMATION TECHNOLOGY - continued |
Computers & Peripherals - 0.0% |
Seagate Technology HDD Holdings 8% 5/15/09 | $ 25,000 | | $ 27,000 |
Electronic Equipment & Instruments - 0.0% |
Avnet, Inc. 9.75% 2/15/08 | 110,000 | | 124,300 |
Ingram Micro, Inc. 9.875% 8/15/08 | 40,000 | | 43,600 |
PerkinElmer, Inc. 8.875% 1/15/13 | 140,000 | | 152,950 |
Solectron Corp. 7.375% 3/1/06 | 255,000 | | 253,725 |
| | 574,575 |
IT Services - 0.0% |
Digitalnet, Inc. 9% 7/15/10 (d) | 60,000 | | 60,000 |
Iron Mountain, Inc. 6.625% 1/1/16 | 220,000 | | 216,700 |
Titan Corp. 8% 5/15/11 (d) | 110,000 | | 116,050 |
| | 392,750 |
Office Electronics - 0.0% |
Xerox Corp.: | | | |
7.125% 6/15/10 | 120,000 | | 120,300 |
7.15% 8/1/04 | 15,000 | | 15,338 |
7.2% 4/1/16 | 200,000 | | 190,000 |
7.625% 6/15/13 | 120,000 | | 120,300 |
| | 445,938 |
Semiconductors & Semiconductor Equipment - 0.0% |
AMI Semiconductor, Inc. 10.75% 2/1/13 (d) | 40,000 | | 45,200 |
Amkor Technology, Inc. 7.75% 5/15/13 (d) | 80,000 | | 75,600 |
SCG Holding Corp./Semiconductor Components Industries LLC 12% 8/1/09 | 125,000 | | 105,625 |
| | 226,425 |
TOTAL INFORMATION TECHNOLOGY | | 2,630,918 |
MATERIALS - 0.1% |
Chemicals - 0.0% |
Geon Co. 6.875% 12/15/05 | 25,000 | | 23,250 |
HMP Equity Holdings Corp. 0% 5/15/08 unit (d) | 190,000 | | 95,000 |
Huntsman International LLC 9.875% 3/1/09 (d) | 105,000 | | 108,675 |
Methanex Corp. yankee 7.75% 8/15/05 | 290,000 | | 305,950 |
Millennium America, Inc.: | | | |
9.25% 6/15/08 | 75,000 | | 81,000 |
9.25% 6/15/08 (d) | 40,000 | | 43,200 |
OMNOVA Solutions, Inc. 11.25% 6/1/10 (d) | 100,000 | | 109,000 |
PolyOne Corp. 8.875% 5/1/12 | 105,000 | | 93,450 |
|
| Principal
Amount | | Value (Note 1) |
Resolution Performance Products LLC: | | | |
9.5% 4/15/10 | $ 100,000 | | $ 104,500 |
13.5% 11/15/10 | 30,000 | | 30,000 |
| | 994,025 |
Construction Materials - 0.0% |
Texas Industries, Inc. 10.25% 6/15/11 (d) | 240,000 | | 252,000 |
Containers & Packaging - 0.1% |
Anchor Glass Container Corp. 11% 2/15/13 (d) | 120,000 | | 129,600 |
BWAY Corp. 10% 10/15/10 (d) | 40,000 | | 40,800 |
Jefferson Smurfit Corp. U.S. 7.5% 6/1/13 (d) | 230,000 | | 234,025 |
Owens-Brockway Glass Container, Inc.: | | | |
7.75% 5/15/11 (d) | 70,000 | | 73,675 |
8.25% 5/15/13 (d) | 130,000 | | 136,500 |
8.75% 11/15/12 | 65,000 | | 70,525 |
8.875% 2/15/09 | 550,000 | | 595,375 |
Owens-Illinois, Inc.: | | | |
7.15% 5/15/05 | 360,000 | | 366,300 |
7.35% 5/15/08 | 175,000 | | 172,375 |
7.5% 5/15/10 | 35,000 | | 34,300 |
7.8% 5/15/18 | 235,000 | | 220,900 |
| | 2,074,375 |
Metals & Mining - 0.0% |
Peabody Energy Corp. 6.875% 3/15/13 (d) | 150,000 | | 156,750 |
Phelps Dodge Corp. 8.75% 6/1/11 | 730,000 | | 851,764 |
Salt Holdings Corp., Inc.: | | | |
0% 12/15/12 (c)(d) | 140,000 | | 94,850 |
0% 6/1/13 (c)(d) | 220,000 | | 123,200 |
Steel Dynamics, Inc. 9.5% 3/15/09 | 55,000 | | 57,750 |
| | 1,284,314 |
Paper & Forest Products - 0.0% |
Georgia-Pacific Corp.: | | | |
7.375% 12/1/25 | 25,000 | | 22,000 |
7.5% 5/15/06 | 285,000 | | 292,125 |
8.125% 5/15/11 | 130,000 | | 133,575 |
8.875% 5/15/31 | 10,000 | | 9,800 |
Norske Skog Canada Ltd. 8.625% 6/15/11 (d) | 150,000 | | 156,563 |
| | 614,063 |
TOTAL MATERIALS | | 5,218,777 |
TELECOMMUNICATION SERVICES - 0.1% |
Diversified Telecommunication Services - 0.0% |
Qwest Corp. 8.875% 3/15/12 (d) | 430,000 | | 480,525 |
Rogers Cantel, Inc. yankee: | | | |
8.8% 10/1/07 | 150,000 | | 153,000 |
9.375% 6/1/08 | 20,000 | | 20,900 |
Triton PCS, Inc.: | | | |
8.75% 11/15/11 | 120,000 | | 119,400 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
TELECOMMUNICATION SERVICES - continued |
Diversified Telecommunication Services - continued |
Triton PCS, Inc.: - continued | | | |
9.375% 2/1/11 | $ 175,000 | | $ 178,500 |
U.S. West Communications 6.875% 9/15/33 | 60,000 | | 54,900 |
| | 1,007,225 |
Wireless Telecommunication Services - 0.1% |
American Tower Corp. 9.375% 2/1/09 | 170,000 | | 170,000 |
Crown Castle International Corp.: | | | |
9.375% 8/1/11 | 90,000 | | 93,375 |
9.5% 8/1/11 | 295,000 | | 303,850 |
10.75% 8/1/11 | 85,000 | | 91,375 |
Nextel Communications, Inc.: | | | |
9.375% 11/15/09 | 170,000 | | 182,325 |
9.5% 2/1/11 | 40,000 | | 44,400 |
9.75% 10/31/07 | 625,000 | | 650,000 |
9.95% 2/15/08 | 180,000 | | 189,000 |
Nextel Partners, Inc. 8.125% 7/1/11 (d) | 125,000 | | 124,375 |
Rogers Wireless, Inc. 9.625% 5/1/11 | 60,000 | | 67,800 |
SBA Communications Corp. 10.25% 2/1/09 | 50,000 | | 45,000 |
| | 1,961,500 |
TOTAL TELECOMMUNICATION SERVICES | | 2,968,725 |
UTILITIES - 0.1% |
Electric Utilities - 0.0% |
