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 | 811-5069 |
EquiTrust Variable Insurance Series Fund
(Exact name of registrant as specified in charter) |
5400 University Avenue, West Des Moines IA | 50266-5997 | |
(Address of principal executive offices) | (Zip code) |
Kristi Rojohn, 5400 University Avenue, West Des Moines IA 50266-5997
(Name and address of agent for service) |
Registrant’s telephone number, including area code: 515/225-5400
Date of fiscal year end: December 31
Date of reporting period: December 31, 2007
Item 1. | Reports to Stockholders. |
January 29, 2008
PRESIDENT’S LETTER
Dear Shareholders:
Domestic large company and international stocks recorded gains for 2007, while U.S. small company stocks struggled and actually declined for the year. The S&P 500 Stock Composite Index (“S&P 500” or “Index”) and the Dow Jones Industrial Average returned 5.49% and 8.87%, respectively, while the small company Russell 2000 Index declined 1.56%. International stocks topped their domestic counterparts, with the developed market MSCI EAFE Index gaining 11.63% and the MSCI Emerging Markets Index 39.78%.
In the U.S. fixed income markets, high quality issues outperformed lower quality securities. The Lehman Brothers U.S. Aggregate Index (“Aggregate Index”), measuring the broad, investment grade segment of the U.S. fixed-income universe, gained 6.97% in 2007, compared to just 1.87% for the Lehman Brothers U.S. Corporate High Yield Index (“High Yield Index”). Investors’ demand for high quality issues, particularly U.S. Treasury securities, pushed yields down and bond prices up, leading to substantial gains for the high quality fixed income benchmarks.
Serious challenges emerged for the world financial markets in 2007, and more challenges lie ahead in the new year. First, consumers faced a shaky employment outlook, rising prices for food and gas, and a decline in the value of their homes. This raised the concern once again that American consumers might retrench, slow their spending and, consequently, the U.S. economy. Growth in corporate earnings, the primary driver of stock prices, has slowed significantly. Adjusted for inflation, earnings have been in decline since 2006. As the U.S. sub-prime crisis erupted in delinquent mortgage payments, mounting foreclosures and an historically high housing supply, the world credit markets shut off credit to all but the worthiest borrowers and drove investors to the relative safety of U.S. Treasury securities. Now, not even a month into 2008, the Federal Reserve and Congress have both initiated dramatic measures they hope will keep the U.S. economy from teetering into recession, or at least lessen its impact if we have already entered a recession.
In all this broad economic and financial market uncertainty, what is certain is that the financial markets will likely face a return to normal volatility. That is, short-term performance will likely gyrate more than it has in recent years. It can be difficult to watch the impact that down markets have on existing savings. However, this volatility also creates opportunities long-term, particularly for investors that follow a plan of regularly contributing to their investment savings. Additionally, it’s during these times of wild ups and downs that we encourage our shareholders to follow a risk-appropriate asset allocation plan. To that end, the EquiTrust Portfolios provide a means of gaining exposure to the domestic equity and fixed income markets. Below is a summary of portfolio and market performance for 2007.
Value Growth: The Value Growth Portfolio gained 5.27% in 2007, just modestly trailing the S&P 500’s gain of 5.49% for the year. The Portfolio was rewarded most for its underweight positions in financial and consumer discretionary stocks, which were the worst performing sectors for the S&P 500 in 2007. This was offset, however, by the Portfolio’s technology and utilities holdings as they generally underperformed the S&P 500’s leaders in these two sectors.
We continue to emphasize the opportunity we see in large company stocks, particularly relative to small company stocks. Valuations for large-cap stocks remain more attractive than for small-caps, while large-caps tend to fare better in an environment of economic uncertainty and volatile stock markets.
High Grade Bond: U.S. Treasury yields fell over the twelve-month reporting period ended December 31, 2007. During the period, the two-year Treasury fell 176 basis points (1.76%) to 3.05%, the ten-year Treasury fell 68 basis points (0.68%) to 4.02% and the thirty-year Treasury fell 36 basis points (0.36%) to 4.45%.
During this period, the High Grade Bond Portfolio underperformed the Aggregate Index as reflected by the 5.48% total return produced by the Portfolio versus the 6.97% total return produced by the Aggregate Index. The total returns for the major components of the Aggregate Index for this period were as follows: U.S. fixed rate mortgage-backed securities (39% of the Aggregate Index) 6.90%; U.S. Treasury securities (22% of the Aggregate Index) 9.01%; and U.S. investment grade corporate securities (20% of the Aggregate Index) 4.56%. The effective duration of the Aggregate Index was 4.41. In comparison, the Portfolio had approximately 48% of its assets invested in U.S. government fixed rate mortgage-backed securities or agencies, 37% in corporate securities, 12% in cash equivalents and 3% in commercial mortgage-backed securities. The effective duration of the Portfolio was 4.13. The Portfolio underperformed the Aggregate Index mainly due to its overexposure to underperforming corporate securities and its underexposure to outperforming Treasury issues, coupled with Portfolio expenses.
