Capital Appreciation Variable Account NCSRS Certified semi-annual shareholder report (management investment company)

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 811-3561

CAPITAL APPRECIATION VARIABLE ACCOUNT

(Exact name of registrant as specified in charter)

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

Registrant’s telephone number, including area code: (617) 954-5000

Date of fiscal year end: December 31

Date of reporting period: June 30, 2008

ITEM 1. REPORTS TO STOCKHOLDERS.

PROFESSIONALLY MANAGED COMBINATION

FIXED/VARIABLE ANNUITIES

FOR PERSONAL INVESTMENTS AND

QUALIFIED RETIREMENT PLANS

SEMIANNUAL REPORT Ÿ June 30, 2008

Capital Appreciation Variable Account

Global Governments Variable Account

Government Securities Variable Account

High Yield Variable Account

Money Market Variable Account

Total Return Variable Account

Issued by

Sun Life Assurance Company of Canada (U.S.),

A Wholly Owned Subsidiary of

Sun Life of Canada (U.S.) Holdings, Inc.

Table of Contents



Letter from the CEO of MFS		1

Portfolio Composition		2

Portfolio of Investments		8

Statements of Assets and Liabilities		28

Statements of Operations		30

Statements of Changes in Net Assets		31

Financial Highlights		33

Notes to Financial Statements		45

Board Review of Investment Advisory Agreements		Back Cover

Proxy Voting Policies and Information		Back Cover

Quarterly Portfolio Disclosure		Back Cover

This report is prepared for the general information of contract owners. It is authorized for distribution to prospective investors only when preceded or accompanied by a current prospectus.


NOT FDIC INSURED MAY LOSE VALUE NO BANK OR CREDIT UNION GUARANTEE
NOT A DEPOSIT NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY OR NCUA/NCUSIF

Letter from the CEO of MFS

Dear Contract Owners:

Negative headlines tend to resonate during difficult markets, and we certainly have had more than our share of tough news recently. As a result consumer, and particularly investor, sentiment are at all-time lows. That said, I do think it is helpful to remember there are always silver linings in the storm clouds if you look hard enough.

Through all of the challenges we have faced, there are some positive underlying trends. In the United States, for example, institutional traders and credit market followers are just now showing increasing signs of confidence and are beginning to take on more risk. At the corporate level, earnings continue to be relatively strong as companies have reduced labor costs, controlled inventories, and relied less on debt to finance expansion. More broadly, low interest rates and strong demand for consumer goods and industrial equipment are good signs for the global economy.

While I do not mean to minimize the risks inherent in today’s markets, periods such as these allow the talented fund managers and research analysts we have at MFS® to test their convictions, reevaluate existing positions, and identify new investment ideas. Our investment process also includes a significant risk management component, with constant attention paid to monitoring market risk, so we can do our best to minimize any surprises to your portfolio.

For investors, this is a great time to check in with your advisor and make sure you have a sound investment plan in place — one that can keep your hard-earned money working over the long term through a strategy that involves asset allocation, diversification, and periodic portfolio rebalancing and reviews. A plan tailored to your distinct needs and goals continues to be the best approach to help you take advantage of the inevitable challenges — and opportunities — that present themselves over time.

Respectfully,

LOGO

Robert J. Manning

Chief Executive Officer and Chief Investment Officer

MFS Investment Management®

August 15, 2008

The opinions expressed in this letter are subject to change, may not be relied upon for investment advice, and no forecasts can be guaranteed.

Portfolio Composition — Capital Appreciation Variable Account

Portfolio structure

LOGO


Top ten holdings
Cisco Systems, Inc.		2.7%
Google, Inc., “A”		2.6%
Oracle Corp.		2.5%
Microsoft Corp.		2.3%
Amdocs Ltd.		2.2%
Genzyme Corp.		2.2%
LVMH Moet Hennessy Louis Vuitton S.A.		2.1%
PepsiCo, Inc.		2.1%
Danaher Corp.		2.1%
CVS Caremark Corp.		2.1%


Equity sectors
Technology		23.8%
Health Care		17.0%
Consumer Staples		9.5%
Energy		9.1%
Retailing		8.9%
Financial Services		7.3%
Special Products & Services		6.4%
Industrial Goods & Services		6.0%
Leisure		4.5%
Utilities & Communications		2.3%
Basic Materials		2.1%
Transportation		1.2%

Percentages are based on net assets as of 6/30/08.

The portfolio is actively managed and current holdings may be different.

Portfolio Composition — Global Governments Variable Account

Portfolio structure (i)

LOGO


Fixed income sectors (i)
Non-U.S. Government Bonds		72.9%
U.S. Treasury Securities		18.7%
Commercial Mortgage-Backed Securities		2.8%
U.S. Government Agencies		2.3%
Mortgage-Backed Securities		1.1%
Municipal Bonds		0.6%

Credit quality of bonds (r)
AAA		65.4%
AA		34.6%


Portfolio facts
Average Duration (d)(i)		6.3
Average Life (i)(m)		8.3 yrs.
Average Maturity (i)(m)		8.9 yrs.
Average Credit Quality of Rated Securities (long-term) (a)		AA+
Average Credit Quality of Rated Securities (short-term) (a)		A-1

Country weightings (i)
United States		26.8%
Japan		25.5%
United Kingdom		11.0%
Germany		9.5%
France		5.2%
Spain		4.8%
Netherlands		4.7%
Italy		4.1%
Belgium		3.9%
Other Countries		4.5%

(a)	The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i)	For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(m)

The average maturity shown is calculated using the final stated maturity on the portfolio’s holdings without taking into account any holdings which have been pre-refunded or pre-paid to an earlier date or which have a mandatory put date prior to the stated maturity. The average life shown takes into account these earlier dates.

(r)

Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. For those portfolios that hold a security which is not rated by any of the three agencies, the security is considered Not Rated. Holdings in U.S. Treasuries and government agency mortgage-backed securities, if any, are included in the “AAA”-rating category. Percentages are based on the total market value of investments as of 6/30/08.

Percentages are based on net assets as of 6/30/08, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

Portfolio Composition — Government Securities Variable Account

Portfolio structure (i)

LOGO


Fixed income sectors (i)
Mortgage-Backed Securities		57.6%
U.S. Treasury Securities		26.0%
U.S. Government Agencies		17.6%
Municipal Bonds		1.2%


Credit quality of bonds (r)
AAA		100.0%

Portfolio facts
Average Duration (d)(i)		4.9
Average Life (i)(m)		7.6 yrs.
Average Maturity (i)(m)		15.4 yrs.
Average Credit Quality of Rated Securities (long-term) (a)		AAA
Average Credit Quality of Rated Securities (short-term) (a)		A-1

(a)	The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i)	For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(m)

(r)

Percentages are based on net assets as of 6/30/08, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

From time to time “Cash & Other Net Assets” may be negative due to the timing of cash receipts and/or the equivalent exposure of derivatives.

Portfolio Composition — High Yield Variable Account

Portfolio structure (i)

LOGO


Top five industries (i)
Medical & Health Technology & Services		9.0%
Gaming & Lodging		8.0%
Utilities - Electric Power		7.2%
Broadcasting		6.3%
Energy - Independent		6.0%


Credit quality of bonds (r)
AAA		3.3%
AA		1.0%
A		1.4%
BBB		0.6%
BB		19.5%
B		52.9%
CCC		17.7%
D		0.1%
Not Rated		3.5%

Portfolio facts
Average Duration (d)(i)		4.3
Average Life (i)(m)		6.9 yrs.
Average Maturity (i)(m)		8.3 yrs.
Average Credit Quality of Rated Securities (long-term) (a)		B+
Average Credit Quality of Rated Securities (short-term) (a)		A-1

(a)	The average credit quality of rated securities is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(d)	Duration is a measure of how much a bond’s price is likely to fluctuate with general changes in interest rates, e.g., if rates rise 1.00%, a bond with a 5-year duration is likely to lose about 5.00% of its value.

(i)	For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(m)

(r)

Percentages are based on net assets as of 6/30/08, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

From time to time “Cash & Other Net Assets” may be negative due to the timing of cash receipts and/or the equivalent exposure of derivative holdings.

Portfolio Composition — Money Market Variable Account

Portfolio structure (u)

LOGO


Short-term credit quality (q)
Average Credit Quality Short-Term Bonds (a)		A-1
All holdings are rated “A-1”

Maturity breakdown (u)
0 - 29 days		49.6%
30 - 59 days		20.5%
60 - 89 days		12.8%
90 - 366 days		17.1%
Other Assets Less Liabilities (o)		0.0%

(a)	The average credit quality is based upon a market weighted average of portfolio holdings that are rated by public rating agencies.

(o)	Less than 0.1%.

(q)

Each security is assigned a rating from Moody’s Investors Service. If not rated by Moody’s, the rating will be that assigned by Standard & Poor’s. Likewise, if not assigned a rating by Standard & Poor’s, it will be based on the rating assigned by Fitch, Inc. If not rated by any of the three agencies, the security is considered Not Rated. U.S. Treasuries and U.S. Agency securities are included in the “A-1”-rating category. Percentages are based on the total market value of investments as of 6/30/08.

(u)	For purposes of this presentation, accrued interest, where applicable, is included.

From time to time “Other Assets Less Liabilities” may be negative due to timing of cash receipts.

Percentages are based on net assets as of 6/30/08, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

Portfolio Composition — Total Return Variable Account

Portfolio structure (i)

LOGO


Top ten holdings (i)
Fannie Mae, 5.5%, 30 year		4.2%
Fannie Mae, 6.0%, 30 year		2.3%
Exxon Mobil Corp.		2.1%
U.S. Treasury Notes, 4.875%, 2009		1.8%
U.S. Treasury Notes, 4.625%, 2008		1.7%
Lockheed Martin Corp.		1.6%
U.S. Treasury Notes, 4.25%, 2013		1.6%
TOTAL S.A., ADR		1.5%
AT&T		1.2%
Wyeth		1.2%


Equity sectors
Financial Services		11.4%
Energy		9.6%
Utilities & Communications		7.2%
Consumer Staples		5.5%
Health Care		5.4%
Industrial Goods & Services		5.2%
Technology		3.3%
Retailing		3.3%
Leisure		1.8%
Basic Materials		1.4%
Autos & Housing		1.3%
Special Products & Services		1.0%
Transportation		0.7%

Fixed income sectors (i)
Mortgage-Backed Securities		16.6%
High Grade Corporates		9.9%
U.S. Treasury Securities		8.1%
Commercial Mortgage-Backed Securities		2.8%
U.S. Government Agencies		1.6%
Non U.S. Government Bonds		1.0%
Asset-Backed Securities		0.5%
Emerging Market Bonds		0.4%
Municipal Bonds		0.3%
High Yield Corporates		0.1%
Residential Mortgage-Backed Securities (o)		0.0%

(i)	For purposes of this presentation, the bond component includes accrued interest amounts and may be positively or negatively impacted by the equivalent exposure from any derivative holdings, if applicable.

(o)	Less than 0.1%.

Percentages are based on net assets as of 6/30/08, unless otherwise noted.

The portfolio is actively managed and current holdings may be different.

Portfolio of Investments (unaudited) — June 30, 2008

Capital Appreciation Variable Account


Issuer	Shares/Par	Value ($)

COMMON STOCKS - 98.1%
Aerospace - 2.1%
Precision Castparts Corp.	7,560	$	728,550
United Technologies Corp.	45,070		2,780,819

		$	3,509,369

Alcoholic Beverages - 1.5%
Diageo PLC	132,970	$	2,444,141

Apparel Manufacturers - 3.5%
LVMH Moet Hennessy Louis Vuitton S.A.	33,560	$	3,499,013
NIKE, Inc., “B”	39,110		2,331,347

		$	5,830,360

Biotechnology - 3.2%
Genentech, Inc. (a)	13,540	$	1,027,686
Genzyme Corp. (a)	51,350		3,698,227
Millipore Corp. (a)	9,910		672,493

		$	5,398,406

Broadcasting - 2.4%
Grupo Televisa S.A., ADR	47,180	$	1,114,392
News Corp., “A”	77,920		1,171,917
Omnicom Group, Inc.	40,190		1,803,727

		$	4,090,036

Brokerage & Asset Managers - 2.6%
Charles Schwab Corp.	104,190	$	2,140,063
Deutsche Boerse AG	11,120		1,248,132
Franklin Resources, Inc.	10,760		986,154

		$	4,374,349

Business Services - 6.4%
Amdocs Ltd. (a)	126,530	$	3,722,513
Automatic Data Processing, Inc.	39,950		1,673,905
Fidelity National Information Services, Inc.	21,350		788,029
Visa, Inc., “A”	20,710		1,683,930
Western Union Co.	119,120		2,944,646

		$	10,813,023

Cable TV - 0.9%
Comcast Corp., “A”	82,310	$	1,561,421

Computer Software - 6.1%
Citrix Systems, Inc. (a)	34,460	$	1,013,469
Microsoft Corp.	137,380		3,779,324
Oracle Corp. (a)	203,590		4,275,390
VeriSign, Inc. (a)	31,170		1,178,226

		$	10,246,409

Computer Software - Systems - 3.1%
Apple, Inc. (a)	10,720	$	1,794,957
EMC Corp. (a)	107,320		1,576,531
International Business Machines Corp.	15,350		1,819,436

		$	5,190,924

Consumer Goods & Services - 3.4%
Colgate-Palmolive Co.	25,100	$	1,734,410
Estee Lauder Cos., Inc., “A”	18,850		875,583
Procter & Gamble Co.	51,260		3,117,121

		$	5,727,114

Electrical Equipment - 3.9%
Danaher Corp.	44,890	$	3,469,997
General Electric Co.	47,230		1,260,569
W.W. Grainger, Inc.	22,730		1,859,314

		$	6,589,880

Electronics - 6.4%
Intel Corp.	135,750	$	2,915,910
Intersil Corp., “A”	47,580		1,157,146


Issuer	Shares/Par	Value ($)

COMMON STOCKS - continued
Electronics - continued
KLA-Tencor Corp.	43,800	$	1,783,098
National Semiconductor Corp.	43,310		889,587
Samsung Electronics Co. Ltd., GDR	7,372		2,161,633
Taiwan Semiconductor Manufacturing Co. Ltd., ADR	166,264		1,813,940

		$	10,721,314

Energy - Integrated - 4.0%
Exxon Mobil Corp.	34,340	$	3,026,384
Hess Corp.	11,450		1,444,876
Marathon Oil Corp.	42,700		2,214,849

		$	6,686,109

Food & Beverages - 4.6%
General Mills, Inc.	25,500	$	1,549,635
Nestle S.A.	58,000		2,624,913
PepsiCo, Inc.	54,780		3,483,460

		$	7,658,008

Food & Drug Stores - 2.7%
CVS Caremark Corp.	87,499	$	3,462,335
Walgreen Co.	33,360		1,084,534

		$	4,546,869

Gaming & Lodging - 1.2%
International Game Technology	36,100	$	901,778
Royal Caribbean Cruises Ltd.	51,070		1,147,543

		$	2,049,321

General Merchandise - 0.5%
Kohl’s Corp. (a)	20,380	$	816,015

Health Maintenance Organizations - 0.5%
UnitedHealth Group, Inc.	28,450	$	746,813

Insurance - 0.7%
MetLife, Inc.	21,930	$	1,157,246

Internet - 3.3%
eBay, Inc. (a)	45,660	$	1,247,888
Google, Inc., “A” (a)	8,210		4,321,908

		$	5,569,796

Major Banks - 3.0%
Bank of New York Mellon Corp.	43,924	$	1,661,645
State Street Corp.	53,140		3,400,429

		$	5,062,074

Medical & Health Technology & Services - 1.2%
Cardinal Health, Inc.	18,300	$	943,914
VCA Antech, Inc. (a)	37,550		1,043,139

		$	1,987,053

Medical Equipment - 4.7%
Advanced Medical Optics, Inc. (a)	68,850	$	1,290,249
Medtronic, Inc.	53,080		2,746,890
ResMed, Inc. (a)	33,380		1,193,001
Stryker Corp.	20,240		1,272,691
Zimmer Holdings, Inc. (a)	20,700		1,408,635

		$	7,911,466

Metals & Mining - 0.7%
BHP Billiton Ltd., ADR	14,310	$	1,219,069

Network & Telecom - 4.3%
Cisco Systems, Inc. (a)	191,720	$	4,459,407
Juniper Networks, Inc. (a)	44,770		992,999
QUALCOMM, Inc.	19,670		872,758
Research in Motion Ltd. (a)	7,500		876,750

		$	7,201,914

8-CAVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Oil Services - 5.1%
Halliburton Co.		61,090	$	3,242,046
Noble Corp.		26,630		1,729,885
Schlumberger Ltd.		11,750		1,262,303
Weatherford International Ltd. (a)		46,260		2,294,033

			$	8,528,267

Other Banks & Diversified Financials - 1.0%
American Express Co.		42,570	$	1,603,612

Personal Computers & Peripherals - 0.6%
NetApp, Inc. (a)		45,890	$	993,977

Pharmaceuticals - 7.4%
Allergan, Inc.		33,140	$	1,724,937
Johnson & Johnson		53,060		3,413,880
Merck KGaA		11,980		1,701,747
Roche Holding AG		13,750		2,471,182
Wyeth		65,470		3,139,941

			$	12,451,687

Specialty Chemicals - 1.4%
Praxair, Inc.		25,590	$	2,411,602

Specialty Stores - 2.2%
Lowe’s Cos., Inc.		43,470	$	902,003
Nordstrom, Inc.		44,530		1,349,259
Staples, Inc.		57,120		1,356,600

			$	3,607,862

Telecommunications - Wireless - 2.3%
America Movil S.A.B. de C.V., “L”, ADR		47,530	$	2,507,208
Rogers Communications, Inc., “B”		33,960		1,312,894

			$	3,820,102

Trucking - 1.2%
FedEx Corp.		12,120	$	954,935
United Parcel Service, Inc., “B”		17,270		1,061,587

			$	2,016,522

Total Common Stocks (Identified Cost, $165,637,600)			$	164,542,130

SHORT-TERM OBLIGATIONS - 1.9%
Toyota Motor Credit Corp., 2.57%, due 7/01/08, at Amortized Cost and Value (y)	$	3,221,000	$	3,221,000

Total Investments (Identified Cost, $168,858,600)			$	167,763,130


OTHER ASSETS, LESS LIABILITIES - 0.0%				30,736

NET ASSETS - 100.0%			$	167,793,866

See portfolio footnotes and notes to financial statements.