Allegheny Energy Supply Co. LLC: | | | |
Series A, 10.25% 11/15/07 (d) | 114,496 | | 117,931 |
Series B, 10.25% 11/15/07 (d)(f) | 10,500 | | 10,080 |
7.8% 3/15/11 | 250,000 | | 207,500 |
8.75% 4/15/12 (d) | 280,000 | | 239,400 |
CMS Energy Corp. 8.5% 4/15/11 | 890,000 | | 921,150 |
Edison International 6.875% 9/15/04 | 55,000 | | 55,550 |
Illinois Power Co. 11.5% 12/15/10 (d) | 210,000 | | 239,400 |
Midland Funding Corp. II 11.75% 7/23/05 | 55,000 | | 59,125 |
Nevada Power Co. 10.875% 10/15/09 | 115,000 | | 129,375 |
Pacific Gas & Electric Co. 6.25% 3/1/04 | 375,000 | | 375,000 |
PG&E Corp. 6.875% 7/15/08 (d) | 90,000 | | 93,375 |
Southern California Edison Co.: | | | |
7.25% 3/1/26 | 115,000 | | 116,438 |
8% 2/15/07 (d) | 80,000 | | 88,000 |
TECO Energy, Inc. 10.5% 12/1/07 | 160,000 | | 184,000 |
| | 2,836,324 |
|
| Principal
Amount | | Value (Note 1) |
Gas Utilities - 0.0% |
ANR Pipeline, Inc. 9.625% 11/1/21 | $ 135,000 | | $ 159,300 |
Dynegy Holdings, Inc.: | | | |
7.45% 7/15/06 | 75,000 | | 71,250 |
8.125% 3/15/05 | 65,000 | | 63,050 |
El Paso Energy Corp.: | | | |
6.75% 5/15/09 | 65,000 | | 59,475 |
6.95% 12/15/07 | 175,000 | | 163,625 |
7.375% 12/15/12 | 10,000 | | 8,950 |
7.75% 1/15/32 | 60,000 | | 50,550 |
7.8% 8/1/31 | 50,000 | | 41,250 |
8.05% 10/15/30 | 380,000 | | 328,700 |
SEMCO Energy, Inc.: | | | |
7.125% 5/15/08 (d) | 30,000 | | 31,200 |
7.75% 5/15/13 (d) | 30,000 | | 31,800 |
Sonat, Inc.: | | | |
6.625% 2/1/08 | 130,000 | | 116,350 |
6.75% 10/1/07 | 70,000 | | 63,263 |
6.875% 6/1/05 | 470,000 | | 455,900 |
Southern Natural Gas Co. 8.875% 3/15/10 (d) | 60,000 | | 65,700 |
Transcontinental Gas Pipe Line Corp.: | | | |
6.125% 1/15/05 | 35,000 | | 35,000 |
8.875% 7/15/12 | 20,000 | | 22,550 |
Williams Holdings of Delaware, Inc. 6.25% 2/1/06 | 15,000 | | 14,700 |
| | 1,782,613 |
Multi-Utilities & Unregulated Power - 0.1% |
AES Corp.: | | | |
8.375% 8/15/07 | 75,000 | | 70,125 |
8.5% 11/1/07 | 55,000 | | 51,425 |
8.75% 6/15/08 | 40,000 | | 39,400 |
8.75% 5/15/13 (d) | 285,000 | | 296,400 |
8.875% 2/15/11 | 81,000 | | 78,975 |
9% 5/15/15 (d) | 150,000 | | 156,375 |
9.375% 9/15/10 | 19,000 | | 19,095 |
9.5% 6/1/09 | 161,000 | | 161,805 |
10% 12/12/05 (d) | 50,000 | | 51,250 |
10.25% 7/15/06 | 60,000 | | 59,100 |
El Paso Corp.: | | | |
7% 5/15/11 | 140,000 | | 127,400 |
7.875% 6/15/12 (d) | 45,000 | | 41,681 |
El Paso Production Holding Co. 7.75% 6/1/13 (d) | 320,000 | | 320,400 |
Reliant Resources, Inc.: | | | |
9.25% 7/15/10 (d) | 100,000 | | 100,500 |
9.5% 7/15/13 (d) | 90,000 | | 90,675 |
Western Resources, Inc. 9.75% 5/1/07 | 155,000 | | 173,600 |
Williams Companies, Inc.: | | | |
6.5% 8/1/06 | 100,000 | | 98,000 |
6.75% 1/15/06 | 125,000 | | 122,188 |
7.125% 9/1/11 | 775,000 | | 755,625 |
7.625% 7/15/19 | 175,000 | | 169,750 |
7.75% 6/15/31 | 40,000 | | 38,800 |
7.875% 9/1/21 | 140,000 | | 137,550 |
8.125% 3/15/12 | 85,000 | | 87,125 |
8.625% 6/1/10 | 150,000 | | 156,938 |
Corporate Bonds - continued |
| Principal
Amount | | Value (Note 1) |
Nonconvertible Bonds - continued |
UTILITIES - continued |
Multi-Utilities & Unregulated Power - continued |
Williams Companies, Inc.: - continued | | | |
8.75% 3/15/32 | $ 40,000 | | $ 41,600 |
9.25% 3/15/04 | 100,000 | | 102,500 |
| | 3,548,282 |
TOTAL UTILITIES | | 8,167,219 |
TOTAL NONCONVERTIBLE BONDS | | 41,696,131 |
TOTAL CORPORATE BONDS (Cost $121,886,913) | 127,651,272 |
Money Market Funds - 1.1% |
| Shares | | |
Fidelity Cash Central Fund, 1.18% (b) | 60,326,080 | | 60,326,080 |
Fidelity Securities Lending Cash Central Fund, 1.19% (b) | 32,303,550 | | 32,303,550 |
TOTAL MONEY MARKET FUNDS (Cost $92,629,630) | 92,629,630 |
TOTAL INVESTMENT PORTFOLIO - 100.3% (Cost $7,969,528,776) | 8,735,375,176 |
NET OTHER ASSETS - (0.3)% | | (25,414,714) |
NET ASSETS - 100% | $ 8,709,960,462 |
Security Type Abbreviations |
PIERS - Preferred Income Equity Redeemable Securities |
PRIDES - Preferred Redeemable Increased Dividend Equity Securities |
Legend |
(a) Non-income producing |
(b) The rate quoted is the annualized seven-day yield of the fund at period end. A complete listing of the fund's holdings as of its most recent fiscal year end is available upon request. |
(c) Debt obligation initially issued in zero coupon form which converts to coupon form at a specified rate and date. The rate shown is the rate at period end. |
(d) Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At the period end, the value of these securities amounted to $45,325,700 or 0.5% of net assets. |
(e) Security or a portion of the security purchased on a delayed delivery or when-issued basis. |