1
Spread levels on corporate issues are at very wide levels but U.S. Treasury yields appear very low so we feel it is reasonable to keep our level of interest rate risk close to that of the Aggregate Index.
Strategic Yield: The High Yield Index produced a return of 1.87% over the twelve-month reporting period ended December 31, 2007. The option-adjusted spread on the High Yield Index finished the current period at 569 basis points (5.69%), which was 294 basis points (2.94%) more than at the start of the period. The High Yield Index was hurt by increased fears of higher defaults due to lower market liquidity and weaker economic growth.
During the reporting period, the Strategic Yield Portfolio produced a total return of 3.56%, exceeding that of the High Yield Index but lagging the 4.56% return on the Lehman Brothers U.S. Investment Grade Corporate Index. The Portfolio’s performance was helped by having a lower exposure to high yield issues than the High Yield Index which more than offset Portfolio expenses. At the end of the period, the Portfolio had approximately 48% of its assets invested in securities rated investment grade, 37% in securities rated high yield by Moody’s or S&P and 15% in cash equivalents.
The Portfolio has historically invested in a mix of high yield and investment grade securities in an attempt to find attractive issues in both markets. As always, we will continue to seek out securities in both the investment grade and non-investment grade markets that we feel offer potentially attractive returns for the amount of risk taken.
Managed: The Managed Portfolio modestly outperformed the S&P 500 in 2007, returning 5.87% compared to 5.49% for the Index. The Portfolio’s equity holdings, in aggregate, topped the performance of the S&P 500 while its fixed income holdings and cash position also contributed a positive return for the period. The Portfolio’s fixed income holdings benefited from the decline in yields near the end of the year.
Throughout the year, we added to the Portfolio’s holdings in high quality equities and fixed-income issues. We continued to find attractive opportunities among the largest U.S. stocks. The bond market sell-off in the first half of the year pushed yields to attractive levels and we added to the Portfolio’s GNMA holdings. Yields have retreated again as investors rushed into U.S. Treasury securities towards the end of the year. Consequently, we currently prefer high quality, dividend-paying large company stocks to fixed-income issues.
Money Market: The interest rates offered by money market funds are closely related to the target rates set by the Federal Open Market Committee (“FOMC”). The FOMC meets several times throughout the year to determine the target Fed Funds rate, or overnight lending rates between banks. These rates were lowered to 4.25% through December 31, 2007. During the fourth quarter, the economy also showed signs that growth slowed sharply while the labor market and consumer spending, once sources of economic strength, began to waver. The probability of sliding into a recession has increased with each new release of negative economic data; however, a recession is not imminent. US exports, business spending, and fiscal stimulus should help mitigate some of the forces for negative growth going forward. The market is currently anticipating the FOMC will continue to lower the target Fed Funds rate several times during the first-half of 2008. At December 31, 2007, the Money Market Portfolio had a 7-day yield of 3.91%.
Blue Chip: The Blue Chip Portfolio passively tracks the direction of the large capitalization, domestic equity market. It remains substantially invested in common stocks of large companies and is designed for those investors who prefer substantial exposure to common stocks at all times or who wish to make their own market value judgments. The Portfolio outperformed the S&P 500 in 2007, recording a gain of 6.49% compared to 5.49% for the S&P 500. Relative to the S&P 500, the Portfolio outperformed in its core holdings, i.e. the largest U.S. stocks.
We appreciate your investment in the Fund and we take seriously our task of seeking to grow and protect that investment. Thank you for continued support of the Fund.
Craig A. Lang
President
An investment in the Money Market Portfolio is neither insured nor guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the Portfolio seeks to preserve the net asset value of $1.00 per share, it is possible to lose money by investing in the Portfolio.
Past performance is not a guarantee of future results.
2
MANAGEMENT’S DISCUSSION OF FUND PERFORMANCE
Comparison of Change in Value of $10,000 Investment in the Value Growth Portfolio and S&P 500 Stock Composite Index
Value Growth trailed the S&P 500 Stock Composite Index for the twelve months ended December 31, 2007, returning 5.27% versus 5.49% for the Index. The Portfolio benefited substantially from underweight positions in the consumer discretionary and financials sectors. We have underweighted consumer discretionary stocks in the Portfolio because we haven’t found their valuations to be compelling. Valuation within the financials sector, in aggregate, has also been unattractive. Additionally, though, we have been concerned about the quality of the loans that financial institutions have added to their balance sheets over the last several years.
The Portfolio’s performance in the technology, utilities and materials sectors offset the Portfolio’s relative gains in the consumer discretionary and financials sectors. It lagged the Index in technology primarily because it did not hold the sector’s top performers, e.g. Apple, Amazon and Google. These three contributed mightily to the Index’s return for the year, but we have not been compelled to add these stocks to the Portfolio given their stratospheric valuations. In the utilities and materials sectors, the Portfolio underperformed the Index due to its particular stock holdings.
We remain most attracted to the large company segment of the domestic equity markets. Valuation appears more attractive for large-caps than small-caps, while large-caps tend to perform better in the current environment of broad economic uncertainty and tight credit markets. Additionally, large-caps tend to have significantly more exposure to the growth occurring outside the U.S. economy.