9-CAVA

Portfolio of Investments (unaudited) — June 30, 2008

Global Governments Variable Account


Issuer	Shares/Par		Value ($)

BONDS - 96.2%
Foreign Bonds - 71.5%
Australia - 1.1%
Commonwealth of Australia, 6%, 2017	AUD	97,000	$	90,199

Belgium - 3.7%
Kingdom of Belgium, 5.5%, 2017	EUR	192,000	$	315,643

Canada - 1.8%
Canada Housing Trust, 4.6%, 2011	CAD	52,000	$	52,337
Government of Canada, 4.5%, 2015	CAD	81,000		84,011
Government of Canada, 5.75%, 2033	CAD	16,000		19,721

			$	156,069

Denmark - 0.6%
Kingdom of Denmark, 4%, 2015	DKK	253,000	$	50,330

France - 5.0%
Republic of France, 6%, 2025	EUR	185,000	$	323,510
Republic of France, 4.75%, 2035	EUR	68,000		102,977

			$	426,487

Germany - 9.2%
Federal Republic of Germany, 5.25%, 2010	EUR	152,000	$	242,032
Federal Republic of Germany, 3.75%, 2015	EUR	172,000		257,309
Federal Republic of Germany, 6.25%, 2030	EUR	152,000		279,240

			$	778,581

Italy - 4.1%
Republic of Italy, 4.75%, 2013	EUR	221,000	$	344,205

Japan - 25.5%
Development Bank of Japan, 1.4%, 2012	JPY	27,000,000	$	256,792
Government of Japan, 0.8%, 2010	JPY	7,000,000		66,114
Government of Japan, 1.5%, 2012	JPY	16,000,000		153,470
Government of Japan, 1.3%, 2014	JPY	96,000,000		905,351
Government of Japan, 1.5%, 2015	JPY	11,000,000		105,025
Government of Japan, 1.7%, 2017	JPY	18,000,000		172,580
Government of Japan, 2.1%, 2024	JPY	29,000,000		275,616
Government of Japan, 2.2%, 2027	JPY	19,000,000		179,784
Government of Japan, 2.4%, 2037	JPY	5,000,000		47,103

			$	2,161,835

Netherlands - 4.5%
Kingdom of Netherlands, 3.75%, 2014	EUR	258,000	$	385,167

Spain - 4.5%
Kingdom of Spain, 5%, 2012	EUR	244,000	$	385,665

Sweden - 0.7%
Kingdom of Sweden, 4.5%, 2015	SEK	345,000	$	56,971

United Kingdom - 10.8%
United Kingdom Treasury, 9%, 2011	GBP	114,000	$	250,875
United Kingdom Treasury, 8%, 2015	GBP	150,000		348,470
United Kingdom Treasury, 8%, 2021	GBP	65,000		162,946
United Kingdom Treasury, 4.25%, 2036	GBP	84,000		154,452

			$	916,743

Total Foreign Bonds			$	6,067,895

U.S. Bonds - 24.7%
Asset Backed & Securitized - 2.7%
Bayview Commercial Asset Trust, FRN, 3.648%, 2023 (n)	CAD	30,000	$	22,575
Commercial Mortgage Asset Trust, FRN, 1.119%, 2032 (i)(n)	$	1,338,267		34,308
Commercial Mortgage Pass-Through Certificates, FRN, 2.661%, 2017 (n)		59,000		56,984


Issuer	Shares/Par		Value ($)

BONDS - continued
U.S. Bonds - continued
Asset Backed & Securitized - continued
Commercial Mortgage Pass-Through Certificates, FRN, 2.671%, 2017 (n)	$	94,804	$	89,752
First Union National Bank Commercial Mortgage Trust, FRN, 1.142%, 2043 (i)(n)		1,473,470		29,443

			$	233,062

Mortgage Backed - 1.1%
Fannie Mae, 5.37%, 2013	$	24,303	$	24,860
Fannie Mae, 4.78%, 2015		23,969		23,365
Fannie Mae, 5.09%, 2016		25,000		24,630
Fannie Mae, 5.424%, 2016		24,300		24,529

			$	97,384

Municipals - 0.6%
Minnesota Public Facilities Authority, Water Pollution Control Rev., “B”, 5%, 2018	$	45,000	$	48,650

U.S. Government Agencies - 2.3%
Aid-Egypt, 4.45%, 2015	$	49,000	$	49,418
Small Business Administration, 4.57%, 2025		39,081		36,984
Small Business Administration, 5.21%, 2026		105,122		105,070

			$	191,472

U.S. Treasury Obligations - 18.0%
U.S. Treasury Bonds, 4.75%, 2017	$	145,000	$	153,609
U.S. Treasury Bonds, 8%, 2021		183,000		248,208
U.S. Treasury Bonds, 4.75%, 2037		52,000		53,698
U.S. Treasury Notes, 3.125%, 2008		1,000		1,004
U.S. Treasury Notes, 2.125%, 2010		572,000		567,844
U.S. Treasury Notes, 4.75%, 2012		267,000		281,747
U.S. Treasury Notes, 4%, 2015		211,000		216,885

			$	1,522,995

Total U.S. Bonds			$	2,093,563
Total Bonds (Identified Cost, $8,078,605)			$	8,161,458

CALL OPTIONS PURCHASED - 0.0%
U.S. Treasury Notes 10 yr Future - July 2008 @ $114.50 (Premiums Paid, $769)		1	$	688

PUT OPTIONS PURCHASED - 0.0%
USD Currency - July 2008 @ EUR 1.59 (Premiums Paid, $855)		125,610	$	806

REPURCHASE AGREEMENTS - 4.3%
Merrill Lynch, 2.5%, dated 6/30/08, due 7/01/08, total to be received $359,025 (secured by various U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	359,000	$	359,000

Total Investments (Identified Cost, $8,439,229)			$	8,521,952


OTHER ASSETS, LESS LIABILITIES - (0.5)%				(39,649	)

NET ASSETS - 100.0%			$	8,482,303

10 - WGVA

Portfolio of Investments (unaudited) — continued

Forward Foreign Currency Exchange Contracts at 6/30/08


	Type	Currency	Contracts to Deliver/ Receive	Settlement Date Range	In Exchange For		Contracts at Value		Net Unrealized Appreciation (Depreciation)
Appreciation
	SELL	AUD	43,861	8/11/08	$	41,928	$	41,815	$	113
	SELL	CAD	17,147	8/25/08		16,865		16,836		29
	BUY	CHF	22,393	7/21/08		21,620		21,961		341
	SELL	CLP	5,130,779	7/17/08		10,298		9,759		539
	BUY	CNY	297,152	8/21/08		43,000		43,627		627
	BUY	DKK	36,123	8/12/08		7,471		7,611		140
	BUY	EUR	596,085	8/25/08		925,748		936,217		10,469
	BUY	GBP	2,000	8/26/08		3,902		3,970		68
	BUY	JPY	67,696,779	7/31/08 - 8/26/08		630,341		640,366		10,025
	BUY	NOK	438,305	7/18/08		84,444		85,967		1,523
	BUY	SEK	244,372	7/31/08		40,411		40,523		112
	SELL	SEK	275,655	7/31/08		46,000		45,710		290

									$	24,276

Depreciation
	SELL	AUD	50,961	8/11/08	$	47,266	$	48,583	$	(1,317	)
	BUY	CLP	10,277,005	7/17/08		20,595		19,546		(1,049	)
	BUY	EUR	26,400	8/25/08		41,469		41,464		(5	)
	SELL	EUR	368,698	8/20/08 - 8/25/08		572,460		579,081		(6,621	)
	SELL	GBP	228,458	8/26/08		447,586		453,446		(5,860	)
	BUY	JPY	4,315,748	7/31/08		41,333		40,772		(561	)
	SELL	JPY	24,590,289	7/31/08 - 8/26/08		228,994		232,367		(3,373	)
	SELL	NZD	81,739	8/20/08		61,162		61,740		(578	)

									$	(19,364	)

At June 30, 2008, the variable account had sufficient cash and/or securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

11-WGVA

Portfolio of Investments (unaudited) — June 30, 2008

Government Securities Variable Account


Issuer	Shares/Par		Value ($)

BONDS - 95.0%
Agency - Other - 5.7%
Financing Corp., 9.4%, 2018	$	1,020,000	$	1,381,217
Financing Corp., 10.35%, 2018		1,150,000		1,654,427
Financing Corp., STRIPS, 0%, 2017		1,220,000		796,152

			$	3,831,796

Mortgage Backed - 57.4%
Fannie Mae, 4.73%, 2012	$	91,746	$	90,983
Fannie Mae, 4.79%, 2012-2015		1,032,900		1,035,956
Fannie Mae, 4.845%, 2013		253,374		251,317
Fannie Mae, 5%, 2013-2027		2,687,695		2,697,529
Fannie Mae, 5.06%, 2013-2017		192,031		190,395
Fannie Mae, 4.545%, 2014		113,216		110,225
Fannie Mae, 4.6%, 2014		122,051		119,067
Fannie Mae, 4.61%, 2014		370,129		361,558
Fannie Mae, 4.77%, 2014		103,146		101,227
Fannie Mae, 4.849%, 2014		761,059		750,852
Fannie Mae, 4.871%, 2014		468,091		463,308
Fannie Mae, 5.1%, 2014		134,379		133,855
Fannie Mae, 4.5%, 2015-2020		2,394,853		2,337,476
Fannie Mae, 4.56%, 2015		157,441		152,114
Fannie Mae, 4.62%, 2015		175,426		170,253
Fannie Mae, 4.665%, 2015		106,275		103,253
Fannie Mae, 4.7%, 2015		122,130		118,872
Fannie Mae, 4.74%, 2015		98,299		95,838
Fannie Mae, 4.81%, 2015		124,796		121,834
Fannie Mae, 4.815%, 2015		117,000		114,386
Fannie Mae, 4.82%, 2015		335,169		328,281
Fannie Mae, 4.89%, 2015		86,023		84,578
Fannie Mae, 4.925%, 2015		338,240		333,522
Fannie Mae, 5.471%, 2015		115,027		116,489
Fannie Mae, 6.5%, 2016-2036		1,381,545		1,433,884
Fannie Mae, 4.995%, 2017		297,377		294,362
Fannie Mae, 5.5%, 2017-2035		9,424,483		9,374,427
Fannie Mae, 6%, 2017-2037		2,473,180		2,512,363
Fannie Mae, 4.88%, 2020		84,499		84,273
Fannie Mae, 5.19%, 2020		81,305		79,504
Fannie Mae, 7.5%, 2022-2031		140,568		151,721
Freddie Mac, 4.5%, 2013-2021		168,039		168,484
Freddie Mac, 4.375%, 2015		392,236		391,247
Freddie Mac, 5%, 2016-2027		2,960,826		2,986,434
Freddie Mac, 6%, 2021-2037		2,324,739		2,361,150
Freddie Mac, 5.5%, 2022-2035		4,505,473		4,499,138
Freddie Mac, 6.5%, 2032-2037		600,240		623,459
Ginnie Mae, 5.5%, 2033-2038		2,535,652		2,530,122
Ginnie Mae, 5.612%, 2058		381,353		380,043
Ginnie Mae, 6.36%, 2058		344,793		353,979

			$	38,607,758

Municipals - 1.2%
California Educational Facilities Authority Rev. (Stanford University), “T-1”, 5%, 2039	$	670,000	$	695,762
Minnesota Public Facilities Authority, Water Pollution Control Rev., “B”, 5%, 2018		105,000		113,516

			$	809,278

U.S. Government Agencies - 11.6%
Aid-Egypt, 4.45%, 2015	$	473,000	$	477,035
Aid-Peru, 9.98%, 2008		91,114		91,123
Empresa Energetica Cornito Ltd., 6.07%, 2010		1,152,000		1,192,735
Farmer Mac, 5.5%, 2011 (n)		690,000		731,263
Small Business Administration, 8.7%, 2009		13,942		14,258
Small Business Administration, 10.05%, 2009		1,645		1,679


Issuer	Shares/Par		Value ($)

BONDS - continued
U.S. Government Agencies - continued
Small Business Administration, 6.44%, 2021	$	388,402	$	402,515
Small Business Administration, 6.625%, 2021		513,799		539,923
Small Business Administration, 4.98%, 2023		205,026		203,067
Small Business Administration, 4.77%, 2024		463,818		453,454
Small Business Administration, 4.86%, 2024		263,257		257,933
Small Business Administration, 4.88%, 2024		231,791		226,177
Small Business Administration, 4.99%, 2024		344,851		338,036
Small Business Administration, 5.11%, 2025		280,316		276,958
U.S. Department of Housing & Urban Development, 6.36%, 2016		500,000		527,028
U.S. Department of Housing & Urban Development, 6.59%, 2016		2,045,000		2,050,789

			$	7,783,973

U.S. Treasury Obligations - 19.1%
U.S. Treasury Bonds, 9.25%, 2016	$	409,000	$	556,687
U.S. Treasury Bonds, 7.5%, 2016		218,000		272,313
U.S. Treasury Bonds, 4.75%, 2017		993,000		1,051,959
U.S. Treasury Bonds, 7.875%, 2021		396,000		527,979
U.S. Treasury Bonds, 6.25%, 2023		322,000		383,105
U.S. Treasury Bonds, 6.75%, 2026 (f)		3,382,000		4,281,135
U.S. Treasury Bonds, 5.25%, 2029		876,000		950,392
U.S. Treasury Bonds, 4.375%, 2038		727,000		708,598
U.S. Treasury Notes, 4.75%, 2010		1,860,000		1,926,408
U.S. Treasury Notes, 2.125%, 2010		500,000		496,367
U.S. Treasury Notes, 4.125%, 2012		1,159,000		1,199,655
U.S. Treasury Notes, 12%, 2013		19,000		19,212
U.S. Treasury Notes, 4%, 2014		211,000		217,610
U.S. Treasury Notes, 4.75%, 2014		261,000		279,800

			$	12,871,220

Total Bonds (Identified Cost, $63,835,523)			$	63,904,025

REPURCHASE AGREEMENTS - 3.3%
Merrill Lynch, 2.5%, dated 6/30/08, due 7/01/08, total to be received $2,239,155 (secured by U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	2,239,000	$	2,239,000

Total Investments (Identified Cost, $66,074,523)			$	66,143,025


OTHER ASSETS, LESS LIABILITIES - 1.7%				1,153,312

NET ASSETS - 100.0%			$	67,296,337

12-GSVA

Portfolio of Investments (unaudited) — continued

Futures contracts outstanding at 6/30/08


Description	Contracts	Value		Expiration Date	Unrealized Appreciation (Depreciation)
U.S. Treasury Bond 30 yr (Short)	14	$	1,618,313	Sep - 08	$	(36,799	)
U.S. Treasury Note 5 yr (Long)	51		5,638,289	Sep - 08		21,736
U.S. Treasury Note 10 yr (Long)	3		341,766	Sep - 08		4,068

					$	(10,995	)

At June 30, 2008, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

13-GSVA

Portfolio of Investments (unaudited) — June 30, 2008

High Yield Variable Account


Issuer	Shares/Par		Value ($)

BONDS - 88.7%
Aerospace - 1.2%
Hawker Beechcraft Acquisition Co. LLC, 9.75%, 2017	$	240,000	$	240,000
Vought Aircraft Industries, Inc., 8%, 2011		315,000		292,950

			$	532,950

Airlines - 0.6%
Continental Airlines, Inc., 7.339%, 2014	$	281,000	$	213,560
Continental Airlines, Inc., 6.9%, 2017		53,024		43,745
Continental Airlines, Inc., 6.748%, 2017		42,178		34,797

			$	292,102

Asset Backed & Securitized - 4.8%
ARCap REIT, Inc., CDO, “H”, 6.1%, 2045 (n)	$	165,567	$	57,948
Banc of America Commercial Mortgage, Inc., 5.39%, 2045		75,059		68,002
Banc of America Commercial Mortgage, Inc., FRN, 5.772%, 2017		315,434		285,292
Banc of America Commercial Mortgage, Inc., FRN, 6.002%, 2017		71,823		65,689
Citigroup Commercial Mortgage Trust, FRN, 5.7%, 2017		148,212		96,907
Credit Suisse Mortgage Capital Certificate, 5.343%, 2039		70,665		63,474
Crest Ltd., CDO, 7%, 2040		154,000		79,969
First Union National Bank Commercial Mortgage Trust, 6.75%, 2032		165,000		137,908
JPMorgan Chase Commercial Mortgage Securities Corp., 5.44%, 2045		224,410		203,629
JPMorgan Chase Commercial Mortgage Securities Corp., 5.372%, 2047		114,643		103,402
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.466%, 2047		145,361		129,756
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 6.26%, 2051		110,000		80,796
Merrill Lynch Mortgage Trust, FRN, 6.022%, 2050		110,000		79,766
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN, 5.204%, 2049		242,759		216,761
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN, 5.902%, 2050		62,000		56,497
Wachovia Bank Commercial Mortgage Trust, FRN, 5.941%, 2047		87,180		60,931
Wachovia Bank Commercial Mortgage Trust, FRN, 6.099%, 2051		240,129		220,660
Wachovia Credit, CDO, FRN, 4.154%, 2026 (z)		250,000		138,258

			$	2,145,645

Automotive - 2.9%
Allison Transmission, Inc., 11%, 2015 (n)	$	355,000	$	317,725
Ford Motor Credit Co. LLC, 8.625%, 2010		190,000		161,178
Ford Motor Credit Co. LLC, 12%, 2015		350,000		307,883
Ford Motor Credit Co. LLC, 8%, 2016		300,000		218,029
Ford Motor Credit Co. LLC, FRN, 4.283%, 2010		155,000		136,467
General Motors Corp., 8.375%, 2033		291,000		172,418

			$	1,313,700

Broadcasting - 5.7%
Allbritton Communications Co., 7.75%, 2012	$	328,000	$	318,980
Bonten Media Acquisition Co., 9%, 2015 (n)(p)		135,000		98,550


Issuer	Shares/Par		Value ($)

BONDS - (continued)
Broadcasting - (continued)
CanWest MediaWorks LP, 9.25%, 2015 (n)	$	160,000	$	130,400
DIRECTV Holdings LLC, 7.625%, 2016 (z)		245,000		241,325
Lamar Media Corp., 6.625%, 2015		225,000		204,750
Lamar Media Corp., “C”, 6.625%, 2015		145,000		131,950
LBI Media, Inc., 8.5%, 2017 (n)		150,000		115,500
LIN TV Corp., 6.5%, 2013		320,000		292,800
Local TV Finance LLC, 9.25%, 2015 (n)(p)		235,000		183,300
Newport Television LLC, 13%, 2017 (n)(p)		280,000		246,400
Nexstar Broadcasting Group, Inc., 7%, 2014		270,000		234,900
Univision Communications, Inc., 9.75%, 2015 (n)(p)		450,000		330,750
Young Broadcasting, Inc., 8.75%, 2014		80,000		43,200

			$	2,572,805

Brokerage & Asset Managers - 0.7%
Nuveen Investments, Inc., 10.5%, 2015 (n)	$	350,000	$	322,875

Building - 1.8%
Associated Materials, Inc., 9.75%, 2012	$	75,000	$	74,250
Associated Materials, Inc., 0% to 2009, 11.25% to 2014		120,000		79,200
Building Materials Corp. of America, 7.75%, 2014		165,000		135,300
Nortek Holdings, Inc., 10%, 2013 (n)		110,000		105,050
Nortek Holdings, Inc., 8.5%, 2014		195,000		124,800
Ply Gem Industries, Inc., 9%, 2012		345,000		202,688
Ply Gem Industries, Inc., 11.75%, 2013 (z)		85,000		77,988

			$	799,276

Business Services - 0.7%
SunGard Data Systems, Inc., 10.25%, 2015	$	326,000	$	327,630

Cable TV - 3.9%
CCH I Holdings LLC, 11%, 2015	$	105,000	$	77,831
CCH II Holdings LLC, 10.25%, 2010		380,000		367,650
CCO Holdings LLC, 8.75%, 2013		705,000		648,600
CSC Holdings, Inc., 6.75%, 2012		285,000		267,900
CSC Holdings, Inc., 8.5%, 2015 (n)		5,000		4,913
Mediacom LLC, 9.5%, 2013		180,000		169,650
NTL Cable PLC, 9.125%, 2016		228,000		213,750

			$	1,750,294

Chemicals - 3.6%
Innophos, Inc., 8.875%, 2014	$	265,000	$	265,000
Koppers Holdings, Inc., 9.875%, 2013		220,000		231,000
Koppers Holdings, Inc., 0% to 2009, 9.875% to 2014		348,000		314,940
Momentive Performance Materials, Inc., 9.75%, 2014		75,000		64,125
Momentive Performance Materials, Inc., 11.5%, 2016		304,000		226,480
Nalco Co., 7.75%, 2011		235,000		235,000
Nalco Co., 8.875%, 2013		300,000		307,500

			$	1,644,045

Computer Software - 0.6%
First Data Corp., 9.875%, 2015 (n)	$	305,000	$	265,350

Consumer Goods & Services - 2.2%
Corrections Corp. of America, 6.25%, 2013	$	120,000	$	115,500
GEO Group, Inc., 8.25%, 2013		180,000		183,600

14-HYVA

Portfolio of Investments (unaudited)— continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Consumer Goods & Services - continued
Jarden Corp., 7.5%, 2017	$	75,000	$	65,250
KAR Holdings, Inc., 10%, 2015		170,000		142,800
Service Corp. International, 7.375%, 2014		110,000		110,000
Service Corp. International, 7%, 2017		400,000		382,000

			$	999,150

Containers - 1.2%
Crown Americas LLC, 7.625%, 2013	$	150,000	$	149,625
Graham Packaging Co. LP, 9.875%, 2014		165,000		146,025
Greif, Inc., 6.75%, 2017		165,000		159,225
Owens-Brockway Glass Container, Inc., 8.25%, 2013		105,000		107,625

			$	562,500

Defense Electronics - 0.9%
L-3 Communications Corp., 6.125%, 2014	$	235,000	$	220,313
L-3 Communications Corp., 5.875%, 2015		215,000		198,338

			$	418,651

Electronics - 0.9%
Avago Technologies Finance, 11.875%, 2015	$	120,000	$	129,000
Flextronics International Ltd., 6.25%, 2014		125,000		116,875
Spansion LLC, 11.25%, 2016 (n)		240,000		148,800

			$	394,675

Emerging Market Sovereign - 0.6%
Republic of Argentina, FRN, 3.092%, 2012	$	303,750	$	255,675

Energy - Independent - 5.9%
Chaparral Energy, Inc., 8.875%, 2017	$	160,000	$	138,800
Chesapeake Energy Corp., 7%, 2014		149,000		146,020
Chesapeake Energy Corp., 6.375%, 2015		265,000		250,425
Forest Oil Corp., 7.25%, 2019		150,000		144,000
Forest Oil Corp., 7.25%, 2019 (n)		35,000		33,600
Hilcorp Energy I LP, 7.75%, 2015 (n)		20,000		19,200
Hilcorp Energy I LP, 9%, 2016 (n)		115,000		117,013
Mariner Energy, Inc., 8%, 2017		140,000		135,450
Newfield Exploration Co., 6.625%, 2014		250,000		235,000
OPTI Canada, Inc., 8.25%, 2014		320,000		318,400
Plains Exploration & Production Co., 7%, 2017		355,000		340,800
Plains Exploration & Production Co., 7.625%, 2018		70,000		70,000
Quicksilver Resources, Inc., 7.125%, 2016		355,000		330,594
SandRidge Energy, Inc., 8.625%, 2015 (n)(p)		95,000		97,375
SandRidge Energy, Inc., 8%, 2018 (n)		130,000		130,650
Southwestern Energy Co., 7.5%, 2018 (n)		140,000		144,047

			$	2,651,374

Entertainment - 0.5%
AMC Entertainment, Inc., 11%, 2016	$	150,000	$	148,500
Marquee Holdings, Inc., 9.505%, 2014		115,000		90,275

			$	238,775


Issuer	Shares/Par		Value ($)

BONDS - continued
Financial Institutions - 1.0%
General Motors Corp., 6.875%, 2011	$	422,000	$	303,237
General Motors Corp., 8%, 2031		217,000		141,175
Residential Capital LLC, 9.625%, 2015 (z)		10,000		4,850

			$	449,262

Food & Beverages - 2.5%
ARAMARK Corp., 8.5%, 2015	$	420,000	$	411,600
B&G Foods, Inc., 8%, 2011		175,000		171,938
Dean Foods Co., 7%, 2016		215,000		186,513
Del Monte Corp., 6.75%, 2015		185,000		176,213
Michael Foods, Inc., 8%, 2013		175,000		172,375