(f) The coupon rate shown on floating or adjustable rate securities represents the rate at period end. |
Other Information |
Purchases and sales of securities, other than short-term securities, aggregated $1,029,757,674 and $1,202,846,718, respectively. |
The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms were $60,895 for the period. |
The fund participated in the interfund lending program as a borrower. The average daily loan balance during the period for which the loans were outstanding amounted to $15,806,636. The weighted average interest rate was 1.39%. Interest expense includes $20,071 paid under the interfund lending program. At period end there were no interfund loans outstanding. |
The fund participated in the bank borrowing program. The average daily loan balance during the period for which loans were outstanding amounted to $3,050,125. The weighted average interest rate was 1.68%. Interest expense includes $1,137 paid under the bank borrowing program. At period end there were no bank borrowings outstanding. |
Income Tax Information |
At December 31, 2002, the fund had a capital loss carryforward of approximately $127,840,000 all of which will expire on December 31, 2010. |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Fidelity Variable Insurance Products: Equity-Income Portfolio
Financial Statements
Statement of Assets and Liabilities
| June 30, 2003 (Unaudited) |
Assets | | |
Investment in securities, at value (including securities loaned of $30,978,451) (cost $7,969,528,776) - See accompanying schedule | | $ 8,735,375,176 |
Cash | | 276,744 |
Receivable for investments sold | | 17,100,070 |
Receivable for fund shares sold | | 4,762,996 |
Dividends receivable | | 12,443,826 |
Interest receivable | | 1,618,385 |
Redemption fees receivable | | 10 |
Other receivables | | 57,320 |
Total assets | | 8,771,634,527 |
| | |
Liabilities | | |
Payable for investments purchased
Regular delivery | $ 14,066,644 | |
Delayed delivery | 204,000 | |
Payable for fund shares redeemed | 10,926,627 | |
Accrued management fee | 3,552,359 | |
Distribution fees payable | 194,119 | |
Other payables and accrued expenses | 426,766 | |
Collateral on securities loaned, at value | 32,303,550 | |
Total liabilities | | 61,674,065 |
| | |
Net Assets | | $ 8,709,960,462 |
Net Assets consist of: | | |
Paid in capital | | $ 7,986,611,076 |
Undistributed net investment income | | 76,409,653 |
Accumulated undistributed net realized gain (loss) on investments and foreign currency transactions | | (118,909,772) |
Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies | | 765,849,505 |
Net Assets | | $ 8,709,960,462 |
Initial Class:
Net Asset Value, offering price and redemption price per share ($7,244,489,053 ÷ 367,912,682 shares) | | $ 19.69 |
Service Class:
Net Asset Value, offering price and redemption price per share ($880,794,139 ÷ 44,857,125 shares) | | $ 19.64 |
Service Class 2:
Net Asset Value, offering price and redemption price per share ($583,761,981 ÷ 29,900,210 shares) | | $ 19.52 |
Service Class 2R:
Net Asset Value, offering price and redemption price per share ($915,289 ÷
46,982 shares) | | $ 19.48 |
Statement of Operations
| Six months ended June 30, 2003 (Unaudited) |
Investment Income | | |
Dividends | | $ 97,852,702 |
Interest | | 4,036,717 |
Security lending | | 124,537 |
Total income | | 102,013,956 |
| | |
Expenses | | |
Management fee | $ 19,332,228 | |
Transfer agent fees | 2,742,609 | |
Distribution fees | 972,967 | |
Accounting and security lending fees | 399,253 | |
Non-interested trustees' compensation | 16,114 | |
Depreciation in deferred trustee compensation account | (22,360) | |
Custodian fees and expenses | 80,861 | |
Audit | 47,943 | |
Legal | 12,220 | |
Interest | 21,208 | |
Miscellaneous | 169,601 | |
Total expenses before
reductions | 23,772,644 | |
Expense reductions | (478,976) | 23,293,668 |
Net investment income (loss) | | 78,720,288 |
Realized and Unrealized Gain (Loss) Net realized gain (loss) on: | | |
Investment securities | 16,944,528 | |
Foreign currency transactions | 29,074 | |
Total net realized gain (loss) | | 16,973,602 |
Change in net unrealized appreciation (depreciation) on: Investment securities | 728,855,641 | |
Assets and liabilities in foreign currencies | (23,730) | |
Total change in net unrealized appreciation (depreciation) | | 728,831,911 |
Net gain (loss) | | 745,805,513 |
Net increase (decrease) in net assets resulting from operations | | $ 824,525,801 |
See accompanying notes which are an integral part of the financial statements.
Semiannual Report
Fidelity Variable Insurance Products: Equity-Income Portfolio
Financial Statements - continued
Statement of Changes in Net Assets
| Six months ended
June 30, 2003 | Year ended
December 31, |
Increase (Decrease) in Net Assets | (Unaudited) | 2002 |
Operations | | |
Net investment income (loss) | $ 78,720,288 | $ 156,904,928 |
Net realized gain (loss) | 16,973,602 | (136,493,863) |
Change in net unrealized appreciation (depreciation) | 728,831,911 | (1,811,259,080) |
Net increase (decrease) in net assets resulting from operations | 824,525,801 | (1,790,848,015) |
Distributions to shareholders from net investment income | (152,426,442) | (162,342,476) |
Distributions to shareholders from net realized gain | - | (222,300,466) |
Total distributions | (152,426,442) | (384,642,942) |
Share transactions - net increase (decrease) | (33,697,536) | (71,251,438) |
Redemption fees | 906 | 259 |
Total increase (decrease) in net assets | 638,402,729 | (2,246,742,136) |
| | |
Net Assets | | |
Beginning of period | 8,071,557,733 | 10,318,299,869 |
End of period (including undistributed net investment income of $76,409,653 and undistributed net investment income of $154,882,636, respectively) | $ 8,709,960,462 | $ 8,071,557,733 |
Other Information: | | | | |
Share Transactions | Six months ended June 30, 2003 |
| Initial Class | Service Class | Service Class 2 | Service Class 2R |
Shares Sold | 16,976,465 | 6,193,408 | 9,178,141 | 54,310 |
Reinvested | 7,869,268 | 847,723 | 452,997 | 1,082 |
Redeemed | (36,646,287) | (4,812,738) | (2,154,576) | (34,576) |
Net increase (decrease) | (11,800,554) | 2,228,393 | 7,476,562 | 20,816 |
| | | | |
Dollars Sold | $ 312,325,235 | $ 113,561,617 | $ 165,872,414 | $ 1,024,730 |
Reinvested | 130,865,933 | 14,063,717 | 7,478,977 | 17,815 |
Redeemed | (653,424,428) | (86,066,956) | (38,852,327) | (564,263) |
Net increase (decrease) | $ (210,233,260) | $ 41,558,378 | $ 134,499,064 | $ 478,282 |
| | | | |
Share Transactions | Year ended December 31, 2002 |
| Initial Class | Service Class | Service Class 2 | Service Class 2R A |
Shares Sold | 55,802,238 | 11,112,619 | 17,439,374 | 30,522 |
Reinvested | 16,371,256 | 1,504,858 | 437,787 | - |
Redeemed | (99,410,660) | (6,864,417) | (5,462,708) | (4,356) |
Net increase (decrease) | (27,237,166) | 5,753,060 | 12,414,453 | 26,166 |
| | | | |
Dollars Sold | $ 1,171,193,465 | $ 231,985,655 | $ 345,877,938 | $ 576,334 |
Reinvested | 343,960,099 | 31,541,832 | 9,140,991 | - |
Redeemed | (1,967,582,454) | (132,366,206) | (105,497,795) | (81,297) |
Net increase (decrease) | $ (452,428,890) | $ 131,161,281 | $ 249,521,134 | $ 495,037 |
| | | | |
Distributions | Six months ended June 30, 2003 |
| Initial Class | Service Class | Service Class 2 | Service Class 2R |
From net investment income | $ 130,865,933 | $ 14,063,717 | $ 7,478,977 | $ 17,815 |
From net realized gain | - | - | - | - |
Total | $ 130,865,933 | $ 14,063,717 | $ 7,478,977 | $ 17,815 |
| | | | |
| Year ended December 31, 2002 |
| Initial Class | Service Class | Service Class 2 | Service Class 2R A |
From net investment income | $ 145,677,218 | $ 12,920,750 | $ 3,744,508 | $ - |
From net realized gain | 198,282,881 | 18,621,082 | 5,396,503 | - |
Total | $ 343,960,099 | $ 31,541,832 | $ 9,141,011 | $ - |
A For the period April 24, 2002 (commencement of sales of shares) to December 31, 2002.
See accompanying notes which are an integral part of the financial statements.