			$	1,118,639

Forest & Paper Products - 2.5%
Buckeye Technologies, Inc., 8%, 2010	$	49,000	$	49,000
Buckeye Technologies, Inc., 8.5%, 2013		375,000		373,125
Georgia-Pacific Corp., 7.125%, 2017 (n)		135,000		126,900
Georgia-Pacific Corp., 8%, 2024		75,000		69,375
Graphic Packaging International Corp., 9.5%, 2013		115,000		109,825
JSG Funding PLC, 7.75%, 2015		25,000		22,750
Millar Western Forest Products Ltd., 7.75%, 2013		245,000		159,250
NewPage Holding Corp., 10%, 2012		80,000		81,000
Smurfit-Stone Container Corp., 8%, 2017		165,000		132,000

			$	1,123,225

Gaming & Lodging - 7.0%
Firekeepers Development Authority, 13.875%, 2015 (z)	$	145,000	$	141,738
Fontainebleau Las Vegas Holdings LLC, 10.25%, 2015 (n)		345,000		224,250
Harrah’s Operating Co., Inc., 5.5%, 2010		140,000		125,125
Harrah’s Operating Co., Inc., 5.375%, 2013		170,000		104,125
Harrah’s Operating Co., Inc., 10.75%, 2016 (n)		415,000		344,450
Harrah’s Operating Co., Inc., 10.75%, 2018 (n)(p)		300,000		220,500
Mandalay Resort Group, 9.375%, 2010		175,000		175,000
MGM Mirage, 8.5%, 2010		140,000		138,250
MGM Mirage, 8.375%, 2011		215,000		207,475
MGM Mirage, 6.75%, 2013		200,000		172,500
MGM Mirage, 5.875%, 2014		195,000		157,950
Pinnacle Entertainment, Inc., 7.5%, 2015		320,000		244,800
Station Casinos, Inc., 6.5%, 2014		530,000		304,750
Station Casinos, Inc., 6.875%, 2016		380,000		207,575
Trump Entertainment Resorts Holdings, Inc., 8.5%, 2015		405,000		252,113
Wynn Las Vegas LLC, 6.625%, 2014		130,000		118,950

			$	3,139,551

General Merchandise - 0.5%
Buhrmann U.S., Inc., 7.875%, 2015	$	195,000	$	217,889

Industrial - 1.6%
Blount, Inc., 8.875%, 2012	$	205,000	$	205,000
JohnsonDiversey, Inc., 9.625%, 2012	EUR	70,000		106,946
JohnsonDiversey, Inc., “B”, 9.625%, 2012	$	400,000		404,000

			$	715,946

Insurance - Property & Casualty - 0.3%
USI Holdings Corp., 9.75%, 2015 (n)	$	160,000	$	137,600

15-HYVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Machinery & Tools - 0.6%
Case New Holland, Inc., 7.125%, 2014	$	280,000	$	274,400

Major Banks - 1.1%
Bank of America Corp., 8% to 2018, FRN to 2049	$	225,000	$	210,796
JPMorgan Chase & Co., 7.9% to 2018, FRN to 2049		325,000		304,733

			$	515,529

Medical & Health Technology & Services - 7.9%
Biomet, Inc., 10%, 2017	$	160,000	$	170,800
Biomet, Inc., 11.625%, 2017		310,000		328,600
Community Health Systems, Inc., 8.875%, 2015		490,000		493,063
Cooper Cos., Inc., 7.125%, 2015		220,000		211,200
DaVita, Inc., 7.25%, 2015		395,000		384,138
HCA, Inc., 6.375%, 2015		445,000		369,350
HCA, Inc., 9.25%, 2016		765,000		787,950
Psychiatric Solutions, Inc., 7.75%, 2015		200,000		198,000
U.S. Oncology, Inc., 10.75%, 2014		325,000		322,563
Universal Hospital Services, Inc., 8.5%, 2015 (p)		155,000		155,000
Universal Hospital Services, Inc., FRN, 6.302%, 2015		45,000		42,075
VWR Funding, Inc., 10.25%, 2015 (p)		135,000		124,538

			$	3,587,277

Metals & Mining - 4.5%
Arch Western Finance LLC, 6.75%, 2013	$	175,000	$	171,500
FMG Finance Ltd., 10.625%, 2016 (n)		320,000		372,800
Freeport-McMoRan Copper & Gold, Inc., 8.375%, 2017		580,000		611,900
Freeport-McMoRan Copper & Gold, Inc., FRN, 5.882%, 2015		305,000		308,007
Peabody Energy Corp., 5.875%, 2016		225,000		210,375
Peabody Energy Corp., 7.375%, 2016		175,000		174,563
PNA Group, Inc., 10.75%, 2016		160,000		188,000

			$	2,037,145

Municipals - 0.4%
Regional Transportation Authority, IL, “A”, MBIA, 4.5%, 2035	$	215,000	$	199,468

Natural Gas - Distribution - 0.9%
AmeriGas Partners LP, 7.125%, 2016	$	200,000	$	185,500
Inergy LP, 6.875%, 2014		235,000		218,550

			$	404,050

Natural Gas - Pipeline - 2.1%
Atlas Pipeline Partners LP, 8.125%, 2015	$	155,000	$	152,288
Atlas Pipeline Partners LP, 8.75%, 2018 (z)		140,000		138,950
Deutsche Bank (El Paso Performance-Linked Trust, CLN), 7.75%, 2011 (n)		255,000		256,895
El Paso Corp., 7.25%, 2018		140,000		137,900
Transcontinental Gas Pipe Line Corp., 7%, 2011		55,000		57,200
Williams Partners LP, 7.25%, 2017		205,000		205,000

			$	948,233

Network & Telecom - 3.8%
Cincinnati Bell, Inc., 8.375%, 2014	$	315,000	$	304,763
Citizens Communications Co., 9.25%, 2011		225,000		232,875
Nordic Telephone Co. Holdings, 8.875%, 2016 (n)		205,000		200,900
Qwest Capital Funding, Inc., 7.25%, 2011		355,000		344,350


Issuer	Shares/Par		Value ($)

BONDS - continued
Network & Telecom - continued
Qwest Corp., 7.875%, 2011	$	95,000	$	95,000
Qwest Corp., 8.875%, 2012		300,000		306,000
Windstream Corp., 8.625%, 2016		215,000		214,463

			$	1,698,351

Oil Services - 0.9%
Basic Energy Services, Inc., 7.125%, 2016	$	290,000	$	282,025
GulfMark Offshore, Inc., 7.75%, 2014		110,000		110,825

			$	392,850

Printing & Publishing - 3.2%
American Media Operations, Inc., 10.25%, 2009 (z)	$	8,181	$	6,586
American Media Operations, Inc., “B”, 10.25%, 2009		225,000		181,125
Dex Media West LLC, 9.875%, 2013		119,000		107,100
Dex Media, Inc., 0% to 2008, 9% to 2013		300,000		214,500
Dex Media, Inc., 0% to 2008, 9% to 2013		425,000		303,875
Idearc, Inc., 8%, 2016		395,000		248,356
Nielsen Finance LLC, 10%, 2014		230,000		231,725
Nielsen Finance LLC, 0% to 2011, 12.5% to 2016		40,000		27,500
Quebecor World, Inc., 6.125%, 2013 (d)		105,000		38,325
R.H. Donnelley Corp., 8.875%, 2016		175,000		105,000

			$	1,464,092

Retailers - 0.4%
Couche-Tard, Inc., 7.5%, 2013	$	120,000	$	118,500
Sally Holdings LLC, 10.5%, 2016		45,000		42,863

			$	161,363

Specialty Stores - 0.3%
Payless ShoeSource, Inc., 8.25%, 2013	$	160,000	$	140,000

Steel - 0.3%
Evraz Group S.A., 8.875%, 2013 (z)	$	140,000	$	140,168

Supermarkets - 0.4%
Stater Brothers Holdings, Inc., 7.75%, 2015	$	165,000	$	163,763

Telecommunications - Wireless - 1.7%
Alltel Corp., 7%, 2012	$	238,000	$	242,760
MetroPCS Wireless, Inc., 9.25%, 2014		255,000		245,438
Wind Acquisition Finance S.A., 10.75%, 2015 (n)		250,000		262,500

			$	750,698

Transportation - Services - 0.3%
Hertz Corp., 8.875%, 2014	$	160,000	$	146,400
Utilities - Electric Power - 5.8%
Dynegy Holdings, Inc., 7.5%, 2015	$	125,000	$	115,313
Edison Mission Energy, 7%, 2017		340,000		317,900
Mirant North America LLC, 7.375%, 2013		240,000		237,900
NRG Energy, Inc., 7.375%, 2016		965,000		908,306
Reliant Energy, Inc., 6.75%, 2014		75,000		76,500
Reliant Energy, Inc., 7.875%, 2017		340,000		332,350
Sierra Pacific Resources, 8.625%, 2014		110,000		115,300
Texas Competitive Electric Holdings LLC, 10.25%, 2015 (n)		525,000		514,500

			$	2,618,069

Total Bonds (Identified Cost, $42,567,665)			$	40,031,440

16-HYVA

Portfolio of Investments (unaudited)— continued


Issuer	Shares/Par		Value ($)

FLOATING RATE LOANS (g)(r) - 6.0%
Aerospace - 0.5%
Hawker Beechcraft Acquisition Co., Letter of Credit, 4.69%, 2014		10,085	$	9,448
Hawker Beechcraft Acquisition Co., Term Loan, 4.8%, 2014		250,954		235,113

			$	244,561

Automotive - 1.2%
Federal-Mogul Corp., Term Loan B, 4.41%, 2014		187,893	$	156,890
Ford Motor Co., Term Loan B, 5.48%, 2013		392,244		315,658
Mark IV Industries, Inc., Second Lien Term Loan, 11.42%, 2011		169,464		68,633

			$	541,181

Broadcasting - 0.5%
Young Broadcasting, Inc., Term Loan, 5.19%, 2012		182,093	$	163,884
Young Broadcasting, Inc., Term Loan B-1, 5.25%, 2012		67,169		60,452

			$	224,336

Computer Software - 0.5%
First Data Corp., Term Loan B-1, 5.26%, 2014		241,834	$	221,671

Forest & Paper Products - 0.1%
Abitibi Consolidated, Inc., Term Loan, 11.5%, 2009		65,619	$	65,701

Gaming & Lodging - 0.3%
Green Valley Ranch Gaming LLC, Second Lien Term Loan, 5.89%, 2014 (o)		248,868	$	156,787

Medical & Health Technology & Services - 0.9%
Community Health Systems, Inc., Delayed Draw Term Loan B, 2014 (q)		8,611	$	8,106
Community Health Systems, Inc., Term Loan B, 4.86%, 2014		168,339		158,465
HCA, Inc., Term Loan B, 5.05%, 2013		240,438		225,481

			$	392,052

Printing & Publishing - 0.5%
Idearc, Inc., Term Loan B, 4.79%, 2014		23,068	$	18,390
Tribune Co., Term Loan B, 2014 (o)		286,550		215,271

			$	233,661

Specialty Stores - 0.2%
Michaels Stores, Inc., Term Loan B, 5.45%, 2013		91,676	$	76,034

Telecommunications - Wireless - 0.3%
ALLTEL Communications, Inc., Term Loan B-2, 2015 (o)		126,672	$	125,754

Utilities - Electric Power - 1.0%
Calpine Corp., DIP Term Loan, 5.69%, 2009		202,032	$	192,829
Texas Competitive Electric Holdings LLC, Term Loan B-3, 6.26%, 2014		262,052		242,153

			$	434,982

Total Floating Rate Loans (Identified Cost, $2,888,263)			$	2,716,720

COMMON STOCKS - 1.9%
Automotive - 0.0%
Oxford Automotive, Inc. (a)		53	$	0


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Cable TV - 0.7%
Cablevision Systems Corp., “A” (a)		2,100	$	47,460
Comcast Corp., “A”		11,300		214,361
Time Warner Cable, Inc. (a)		2,800		74,144

			$	335,965

Consumer Goods & Services - 0.0%
Central Garden & Pet Co. (a)		2,300	$	10,465

Electronics - 0.1%
Intel Corp.		2,300	$	49,404

Energy - Integrated - 0.1%
Chevron Corp.		500	$	49,565

Forest & Paper Products - 0.0%
Louisiana-Pacific Corp.		2,600	$	22,074

Gaming & Lodging - 0.2%
MGM Mirage (a)		1,300	$	44,057
Pinnacle Entertainment, Inc. (a)		2,400		25,176

			$	69,233

Major Banks - 0.1%
Bank of America Corp.		1,200	$	28,644
JPMorgan Chase & Co.		600		20,586

			$	49,230

Printing & Publishing - 0.0%
Golden Books Family Entertainment, Inc. (a)		21,250	$	0

Real Estate - 0.2%
Host Hotels & Resorts, Inc., REIT		5,000	$	68,250

Telephone Services - 0.2%
Windstream Corp.		7,600	$	93,784

Utilities - Electric Power - 0.3%
Reliant Energy, Inc. (a)		6,100	$	129,747

Total Common Stocks (Identified Cost, $1,179,955)			$	877,717

PREFERRED STOCKS - 0.8%
Brokerage & Asset Managers - 0.8%
Merrill Lynch Co., Inc., 8.625%, (Identified Cost, $380,625)	$	15,225	$	353,220

SHORT-TERM OBLIGATIONS - 1.1%
Toyota Motor Credit Corp., at Amortized Cost and Value (y)		494,000	$	494,000

Total Investments (Identified Cost, $47,510,508)			$	44,473,097


OTHER ASSETS, LESS LIABILITIES - 1.5%				675,468

NET ASSETS - 100.0%			$	45,148,565

17-HYVA

Portfolio of Investments (unaudited) — continued

Derivative Contracts at 6/30/08

Forward Foreign Currency Exchange Contracts at 6/30/08


	Type	Currency	Contracts to Deliver/ Receive	Settlement Date Range	In Exchange For		Contracts at Value		Net Unrealized Appreciation (Depreciation)
Appreciation
	BUY	EUR	47,850	8/25/08	$	74,323	$	75,154	$	831

Depreciation
	SELL	EUR	107,762	8/25/08	$	167,321	$	169,251	$	(1,930	)

Swap Agreements at 6/30/08


Expiration	Notional Amount		Counterparty	Cash Flows to Receive	Cash Flows to Pay	Value
Credit Default Swaps
6/20/09	USD	200,000	JPMorgan Chase Bank	4.10% (fixed rate)	(1)	$	(30,804	)
6/20/09	USD	100,000	JPMorgan Chase Bank	4.80% (fixed rate)	(1)	$	(14,792	)
6/20/12	USD	200,000	Morgan Stanley Capital Services, Inc.	3.76% (fixed rate)	(2)	$	(53,953	)
6/20/12	USD	100,000	Morgan Stanley Capital Services, Inc.	4.15% (fixed rate)	(2)	$	(25,998	)
6/20/13	USD	200,000	Goldman Sachs International (a)	5.0% (fixed rate)	(3)	$	(44,927	)

						$	(170,474	)

(1)	Variable account to pay notional amount upon a defined credit event by Abitibi Consolidated, Inc., 8.375%, 4/01/15.

(2)	Variable account to pay notional amount upon a defined credit event by Bowater, Inc., 6.5%, 6/15/13.

(3)	Variable account to pay notional amount upon a defined credit event by Station Casinos, Inc., 6.0%, 4/01/12.

(a)	Net unamortized premiums received by the variable account amounted to $33,974.

At June 30, 2008, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

18-HYVA

Portfolio of Investments (unaudited) — June 30, 2008

Money Market Variable Account


Issuer	Shares/Par		Value ($)

CERTIFICATES OF DEPOSIT - 20.2%
Financial Institutions - 3.0%
Swedbank AB, NY, 2.87%, due 10/14/08	$	1,280,000	$	1,280,000

Major Banks - 11.9%
Bank of Scotland PLC, NY, 2.78%, due 9/09/08	$	1,250,000	$	1,250,000
Barclays Bank PLC, NY, 2.8%, due 11/20/08		1,250,000		1,250,000
BNP Paribas, NY, 3.65%, due 7/16/08		1,350,000		1,350,000
Societe Generale, NY, 2.91%, due 7/14/08		1,295,000		1,295,000

			$	5,145,000

Other Banks & Diversified Financials - 5.3%
DEPFA Bank PLC, NY, 3.15%, due 12/29/08	$	1,280,000	$	1,280,000
Rabobank Nederland N.V., NY, 2.38%, due 7/02/08		993,000		993,000

			$	2,273,000

Total Certificates of Deposit, at Amortized Cost and Value			$	8,698,000

COMMERCIAL PAPER (y) - 65.5%
Alcoholic Beverages - 3.0%
Anheuser-Busch Company, Inc., 2.4%, due 7/01/08 (t)	$	1,288,000	$	1,288,000

Automotive - 3.0%
Toyota Motor Credit Corp., 2.45%, due 7/01/08	$	1,283,000	$	1,283,000
Toyota Motor Credit Corp., 2.57%, due 7/01/08		5,000		5,000

			$	1,288,000

Brokerage & Asset Managers - 5.9%
Merrill Lynch & Co., Inc., 3.15%, due 12/22/08	$	1,293,000	$	1,273,314
Morgan Stanley, 3.15%, due 12/08/08		1,294,000		1,275,884

			$	2,549,198

Conglomerates - 3.0%
United Technologies Corp., 2.35%, due 7/01/08 (t)	$	1,288,000	$	1,288,000

Energy - Integrated - 2.1%
ConocoPhillips, 2.3%, due 7/01/08 (t)	$	901,000	$	901,000

Financial Institutions - 11.7%
American Express Credit Corp., 2.5%, due 7/01/08	$	13,000	$	13,000
American Express Credit Corp., 2.8%, due 9/18/08		1,283,000		1,275,117
American General Finance Corp., 2.58%, due 7/01/08		11,000		11,000
American General Finance Corp., 2.78%, due 9/09/08		1,284,000		1,277,059
Cargill, Inc., 2.35%, due 7/30/08 (t)		1,280,000		1,277,577
General Electric Capital Co., 2.42%, due 8/01/08		1,200,000		1,197,499

			$	5,051,252

Food & Beverages - 5.9%
Archer Daniels Midland Co., 2.27%, due 8/04/08 (t)	$	1,290,000	$	1,287,234
Coca-Cola Co., 2.03%, due 7/10/08 (t)		1,266,000		1,265,358

			$	2,552,592


Issuer	Shares/Par		Value ($)

COMMERCIAL PAPER (y) - continued
Forest & Paper Products - 3.0%
Mcgraw-Hill Cos., Inc., 2.25%, due 7/14/08 (t)	$	1,289,000	$	1,287,953

Insurance - 1.0%
Prudential Funding LLC, 2.5%, due 9/10/08	$	425,000	$	422,905
Major Banks - 11.5%
Abbey National North America LLC, 2.36%, due 7/15/08	$	270,000	$	269,752
Abbey National North America LLC, 2.81%, due 11/10/08		1,010,000		999,594
Bank of America Corp., 2.45%, due 7/02/08		420,000		419,971
Bank of America Corp., 2.6%, due 8/26/08		647,000		644,383
JPMorgan Chase & Co., 2.6%, due 7/21/08		1,289,000		1,287,138
Natexis Banques Populaires U.S. Financial Co., LLC, 2.6%, due 7/14/08		1,330,000		1,328,751

			$	4,949,589

Medical Equipment - 3.2%
Pfizer, Inc., 2.68%, due 8/06/08 (t)	$	1,380,000	$	1,376,302

Network & Telecom - 3.0%
AT&T, Inc., 2.18%, due 7/31/08 (t)	$	1,277,000	$	1,274,680
AT&T, Inc., 2.35%, due 7/01/08 (t)		14,000		14,000

			$	1,288,680

Other Banks & Diversified Financials - 9.2%
Calyon North America, Inc., 2.44%, due 7/08/08	$	207,000	$	206,902
Citigroup Funding Inc., 2.67%, due 9/02/08		361,000		359,313
Citigroup Funding, Inc., 2.7%, due 9/19/08		922,000		916,468
Dexia Delaware LLC, 2.63%, due 8/12/08		1,275,000		1,271,088
Svenska Handelsbanken AB, 2.52%, due 7/11/08		735,000		734,486
UBS Finance Delaware LLC, 2.65%, due 7/16/08		482,000		481,467

			$	3,969,724

Total Commercial Paper, at Amortized Cost and Value			$	28,213,195

U.S. GOVERNMENT AGENCIES - 4.2%
Fannie Mae, 2.5%, due 8/20/08, at Amortized Cost and Value (y)	$	1,798,000	$	1,791,757

REPURCHASE AGREEMENTS - 10.0%
Merrill Lynch, 2.50%, dated 6/30/08, due 7/01/08, total to be received $4,295,298 (secured by various U.S. Treasury and Federal Agency obligations and Mortgage Backed securities in a jointly traded account), at Cost	$	4,295,000	$	4,295,000

Total Investments, at Amortized Cost and Value			$	42,997,952


OTHER ASSETS, LESS LIABILITIES - 0.1%				45,314

NET ASSETS - 100.0%			$	43,043,266

See portfolio footnotes and notes to financial statements.

19-MMVA

Portfolio of Investments (unaudited) — June 30, 2008

Total Return Variable Account


Issuer	Shares/Par	Value ($)

COMMON STOCKS - 57.1%
Aerospace - 3.0%
Lockheed Martin Corp.	22,560	$	2,225,757
Northrop Grumman Corp.	13,010		870,369
Raytheon Co.	1,230		69,224
United Technologies Corp.	17,010		1,049,517

		$	4,214,867

Alcoholic Beverages - 0.6%
Diageo PLC	34,196	$	628,562
Heineken N.V.	3,700		188,137

		$	816,699

Apparel Manufacturers - 0.6%
NIKE, Inc., “B”	13,140	$	783,275

Automotive - 0.6%
Harley-Davidson, Inc.	5,250	$	190,365
Johnson Controls, Inc.	21,570		618,628

		$	808,993

Biotechnology - 0.5%
Amgen, Inc. (a)	5,370	$	253,249
Genzyme Corp. (a)	6,250		450,125

		$	703,374

Broadcasting - 1.0%
Omnicom Group, Inc.	15,100	$	677,688
Walt Disney Co.	21,020		655,824
WPP Group PLC	11,250		108,388

		$	1,441,900

Brokerage & Asset Managers - 1.8%
Deutsche Boerse AG	2,490	$	279,483
Franklin Resources, Inc.	5,860		537,069
Goldman Sachs Group, Inc.	5,930		1,037,157
Invesco Ltd.	7,640		183,207
Legg Mason, Inc.	1,810		78,862
Merrill Lynch & Co., Inc.	13,830		438,549

		$	2,554,327

Business Services - 1.0%
Accenture Ltd., “A”	12,770	$	519,994
Automatic Data Processing, Inc.	6,780		284,082
Fidelity National Information Services, Inc.	7,890		291,220
Visa, Inc., “A”	2,990		243,117
Western Union Co.	2,200		54,384

		$	1,392,797

Cable TV - 0.2%
Time Warner Cable, Inc. (a)	10,430	$	276,186

Chemicals - 1.0%
3M Co.	3,100	$	215,729
PPG Industries, Inc.	16,700		958,079
Rohm & Haas Co.	3,300		153,252

		$	1,327,060

Computer Software - 0.8%
Oracle Corp. (a)	53,740	$	1,128,540
Synopsys, Inc. (a)	1,300		31,083

		$	1,159,623

Computer Software - Systems - 1.3%
Hewlett-Packard Co.	8,780	$	388,164
International Business Machines Corp.	12,330		1,461,475

		$	1,849,639

Construction - 0.5%
Masco Corp.	13,940	$	219,276
Pulte Homes, Inc.	15,800		152,154


Issuer	Shares/Par	Value ($)

COMMON STOCKS - continued
Construction - continued
Sherwin-Williams Co.	3,770	$	173,156
Toll Brothers, Inc. (a)	5,820		109,009

		$	653,595

Consumer Goods & Services - 0.6%
Clorox Co.	7,050	$	368,010
Procter & Gamble Co.	8,560		520,534

		$	888,544

Containers - 0.0%
Smurfit-Stone Container Corp. (a)	710	$	2,890

Electrical Equipment - 1.1%
Danaher Corp.	4,000	$	309,200
General Electric Co.	11,380		303,732
W.W. Grainger, Inc.	7,040		575,872
WESCO International, Inc. (a)	7,150		286,286

		$	1,475,090

Electronics - 1.0%
Flextronics International Ltd. (a)	21,340	$	200,596
Intel Corp.	44,860		963,593
Samsung Electronics Co. Ltd., GDR	454		133,123
SanDisk Corp. (a)	4,600		86,020

		$	1,383,332

Energy - Independent - 2.4%
Apache Corp.	11,500	$	1,598,500
Devon Energy Corp.	10,220		1,228,035
EOG Resources, Inc.	2,240		293,888
Sunoco, Inc.	4,240		172,526

		$	3,292,949

Energy - Integrated - 6.5%
Chevron Corp.	10,475	$	1,038,387
ConocoPhillips	4,200		396,438
Exxon Mobil Corp.	32,772		2,888,196
Hess Corp.	13,180		1,663,184
Marathon Oil Corp.	18,450		957,002
TOTAL S.A., ADR	24,370		2,078,030

		$	9,021,237

Engineering - Construction - 0.0%
North American Energy Partners, Inc. (a)	1,800	$	39,024

Food & Beverages - 2.7%
General Mills, Inc.	17,050	$	1,036,129
Hain Celestial Group, Inc. (a)	600		14,088
Kellogg Co.	16,000		768,320
Nestle S.A.	25,190		1,140,027
PepsiCo, Inc.	12,360		785,972

		$	3,744,536

Food & Drug Stores - 1.4%
CVS Caremark Corp.	23,864	$	944,298
Kroger Co.	8,930		257,809
Safeway, Inc.	13,140		375,147
Walgreen Co.	11,770		382,643

		$	1,959,897

Furniture & Appliances - 0.2%
Jarden Corp. (a)	13,140	$	239,674

Gaming & Lodging - 0.6%
Royal Caribbean Cruises Ltd.	24,780	$	556,807
Wyndham Worldwide	14,000		250,740

		$	807,547

20-TRVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par	Value ($)

COMMON STOCKS - continued
General Merchandise - 0.8%
Macy’s, Inc.	40,460	$	785,733
Wal-Mart Stores, Inc.	6,260		351,812

		$	1,137,545

Health Maintenance Organizations - 0.6%
UnitedHealth Group, Inc.	10,760	$	282,450
WellPoint, Inc. (a)	10,180		485,179

		$	767,629

Insurance - 4.4%
Allstate Corp.	35,260	$	1,607,503
Aon Corp.	2,110		96,933
Aspen Insurance Holdings Ltd.	3,600		85,212
Chubb Corp.	3,370		165,164
Conseco, Inc. (a)	25,300		250,976
Genworth Financial, Inc., “A”	55,810		993,976
Hartford Financial Services Group, Inc.	8,910		575,319
Max Capital Group Ltd.	10,700		228,231
MetLife, Inc.	27,810		1,467,534
Principal Financial Group, Inc.	2,500		104,925
Prudential Financial, Inc.	2,690		160,701
Travelers Cos., Inc.	8,540		370,636

		$	6,107,110

Machinery & Tools - 1.1%
Eaton Corp.	4,900	$	416,353
Ingersoll-Rand Co. Ltd., “A” (a)	9,040		338,367
Kennametal, Inc.	8,390		273,095
Timken Co.	13,500		444,690

		$	1,472,505

Major Banks - 4.4%
Bank of America Corp.	40,458	$	965,732
Bank of New York Mellon Corp.	36,484		1,380,190
JPMorgan Chase & Co.	40,872		1,402,318
PNC Financial Services Group, Inc.	13,710		782,841
State Street Corp.	13,560		867,704
SunTrust Banks, Inc.	9,310		337,208
UnionBanCal Corp.	3,500		141,470
Wachovia Corp.	11,500		178,595

		$	6,056,058

Medical & Health Technology & Services - 0.1%
DaVita, Inc. (a)	3,340	$	177,454

Medical Equipment - 0.7%
Advanced Medical Optics, Inc. (a)	11,790	$	220,945
Boston Scientific Corp. (a)	17,150		210,774
Cooper Cos., Inc.	3,540		131,511
Zimmer Holdings, Inc. (a)	5,000		340,250

		$	903,480

Metals & Mining - 0.1%
Century Aluminum Co. (a)	2,920	$	194,151

Natural Gas - Distribution - 0.6%
Sempra Energy	14,510	$	819,090

Natural Gas - Pipeline - 0.8%
El Paso Corp.	18,560	$	403,494
Williams Cos., Inc.	17,030		686,479

		$	1,089,973

Network & Telecom - 0.2%
Cisco Systems, Inc. (a)	1,810	$	42,101
Nokia Corp., ADR	9,600		235,200

		$	277,301


Issuer	Shares/Par	Value ($)

COMMON STOCKS - continued
Oil Services - 0.7%
Halliburton Co.	7,380	$	391,657
Helix Energy Solutions Group, Inc. (a)	2,400		99,936
Nabors Industries Ltd. (a)	2,000		98,460
Noble Corp.	5,460		354,682

		$	944,735

Other Banks & Diversified Financials - 0.8%
American Express Co.	9,770	$	368,036
Assured Guaranty Ltd.	2,500		44,975
East West Bancorp, Inc.	5,500		38,830
New York Community Bancorp, Inc.	7,370		131,481
Sovereign Bancorp, Inc.	49,900		367,264
UBS AG (a)	5,657		117,137

		$	1,067,723

Pharmaceuticals - 3.5%
Abbott Laboratories	2,310	$	122,361
GlaxoSmithKline PLC	7,830		173,186
Johnson & Johnson	17,630		1,134,314
Merck & Co., Inc.	27,910		1,051,928
Merck KGaA	2,020		286,939
Pfizer, Inc.	6,760		118,097
Roche Holding AG	1,800		323,500
Wyeth	35,070		1,681,957

		$	4,892,282

Railroad & Shipping - 0.5%
Burlington Northern Santa Fe Corp.	4,800	$	479,472
Norfolk Southern Corp.	3,350		209,945

		$	689,417

Specialty Chemicals - 0.3%
Air Products & Chemicals, Inc.	3,770	$	372,702
Praxair, Inc.	700		65,968

		$	438,670

Specialty Stores - 0.5%
Advance Auto Parts, Inc.	1,360	$	52,809
Nordstrom, Inc.	2,200		66,660
PetSmart, Inc.	5,300		105,735
Staples, Inc.	17,120		406,600

		$	631,804

Telecommunications - Wireless - 0.2%
Rogers Communications, Inc., “B”	1,760	$	68,418
Vodafone Group PLC, ADR	8,849		260,692

		$	329,110

Telephone Services - 2.2%
AT&T, Inc.	50,744	$	1,709,565
Embarq Corp.	21,200		1,002,124
TELUS Corp.	2,080		84,802
Verizon Communications, Inc.	7,000		247,800

		$	3,044,291

Tobacco - 1.6%
Altria Group, Inc.	6,520	$	134,051
Lorillard, Inc. (a)	5,640		390,062
Philip Morris International, Inc.	33,710		1,664,937

		$	2,189,050

Trucking - 0.2%
United Parcel Service, Inc., “B”	4,510	$	277,230

Utilities - Electric Power - 3.4%
American Electric Power Co., Inc.	11,150	$	448,565
CMS Energy Corp.	6,980		104,002
Dominion Resources, Inc.	8,434		400,531
DPL, Inc.	5,920		156,170

21-TRVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Utilities - Electric Power - continued
Entergy Corp.		2,070	$	249,394
FPL Group, Inc.		12,180		798,764
NRG Energy, Inc. (a)		13,080		561,132
Pepco Holdings, Inc.		6,540		167,751
PG&E Corp.		20,770		824,361
PPL Corp.		7,660		400,388
Public Service Enterprise Group, Inc.		11,350		521,306

			$	4,632,364

Total Common Stocks (Identified Cost, $79,780,639)			$	78,976,027

BONDS - 40.8%
Agency - Other - 0.0%
Financing Corp., 9.65%, 2018	$	45,000	$	62,447

Asset Backed & Securitized - 3.3%
Banc of America Commercial Mortgage, Inc., 5.935%, 2051	$	210,000	$	199,963
Banc of America Commercial Mortgage, Inc., FRN, 5.482%, 2049		48,384		43,222
Bayview Financial Revolving Mortgage Loan Trust, FRN, 3.182%, 2040 (z)		250,000		191,740
BlackRock Capital Finance LP, 7.75%, 2026 (n)		32,486		19,492
Chase Commercial Mortgage Securities Corp., 7.543%, 2032		12,722		12,848
Citigroup Commercial Mortgage Trust, FRN, 5.888%, 2049		320,000		304,083
Countrywide Asset-Backed Certificates, FRN, 4.823%, 2035		16,095		16,030
Countrywide Asset-Backed Certificates, FRN, 5.689%, 2046		90,000		80,041
Credit Suisse Commercial Mortgage Trust, 5.509%, 2039		128,277		116,818
Credit Suisse Mortgage Capital Certificate, 5.343%, 2039		98,568		88,538
Credit Suisse Mortgage Capital Certificate, FRN, 5.695%, 2040		152,515		143,745
GE Commercial Mortgage Corp., FRN, 5.517%, 2044		130,000		119,132
GMAC Mortgage Corp. Loan Trust, FRN, 5.805%, 2036		115,000		60,315
Greenwich Capital Commercial Funding Corp., 4.305%, 2042		107,385		106,614
Greenwich Capital Commercial Funding Corp., FRN, 5.317%, 2036		60,728		59,681
JPMorgan Chase Commercial Mortgage Securities Corp, 6.007%, 2049		200,000		191,307
JPMorgan Chase Commercial Mortgage Securities Corp., 4.78%, 2042		152,000		140,338
JPMorgan Chase Commercial Mortgage Securities Corp., 5.552%, 2045		97,000		92,812
JPMorgan Chase Commercial Mortgage Securities Corp., 5.372%, 2047		170,000		153,331
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.378%, 2041		39,903		39,160
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.475%, 2043		110,000		105,144
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 6.065%, 2045		110,000		108,051
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.038%, 2046		197,476		188,638
Merrill Lynch Mortgage Trust, FRN, 6.022%, 2050		84,000		59,042


Issuer	Shares/Par		Value ($)

BONDS - continued
Asset Backed & Securitized - continued
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN, 5.81%, 2050	$	152,515	$	144,805
Morgan Stanley Capital I, Inc., 5.168%, 2042		48,533		46,817
Morgan Stanley Capital I, Inc., FRN, 0.619%, 2030 (i)(n)		3,516,146		39,192
Multi-Family Capital Access One, Inc., 6.65%, 2024		20,953		20,924
Nomura Asset Securities Corp., FRN, 9.946%, 2027 (z)		203,015		221,656
Residential Asset Mortgage Products, Inc., 4.109%, 2035		14,471		14,442
Residential Asset Mortgage Products, Inc., FRN, 4.97%, 2034		92,000		87,925
Residential Funding Mortgage Securities, Inc., FRN, 5.32%, 2035		129,000		49,763
Spirit Master Funding LLC, 5.05%, 2023 (z)		173,446		133,549
Structured Asset Securities Corp., FRN, 4.67%, 2035		160,286		153,940
Wachovia Bank Commercial Mortgage Trust, 6.099%, 2051		245,000		236,428
Wachovia Bank Commercial Mortgage Trust, FRN, 4.847%, 2041		50,000		47,340
Wachovia Bank Commercial Mortgage Trust, FRN, 5.083%, 2042		185,000		177,093
Wachovia Bank Commercial Mortgage Trust, FRN, 5.118%, 2042		200,000		190,936
Wachovia Bank Commercial Mortgage Trust, FRN, 5.513%, 2043		55,500		38,205
Wachovia Bank Commercial Mortgage Trust, FRN, 6.158%, 2045		140,000		132,879
Wachovia Bank Commercial Mortgage Trust, FRN, 5.795%, 2045		150,000		139,521

			$	4,515,500

Automotive - 0.1%
Johnson Controls, Inc., 5.5%, 2016	$	136,000	$	130,473

Broadcasting - 0.2%
CBS Corp., 6.625%, 2011	$	137,000	$	140,287
News America, Inc., 8.5%, 2025		99,000		111,792

			$	252,079

Brokerage & Asset Managers - 0.6%
Goldman Sachs Group, Inc., 5.625%, 2017	$	146,000	$	135,277
Lehman Brothers Holdings, Inc., 6.5%, 2017		170,000		157,270
Merrill Lynch & Co., Inc., 6.15%, 2013		100,000		96,920
Merrill Lynch & Co., Inc., 6.11%, 2037		130,000		103,247
Morgan Stanley, 5.75%, 2016		100,000		92,437
Morgan Stanley Group, Inc., 6.75%, 2011		126,000		129,250
Morgan Stanley Group, Inc., 6.625%, 2018		104,000		98,543

			$	812,944

Building - 0.1%
CRH America, Inc., 6.95%, 2012	$	208,000	$	208,131

Business Services - 0.1%
Xerox Corp., 5.5%, 2012	$	80,000	$	79,075

22-TRVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Cable TV - 0.2%
Cox Communications, Inc., 4.625%, 2013	$	159,000	$	150,522
Time Warner Entertainment Co. LP, 8.375%, 2033		110,000		119,048

			$	269,570

Chemicals - 0.1%
PPG Industries, Inc., 5.75%, 2013	$	132,000	$	134,212

Conglomerates - 0.2%
General Electric Co., 5.25%, 2017	$	80,000	$	76,907
Kennametal, Inc., 7.2%, 2012		211,000		223,442

			$	300,349

Consumer Goods & Services - 0.3%
Fortune Brands, Inc., 5.125%, 2011	$	158,000	$	157,160
Western Union Co., 5.4%, 2011		210,000		208,855

			$	366,015

Defense Electronics - 0.1%
BAE Systems Holdings, Inc., 5.2%, 2015 (n)	$	103,000	$	98,732

Electronics - 0.1%
Tyco Electronics Group S.A., 6.55%, 2017	$	128,000	$	129,148

Emerging Market Sovereign - 0.1%
State of Israel, 4.625%, 2013	$	112,000	$	112,189

Energy - Independent - 0.1%
Nexen, Inc., 5.875%, 2035	$	30,000	$	26,793
Ocean Energy, Inc., 7.25%, 2011		165,000		176,197

			$	202,990

Energy - Integrated - 0.1%
Petro-Canada, 6.05%, 2018	$	148,000	$	145,852

Financial Institutions - 0.5%
American Express Co., 5.5%, 2016	$	184,000	$	174,785
Capital One Financial Corp., 6.15%, 2016		130,000		114,600
General Electric Capital Corp., 5.375%, 2016		60,000		59,043
HSBC Finance Corp., 5.25%, 2011		145,000		145,349
ORIX Corp., 5.48%, 2011		210,000		194,200

			$	687,977

Food & Beverages - 0.5%
Diageo Finance B.V., 5.5%, 2013	$	230,000	$	232,871
Dr. Pepper Snapple Group, Inc., 6.12%, 2013 (z)		40,000		40,545
Dr. Pepper Snapple Group, Inc., 6.82%, 2018 (n)		48,000		48,198
Kraft Foods, Inc., 6.125%, 2018		80,000		77,474
Miller Brewing Co., 5.5%, 2013 (n)		276,000		282,068

			$	681,156

Food & Drug Stores - 0.1%
CVS Caremark Corp., 6.125%, 2016	$	110,000	$	110,935

Gaming & Lodging - 0.2%
Marriott International, Inc., 6.375%, 2017	$	160,000	$	152,100
Wyndham Worldwide Corp., 6%, 2016		100,000		88,307

			$	240,407


Issuer	Shares/Par		Value ($)

BONDS - continued
Insurance - 0.3%
American International Group, Inc., 6.25%, 2037	$	100,000	$	78,277
ING Groep N.V., 5.775% to 2015, FRN to 2049		133,000		110,387
MetLife, Inc., 6.4%, 2036		120,000		104,774
Metropolitan Life Global Funding, 5.125%, 2013 (z)		100,000		98,469

			$	391,907

Insurance - Property & Casualty - 0.3%
Allstate Corp., 6.125%, 2032	$	185,000	$	172,721
Chubb Corp., 6.375% to 2017, FRN to 2067		200,000		182,949
Fund American Cos., Inc., 5.875%, 2013		117,000		113,184

			$	468,854

International Market Quasi-Sovereign - 0.2%
Hydro-Quebec, 6.3%, 2011	$	262,000	$	278,675

International Market Sovereign - 0.1%
Province of Ontario, 5%, 2011	$	200,000	$	207,349

Machinery & Tools - 0.1%
Atlas Copco AB, 5.6%, 2017 (n)	$	160,000	$	155,651
			��
Major Banks - 0.8%
Commonwealth Bank, 5%, 2012 (n)	$	154,000	$	155,297

DBS Capital Funding Corp., 7.657% to 2011, FRN to 2049 (n)		170,000		171,883
MUFG Capital Finance 1 Ltd., 6.346% to 2016, FRN to 2049		200,000		173,358
Natixis S.A., 10% to 2018, FRN to 2049 (z)		151,000		150,703
PNC Funding Corp., 5.625%, 2017		90,000		83,926
UniCredito Italiano Capital Trust II, 9.2% to 2010, FRN to 2049 (n)		208,000		213,270
Unicredito Luxembourg Finance S.A., 6%, 2017 (n)		100,000		96,008
Wachovia Corp., 5.25%, 2014		81,000		75,418

			$	1,119,863

Medical & Health Technology & Services - 0.3%
Baxter International, Inc., 5.9%, 2016	$	116,000	$	118,778
Cardinal Health, Inc., 5.8%, 2016		75,000		73,403
HCA, Inc., 8.75%, 2010		15,000		15,188
Hospira, Inc., 5.55%, 2012		50,000		49,122
Hospira, Inc., 6.05%, 2017		174,000		167,922

			$	424,413

Metals & Mining - 0.2%
ArcelorMittal, 6.125%, 2018 (z)	$	155,000	$	151,475
Vale Overseas Ltd., 6.25%, 2017		150,000		145,196

			$	296,671

Mortgage Backed - 16.6%
Fannie Mae, 4.01%, 2013	$	18,506	$	17,685
Fannie Mae, 4.555%, 2014		122,493		119,257
Fannie Mae, 4.63%, 2014		45,866		44,783
Fannie Mae, 4.854%, 2014		60,918		60,101
Fannie Mae, 4.56%, 2015		38,155		36,864
Fannie Mae, 4.78%, 2015		38,352		37,385
Fannie Mae, 4.925%, 2015		258,794		255,184
Fannie Mae, 5.09%, 2016		40,000		39,408
Fannie Mae, 5.5%, 2016-2035		6,566,213		6,523,839
Fannie Mae, 4.994%, 2017		87,207		86,323
Fannie Mae, 5.05%, 2017		39,000		38,316
Fannie Mae, 6%, 2017 - 2037		3,649,980		3,703,783