Equity-Income Portfolio
Financial Highlights - Initial Class
| Six months ended
June 30, 2003 | Years ended December 31, |
| (Unaudited) | 2002 | 2001 | 2000 | 1999 | 1998 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.16 | $ 22.75 | $ 25.52 | $ 25.71 | $ 25.42 | $ 24.28 |
Income from Investment Operations | | | | | | |
Net investment income (loss) E | .18 | .34 | .34 | .40 | .41 | .38 |
Net realized and unrealized gain (loss) | 1.70 | (4.08) | (1.51) | 1.46 | 1.10 | 2.31 |
Total from investment operations | 1.88 | (3.74) | (1.17) | 1.86 | 1.51 | 2.69 |
Distributions from net investment income | (.35) | (.36) | (.42) | (.44) | (.38) | (.34) |
Distributions from net realized gain | - | (.49) | (1.18) | (1.61) | (.84) | (1.21) |
Total distributions | (.35) | (.85) | (1.60) | (2.05) | (1.22) | (1.55) |
Redemption fees added to paid in capital | - E,G | - E,G | - | - | - | - |
Net asset value, end of period | $ 19.69 | $ 18.16 | $ 22.75 | $ 25.52 | $ 25.71 | $ 25.42 |
Total Return B,C,D | 10.71% | (16.95)% | (4.96)% | 8.42% | 6.33% | 11.63% |
Ratios to Average Net Assets F | | | | | | |
Expenses before expense reductions | .57% A | .57% | .58% | .56% | .57% | .58% |
Expenses net of voluntary waivers, if any | .57% A | .57% | .58% | .56% | .57% | .58% |
Expenses net of all reductions | .56% A | .56% | .57% | .55% | .56% | .57% |
Net investment income (loss) | 1.99% A | 1.70% | 1.47% | 1.68% | 1.57% | 1.58% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 7,244,489 | $ 6,895,940 | $ 9,256,205 | $ 9,969,086 | $ 11,014,291 | $ 11,409,912 |
Portfolio turnover rate | 26% A | 25% | 24% | 22% | 27% | 28% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower had certain expenses not been reduced during the periods shown.
E Calculated based on average shares outstanding during the period.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per-share.
Financial Highlights - Service Class
| Six months ended
June 30, 2003 | Years ended December 31, |
| (Unaudited) | 2002 | 2001 | 2000 | 1999 | 1998 |
Selected Per-Share Data | | | | | | |
Net asset value, beginning of period | $ 18.10 | $ 22.67 | $ 25.45 | $ 25.66 | $ 25.39 | $ 24.27 |
Income from Investment Operations | | | | | | |
Net investment income (loss)E | .17 | .32 | .31 | .37 | .38 | .36 |
Net realized and unrealized gain (loss) | 1.70 | (4.06) | (1.51) | 1.46 | 1.11 | 2.31 |
Total from investment operations | 1.87 | (3.74) | (1.20) | 1.83 | 1.49 | 2.67 |
Distributions from net investment income | (.33) | (.34) | (.40) | (.43) | (.38) | (.34) |
Distributions from net realized gain | - | (.49) | (1.18) | (1.61) | (.84) | (1.21) |
Total distributions | (.33) | (.83) | (1.58) | (2.04) | (1.22) | (1.55) |
Redemption fees added to paid in capital | - E,G | - E,G | - | - | - | - |
Net asset value, end of period | $ 19.64 | $ 18.10 | $ 22.67 | $ 25.45 | $ 25.66 | $ 25.39 |
Total ReturnB,C,D | 10.67% | (17.00)% | (5.09)% | 8.30% | 6.25% | 11.54% |
Ratios to Average Net AssetsF | | | | | | |
Expenses before expense reductions | .67%A | .67% | .68% | .66% | .67% | .68% |
Expenses net of voluntary waivers, if any | .67%A | .67% | .68% | .66% | .67% | .68% |
Expenses net of all reductions | .66%A | .66% | .67% | .65% | .66% | .67% |
Net investment income (loss) | 1.89%A | 1.60% | 1.37% | 1.58% | 1.47% | 1.51% |
Supplemental Data | | | | | | |
Net assets, end of period (000 omitted) | $ 880,794 | $ 771,516 | $ 836,017 | $ 634,897 | $ 437,332 | $ 225,145 |
Portfolio turnover rate | 26%A | 25% | 24% | 22% | 27% | 28% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower had certain expenses not been reduced during the periods shown.
E Calculated based on average shares outstanding during the period.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per-share.
See accompanying notes which are an integral part of the financial statements.
Equity-Income Portfolio
Financial Highlights - Service Class 2
| Six months ended
June 30, 2003 | Years ended December 31, |
| (Unaudited) | 2002 | 2001 | 2000 H |
Selected Per-Share Data | | | | |
Net asset value, beginning of period | $ 18.00 | $ 22.59 | $ 25.41 | $ 25.18 |
Income from Investment Operations | | | | |
Net investment income (loss) E | .16 | .28 | .27 | .32 |
Net realized and unrealized gain (loss) | 1.68 | (4.04) | (1.50) | 1.95 |
Total from investment operations | 1.84 | (3.76) | (1.23) | 2.27 |
Distributions from net investment income | (.32) | (.34) | (.41) | (.43) |
Distributions from net realized gain | - | (.49) | (1.18) | (1.61) |
Total distributions | (.32) | (.83) | (1.59) | (2.04) |
Redemption fees added to paid in capital | - E,G | - E,G | - | - |
Net asset value, end of period | $ 19.52 | $ 18.00 | $ 22.59 | $ 25.41 |
Total Return B,C,D | 10.55% | (17.15)% | (5.23)% | 10.19% |
Ratios to Average Net AssetsF | | | | |
Expenses before expense reductions | .82%A | .83% | .84% | .83% A |
Expenses net of voluntary waivers, if any | .82%A | .83% | .84% | .83% A |
Expenses net of all reductions | .81%A | .82% | .83% | .82% A |
Net investment income (loss) | 1.74%A | 1.44% | 1.21% | 1.41% A |
Supplemental Data | | | | |
Net assets, end of period (000 omitted) | $ 583,762 | $ 403,632 | $ 226,078 | $ 39,911 |
Portfolio turnover rate | 26%A | 25% | 24% | 22% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower had certain expenses not been reduced during the periods shown.
E Calculated based on average shares outstanding during the period.
F Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
G Amount represents less than $.01 per-share.
H For the period January 12, 2000 (commencement of sales of shares) to December 31, 2000.
Financial Highlights - Service Class 2R
| Six months ended
June 30, 2003 | Year ended
December 31, |
| (Unaudited) | 2002F |
Selected Per-Share Data | | |
Net asset value, beginning of period | $ 17.99 | $ 21.82 |
Income from Investment Operations | | |
Net investment income (loss) E | .15 | .18 |
Net realized and unrealized gain (loss) | 1.69 | (4.01) |
Total from investment operations | 1.84 | (3.83) |
Distributions from net investment income | (.35) | - |
Redemption fees added to paid in capital E,H | - | - |
Net asset value, end of period | $ 19.48 | $ 17.99 |
Total Return B,C,D | 10.58% | (17.55)% |
Ratios to Average Net AssetsG | | |
Expenses before expense reductions | .82% A | .85% A |
Expenses net of voluntary waivers, if any | .82% A | .85% A |
Expenses net of all reductions | .81% A | .84% A |
Net investment income (loss) | 1.74% A | 1.45% A |
Supplemental Data | | |
Net assets, end of period (000 omitted) | $ 915 | $ 471 |
Portfolio turnover rate | 26% A | 25% |
A Annualized
B Total returns for periods of less than one year are not annualized.
C Total returns do not reflect charges attributable to your insurance company's separate account. Inclusion of these charges would reduce the total returns shown.
D Total returns would have been lower had certain expenses not been reduced during the periods shown.
E Calculated based on average shares outstanding during the period.
F For the period April 24, 2002 (commencement of sale of shares) to December 31, 2002.
G Expense ratios reflect operating expenses of the class. Expenses before reductions do not reflect amounts reimbursed by the investment adviser or reductions from brokerage service arrangements or other expense offset arrangements and do not represent the amount paid by the class during periods when reimbursements or reductions occur. Expense ratios before reductions for start-up periods may not be representative of longer-term operating periods. Expenses net of any voluntary waivers reflect expenses after reimbursement by the investment adviser but prior to reductions from brokerage service arrangements or other expense offset arrangements. Expenses net of all reductions represent the net expenses paid by the class.
H Amount represents less than $.01 per-share.
See accompanying notes which are an integral part of the financial statements.
Equity-Income Portfolio
Notes to Financial Statements
For the period ended June 30, 2003 (Unaudited)
1. Significant Accounting Policies.
Equity-Income Portfolio (the fund) is a fund of Variable Insurance Products Fund, (the trust) (referred to in this report as Fidelity Variable Insurance Products: Equity-Income Portfolio) and is authorized to issue an unlimited number of shares. The trust is registered under the Investment Company Act of 1940, as amended (the 1940 Act), as an open-end management investment company organized as a Massachusetts business trust. Shares of the fund may only be purchased by insurance companies for the purpose of funding variable annuity or variable life insurance contracts. The fund offers the following classes of shares: Initial Class shares, Service Class shares, Service Class 2 shares and Service Class 2R shares. All classes have equal rights and voting privileges, except for matters affecting a single class. Investment income, realized and unrealized capital gains and losses, the common expenses of the fund, and certain fund-level expense reductions, if any, are allocated on a pro rata basis to each class based on the relative net assets of each class to the total net assets of the fund. Each class differs with respect to distribution and service plan fees incurred. Certain expense reductions also differ by class.
The financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which require management to make certain estimates and assumptions at the date of the financial statements. The following summarizes the significant accounting policies of the fund:
Security Valuation. Net asset value per share (NAV calculation) is calculated as of the close of business of the New York Stock Exchange, normally 4:00 p.m. Eastern time. Equity securities for which market quotations are available are valued at the last sale price or official closing price (closing bid price or last evaluated quote if no sale has occurred) on the primary market or exchange on which they trade. Debt securities for which quotations are readily available are valued at their most recent bid prices (sales prices if the principal market is an exchange) in the principal market in which such securities are normally traded, as determined by recognized dealers in such securities, or securities are valued on the basis of information provided by a pricing service. Pricing services use valuation matrices that incorporate both dealer-supplied valuations and electronic data processing techniques. If an event that is expected to materially affect the value of a security occurs after the close of an exchange or market on which that security trades, but prior to the NAV calculation, then that security will be fair valued taking the event into account. Securities (including restricted securities) for which market quotations are not readily available are valued at their fair value as determined in good faith under consistently applied procedures under the general supervision of the Board of Trustees. Price movements in futures contracts and ADRs, market and trading trends, the bid/ask quotes of brokers and off-exchange institutional trading may be reviewed in the course of making a good faith determination of a security's fair value. Short-term securities with remaining maturities of sixty days or less for which quotations are not readily available are valued on the basis of amortized cost. Investments in open-end investment companies are valued at their net asset value each business day.
Foreign Currency. The fund uses foreign currency contracts to facilitate transactions in foreign-denominated securities. Losses from these transactions may arise from changes in the value of the foreign currency or if the counterparties do not perform under the contracts' terms.
Foreign denominated assets, including investment securities, and liabilities are translated into U.S. dollars at the exchange rate at period end. Purchases and sales of investment securities, income and dividends received and expenses denominated in foreign currencies are translated into U.S. dollars at the exchange rate in effect on the transaction date.