23-TRVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Mortgage Backed - continued
Fannie Mae, 4.5%, 2018-2035	$	793,235	$	763,421
Fannie Mae, 5%, 2018-2038		2,287,263		2,234,642
Fannie Mae, 6.5%, 2031-2037		1,024,958		1,064,232
Fannie Mae, 7.5%, 2031		20,390		21,952
Freddie Mac, 6%, 2016-2037		1,654,969		1,680,960
Freddie Mac, 4.5%, 2018-2035		605,244		584,813
Freddie Mac, 5%, 2018-2035		1,937,054		1,875,886
Freddie Mac, 5.5%, 2020-2038		1,686,125		1,673,177
Freddie Mac, 6.5%, 2034-2038		467,233		482,651
Ginnie Mae, 4.5%, 2033-2034		133,192		124,209
Ginnie Mae, 5%, 2033-2034		134,853		131,020
Ginnie Mae, 5.5%, 2033-2038		821,570		819,452
Ginnie Mae, 6%, 2033-2038		477,621		486,146

			$	22,905,489

Municipals - 0.3%
California Educational Facilities Authority Rev. (Stanford University), “T-1”, 5%, 2039	$	180,000	$	186,921
Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 2030		65,000		71,497
Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 2035		105,000		115,192

			$	373,610

Natural Gas - Pipeline - 0.4%
CenterPoint Energy, Inc., 7.875%, 2013	$	112,000	$	119,896
Enterprise Products Operating LLC, 6.5%, 2019		130,000		130,689
Kinder Morgan Energy Partners LP, 6.75%, 2011		165,000		170,078
Kinder Morgan Energy Partners LP, 7.75%, 2032		71,000		76,846
Spectra Energy Capital LLC, 8%, 2019		53,000		57,977

			$	555,486

Network & Telecom - 0.8%
AT&T, Inc., 6.5%, 2037	$	139,000	$	134,527
BellSouth Corp., 6.55%, 2034		146,000		141,004
Deutsche Telekom International Finance B.V., 5.75%, 2016		176,000		171,725
Telecom Italia Capital, 5.25%, 2013		60,000		56,679
Telefonica Europe B.V., 7.75%, 2010		50,000		52,698
TELUS Corp., 8%, 2011		180,000		193,260
Verizon New York, Inc., 6.875%, 2012		286,000		298,268

			$	1,048,161

Oil Services - 0.1%
Weatherford International Ltd., 6.35%, 2017	$	40,000	$	40,515
Weatherford International Ltd., 6%, 2018		113,000		111,522

			$	152,037

Oils - 0.1%
Valero Energy Corp., 6.875%, 2012	$	111,000	$	115,223

Other Banks & Diversified Financials - 0.4%
Nordea Bank AB, 5.424% to 2015, FRN to 2049 (n)	$	100,000	$	85,861
UBS Preferred Funding Trust V, 6.243% to 2016, FRN to 2049		190,000		166,481


Issuer	Shares/Par		Value ($)

BONDS - continued
Other Banks & Diversified Financials - continued
UFJ Finance Aruba AEC, 6.75%, 2013	$	145,000	$	152,328
Woori Bank, 6.125% to 2011, FRN to 2016 (n)		220,000		213,083

			$	617,753

Pharmaceuticals - 0.1%
Allergan, Inc., 5.75%, 2016	$	160,000	$	160,589
Glaxosmithkline Capital, Inc., 4.85%, 2013		50,000		49,933

			$	210,522

Pollution Control - 0.1%
Waste Management, Inc., 7.375%, 2010	$	134,000	$	139,974

Railroad & Shipping - 0.1%
CSX Corp., 6.75%, 2011	$	6,000	$	6,218
CSX Corp., 7.9%, 2017		120,000		127,573

			$	133,791

Real Estate - 0.4%
Boston Properties, Inc., REIT, 5%, 2015	$	42,000	$	38,528
HRPT Properties Trust, REIT, 6.25%, 2016		180,000		165,229
ProLogis, REIT, 5.75%, 2016		179,000		168,581
Simon Property Group, Inc., REIT, 5.1%, 2015		193,000		174,638

			$	546,976

Retailers - 0.2%
Federated Retail Holdings, Inc., 5.35%, 2012	$	40,000	$	37,168
Home Depot, Inc., 5.25%, 2013		55,000		52,751
Limited Brands, Inc., 5.25%, 2014		99,000		83,743
Wal-Mart Stores, Inc., 5.25%, 2035		194,000		168,550

			$	342,212

Supermarkets - 0.1%
Kroger Co., 5%, 2013	$	51,000	$	50,165
Kroger Co., 6.4%, 2017		23,000		23,459

			$	73,624

Supranational - 0.7%
European Investment Bank, 5.125%, 2017	$	876,000	$	919,193

Telecommunications - Wireless - 0.1%
Cingular Wireless LLC, 6.5%, 2011	$	35,000	$	36,379
Nextel Communications, Inc., 5.95%, 2014		180,000		144,450
Vodafone Group PLC, 5.625%, 2017		32,000		30,825

			$	211,654

Tobacco - 0.1%
Philip Morris International, Inc., 4.875%, 2013	$	190,000	$	186,642

U.S. Government Agencies - 1.5%
Aid-Egypt, 4.45%, 2015	$	152,000	$	153,297
Fannie Mae, 6.625%, 2009		280,000		292,153
Freddie Mac, 5.5%, 2017		700,000		740,267
Small Business Administration, 4.35%, 2023		34,054		32,646
Small Business Administration, 4.77%, 2024		81,850		80,021
Small Business Administration, 4.99%, 2024		118,235		115,898

24-TRVA

Portfolio of Investments (unaudited) — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
U.S. Government Agencies - continued
Small Business Administration, 5.18%, 2024	$	134,180	$	134,214
Small Business Administration, 5.52%, 2024		200,717		202,811
Small Business Administration, 4.95%, 2025		89,334		86,198
Small Business Administration, 5.09%, 2025		115,277		113,121
Small Business Administration, 5.39%, 2025		86,993		87,561

			$	2,038,187

U.S. Treasury Obligations - 8.0%
U.S. Treasury Bonds, 4.75%, 2017	$	130,000	$	137,719
U.S. Treasury Bonds, 8%, 2021		37,000		50,184
U.S. Treasury Bonds, 6.25%, 2023		211,000		251,041
U.S. Treasury Bonds, 6%, 2026		125,000		146,397
U.S. Treasury Bonds, 6.75%, 2026		384,000		486,090
U.S. Treasury Bonds, 5.375%, 2031		900,000		999,985
U.S. Treasury Bonds, 4.5%, 2036		577,000		572,898
U.S. Treasury Notes, 4.625%, 2008		2,297,000		2,313,329
U.S. Treasury Notes, 4.75%, 2008		46,000		46,442
U.S. Treasury Notes, 4%, 2009		23,000		23,350
U.S. Treasury Notes, 4.875%, 2009		2,415,000		2,479,526
U.S. Treasury Notes, 6.5%, 2010		128,000		136,200
U.S. Treasury Notes, 5.125%, 2011		180,000		191,306
U.S. Treasury Notes, 3.875%, 2013		614,000		629,350
U.S. Treasury Notes, 4.25%, 2013		2,046,000		2,134,553
U.S. Treasury Notes, 4.25%, 2013		250,000		260,899
U.S. Treasury Notes, 4.75%, 2014		150,000		160,805
U.S. Treasury Notes, 4.5%, 2015		68,000		71,613

			$	11,091,687

Utilities - Electric Power - 1.4%
Bruce Mansfield Unit, 6.85%, 2034	$	210,000	$	212,529
E.On International Finance B.V., 5.8%, 2018 (z)		160,000		156,961
EDP Finance B.V., 6%, 2018 (n)		110,000		109,535
Enel Finance International S.A., 6.25%, 2017 (n)		170,000		172,018
Exelon Generation Co. LLC, 6.95%, 2011		232,000		239,788
Exelon Generation Co. LLC, 6.2%, 2017		80,000		77,920
MidAmerican Energy Holdings Co., 5.875%, 2012		61,000		62,741
MidAmerican Funding LLC, 6.927%, 2029		154,000		166,361
Oncor Electric Delivery Co., 7%, 2022		152,000		148,217
Pacific Gas & Electric Co., 4.8%, 2014		45,000		43,849
PSEG Power LLC, 6.95%, 2012		111,000		116,445
PSEG Power LLC, 5.5%, 2015		90,000		86,668
System Energy Resources, Inc., 5.129%, 2014 (n)		74,524		72,440
Waterford 3 Funding Corp., 8.09%, 2017		315,981		307,740

			$	1,973,212

Total Bonds (Identified Cost, $57,849,098)			$	56,518,997


Issuer	Shares/Par		Value ($)

SHORT-TERM OBLIGATIONS - 1.7%
Toyota Motor Credit Corp., 2.57%, due 7/01/08, at Amortized Cost and Value (y)	$	2,317,000	$	2,317,000

Total Investments (Identified Cost, $139,946,737)			$	137,812,024


OTHER ASSETS, LESS LIABILITIES - 0.4%				508,477

NET ASSETS - 100.0%			$	138,320,501

See portfolio footnotes and notes to financial statements.

25-TRVA

Portfolio of Investments (unaudited) — continued

Portfolio Footnotes

(a)	Non-income producing security.

(d)	Non-income producing security – in default.

(f)	All or a portion of the security has been segregated as collateral for an open futures contract.

(g)	The rate shown represents a weighted average coupon rate on settled positions at period end, unless otherwise indicated.

(i)	Interest only security for which the variable account receives interest on notional principal (Par amount). Par amount shown is the notional principal and does not reflect the cost of the security.

(n)	Securities exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be sold in the ordinary course of business in transactions exempt from registration, normally to qualified institutional buyers. At period end, the aggregate value of these securities was:


Variable Account	Market Value		% of Net Assets
Global Governments Variable Account	$	233,062	2.7	%
Government Securities Variable Account		731,263	1.1
High Yield Variable Account		5,530,741	12.3
Total Return Variable Account		1,932,728	1.4

(o)	All or a portion of this position has not settled. Upon settlement date, interest rates will be determined.

(p)	Payment-in-kind security.

(q)	All or a portion of this position represents an unfunded loan commitment. The rate shown represents a weighted average coupon rate on the full position, including the unfunded loan commitment which has no current coupon rate.

(r)

Remaining maturities of floating rate loans may be less than stated maturities shown as a result of contractual or optional prepayments by the borrower. Such prepayments cannot be predicted with certainty. These loans may be subject to restrictions on resale. Floating rate loans generally have rates of interest which are determined periodically by reference to a base lending rate plus a premium.

(t)	Security exempt from registration with the U.S. Securities and Exchange Commission under Section 4(2) of the Securities Act of 1933.

(y)	The rate shown represents an annualized yield at time of purchase.

(z)

Restricted securities are not registered under the Securities Act of 1933 and are subject to legal restrictions on resale. These securities generally may be resold in transactions exempt from registration or to the public if the securities are subsequently registered. Disposal of these securities may involve time-consuming negotiations and prompt sale at an acceptable price may be difficult. The variable accounts holds the following restricted securities:


Variable Account	Restricted Securities	Acquisition Date	Cost		Current Market Value		Total % of Net Assets
High Yield Variable Account	American Media Operations, Inc., 10.25%, 2009	1/04/07 - 11/28/07	$	8,026	$	6,586
High Yield Variable Account	Atlas Pipeline Partners LP, 8.75%, 2018	6/24/2008		140,000		138,950
	DIRECTV Holdings LLC, 7.625%, 2016	5/7/2008		245,000		241,325
	Evraz Group S.A., 8.875%, 2013	4/28/2008		142,100		140,168
	Firekeepers Development Authority, 13.875%, 2015	4/22/2008		140,855		141,738
	Ply Gem Industries, Inc., 11.75%, 2013	6/10/2008		82,490		77,988
	Residential Capital LLC, 9.625%, 2015	6/6/2008		5,012		4,850
	Wachovia Credit, CDO, FRN, 4.154%, 2026	6/8/2006		250,000		138,258
	Total Restricted Securities				$	889,863	2.0%


Total Return Variable Account	ArcelorMittal, 6.125%, 2018	5/19/2008	$	154,335	$	151,475
Total Return Variable Account	Bayview Financial Revolving Mortgage Loan Trust, FRN, 3.182%, 2040	3/1/2006		250,000		191,740
	Dr. Pepper Snapple Group, Inc., 6.12%, 2013	4/25/2008		39,995		40,545
	E.On International Finance B.V., 5.8%, 2018	4/15/2008		159,325		156,961
	Metropolitan Life Global Funding, 5.125%, 2013	4/7/2008		99,926		98,469
	Natixis S.A., 10% to 2018, FRN to 2049	4/24/2008		151,000		150,703
	Nomura Asset Securities Corp., FRN, 9.946%, 2027	7/16/2007		223,515		221,656
	Spirit Master Funding LLC, 5.05%, 2023	10/4/2005		171,210		133,549
	Total Restricted Securities				$	1,145,098	0.8%

The following abbreviations are used in this report and are defined:

ADR	American Depository Receipt

CDO	Collateralized Debt Obligation

CLN	Credit-Linked Note

DIP	Debtor-in-Possession

FRN	Floating Rate Note. Interest rate resets periodically and may not be the rate reported at period end.

GDR	Global Depository Receipt

IEU	International Equity Unit

REIT	Real Estate Investment Trust

STRIPS

Separate Trading of Registered Interest and Principal of Securities

Insurers

MBIA	MBIA Insurance Corp.

26-TRVA

Portfolio of Investments (unaudited) — continued

Abbreviations indicate amounts shown in currencies other than the U.S. dollar. All amounts are stated in U.S. dollars unless otherwise indicated. A list of abbreviations is shown below:


AUD	Australian Dollar	EUR	Euro
CAD	Canadian Dollar	GBP	British Pound
CHF	Swiss Franc	JPY	Japanese Yen
CLP	Chilean Peso	NOK	Norwegian Krone
CNY	Chinese Yuan Renminbi	NZD	New Zealand Dollar
DKK	Danish Krone	SEK	Swedish Krona

See portfolio footnotes and notes to financial statements.

27-TRVA

Statements of Assets and Liabilities (unaudited) — June 30, 2008

(000 Omitted)


	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account				Money Market Variable Account			Total Return Variable Account
Assets:
Investments —
Investments, cost	$	168,859		$	8,439		$	66,075		$	47,511			$	42,998		$	139,947
Unrealized appreciation (depreciation)		(1,096	)		83			68			(3,038	)			—			(2,135	)

Total investments, at value	$	167,763		$	8,522		$	66,143		$	44,473			$	42,998		$	137,812
Cash		15			1			0	*		15				0	*		1
Foreign currency, at value (identified cost, $2)		—			2			—			—				—			—
Receivable for forward foreign currency exchange contracts		—			24			—			1				—			—
Receivable for daily variation margin on open futures contracts		—			—			7			—				—			—
Receivable for investments sold		—			—			1,100			828				—			214
Receivable for units sold		28			0	*		6			2				136			10
Interest and dividends receivable		159			138			649			908				48			696
Receivable from investment adviser		5			8			—			3				—			5
Receivable from sponsor		—			—			—			5				1			7
Other assets		2			0	*		1			1				1			2

Total assets	$	167,972		$	8,695		$	67,906		$	46,236		��	$	43,184		$	138,747

Liabilities:
Payable to custodian	$	—		$	—		$	—		$	—			$	—		$	11
Payable for forward foreign currency exchange contracts		—			19			—			2				—			—
Payable for investments purchased		—			153			483			685				—			285
Payable for units surrendered		88			2			44			191				121			53
Swaps, at value (Net unamortized premiums received, $34)		—			—			—			170				—			—
Payable to affiliates —
Investment adviser		14			1			4			4				2			11
Administrative fee		0	*		0	*		0	*		0	*			0	*		1
Sponsor		20			1			43			—				—			—
Payable for Board of Managers fees		4			0	*		1			1				1			3
Accrued expenses and other liabilities		52			37			35			34				17			62

Total liabilities	$	178		$	213		$	610		$	1,087			$	141		$	426

Net assets	$	167,794		$	8,482		$	67,296		$	45,149			$	43,043		$	138,321

*	Amount was less than $500.

See notes to financial statements.

Statements of Assets and Liabilities (unaudited) — June 30, 2008 — continued

(000 Omitted except for unit values)


	Unit	Unit Value		Capital Appreciation Variable Account		Global Governments Variable Account		Government Securities Variable Account		High Yield Variable Account		Money Market Variable Account		Total Return Variable Account
Net assets applicable to contract owners:
Capital Appreciation Variable Account —
Compass 2	1,868	$	57.375	$	107,200
Compass 3	56		37.702		2,112
Compass 3 – Level 2	3,548		15.775		55,974
Global Governments Variable Account —
Compass 2	96	$	28.494			$	2,742
Compass 3	13		27.640				368
Compass 3 – Level 2	325		16.297				5,303
Government Securities Variable Account —
Compass 2	1,219	$	41.327					$	50,368
Compass 3	26		28.770						741
Compass 3 – Level 2	872		16.936						14,775
High Yield Variable Account —
Compass 2	896	$	39.522							$	35,416
Compass 3	16		28.940								470
Compass 3 – Level 2	538		15.570								8,383
Money Market Variable Account —
Compass 2	855	$	21.816									$	18,649
Compass 3	52		17.810										934
Compass 3 – Level 2	1,723		13.420										23,116
Total Return Variable Account —
Compass 2	879	$	48.843											$	42,931
Compass 3	90		47.381												4,282
Compass 3 – Level 2	3,889		23.027												89,560

Net assets applicable to owners of deferred contracts					165,286		8,413		65,884		44,269		42,699		136,773
Reserve for variable annuities —
Compass 2 Contracts					2,262		17		1,369		839		279		1,128
Compass 3 Contracts					1		1		—		2		1		2
Compass 3 – Level 2 Contracts					245		51		43		39		64		418

Net assets				$	167,794	$	8,482	$	67,296	$	45,149	$	43,043	$	138,321

See notes to financial statements.

Statements of Operations (unaudited)— Six Months Ended June 30, 2008

(000 Omitted)


	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Net Investment income (loss):
Income —
Interest	$	45		$	148		$	1,693		$	2,033		$	718		$	1,668
Dividends		1,281			—			—			11			—			1,014
Foreign taxes withheld		(67	)		—			—			—			—			(15	)

Total investment income	$	1,259		$	148		$	1,693		$	2,044		$	718		$	2,667

Expenses —
Mortality and expense risk charges	$	1,114		$	53		$	430		$	298		$	273		$	909
Management fee		665			32			188			178			109			554
Boards of Managers fees		10			0	*		4			3			2			8
Distribution fee		2			0	*		1			0	*		1			4
Administrative fee		22			5			9			6			6			18
Custodian fee		27			21			14			12			6			37
Printing		13			6			8			8			12			10
Auditing fees		18			23			21			25			11			25
Legal fees		3			3			3			3			3			3
Miscellaneous		8			2			4			4			4			8

Total expenses	$	1,882		$	145		$	682		$	537		$	427		$	1,576
Fees paid indirectly		(1	)		(0	)*		(1	)		(2	)		(2	)		(1	)
Reduction of expenses by investment adviser		(39	)		(39	)		—			(25	)		—			(35	)

Net expenses	$	1,842		$	106		$	681		$	510		$	425		$	1,540

Net investment income (loss)	$	(583	)	$	42		$	1,012		$	1,534		$	293		$	1,127

Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) —
Investment transactions	$	1,259		$	216		$	481		$	(1,192	)	$	—		$	(2,534	)
Futures contracts		—			—			151			—			—			—
Swap transactions		—			—			—			48			—			—
Foreign currency transactions		(5	)		22			—			(12	)		—			0	*

Net realized gain (loss) on investments and foreign currency transactions	$	1,254		$	238		$	632		$	(1,156	)	$	—		$	(2,534	)

Change in unrealized appreciation (depreciation) —
Investments	$	(19,714	)	$	(35	)	$	(702	)	$	(1,306	)	$	—		$	(9,939	)
Futures contracts		—			—			(43	)		—			—			—
Swap transactions		—			—			—			(61	)		—			—
Translation of assets and liabilities in foreign currencies		4			5			—			(1	)		—			2

Net unrealized gain (loss) on investments and foreign currency translation	$	(19,710	)	$	(30	)	$	(745	)	$	(1,368	)	$	—		$	(9,937	)

Net realized and unrealized gain (loss) on investments and foreign currency	$	(18,456	)	$	208		$	(113	)	$	(2,524	)	$	—		$	(12,471	)

Change in net assets from operations	$	(19,039	)	$	250		$	899		$	(990	)	$	293		$	(11,344	)

*	Amount was less than $500.

See notes to financial statements.

Statements of Changes in Net Assets

(000 Omitted)


	Capital Appreciation Variable Account						Global Governments Variable Account						Government Securities Variable Account
	Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07			Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07			Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07
Change in net assets:
From operations:
Net investment income (loss)	$	(583	)	$	(1,868	)	$	42		$	132		$	1,012		$	2,385
Net realized gain (loss) on investments and foreign currency transactions		1,254			19,822			238			445			632			702
Net unrealized gain (loss) on investments and foreign currency translation		(19,710	)		1,267			(30	)		29			(745	)		890

Change in net assets from operations	$	(19,039	)	$	19,221		$	250		$	606		$	899		$	3,977

Participant transactions:
Accumulation activity:
Purchase payments received	$	1,414		$	3,083		$	69		$	182		$	423		$	888
Net transfers between variable and fixed accumulation accounts		(1,111	)		(6,076	)		510			(63	)		1,123			(2,041	)
Withdrawals, surrenders, annuitizations, and contract charges		(9,612	)		(37,910	)		(421	)		(1,776	)		(3,951	)		(12,438	)

Net accumulation activity	$	(9,309	)	$	(40,903	)	$	158		$	(1,657	)	$	(2,405	)	$	(13,591	)

Annuitization activity:
Annuitizations	$	39		$	139		$	(4	)	$	17		$	(23	)	$	240
Annuity payments and contract charges		(198	)		(409	)		(4	)		(6	)		(118	)		(252	)
Net transfers among accounts for annuity reserves		—			(168	)		—			—			—			—
Adjustments to annuity reserves		(28	)		41			(0	)*		(5	)		(52	)		26

Net annuitization activity	$	(187	)	$	(397	)	$	(8	)	$	6		$	(193	)	$	14

Change in net assets from participations transactions	$	(9,496	)	$	(41,300	)	$	150		$	(1,651	)	$	(2,598	)	$	(13,577	)

Total change in net assets	$	(28,535	)	$	(22,079	)	$	400		$	(1,045	)	$	(1,699	)	$	(9,600	)
Net assets:
At beginning of period		196,329			218,408			8,082			9,127			68,995			78,595

At end of period	$	167,794		$	196,329		$	8,482		$	8,082		$	67,296		$	68,995

See notes to financial statements.

Statements of Changes in Net Assets — continued

(000 Omitted)


	High Yield Variable Account						Money Market Variable Account						Total Return Variable Account
	Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07			Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07			Six Months Ended 6/30/08 (unaudited)			Year Ended 12/31/07
Change in net assets:
From operations:
Net investment income	$	1,534		$	3,290		$	293		$	1,548		$	1,127		$	2,238
Net realized gain (loss) on investments and foreign currency transactions		(1,156	)		285			—			(5	)		(2,534	)		11,869
Net unrealized gain (loss) on investments and foreign currency translation		(1,368	)		(3,174	)		—			—			(9,937	)		(9,246	)

Change in net assets from operations	$	(990	)	$	401		$	293		$	1,543		$	(11,344	)	$	4,861

Participant transactions:
Accumulation activity:
Purchase payments received	$	274		$	702		$	429		$	1,063		$	1,569		$	3,595
Net transfers between variable and fixed accumulation accounts		(736	)		(2,554	)		842			6,899			(2,071	)		1,562
Withdrawals, surrenders, annuitizations, and contract charges		(2,752	)		(8,241	)		(4,168	)		(11,300	)		(9,213	)		(32,427	)

Net accumulation activity	$	(3,214	)	$	(10,093	)	$	(2,897	)	$	(3,338	)	$	(9,715	)	$	(27,270	)

Annuitization activity:
Annuitizations	$	(1	)	$	30		$	3		$	(68	)	$	15		$	18
Annuity payments and contract charges		(73	)		(156	)		(45	)		(118	)		(124	)		(315	)
Net transfers among accounts for annuity reserves		—			—			—			0	*		—			168
Adjustments to annuity reserves		13			(42	)		0	*		79			0	*		(6	)

Net annuitization activity	$	(61	)	$	(168	)	$	(42	)	$	(107	)	$	(109	)	$	(135	)

Change in net assets from participations transactions	$	(3,275	)	$	(10,261	)	$	(2,939	)	$	(3,445	)	$	(9,824	)	$	(27,405	)

Total change in net assets	$	(4,265	)	$	(9,860	)	$	(2,646	)	$	(1,902	)	$	(21,168	)	$	(22,544	)
Net assets:
At beginning of period		49,414			59,274			45,689			47,591			159,489			182,033

At end of period	$	45,149		$	49,414		$	43,043		$	45,689		$	138,321		$	159,489

*	Amount was less than $500.

See notes to financial statements.

Financial Highlights

The financial highlights table is intended to help you understand the variable account’s financial performance for the semiannual period and the past 5 years. Certain information reflects financial results for a single unit value. The total returns in the table represent the rate by which an investor would have earned (or lost) on an investment in the variable account held for the entire period.


	Capital Appreciation Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	63.669		$	58.101		$	55.446		$	55.625		$	50.814		$	39.859

Investment income	$	0.459		$	0.751		$	0.560		$	0.580		$	0.744		$	0.402
Expenses		(0.675	)		(1.319	)		(1.198	)		(1.179	)		(1.109	)		(0.951	)

Net investment loss	$	(0.216	)	$	(0.568	)	$	(0.638	)	$	(0.599	)	$	(0.365	)	$	(0.549	)
Net realized and unrealized gain (loss) on investments and foreign currency		(6.078	)		6.136			3.293			0.420			5.176			11.504

Change in unit value	$	(6.294	)	$	5.568		$	2.655		$	(0.179	)	$	4.811		$	10.955

Unit value:
Net asset value — end of period	$	57.375		$	63.669		$	58.101		$	55.446		$	55.625		$	50.814

Total Return (%) (k)(r)(s)		(9.89	)(n)		9.58			4.79			(0.32	)		9.47	(b)		27.48	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.17	(a)		2.15			2.15			2.16			2.14			2.12
Expenses after expense reductions (f)		2.12	(a)		2.14			N/A			N/A			N/A			N/A
Net investment loss		(0.66	)(a)		(0.91	)		(1.11	)		(1.08	)		(0.70	)		(1.20	)
Portfolio turnover (%)		18			63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		1,868			1,980			2,419			3,018			3,544			4,040

	Capital Appreciation Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	41.858		$	38.235		$	36.524		$	36.678		$	33.539		$	26.334

Investment income	$	0.272		$	0.490		$	0.355		$	0.370		$	0.458		$	0.260
Expenses		(0.427	)		(0.903	)		(0.807	)		(0.795	)		(0.753	)		(0.648	)

Net investment loss	$	(0.155	)	$	(0.413	)	$	(0.452	)	$	(0.425	)	$	(0.295	)	$	(0.388	)
Net realized and unrealized gain (loss) on investments and foreign currency		(4.001	)		4.036			2.163			0.271			3.434			7.593

Change in unit value	$	(4.156	)	$	3.623		$	1.711		$	(0.154	)	$	3.139		$	7.205

Unit value:
Net asset value — end of period	$	37.702		$	41.858		$	38.235		$	36.524		$	36.678		$	33.539

Total Return (%) (k)(r)(s)		(9.93	)(n)		9.48			4.69			(0.42	)		9.36	(b)		27.36	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.27	(a)		2.25			2.25			2.26			2.24			2.22
Expenses after expense reductions (f)		2.22	(a)		2.24			N/A			N/A			N/A			N/A
Net investment loss		(0.80	)(a)		(1.04	)		(1.30	)		(1.20	)		(0.87	)		(1.31	)
Portfolio turnover (%)		18			63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		56			73			128			237			413			621

Financial Highlights — continued


	Capital Appreciation Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	17.501		$	15.963		$	15.226		$	15.267		$	13.940		$	10.929

Investment income	$	0.120		$	0.203		$	0.152		$	0.158		$	0.205		$	0.109
Expenses		(0.174	)		(0.352	)		(0.320	)		(0.316	)		(0.297	)		(0.254	)

Net investment loss	$	(0.054	)	$	(0.149	)	$	(0.168	)	$	(0.158	)	$	(0.092	)	$	(0.145	)
Net realized and unrealized gain (loss) on investments and foreign currency		(1.672	)		1.687			0.905			0.117			1.419			3.156

Change in unit value	$	(1.726	)	$	1.538		$	0.737		$	(0.041	)	$	1.327		$	3.011

Unit value:
Net asset value — end of period	$	15.775		$	17.501		$	15.963		$	15.226		$	15.267		$	13.940

Total Return (%) (k)(r)(s)		(9.86	)(n)		9.64			4.84			(0.27	)		9.52	(b)		27.55	(j)
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.12	(a)		2.10			2.10			2.11			2.09			2.07
Expenses after expense reductions (f)		2.07	(a)		2.09			N/A			N/A			N/A			N/A
Net investment loss		(0.63	)(a)		(0.88	)		(1.13	)		(1.05	)		(0.65	)		(1.17	)
Portfolio turnover (%)		18			63			61			130			65			104
Number of units outstanding at end of period (000 Omitted)		3,548			3,671			4,378			5,248			5,798			6,086

(a)	Annualized.

(b)

The variable account’s net asset value and total return calculation include a non-recurring accrual recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales. The non-recurring accrual resulted in an increase in the net asset value of $0.039, $0.026, and $0.010 per unit for Compass 2, Compass 3, and Compass 3 – Level 2, respectively, based on units outstanding on the day the proceeds were recorded.

(d)	Per unit data are based on the average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(j)

The variable account’s net asset value and total return calculation include proceeds received on March 26, 2003 for the partial payment of a non-recurring litigation settlement from Cendant Corporation, recorded as a realized gain on investment transactions. The proceeds resulted in an increase in the net asset value of $0.900, $0.594, and $0.247 per unit for Compass 2, Compass 3, and Compass 3 – Level 2, respectively, based on units outstanding on the day the proceeds were received. Excluding the effect of this payment from the ending net asset value per unit, the Compass 2, Compass 3, and Compass 3 – Level 2 total return per unit value for the year ended December 31, 2003 would have been lower by approximately 2.24%, 2.24%, and 2.25%, respectively.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

(r)	Certain expenses have been reduced without which performance would have been lower.

(s)	From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

Financial Highlights — continued


	Global Governments Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	27.622		$	25.732		$	24.865		$	27.240		$	25.169		$	22.125

Investment income	$	0.545		$	1.052		$	1.003		$	0.925		$	0.872		$	0.877
Expenses		(0.389	)		(0.653	)		(0.629	)		(0.651	)		(0.633	)		(0.584	)

Net investment income	$	0.156		$	0.399		$	0.374		$	0.274		$	0.239		$	0.293
Net realized and unrealized gain (loss) on investments and foreign currency		0.716			1.491			0.493			(2.649	)		1.832			2.751

Change in unit value	$	0.872		$	1.890		$	0.867		$	(2.375	)	$	2.071		$	3.044

Unit value:
Net asset value — end of period	$	28.494		$	27.622		$	25.732		$	24.865		$	27.240		$	25.169

Total Return (%) (k)(r)		3.16	(n)		7.34			3.49			(8.72	)		8.23			13.76
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.43	(a)		3.35			3.39			2.95			2.67			2.47
Expenses after expense reductions (f)		2.50	(a)		2.50			2.50			2.50			2.50			N/A
Net investment income		1.00	(a)		1.52			1.48			1.04			0.94			1.23
Portfolio turnover (%)		46			141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		96			85			104			116			128			161

	Global Governments Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	26.814		$	25.017		$	24.209		$	26.561		$	24.578		$	21.638

Investment income	$	0.484		$	1.044		$	1.025		$	0.949		$	0.883		$	0.869
Expenses		(0.369	)		(0.678	)		(0.659	)		(0.688	)		(0.662	)		(0.600	)

Net investment income	$	0.115		$	0.366		$	0.366		$	0.261		$	0.221		$	0.269
Net realized and unrealized gain (loss) on investments and foreign currency		0.711			1.431			0.442			(2.613	)		1.762			2.671

Change in unit value	$	0.826		$	1.797		$	0.808		$	(2.352	)	$	1.983		$	2.940

Unit value:
Net asset value — end of period	$	27.640		$	26.814		$	25.017		$	24.209		$	26.561		$	24.578

Total Return (%) (k)(r)		3.08	(n)		7.18			3.34			(8.85	)		8.07			13.59
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.58	(a)		3.50			3.54			3.10			2.82			2.62
Expenses after expense reductions (f)		2.65	(a)		2.65			2.65			2.65			2.65			N/A
Net investment income		0.82	(a)		1.44			1.41			0.97			0.85			1.15
Portfolio turnover (%)		46			141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		13			15			18			26			28			41

Financial Highlights — continued


	Global Governments Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	15.798		$	14.718		$	14.221		$	15.580		$	14.396		$	12.655

Investment income	$	0.304		$	0.608		$	0.574		$	0.526		$	0.497		$	0.494
Expenses		(0.218	)		(0.377	)		(0.361	)		(0.371	)		(0.361	)		(0.331	)

Net investment income	$	0.086		$	0.231		$	0.213		$	0.155		$	0.136		$	0.163
Net realized and unrealized gain (loss) on investments and foreign currency		0.413			0.849			0.284			(1.514	)		1.048			1.578

Change in unit value	$	0.499		$	1.080		$	0.497		$	(1.359	)	$	1.184		$	1.741

Unit value:
Net asset value — end of period	$	16.297		$	15.798		$	14.718		$	14.221		$	15.580		$	14.396

Total Return (%) (k)(r)		3.16	(n)		7.34			3.49			(8.72	)		8.23			13.76
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.43	(a)		3.35			3.39			2.95			2.67			2.47
Expenses after expense reductions		2.50	(a)		2.50			2.50			2.50			2.50			N/A
Net investment income		1.00	(a)		1.53			1.47			1.04			0.94			1.21
Portfolio turnover (%)		46			141			118			144			128			130
Number of units outstanding at end of period (000 Omitted)		325			332			403			468			500			559

(a)	Annualized.

(d)	Per unit data are based on the average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

(r)	Certain expenses have been reduced without which performance would have been lower.

See notes to financial statements.

Financial Highlights — continued


	Government Securities Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	40.804		$	38.619		$	37.679		$	37.338		$	36.470		$	36.124

Investment income	$	1.125		$	2.117		$	2.024		$	1.936		$	1.834		$	1.482
Expenses		(0.453	)		(0.802	)		(0.757	)		(0.752	)		(0.726	)		(0.711	)

Net investment income	$	0.672		$	1.315		$	1.267		$	1.184		$	1.108		$	0.771
Net realized and unrealized gain (loss) on investments and foreign currency		(0.149	)		0.870			(0.327	)		(0.843	)		(0.240	)		(0.425	)

Change in unit value	$	0.523		$	2.185		$	0.940		$	0.341		$	0.868		$	0.346

Unit value:
Net asset value — end of period	$	41.327		$	40.804		$	38.619		$	37.679		$	37.338		$	36.470

Total Return (%) (k)		1.28	(n)		5.66			2.50			0.91			2.38			0.96
Ratios (%) (to average net assets):
Expenses (f)		2.03	(a)		2.02			2.01			2.01			1.97			1.95
Net investment income		2.95	(a)		3.26			3.28			3.09			2.96			2.08
Portfolio turnover (%)		22			35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		1,219			1,269			1,538			1,852			2,125			2,447

	Government Securities Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	28.419		$	26.924		$	26.295		$	26.082		$	25.501		$	25.284

Investment income	$	0.719		$	1.470		$	1.352		$	1.316		$	1.244		$	1.045
Expenses		(0.309	)		(0.583	)		(0.538	)		(0.543	)		(0.525	)		(0.514	)

Net investment income	$	0.410		$	0.887		$	0.814		$	0.773		$	0.719		$	0.531
Net realized and unrealized gain (loss) on investments and foreign currency		(0.059	)		0.608			(0.185	)		(0.560	)		(0.138	)		(0.314	)
		��
Change in unit value	$	0.351		$	1.495		$	0.629		$	0.213		$	0.581		$	0.217

Unit value:
Net asset value — end of period	$	28.770		$	28.419		$	26.924		$	26.295		$	26.082		$	25.501

Total Return (%) (k)		1.23	(n)		5.55			2.40			0.82			2.28			0.86
Ratios (%) (to average net assets):
Expenses (f)		2.13	(a)		2.12			2.11			2.11			2.07			2.05
Net investment income		2.82	(a)		3.25			3.15			2.96			2.82			2.08
Portfolio turnover (%)		22			35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		26			28			40			69			100			147

Financial Highlights — continued


	Government Securities Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	16.717		$	15.814		$	15.421		$	15.274		$	14.912		$	14.763

Investment income	$	0.434		$	0.848		$	0.813		$	0.781		$	0.742		$	0.597
Expenses		(0.173	)		(0.318	)		(0.300	)		(0.299	)		(0.289	)		(0.282	)

Net investment income	$	0.261		$	0.530		$	0.513		$	0.482		$	0.453		$	0.315
Net realized and unrealized gain (loss) on investments and foreign currency		(0.042	)		0.373			(0.120	)		(0.335	)		(0.091	)		(0.166	)

Change in unit value	$	0.219		$	0.903		$	0.393		$	0.147		$	0.362		$	0.149

Unit value:
Net asset value — end of period	$	16.936		$	16.717		$	15.814		$	15.421		$	15.274		$	14.912

Total Return (%) (k)		1.31	(n)		5.71			2.55			0.96			2.43			1.01
Ratios (%) (to average net assets):
Expenses (f)		1.98	(a)		1.97			1.96			1.96			1.92			1.90
Net investment income		2.97	(a)		3.29			3.30			3.12			2.99			2.10
Portfolio turnover (%)		22			35			17			69			89			138
Number of units outstanding at end of period (000 Omitted)		872			889			1,054			1,280			1,377			1,562

(a)	Annualized.

(d)	Per unit data are based on the average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

See notes to financial statements.

Financial Highlights — continued


	High Yield Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	40.344		$	40.172		$	36.840		$	36.669		$	34.056		$	28.505

Investment income	$	1.868		$	3.391		$	3.121		$	2.959		$	2.857		$	2.769
Expenses		(0.467	)		(0.901	)		(0.847	)		(0.820	)		(0.770	)		(0.689	)

Net investment income	$	1.401		$	2.490		$	2.274		$	2.139		$	2.087		$	2.080
Net realized and unrealized gain (loss) on investments and foreign currency		(2.223	)		(2.318	)		1.058			(1.968	)		0.526			3.471

Change in unit value	$	(0.822	)	$	0.172		$	3.332		$	0.171		$	2.613		$	5.551

Unit value:
Net asset value — end of period	$	39.522		$	40.344		$	40.172		$	36.840		$	36.669		$	34.056

Total Return (%) (k)(r)(s)		(2.04	)(n)		0.43			9.04			0.47			7.67			19.47
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.31	(a)		2.25			2.32			2.28	(o)		2.21			2.20
Expenses after expense reductions (f)		2.20	(a)		2.20			2.22			2.25			N/A			N/A
Net investment income		6.48	(a)		5.96			5.84			5.76			5.91			6.53
Portfolio turnover (%)		42			66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		896			958			1,119			1,323			1,601			1,827

	High Yield Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	29.556		$	29.459		$	27.043		$	26.943		$	25.048		$	20.986

Investment income	$	1.246		$	2.445		$	2.212		$	2.118		$	2.021		$	1.964
Expenses		(0.330	)		(0.681	)		(0.635	)		(0.620	)		(0.576	)		(0.514	)

Net investment income	$	0.916		$	1.764		$	1.577		$	1.498		$	1.445		$	1.450
Net realized and unrealized gain (loss) on investments and foreign currency		(1.532	)		(1.667	)		0.839			(1.398	)		0.450			2.612

Change in unit value	$	(0.616	)	$	0.097		$	2.416		$	0.100		$	1.895		$	4.062

Unit value:
Net asset value — end of period	$	28.940		$	29.556		$	29.459		$	27.043		$	26.943		$	25.048

Total Return (%) (k)(r)(s)		(2.09	)(n)		0.33			8.94			0.37			7.57			19.35
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.41	(a)		2.35			2.42			2.38	(o)		2.31			2.30
Expenses after expense reductions (f)		2.30	(a)		2.30			2.32			2.35			N/A			N/A
Net investment income		6.35	(a)		5.93			5.71			5.64			5.75			6.41
Portfolio turnover (%)		42			66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		16			21			34			47			67			115

Financial Highlights — continued


	High Yield Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	15.890		$	15.814		$	14.495		$	14.421		$	13.386		$	11.199

Investment income	$	0.718		$	1.310		$	1.202		$	1.142		$	1.019		$	1.161
Expenses		(0.177	)		(0.344	)		(0.323	)		(0.312	)		(0.275	)		(0.286	)

Net investment income	$	0.541		$	0.966		$	0.879		$	0.830		$	0.744		$	0.875
Net realized and unrealized gain (loss) on investments and foreign currency		(0.861	)		(0.890	)		0.440			(0.756	)		0.291			1.312

Change in unit value	$	(0.320	)	$	0.076		$	1.319		$	0.074		$	1.035		$	2.187

Unit value:
Net asset value — end of period	$	15.570		$	15.890		$	15.814		$	14.495		$	14.421		$	13.386

Total Return (%) (k)(r)(s)		(2.01	)(n)		0.48			9.10			0.52			7.73			19.53
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.26	(a)		2.20			2.27			2.23	(o)		2.16			2.15
Expenses after expense reductions (f)		2.15	(a)		2.15			2.17			2.20			N/A			N/A
Net investment income		6.50	(a)		5.98			5.86			5.81			5.77			6.57
Portfolio turnover (%)		42			66			88			53			81			164
Number of units outstanding at end of period (000 Omitted)		538			579			774			937			971			2,631

(a)	Annualized.

(d)	Per unit data are based on the average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

(o)

Due to a revision, the ratios of expenses before expense reductions for the year ended December 31, 2005 not previously reported, were 2.28%, 2.38% and 2.23% for Compass 2, Compass 3, and Compass 3 – Level 2, respectively. There was no impact to net assets or the expenses charged to the shareholder.

(r)	Certain expenses have been reduced without which performance would have been lower.