The effects of exchange rate fluctuations on investments are included with the net realized and unrealized gain (loss) on investment securities. Other foreign currency transactions resulting in realized and unrealized gain (loss) are disclosed separately.
Investment Transactions and Income. Security transactions are accounted for as of trade date. Gains and losses on securities sold are determined on the basis of identified cost. Dividend income is recorded on the ex-dividend date, except for certain dividends from foreign securities where the ex-dividend date may have passed, which are recorded as soon as the fund is informed of the ex-dividend date. Non-cash dividends included in dividend income, if any, are recorded at the fair market value of the securities received. Interest income, which includes amortization of premium and accretion of discount on debt securities, as required, is accrued as earned. Investment income is recorded net of foreign taxes withheld where recovery of such taxes is uncertain.
Expenses. Most expenses of the trust can be directly attributed to a fund. Expenses which cannot be directly attributed are apportioned among the funds in the trust.
Deferred Trustee Compensation. Under a Deferred Compensation Plan (the Plan) non-interested Trustees must defer receipt of a portion of, and may elect to defer receipt of an additional portion of, their annual compensation. Deferred amounts are treated as though equivalent dollar amounts had been invested in a cross-section of other Fidelity funds, and are marked-to-market. Deferred amounts remain in the fund until distributed in accordance with the Plan.
Income Tax Information and Distributions to Shareholders. Each year the fund intends to qualify as a regulated investment company by distributing all of its taxable income and realized gains under Subchapter M of the Internal Revenue Code. As a result, no provision for income taxes is required in the accompanying financial statements. Foreign taxes are provided for based on each fund's understanding of the tax rules and rates that exist in the foreign markets in which it invests. Income dividends and capital gain distributions are declared separately for each class. Distributions are recorded on the ex-dividend date.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
1. Significant Accounting Policies - continued
Income Tax Information and Distributions to Shareholders - continued
Income and capital gain distributions are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Capital accounts within the financial statements are adjusted for permanent and temporary book and tax differences. These adjustments have no impact on net assets or the results of operations. Temporary differences will reverse in a subsequent period. These differences are primarily due to foreign currency transactions, defaulted bonds, market discount, contingent interest, non-taxable dividends, capital loss carryforwards and losses deferred due to wash sales.
The federal tax cost of investments including unrealized appreciation (depreciation) as of period end was as follows:
Unrealized appreciation | $ 1,703,193,152 | | |
Unrealized depreciation | (950,439,083) | |
Net unrealized appreciation (depreciation) | $ 752,754,069 | |
Cost for federal income tax purposes | $ 7,982,621,107 | |
Trading (Redemption) Fees. Service Class 2R shares held less than 60 days are subject to a short-term trading fee equal to 1% of the proceeds of the redeemed shares. The fee, which is retained by the fund, is accounted for as an addition to paid in capital.
2. Operating Policies.
Repurchase Agreements. Fidelity Management & Research Company (FMR) has received an Exemptive Order from the Securities and Exchange Commission (the SEC) which permits the fund and other affiliated entities of FMR to transfer uninvested cash balances into joint trading accounts. These accounts are then invested in repurchase agreements that are collateralized by U.S. Treasury or Government obligations. The fund may also invest directly with institutions, in repurchase agreements that are collateralized by commercial paper obligations and corporate obligations. The custodian bank receives the collateral, which is marked-to-market daily and maintained at a value at least equal to the principal amount of the repurchase agreement (including accrued interest).
Delayed Delivery Transactions and When-Issued Securities. The fund may purchase or sell securities on a delayed delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. During the time a delayed delivery sell is outstanding, the contract is marked to market daily and equivalent deliverable securities are held for the transaction. The value of the securities purchased on a delayed delivery or when-issued basis are identified as such in the fund's Schedule of Investments. The fund may receive compensation for interest forgone in the purchase of a delayed delivery or when-issued security. With respect to purchase commitments, the fund identifies securities as segregated in its records with a value at least equal to the amount of the commitment. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract, or if the issuer does not issue the securities due to political, economic, or other factors.
Restricted Securities. The fund may invest in securities that are subject to legal or contractual restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are registered. Disposal of these securities may involve time-consuming negotiations and expense, and prompt sale at an acceptable price may be difficult. Information regarding restricted securities is included under the captions "Legend" and/or "Other Information" at the end of the fund's Schedule of Investments.
3. Purchases and Sales of Investments.
Information regarding purchases and sales of securities is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
4. Fees and Other Transactions with Affiliates.
Management Fee. FMR and its affiliates provide the fund with investment management related services for which the fund pays a monthly management fee.
The management fee is the sum of an individual fund fee rate that is based on an annual rate of .20% of the fund's average net assets and a group fee rate that averaged .28% during the period. The group fee rate is based upon the average net assets of all the mutual funds advised by FMR. The group fee rate decreases as assets under management increase and increases as assets under management decrease. For the period, the total annualized management fee rate was .48% of the fund's average net assets.
Equity-Income Portfolio
4. Fees and Other Transactions with Affiliates - continued
Distribution and Service Plan. In accordance with Rule 12b-1 of the 1940 Act, the Fund has adopted separate 12b-1 Plans for each Service Class of shares. Each Service Class pays Fidelity Distributors Corporation (FDC), an affiliate of FMR, a service fee. For the period, the service fee is based on an annual rate of .10% of Service Class's average net assets and .25% of Service Class 2's and Service Class 2R's average net assets.