(s)	From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

Financial Highlights — continued


	Money Market Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	21.676		$	20.979		$	20.331		$	20.073		$	20.188		$	20.322

Investment income	$	0.372		$	1.145		$	1.051		$	0.661		$	0.281		$	0.247
Expenses		(0.232	)		(0.431	)		(0.403	)		(0.403	)		(0.396	)		(0.381	)

Net investment income (loss)	$	0.140		$	0.714		$	0.648		$	0.258		$	(0.115	)	$	(0.134	)
Net realized and unrealized gain (loss) on investments		—			(0.017	)(g)		—			(0.000	)(w)		—			—

Change in unit value	$	0.140		$	0.697		$	0.648		$	0.258		$	(0.115	)	$	(0.134	)

Unit value:
Net asset value — end of period	$	21.816		$	21.676		$	20.979		$	20.331		$	20.073		$	20.188

Total Return (%) (k)(s)		0.65	(n)		3.32			3.19			1.29			(0.57	)		(0.66	)
Ratios (%) (to average net assets):
Expenses (f)		2.00	(a)		2.00			1.95			1.99			1.96			1.87
Net investment income (loss)		1.33	(a)		3.29			3.15			1.38			(0.56	)		(0.63	)
Number of units outstanding at end of period (000 Omitted)		855			887			928			1,128			1,009			1,172

	Money Market Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	17.704		$	17.152		$	16.638		$	16.443		$	16.553		$	16.680

Investment income	$	0.292		$	0.902		$	0.852		$	0.539		$	0.229		$	0.198
Expenses		(0.186	)		(0.356	)		(0.338	)		(0.344	)		(0.339	)		(0.325	)

Net investment income (loss)	$	0.106		$	0.546		$	0.514		$	0.195		$	(0.110	)	$	(0.127	)
Net realized and unrealized gain (loss) on investments		—			0.006	(g)		—			(0.000	)(w)		—			—

Change in unit value	$	0.106		$	0.552		$	0.514		$	0.195		$	(0.110	)	$	(0.127	)

Unit value:
Net asset value — end of period	$	17.810		$	17.704		$	17.152		$	16.638		$	16.443		$	16.553

Total Return (%) (k)(s)		0.60	(n)		3.22			3.09			1.19			(0.67	)		(0.76	)
Ratios (%) (to average net assets):
Expenses (f)		2.10	(a)		2.10			2.05			2.09			2.06			1.97
Net investment income (loss)		1.24	(a)		3.20			3.00			1.42			(0.71	)		(0.74	)
Number of units outstanding at end of period (000 Omitted)		52			64			131			218			97			155

Financial Highlights — continued


	Money Market Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	13.330		$	12.895		$	12.491		$	12.326		$	12.390		$	12.466

Investment income	$	0.224		$	0.695		$	0.644		$	0.405		$	0.181		$	0.131
Expenses		(0.134	)		(0.257	)		(0.240	)		(0.240	)		(0.245	)		(0.207	)

Net investment income (loss)	$	0.090		$	0.438		$	0.404		$	0.165		$	(0.064	)	$	(0.076	)
Net realized and unrealized gain (loss) on investments		—			(0.003	)(g)		—			(0.000	)(w)		—			—

Change in unit value	$	0.090		$	0.435		$	0.404		$	0.165		$	(0.064	)	$	(0.076	)

Unit value:
Net asset value — end of period	$	13.420		$	13.330		$	12.895		$	12.491		$	12.326		$	12.390

Total Return (%) (k)(s)		0.67	(n)		3.38			3.24			1.34			(0.52	)		(0.61	)
Ratios (%) (to average net assets):
Expenses (f)		1.95	(a)		1.95			1.90			1.94			1.91			1.82
Net investment income (loss)		1.37	(a)		3.32			3.18			1.39			(0.48	)		(0.61	)
Number of units outstanding at end of period (000 Omitted)		1,723			1,871			1,969			2,384			2,259			896

(a)	Annualized.

(d)	Per unit data are based on the average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(g)	The per share amount varies from the net realized and unrealized gain/loss for the period because of the timing of sales of variable account units and the per unit amount of realized and unrealized gains and losses at such time.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

(s)	From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

(w)	Per unit amount was less than $0.01.

See notes to financial statements.

Financial Highlights — continued


	Total Return Variable Account
	Compass 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	52.709		$	51.373		$	46.459		$	45.729		$	41.571		$	35.950

Investment income	$	0.998		$	1.832		$	1.749		$	1.521		$	1.450		$	1.237
Expenses		(0.570	)		(1.126	)		(1.033	)		(0.970	)		(0.905	)		(0.800	)

Net investment income	$	0.428		$	0.706		$	0.716		$	0.551		$	0.545		$	0.437
Net realized and unrealized gain (loss) on investments and foreign currency		(4.294	)		0.630			4.198			0.179			3.613			5.184

Change in unit value	$	(3.866	)	$	1.336		$	4.914		$	0.730		$	4.158		$	5.621

Unit value:
Net asset value — end of period	$	48.843		$	52.709		$	51.373		$	46.459		$	45.729		$	41.571

Total Return (%) (k)(r)(s)		(7.34	)(n)		2.60			10.58			1.60			10.00	(b)		15.64
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.15	(a)		2.12			2.14			2.12			2.11			2.10
Expenses after expense reductions (f)		2.10	(a)		2.11			N/A			N/A			N/A			N/A
Net investment income		1.54	(a)		1.30			1.46			1.18			1.25			1.13
Portfolio turnover (%)		24			54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		879			948			1,156			1,349			1,511			1,688

	Total Return Variable Account
	Compass 3
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	51.169		$	49.947		$	45.236		$	44.592		$	40.597		$	35.160

Investment income	$	0.903		$	1.770		$	1.645		$	1.450		$	1.375		$	1.200
Expenses		(0.561	)		(1.165	)		(1.051	)		(1.019	)		(0.929	)		(0.823	)

Net investment income	$	0.342		$	0.605		$	0.594		$	0.431		$	0.446		$	0.377
Net realized and unrealized gain (loss) on investments and foreign currency		(4.130	)		0.617			4.117			0.213			3.549			5.060

Change in unit value	$	(3.788	)	$	1.222		$	4.711		$	0.644		$	3.995		$	5.437

Unit value:
Net asset value — end of period	$	47.381		$	51.169		$	49.947		$	45.236		$	44.592		$	40.597

Total Return (%) (k)(r)(s)		(7.40	)(n)		2.45			10.42			1.45			9.84	(b)		15.46
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.30	(a)		2.27			2.29			2.27			2.26			2.25
Expenses after expense reductions (f)		2.25	(a)		2.26			N/A			N/A			N/A			N/A
Net investment income		1.37	(a)		1.18			1.28			0.97			1.07			1.01
Portfolio turnover (%)		24			54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		90			107			142			217			315			453

Financial Highlights — continued


	Total Return Variable Account
	Compass 3 – Level 2
	Six Months Ended 6/30/08 (unaudited)			Years Ended 12/31
	Six Months Ended 6/30/08 (unaudited)			2007			2006			2005			2004			2003
Per unit data: (d)
Net asset value — beginning of period	$	24.850		$	24.220		$	21.903		$	21.559		$	19.599		$	16.949

Investment income	$	0.446		$	0.849		$	0.812		$	0.710		$	0.676		$	0.575
Expenses		(0.258	)		(0.527	)		(0.484	)		(0.457	)		(0.425	)		(0.376	)

Net investment income	$	0.188		$	0.322		$	0.328		$	0.253		$	0.251		$	0.199
Net realized and unrealized gain (loss) on investments and foreign currency		(2.011	)		0.308			1.989			0.091			1.709			2.451

Change in unit value	$	(1.823	)	$	0.630		$	2.317		$	0.344		$	1.960		$	2.650

Unit value:
Net asset value — end of period	$	23.027		$	24.850		$	24.220		$	21.903		$	21.559		$	19.599

Total Return (%) (k)(r)(s)		(7.34	)(n)		2.60			10.58			1.60			10.00	(b)		15.64
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.15	(a)		2.12			2.14			2.12			2.11			2.10
Expenses after expense reductions (f)		2.10	(a)		2.11			N/A			N/A			N/A			N/A
Net investment income		1.53	(a)		1.28			1.44			1.17			1.24			1.11
Portfolio turnover (%)		24			54			45			49			64			62
Number of units outstanding at end of period (000 Omitted)		3,889			4,116			4,695			5,462			5,646			5,946

(a)	Annualized.

(b)

The variable account’s net asset value and total return calculation include a non-recurring accrual recorded as a result of an administrative proceeding regarding disclosure of brokerage allocation practices in connection with fund sales. The non-recurring accrual did not have a material impact on the net asset value per share based on the shares outstanding on the day the proceeds were recorded.

(d)	Per unit data are based on average number of units outstanding during each year.

(f)	Ratios do not reflect reductions from fees paid indirectly, if applicable.

(k)	The total return does not reflect expenses that apply to separate accounts. Inclusion of these charges would reduce the total return figures for all periods shown.

(n)	Not annualized.

(r)	Certain expenses have been reduced without which performance would have been lower.

(s)	From time to time the variable account may receive proceeds from litigation settlements, without which performance would be lower.

See notes to financial statements.

Notes to Financial Statements (unaudited)

(1)

Business and Organization

Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account, and Total Return Variable Account (the variable account(s)) are separate accounts established by Sun Life Assurance Company of Canada (U.S.), the Sponsor, in connection with the issuance of Compass 2 and Compass 3 combination fixed/variable annuity contracts. The variable accounts operate as open-end management investment companies as those terms are defined in the Investment Company Act of 1940, as amended.

(2)

Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The High Yield Variable Account can invest up to 100% of its portfolio in high-yield securities rated below investment grade. Investments in high-yield securities involve greater degrees of credit and market risk than investments in higher-rated securities and tend to be more sensitive to economic conditions. The Capital Appreciation Variable Account, Global Governments Variable Account, High Yield Variable Account, and Total Return Variable Account can invest in foreign securities, including securities of emerging market issuers. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s legal, political, and economic environment. The markets of emerging markets countries are generally more volatile than the markets of developed countries with more mature economies. All of the risks of investing in foreign securities previously described are heightened when investing in emerging markets countries.

Investment Valuations – Money market instruments are valued at amortized cost, which approximates market value. Amortized cost involves valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. Each money market fund’s use of amortized cost is subject to the fund’s compliance with Rule 2a-7 under the Investment Company Act of 1940. The amortized cost value of an instrument can be different from the market value of an instrument. Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities for which there were no sales reported that day, equity securities are generally valued at the last quoted daily bid quotation as reported by an independent pricing service on the market or exchange on which they are primarily traded. For securities held short for which there were no sales reported for the day, the position is generally valued at the last quoted daily ask quotation as reported by an independent pricing service on the market or exchange on which such securities are primarily traded. Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as reported by an independent pricing service. Short-term instruments with a maturity at issuance of 60 days or less may be valued at amortized cost, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing price as reported by an independent pricing service on the exchange on which such options are primarily traded. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation as reported by an independent pricing service on the exchange on which such options are primarily traded. Options not traded on an exchange are generally valued at a broker-dealer bid quotation. Foreign currency options are generally valued using an external pricing model that uses market data from an independent source. Futures contracts are generally valued at last posted settlement price as reported by an independent pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as reported by an independent pricing service on the market on which such futures contracts are primarily traded. Forward foreign currency contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates reported by an independent pricing service for proximate time periods. Swaps are generally valued at an evaluated bid as reported by an independent pricing service. Securities and other assets generally valued on the basis of information from an independent pricing service may also be valued at a broker-dealer bid quotation. Values obtained from pricing services can utilize both dealer-supplied valuations and electronic data processing techniques, which take into account factors such as institutional-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates reported by an independent pricing service.

The Board of Trustees has delegated primary responsibility for determining or causing to be determined the value of the variable accounts’ investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Trustees. Under the variable accounts’ valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from independent pricing services. In addition, investments may be valued at fair value if the adviser determines that an investment’s value has been materially affected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the variable accounts’ net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur on a frequent basis after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the variable accounts’ net asset value may be deemed to have a material affect on the value of securities traded in foreign markets. Accordingly, the variable accounts’ foreign equity securities may often be valued at fair value. The adviser may rely on independent pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the

Notes to Financial Statements (unaudited) — continued

type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating the variable accounts’ net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of investments used to determine the variable accounts’ net asset value may differ from quoted or published prices for the same investments.

The variable accounts adopted FASB Statement No. 157, Fair Value Measurements (the “Statement”) in this reporting period. This Statement provides a single definition of fair value, a hierarchy for measuring fair value and expanded disclosures about fair value measurements. Various inputs are used in determining the value of each variable account’s assets or liabilities carried at market value. These inputs are categorized into three broad levels. Level 1 includes quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures, forwards, swap contracts and written options, which are valued at the unrealized appreciation/depreciation on the instrument. The following is a summary of the levels used as of June 30, 2008 in valuing each variable account’s assets or liabilities carried at market value:

Capital Appreciation Variable Account:


	Level 1	Level 2	Level 3	Total
Investments in Securities	$151,016,283	$16,746,847	$—	$167,763,130
Other Financial Instruments	$—	$—	$—	$—

Global Governments Variable Account:


	Level 1	Level 2	Level 3	Total
Investments in Securities	$1,493	$8,520,459	$—	$8,521,952
Other Financial Instruments	$4,912	$—	$—	$4,912

Government Securities Variable Account:


	Level 1		Level 2	Level 3	Total
Investments in Securities	$—		$66,143,025	$—	$66,143,025
Other Financial Instruments	$(10,995	)	$—	$—	$(10,995	)

High Yield Variable Account:


	Level 1		Level 2		Level 3	Total
Investments in Securities	$1,230,937		$43,242,160		$—	$44,473,097
Other Financial Instruments	$(1,099	)	$(170,474	)	$—	$(171,573	)

Money Market Variable Account:


	Level 1	Level 2	Level 3	Total
Investments in Securities	$	$42,997,952	$—	$42,997,952
Other Financial Instruments	$—	$—	$—	$—

Total Return Variable Account:


	Level 1	Level 2	Level 3	Total
Investments in Securities	$76,737,581	$61,074,443	$—	$137,812,024
Other Financial Instruments	$—	$—	$—	$—

Repurchase Agreements – Each variable account may enter into repurchase agreements with institutions that the variable accounts’ investment adviser has determined are creditworthy. Each repurchase agreement is recorded at cost. The variable accounts require that the securities collateral in a repurchase transaction be transferred to a custodian in a manner sufficient to enable the variable accounts to obtain those securities in the event of a default under the repurchase agreement. The variable accounts monitor, on a daily basis, the value of the collateral to ensure that its value, including accrued interest, is greater than amounts owed to the variable accounts under each such repurchase agreement. The variable account and other funds managed by Massachusetts Financial Services Company (MFS), may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Inflation-Adjusted Debt Securities – Certain variable accounts invest in inflation-adjusted debt securities issued by the U.S. Treasury. The variable accounts may also invest in inflation-adjusted debt securities issued by U.S. Government agencies and instrumentalities other than the U.S. Treasury and by other entities such as U.S. and foreign corporations and foreign governments. The principal value of these debt securities is adjusted through income according to changes in the Consumer Price Index or another general price or wage index. These debt securities typically pay a fixed rate of interest, but this fixed rate is applied to the inflation-adjusted principal amount. The principal paid at maturity of the debt security is typically equal to the inflation-adjusted principal amount, or the security’s original par value, whichever is greater. Other types of inflation-adjusted securities may use other methods to adjust for other measures of inflation.

Foreign Currency Translation – Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions. Gains and losses attributable to foreign currency exchange rates on sales of

Notes to Financial Statements (unaudited) — continued

securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign exchange rate movements on income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.

Derivative Risk – Certain variable accounts may invest in derivatives for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the variable accounts use derivatives as an investment to gain market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost. Cash that has been segregated on behalf of certain derivative contracts will be reported separately on the Statement of Assets and Liabilities as restricted cash. On certain over-the-counter derivatives, the variable account attempts to reduce its exposure to counterparty credit risk by entering into an ISDA Master Agreement on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The ISDA Master Agreement gives the variable account the right, upon an event of default by the applicable counterparty, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. This right to close out and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of the variable account’s credit risk to such counterparty equal to any amounts payable by the variable account under the applicable transactions, if any. However, absent an event of default by the counterparty, the ISDA Master Agreement does not result in an offset of reported balance sheet assets and liabilities across transactions between the variable account and the applicable counterparty. Derivative instruments include purchased options and forward foreign currency exchange contracts for the Global Governments Variable Account, futures contracts for the Government Securities Variable Account and swap agreements and forward foreign currency exchange contracts for the High Yield Variable Account.

Purchased Options – Certain variable accounts may purchase call or put options for a premium. Purchasing call options may be a hedge against an anticipated increase in the dollar cost of securities to be acquired or to increase the variable accounts’ exposure to the underlying instrument. Purchasing put options may hedge against a decline in the value of portfolio securities. The premium paid is included as an investment in the Statement of Assets and Liabilities and is subsequently adjusted to the current value of the option. Premiums paid for purchased options which have expired are treated as realized losses on investments in the Statement of Operations. Premiums paid for purchased options which are exercised or closed are added to the amount paid or offset against the proceeds on the underlying security or financial instrument to determine the realized gain or loss. The risk of loss associated with purchased options is limited to the premium paid.

Futures Contracts – Certain variable accounts may enter into futures contracts for the delayed delivery of securities or currency, or contracts based on financial indices at a fixed price on a future date. In entering such contracts, the variable accounts are required to deposit with the broker either in cash or securities an amount equal to a certain percentage of the contract amount. Subsequent payments are made or received by the variable account each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gains or losses by the variable account. Upon entering into such contracts, the variable accounts bear the risk of interest or exchange rates or securities prices moving unexpectedly, in which case, the variable accounts may not achieve the anticipated benefits of the futures contracts and may realize a loss.

Forward Foreign Currency Exchange Contracts – Certain variable accounts may enter into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. Risks may arise upon entering into these contracts from the potential inability of counterparties to meet the terms of their contracts and from unanticipated movements in the value of the contract. The variable accounts may enter into forward foreign currency exchange contracts for hedging purposes as well as for non-hedging purposes. For hedging purposes, the variable accounts may enter into contracts to deliver or receive foreign currency it will receive from or require for its normal investment activities. The variable accounts may also use contracts in a manner intended to protect foreign currency denominated securities from declines in value due to unfavorable exchange rate movements. For non-hedging purposes, the variable accounts may enter into contracts with the intent of changing the relative exposure of the variable accounts’ portfolio of securities to different currencies to take advantage of anticipated changes. The forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any gains or losses are recorded as unrealized until the contract settlement date. On contract settlement date, the gains or losses are recorded as realized gains or losses on foreign currency transactions.

Swap Agreements – Certain variable accounts may enter into swap agreements. A swap is an exchange of cash payments between the fund and another party. Net cash payments are exchanged at specified intervals and are recorded as a realized gain or loss in the Statement of Operations. The value of the swap is adjusted daily and the change in value, including accruals of periodic amounts of interest to be paid or received, is recorded as unrealized appreciation or depreciation in the Statement of Operations. Amounts paid or received at the inception of the swap are reflected as premiums paid or received on the Statement of Assets and Liabilities and are amortized using the effective interest method over the term of the agreement. A liquidation payment received or made upon early termination is recorded as a realized gain or loss in the Statement of Operations. Collateral, in the form of cash or securities, may be required to be held in segregated accounts with the fund’s custodian in connection with these agreements. Risk of loss may exceed amounts recognized on the Statement of Assets and Liabilities. These risks include the possible lack of a liquid market, failure of the counterparty to perform under the terms of the agreements, and unfavorable market and interest rate movements of the underlying instrument.

The High Yield Variable Account holds credit default swaps in which one party makes a stream of payments based on a fixed percentage applied to the notional amount to another party in exchange for the right to receive a specified return in the event of a default by a third party, such as a corporate issuer or foreign issuer, on its obligation. The variable accounts may enter into credit default swaps to limit or to reduce its risk exposure to defaults of corporate and sovereign issuers or to create direct or synthetic short or long exposure to corporate debt securities or certain sovereign debt securities to which it is not otherwise exposed.

Notes to Financial Statements (unaudited) — continued

In March 2008, FASB Statement No. 161, Disclosures about Derivative Instruments and Hedging Activities (the “Standard”) was issued, and is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008. This Standard provides enhanced disclosures about the variable account’s use of and accounting for derivative instruments and the effect of derivative instruments on the variable account’s results of operations and financial position. Management is evaluating the application of the Standard to each variable account, and has not at this time determined the impact, if any, resulting from the adoption of this Standard on each variable account’s financial statements.

Loans and Other Direct Debt Instruments – Certain variable accounts may invest in loans and loan participations or other receivables. These investments may include standby financing commitments, including revolving credit facilities, which obligate the variable account to supply additional cash to the borrower on demand. At June 30, 2008, the High Yield variable account had unfunded loan commitments of $8,611, which could be extended at the option of the borrower and which are covered by sufficient cash and/or liquid securities held by the variable account. The market value and obligation of the variable account on these unfunded loan commitments is included in Investments, at value and Payable for investments purchased, respectively, on the Statement of Assets and Liabilities. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary.

Indemnifications – Under each variable accounts’ organizational documents, its officers and trustees may be indemnified against certain liabilities and expenses arising out of the performance of their duties to the variable account. Additionally, in the normal course of business, the variable account enters into agreements with service providers that may contain indemnification clauses. The variable accounts’ maximum exposure under these agreements is unknown as this would involve future claims that may be made against the variable account that have not yet occurred.

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Certain variable accounts earn certain fees in connection with its floating rate loan purchasing activities. These fees are in addition to interest payments earned and may include amendment fees, commitment fees, facility fees, consent fees, and prepayment fees. Commitment fees are recorded on an accrual basis as income in the accompanying financial statements. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the variable account is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date.

The variable accounts may receive proceeds from litigation settlements. Any proceeds received from litigation involving portfolio holdings are reflected in the Statement of Operations in realized gain/loss if the security has been disposed of by the variable accounts or in unrealized gain/loss if the security is still held by the variable accounts. Any other proceeds from litigation not related to portfolio holdings are reflected as other income in the Statement of Operations.

Fees Paid Indirectly – The variable accounts’ custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the variable account. This amount, for the six months ended June 30, 2008, is shown as a reduction of total expenses on the Statement of Operations.

Federal Income Taxes – The variable accounts are funding vehicles for individual variable annuities. The operations of the variable accounts are part of the operations of Sun Life Assurance Company of Canada (U.S.), the Sponsor, and are not taxed separately; the variable accounts are not taxed as regulated investment companies. The Sponsor qualifies for the federal income tax treatment granted to life insurance companies under Subchapter L of the Internal Revenue Code. Accordingly, no provision for federal income or excise tax is necessary. Foreign taxes have been provided for on interest and dividend income earned on foreign investments in accordance with the applicable country’s tax rates and to the extent unrecoverable are recorded as a reduction of investment income.

(3)

Contract Charges

The Sponsor makes a deduction from the variable accounts at the end of each valuation period, during both the accumulation period and after annuity payments begin, for assuming the mortality and expense risks under the contracts. The rate of the deduction may be changed annually but in no event may it exceed 1.25% of the average net assets of each variable account attributable to Compass 3 contracts, or, with respect to Compass 2 contracts, 1.30% of the assets of Capital Appreciation Variable Account, Government Securities Variable Account, High Yield Variable Account, and Money Market Variable Account, or 1.25% of the assets of Global Governments Variable Account, and Total Return Variable Account attributable to such contracts.

For assuming the distribution expense risk under Compass 3 contracts, the Sponsor makes a deduction from the variable accounts at the end of each valuation period for the first seven contract years at an effective annual rate of 0.15% of the net assets of the variable accounts attributable to such contracts. Contracts are transferred from Compass 3 to Compass 3 – Level 2 in the month following the seventh contract anniversary. No deduction is made after the seventh contract anniversary. No deduction is made with respect to assets attributable to Compass 2 contracts.

Each year, on the contract anniversary, a contract maintenance charge of $25 with respect to Compass 2 contracts and $30 with respect to Compass 3 contracts is deducted from each contract’s accumulation account and paid the Sponsor to cover administrative expenses relating to the contract. After the annuity commencement date, the annual contract maintenance charge is deducted pro rata from each annuity payment made during the year.

The Sponsor does not deduct a sales charge from purchase payments. However, a withdrawal charge (contingent deferred sales charge) may be deducted to cover certain expenses relating to the sale of the contract. In no event shall the aggregate withdrawal charges (including the distribution

Notes to Financial Statements (unaudited) — continued

expense charge described above applicable to Compass 3 contracts) exceed 5% of the purchase payments made under a Compass 2 contract or 9% of the purchase payments made under a Compass 3 contract.

(4)

Annuity Reserves

Annuity reserves for contracts with annuity commencement dates prior to February 1, 1987 have been calculated using the 1971 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates between February 1, 1987 and December 31, 1998 have been calculated using the 1983 Individual Annuitant Mortality Table. Annuity reserves for contracts with annuity commencement dates on or after January 1, 1999 have been calculated using the Annuity Mortality 2000 table. Annuity reserves for contracts in payment period are calculated using an assumed interest rate of 4%. Required adjustments are accomplished by transfers to or from the Sponsor.

(5)

Transactions with Affiliates

Investment Adviser – Each variable account has an investment advisory agreement with MFS to provide overall investment management and related administrative services and facilities to the variable accounts. The management fee is computed daily and paid monthly at the following annual rates based on a percentage of each variable accounts’ average daily net assets:


	Annual Rate of Management Fee Based on Average Daily Net Assets Not Exceeding $300 Million		Annual Rate of Management Fee Based on Average Daily Net Assets In Excess of $300 Million		Effective Management Fees
Capital Appreciation Variable Account	0.75	%	0.675	%	0.75	%
Global Governments Variable Account	0.75	%	0.675	%	0.75	%
Government Securities Variable Account	0.55	%	0.495	%	0.55	%
High Yield Variable Account	0.75	%(a)	0.675	%	0.70	%
Money Market Variable Account	0.50	%(b)	0.50	%(b)	0.50	%
Total Return Variable Account	0.75	%	0.675	%	0.75	%

(a)

The investment adviser had agreed to reduce its management fee to 0.70% for the first $300 million of average daily net assets. This written agreement will continue through April 30, 2010, unless changed or rescinded by the variable accounts’ Board of Managers. This management fee reduction amounted to $11,834, which is shown as a reduction of total expenses in the Statement of Operations.

(b)

The investment adviser has agreed in writing to reduce its management fee to 0.45% of average daily net assets in excess of $500 million. This written agreement may be rescinded only upon consent of the variable accounts’ Board of Managers. For the six months ended June 30, 2008, the Money Market Variable Account’s average daily net assets did not exceed $500 million, and therefore, the management fee was not reduced.

The investment adviser has agreed in writing to pay each variable accounts’ operating expenses, exclusive of certain expenses and charges, such that total operating expenses do not exceed 1.25% annually of the average daily net assets of each variable account. These agreements are contained in the investment advisory agreement between MFS and the variable accounts and may not be rescinded without shareholder approval. For the six months ended June 30, 2008, this reduction amounted to $39,432 for the Global Governments Variable Account and is reflected as a reduction of total expenses in the Statement of Operations. Each of the other variable accounts did not exceed the limit and therefore, the investment adviser did not pay any portion of the variable accounts’ expenses. In addition, the investment adviser has agreed in writing to pay a portion of the operating expenses of the variable accounts listed below, exclusive of certain expenses and charges, such that total annual operating expenses of these variable accounts do not exceed the expense limitations indicated below, based on the average daily net assets of such variable accounts. These written agreements will continue through April 30, 2010, unless changed or rescinded by the variable accounts’ Board of Managers. For the six months ended June 30, 2008, these reductions amounted to the following for each variable account and are reflected as a reduction of the total expenses in the Statement of Operations:


	Expense Limitation		Expense Reduction
Capital Appreciation Variable Account	0.82	%	$	38,970
High Yield Variable Account	0.90	%		13,523
Money Market Variable Account	0.65	%(a)		—
Total Return Variable Account	0.85	%		34,858

(a)	The expense limitation noted is effective on September 1, 2008 through April 30, 2010, unless changed or rescinded by the variable accounts’ Board of Managers.

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to each variable account. Under an administrative services agreement, each variable account partially reimburses MFS the costs incurred to provide these services. Each variable accounts’ is charged an annual fixed amount of $10,000 plus a fee based on average daily net assets. The administrative services fee incurred for the six months ended June 30, 2008 was equivalent to the following annual effective rate of the variable accounts’ average daily net assets:


	Capital Appreciation Variable Account		Global Governments Variable Account		Government Securities Variable Account		High Yield Variable Account		Money Market Variable Account		Total Return Variable Account
Percent of average daily net assets	0.0250	%	0.1169	%	0.0264	%	0.0274	%	0.0277	%	0.0252	%

Managers’ and Officers’ Compensation – Each variable account pays compensation to managers in the form of a retainer, attendance fees, and additional compensation to the Board chairperson. Each variable account does not pay compensation directly to officers who are affiliated with the

Notes to Financial Statements (unaudited) — continued

Investment Adviser or the Sponsor all of whom receive remuneration for their services to the variable accounts from MFS. Certain officers of the variable accounts are officers or directors of MFS, MFS Fund Distributors, Inc. (MFD), and MFS Service Center, Inc. (MFSC).

Other – These variable accounts and certain other MFS funds (the funds) have entered into a services agreement (the Agreement) which provides for payment of fees by the funds to Tarantino LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) for the funds. The ICCO is an officer of the funds and the sole member of Tarantino LLC. The funds can terminate the Agreement with Tarantino LLC at any time under the terms of the Agreement. MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO. For the six months ended June 30, 2008, the fees paid to Tarantino LLC were as follows:


Capital Appreciation Variable Account	$	652
Global Governments Variable Account		31
Government Securities Variable Account		249
High Yield Variable Account		170
Money Market Variable Account		162
Total Return Variable Account		545

(6)

Portfolio Securities

Purchases and sales of investments, other than U.S. Government securities, purchased option transactions, and short-term obligations were as follows:


	Purchases		Sales
Capital Appreciation Variable Account	$	31,455,714	$	41,878,517
Global Governments Variable Account		2,337,648		2,159,289
Government Securities Variable Account		2,388,528		3,278,548
High Yield Variable Account		19,000,540		19,888,176
Total Return Variable Account		29,343,663		30,901,631

Purchases and sales of investments for the Money Market Variable Account, exclusive of securities subject to repurchase agreements, aggregated $260,923,708 and $264,021,000, respectively.

Purchases and sales of U.S. government securities, other than purchased option transactions and short-term obligations, were as follows:


	Purchases		Sales
Global Governments Variable Account	$	1,919,020	$	1,476,507
Government Securities Variable Account		12,067,555		14,221,798
High Yield Variable Account		—		361,481
Total Return Variable Account		8,466,937		16,624,823

Notes to Financial Statements (unaudited) — continued

(7)

Participant Transactions

The changes in net assets from changes in numbers of outstanding units were as follows:


	Six Months Ended 6/30/08 (000 Omitted)
	Purchase Payments Received			Transfers Between Variable Accounts and Fixed Accumulation Account					Withdrawals, Surrenders, Annuitizations, and Contract Charges					Net Accumulation Activity					Net Annuitization Activity			Net Increases (Decrease)
	Units	Dollars		Units		Dollars			Units		Dollars			Units		Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts	8	$	482	(14	)	$	(815	)	(106	)	$	(6,302	)	(112	)	$	(6,635	)	$	(170	)	$	(6,805	)
Compass 3 Contracts	5		185	(18	)		(713	)	(4	)		(151	)	(17	)		(679	)		0	*		(679	)
Compass 3 – Level 2 Contracts	45		747	26			417		(194	)		(3,159	)	(123	)		(1,995	)		(17	)		(2,012	)

		$	1,414			$	(1,111	)			$	(9,612	)			$	(9,309	)	$	(187	)	$	(9,496	)

Global Governments Variable Account
Compass 2 Contracts	1	$	11	12		$	365		(2	)	$	(44	)	11		$	332		$	(3	)	$	329
Compass 3 Contracts	1		21	(1	)		(18	)	(2	)		(66	)	(2	)		(63	)		0	*		(63	)
Compass 3 – Level 2 Contracts	2		37	10			163		(19	)		(311	)	(7	)		(111	)		(5	)		(116	)

		$	69			$	510				$	(421	)			$	158		$	(8	)	$	150

Government Securities Variable Account
Compass 2 Contracts	5	$	226	22		$	918		(77	)	$	(3,188	)	(50	)	$	(2,044	)	$	(191	)	$	(2,235	)
Compass 3 Contracts	2		47	(3	)		(93	)	(1	)		(20	)	(2	)		(66	)		—			(66	)
Compass 3 – Level 2 Contracts	9		150	18			298		(44	)		(743	)	(17	)		(295	)		(2	)		(297	)

		$	423			$	1,123				$	(3,951	)			$	(2,405	)	$	(193	)	$	(2,598	)

High Yield Variable Account
Compass 2 Contracts	3	$	130	(23	)	$	(912	)	(42	)	$	(1,688	)	(62	)	$	(2,470	)	$	(59	)	$	(2,529	)
Compass 3 Contracts	1		42	(4	)		(105	)	(2	)		(61	)	(5	)		(124	)		0	*		(124	)
Compass 3 – Level 2 Contracts	6		102	18			281		(65	)		(1,003	)	(41	)		(620	)		(2	)		(622	)

		$	274			$	(736	)			$	(2,752	)			$	(3,214	)	$	(61	)	$	(3,275	)

Money Market Variable Account
Compass 2 Contracts	2	$	47	37		$	792		(71	)	$	(1,544	)	(32	)	$	(705	)	$	(24	)	$	(729	)
Compass 3 Contracts	4		76	(13	)		(230	)	(3	)		(49	)	(12	)		(203	)		0	*		(203	)
Compass 3 – Level 2 Contracts	23		306	21			280		(192	)		(2,575	)	(148	)		(1,989	)		(18	)		(2,007	)

		$	429			$	842				$	(4,168	)			$	(2,897	)	$	(42	)	$	(2,939	)

Total Return Variable Account
Compass 2 Contracts	8	$	393	(21	)	$	(1,062	)	(55	)	$	(2,801	)	(68	)	$	(3,470	)	$	(67	)	$	(3,537	)
Compass 3 Contracts	5		252	(16	)		(772	)	(7	)		(316	)	(18	)		(836	)		0	*		(836	)
Compass 3 – Level 2 Contracts	39		924	(10	)		(237	)	(255	)		(6,096	)	(226	)		(5,409	)		(42	)		(5,451	)

		$	1,569			$	(2,071	)			$	(9,213	)			$	(9,715	)	$	(109	)	$	(9,824	)


	Year Ended 12/31/07 (000 Omitted)
	Purchase Payments Received			Transfers Between Variable Accounts and Fixed Accumulation Account					Withdrawals, Surrenders, Annuitizations, and Contract Charges					Net Accumulation Activity					Net Annuitization Activity			Net Increases (Decrease)
	Units	Dollars		Units		Dollars			Units		Dollars			Units		Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts	14	$	843	(65	)	$	(3,891	)	(388	)	$	(23,761	)	(439	)	$	(26,809	)	$	(361	)	$	(27,170	)
Compass 3 Contracts	12		478	(50	)		(1,999	)	(17	)		(695	)	(55	)		(2,216	)		0	*		(2,216	)
Compass 3 – Level 2 Contracts	105		1,762	(14	)		(186	)	(798	)		(13,454	)	(707	)		(11,878	)		(36	)		(11,914	)

		$	3,083			$	(6,076	)			$	(37,910	)			$	(40,903	)	$	(397	)	$	(41,300	)

*	Amount less than $500

Notes to Financial Statements (unaudited) — continued


	Year Ended 12/31/07 (000 Omitted)
	Purchase Payments Received			Transfers Between Variable Accounts and Fixed Accumulation Account					Withdrawals, Surrenders, Annuitizations, and Contract Charges					Net Accumulation Activity					Net Annuitization Activity			Net Increases (Decrease)
	Units	Dollars		Units		Dollars			Units		Dollars			Units		Dollars			Dollars			Dollars
Global Governments Variable Account
Compass 2 Contracts	1	$	34	(7	)	$	(170	)	(13	)	$	(339	)	(19	)	$	(475	)	$	(3	)	$	(478	)
Compass 3 Contracts	2		62	(3	)		(68	)	(2	)		(65	)	(3	)		(71	)		0	*		(71	)
Compass 3 – Level 2 Contracts	6		86	12			175		(89	)		(1,372	)	(71	)		(1,111	)		9			(1,102	)

		$	182			$	(63	)			$	(1,776	)			$	(1,657	)	$	6		$	(1,651	)

Government Securities Variable Account
Compass 2 Contracts	10	$	383	(36	)	$	(1,401	)	(243	)	$	(9,579	)	(269	)	$	(10,597	)	$	18		$	(10,579	)
Compass 3 Contracts	5		141	(8	)		(234	)	(9	)		(244	)	(12	)		(337	)		—			(337	)
Compass 3 – Level 2 Contracts	23		364	(25	)		(406	)	(163	)		(2,615	)	(165	)		(2,657	)		(4	)		(2,661	)

		$	888			$	(2,041	)			$	(12,438	)			$	(13,591	)	$	14		$	(13,577	)

High Yield Variable Account
Compass 2 Contracts	7	$	304	(21	)	$	(860	)	(147	)	$	(5,999	)	(161	)	$	(6,555	)	$	(162	)	$	(6,717	)
Compass 3 Contracts	4		115	(10	)		(311	)	(7	)		(192	)	(13	)		(388	)		0	*		(388	)
Compass 3– Level 2 Contracts	18		283	(85	)		(1,383	)	(128	)		(2,050	)	(195	)		(3,150	)		(6	)		(3,156	)

		$	702			$	(2,554	)			$	(8,241	)			$	(10,093	)	$	(168	)	$	(10,261	)

Money Market Variable Account
Compass 2 Contracts	8	$	165	184		$	3,917		(233	)	$	(4,971	)	(41	)	$	(889	)	$	(66	)	$	(955	)
Compass 3 Contracts	11		190	(59	)		(1,035	)	(19	)		(326	)	(67	)		(1,171	)		(7	)		(1,178	)
Compass 3 – Level 2 Contracts	54		708	306			4,017		(458	)		(6,003	)	(98	)		(1,278	)		(34	)		(1,312	)

		$	1,063			$	6,899				$	(11,300	)			$	(3,338	)	$	(107	)	$	(3,445	)

Total Return Variable Account
Compass 2 Contracts	10	$	543	18		$	932		(236	)	$	(12,501	)	(208	)	$	(11,026	)	$	(2	)	$	(11,028	)
Compass 3 Contracts	14		733	(28	)		(1,444	)	(21	)		(1,098	)	(35	)		(1,809	)		0	*		(1,809	)
Compass 3 – Level 2 Contracts	93		2,319	82			2,074		(754	)		(18,828	)	(579	)		(14,435	)		(133	)		(14,568	)

		$	3,595			$	1,562				$	(32,427	)			$	(27,270	)	$	(135	)	$	(27,405	)

*	Amount less than $500

(8)

Line of Credit

The variable accounts and other funds managed by MFS participate in a $1 billion unsecured committed line of credit provided by a syndication of banks under a credit agreement. In addition, the variable accounts and other funds managed by MFS have established uncommitted borrowing arrangements with certain banks. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the Federal Reserve funds rate plus 0.30%. In addition, a commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. For the six months ended June 30, 2008, the variable accounts’ commitment fee and interest expense are included in miscellaneous expense on the Statement of Operations and were as follows:


	Commitment fee		Interest expense
Capital Appreciation Variable Account	$	463	$	—
Global Governments Variable Account		21		—
Government Securities Variable Account		172		—
High Yield Variable Account		117		—
Money Market Variable Account		113		—
Total Return Variable Account		377		—

Investment Adviser

Massachusetts Financial Services Company

500 Boylston Street, Boston, MA 02116-3741

Custodian

State Street Bank and Trust Company

225 Franklin Street, Boston, MA 02110-2875

Board Review of Investment Advisory Agreement

A discussion regarding the Board’s most recent review and renewal of each variable account’s Investment Advisory Agreement with MFS will be available on or about November 1, 2008 by clicking on the variable account’s name under “Compass” in the “Products and Performance” section of the MFS Web site (mfs.com).

Proxy Voting Policies and Information

A general description of the variable accounts’ proxy voting policies and procedures is available without charge, upon request, by calling 1-800-225-2606, by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s website at http://www.sec.gov.

Information regarding how the accounts voted proxies relating to portfolio securities during the most recent twelve month period ended June 30 is available without charge by visiting the Proxy Voting section of mfs.com or by visiting the SEC’s website at http://www.sec.gov.

Quarterly Portfolio Disclosure

The accounts will file a complete schedule of portfolio holdings with the Securities and Exchange Commission (the Commission) for the first and third quarters of each fiscal year on Form N-Q. The accounts’ Form N-Q may be reviewed and copied at the:

Public Reference Room

Securities and Exchange Commission

Washington, D.C. 20549 0102

Information on the operation of the Public Reference Room may be obtained by calling the Commission at 1-800-SEC-0330. The accounts’ Form N-Q is available on the EDGAR database on the Commission’s Internet website at http://www.sec.gov, and copies of this information may be obtained, upon payment of a duplicating fee, by electronic request at the following e-mail address: publicinfor@sec.gov or by writing the Public Reference Section at the above address.

cous-sem-8/08

Sun Life Financial Distributors Inc.

ITEM 2. CODE OF ETHICS.

The Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to any element of the Code’s definition enumerated in paragraph (b) of Item 2 of this Form N-CSR.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable for semi-annual reports.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable for semi-annual reports.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the Registrant.

ITEM 6. INVESTMENTS

A schedule of investments for each series of the Registrant is included as part of the report to shareholders of such series under Item 1 of this Form N-CSR.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable to the Registrant.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There were no material changes to the procedures by which shareholders may send recommendations to the Board for nominees to the Registrant’s Board since the Registrant last provided disclosure as to such procedures in response to the requirements of Item 407 (c)(2)(iv) of Regulation S-K or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a)

Based upon their evaluation of the effectiveness of the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”)) as conducted within 90 days of the filing date of this report on Form N-CSR, the registrant’s principal financial officer and principal executive officer have concluded that those disclosure controls and procedures provide reasonable assurance that the material information required to be disclosed by the registrant on this report is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

(b)

There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by the 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.

(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.

(2)

A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2): Attached hereto.

(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 (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), 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 specifically incorporates it by reference: Attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant)		CAPITAL APPRECIATION VARIABLE ACCOUNT

By (Signature and Title)*		ROBERT J. MANNING
		Robert J. Manning, President

Date: August 15, 2008

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)*

ROBERT J. MANNING

Robert J. Manning, President

(Principal Executive Officer)

Date: August 15, 2008

By (Signature and Title)*

MARIA F. DWYER

Maria F. Dwyer, Treasurer

(Principal Financial Officer and Accounting Officer)

Date: August 15, 2008

* Print name and title of each signing officer under his or her signature.

Capital Appreciation Variable Account Inactive N-CSRSCertified semi-annual shareholder report (management investment company)