For the period, each class paid FDC the following amounts, all of which were re-allowed to insurance companies, for the distribution of shares and providing shareholder support services:
Service Class | $ 393,406 | | |
Service Class 2 | 578,824 | |
Service Class 2R | 737 | |
| $ 972,967 | |
Transfer Agent Fees. Fidelity Investments Institutional Operations Company, Inc. (FIIOC), an affiliate of FMR, is the fund's transfer, dividend disbursing, and shareholder servicing agent. FIIOC receives account fees and asset-based fees that vary according to account size and type of account. FIIOC pays a portion of the expenses related to the typesetting, printing and mailing of all shareholder reports, except proxy statements. For the period, the transfer agent fees of the fund were equivalent to an annualized rate of .07% of average net assets.
For the period, the following amounts were paid to FIIOC:
Initial Class | $ 2,302,677 | | |
Service Class | 269,551 | |
Service Class 2 | 170,175 | |
Service Class 2R | 206 | |
| $ 2,742,609 | |
Accounting and Security Lending Fees. Fidelity Service Company, Inc. (FSC), an affiliate of FMR, maintains the fund's accounting records and administers the security lending program. The security lending fee is based on the number and duration of lending transactions. The accounting fee is based on the level of average net assets for the month plus out-of-pocket expenses.
Central Funds. The fund may invest in affiliated Central Funds managed by Fidelity Investments Money Management, Inc. (FIMM), an affiliate of FMR. The Central Funds are open-end investment companies available only to investment companies and other accounts managed by FMR and its affiliates. The Central Funds seek preservation of capital and current income and do not pay a management fee. Income distributions earned by the fund are recorded as income in the accompanying financial statements and totaled $171,761 for the period.
Brokerage Commissions. The fund placed a portion of its portfolio transactions with brokerage firms which are affiliates of the investment adviser. The commissions paid to these affiliated firms are shown under the caption "Other Information" at the end of the fund's Schedule of Investments.
Interfund Lending Program. Pursuant to an Exemptive Order issued by the SEC, the fund, along with other registered investment companies having management contracts with FMR, may participate in an interfund lending program. This program provides an alternative credit facility allowing the funds to borrow from, or lend money to, other participating funds. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
5. Committed Line of Credit.
The fund participates with other funds managed by FMR in a $3.5 billion credit facility (the "line of credit") to be utilized for temporary or emergency purposes to fund shareholder redemptions or for other short-term liquidity purposes. The fund has agreed to pay commitment fees on its pro rata portion of the line of credit. During the period, there were no borrowings on this line of credit.
6. Security Lending.
The fund lends portfolio securities from time to time in order to earn additional income. The fund receives collateral (in the form of U.S. Treasury obligations, letters of credit and/or cash) against the loaned securities and maintains collateral in an amount not less than 100% of the market value of the loaned securities during the period of the loan. The market value of the loaned securities is determined at the close of business of the fund and any additional required collateral is delivered to the fund on the next business day. If the borrower defaults on its obligation to return the securities loaned because of insolvency or other reasons, a fund could experience delays and costs in recovering the securities loaned or in gaining access to the collateral. Cash collateral is invested in cash equivalents. The value of loaned securities and cash collateral at period end are disclosed on the fund's Statement of Assets and Liabilities.
Semiannual Report
Notes to Financial Statements (Unaudited) - continued
7. Bank Borrowings.
The fund is permitted to have bank borrowings for temporary or emergency purposes to fund shareholder redemptions. The fund has established borrowing arrangements with certain banks. The interest rate on the borrowings is the bank's base rate, as revised from time to time. Information regarding the fund's participation in the program is included under the caption "Other Information" at the end of the fund's Schedule of Investments.
8. Expense Reductions.
Many of the brokers with whom FMR places trades on behalf of the fund provided services to the fund in addition to trade execution. These services included payments of certain expenses on behalf of the fund totaling $477,996 for the period. In addition, through arrangements with the fund's custodian, credits realized as a result of uninvested cash balances were used to reduce the fund's expenses. During the period, these credits reduced the fund's custody expenses by $980.
9. Other Information.
At the end of the period, FMR or its affiliates were the owners of record of 11% of the total outstanding shares of the fund and one unaffiliated shareholder was the owner of record of 27% of the total outstanding shares of the fund.
Equity-Income Portfolio
Semiannual Report
Investment Adviser
Fidelity Management & Research Company
Boston, MA
Investment Sub-Adviser
FMR Co., Inc.
General Distributor
Fidelity Distributors Corporation
Boston, MA
Transfer and Shareholder Servicing Agent
Fidelity Investments Institutional Operations Company, Inc.
Boston, MA
Custodian
JPMorgan Chase Bank
New York, NY
VIPEI-SANN-0803
1.705693.105
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Reserved
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Reserved
Item 9. Controls and Procedures
(a)(i) The President and Treasurer and the Chief Financial Officer have concluded that the Variable Insurance Products Fund: Equity-Income Portfolio's (the "Fund") disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act) provide reasonable assurances that material information relating to the Fund is made known to them by the appropriate persons, based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this report.
(a)(ii) There was no change in the Fund's internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act) that occurred during the Trust's last fiscal half-year that has materially affected, or is reasonably likely to materially affect, the Fund's internal control over financial reporting.
Item 10. Exhibits
(a) | (1) | Not applicable. |
(a) | (2) | Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) attached hereto as Exhibit 99.CERT. |
(b) | | Certification pursuant to Rule 30a-2(b) under the Investment Company Act of 1940 (17 CFR 270.30a-2(b)) attached hereto as Exhibit 99.906CERT. |
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.
Variable Insurance Products Fund
By: | /s/Maria Dwyer |
| Maria Dwyer |
| President and Treasurer |
| |
Date: | August 25, 2003 |
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: | /s/Maria Dwyer |
| Maria Dwyer |
| President and Treasurer |
| |
Date: | August 25, 2003 |
By: | /s/Timothy F. Hayes |
| Timothy F. Hayes |
| Chief Financial Officer |
| |
Date: | August 25, 2003 |