* | Returns shown do not reflect the deduction of taxes that a shareholder may pay on Portfolio distributions or the redemption of Portfolio shares. |
3
Comparison of Change in Value of $10,000 Investment in the High Grade Bond Portfolio and Lehman Brothers U.S. Aggregate Index
During the twelve-month period ended December 31, 2007, the High Grade Bond Portfolio underperformed the Lehman Brothers U.S. Aggregate Index, as reflected by the 5.48% total return produced by the Portfolio versus the 6.97% total return produced by the Index.
The total returns for the major components of the Index for this period were as follows: U.S. fixed rate mortgage-backed securities (39% of the Index), 6.90%; U.S. Treasury securities (22% of the Index), 9.01%; and U.S. investment grade corporate securities (20% of the Index), 4.56%. In comparison, the Portfolio had approximately 48% of its assets invested in U.S. government fixed rate mortgage-backed or agency securities, 37% in corporate securities, 12% in cash equivalents, and 3% in commercial mortgage-backed securities. The Index had an effective duration1 of 4.41 as of December 31, 2007. The effective duration of the Portfolio was 4.13. The Portfolio underperformed the Index mainly due to the Portfolio’s overexposure to underperforming corporate issues and underexposure to outperforming U.S. Treasuries, as well as Portfolio expenses.
The composition of the Portfolio at the end of the reporting period changed only slightly with a decrease in corporate issues and an increase in U.S. government fixed rate mortgage-backed securities and cash. We anticipate maintaining a Portfolio duration close to that of the Index as we feel that market risks are reasonably balanced and a major divergence from the Index is not warranted at this time.
1 | Duration is a measure of interest rate risk for individual securities and portfolios. The lower the duration for a security or portfolio, the less sensitive it is to movements in interest rates. |
* | Returns shown do not reflect the deduction of taxes that a shareholder may pay on Portfolio distributions or the redemption of Portfolio shares. |
4
Comparison of Change in Value of $10,000 Investment in the Strategic Yield Portfolio and Lehman Brothers U.S. Credit/Corporate High Yield Index
During the twelve-month period ended December 31, 2007, the 3.56% total return produced by the Strategic Yield Portfolio was less than the 4.38% return produced by the Lehman Brothers U.S. Credit/Corporate High Yield Index. The total returns for the two components of the Index over this period were as follows: Investment Grade Credit (79% of the Index), 5.11%; and Corporate High Yield (21% of the Index), 1.87%. In comparison, the Portfolio had approximately 37% of its assets invested in corporate securities rated as non-investment grade or high yield by Moody’s and/or Standard & Poor’s, 25% in corporate securities rated investment grade by both Moody’s and Standard & Poor’s, 23% in U.S. Government Agency issues, and 15% in cash equivalents. The Portfolio underperformed the overall Index mainly due to its larger exposure to underperforming high yield issues and Portfolio expenses.
The Portfolio has historically invested in a mix of high yield and investment grade securities in an attempt to find attractive issues in both markets.
* | Returns shown do not reflect the deduction of taxes that a shareholder may pay on Portfolio distributions or the redemption of Portfolio shares. |
5
Comparison of Change in Value of $10,000 Investment in the Managed Portfolio and S&P 500 Stock Composite Index
For the twelve-months ended December 31, 2007, the Managed Portfolio generated a return of 5.87%, compared to a total return of 5.49% for the S&P 500 Stock Composite Index. This Portfolio is a tactical asset allocation portfolio, with an investment emphasis on securities producing income and the potential for capital appreciation. For this reason, neither its performance nor its constitution will likely mirror any one particular equity index over long periods of time.
The Portfolio outperformed the Index in 2007 primarily due to better relative performance from its equity position. In particular, the Portfolio benefited from underweight positions in the consumer discretionary and financials sectors, which were the worst performing sectors for the Index. The Portfolio’s fixed-income and cash positions lagged equities on a relative basis, but also dampened the volatility of the equity position. Overall, the Portfolio outperformed the Index with a lower level of volatility.
Within the Portfolio’s equity allocation, we continue to focus on high-quality large-cap companies that generate dividend income. Yields on high quality fixed-income issues declined sharply through year-end as investors sought the relative safety of U.S. Treasury securities. Consequently, we currently find high quality, dividend-paying stocks to be more attractive than fixed-income issues.
* | Returns shown do not reflect the deduction of taxes that a shareholder may pay on Portfolio distributions or the redemption of Portfolio shares. |
6
Comparison of Change in Value of $10,000 Investment in the Blue Chip Portfolio and S&P 500 Stock Composite Index
The Blue Chip Portfolio is designed to represent the large-capitalization sector of the domestic equity market and remains substantially invested in approximately 50 such common stock issues. Given the Portfolio’s constitution, its performance will track the broad-market S&P 500 Stock Composite Index, but will be most similar to that of the large-capitalization segment within the Index.
For the twelve months ended December 31, 2007, the Portfolio returned 6.49% compared to 5.49% for the Index. In recent years, the Index’s smaller constituents have contributed the bulk of its total return. For the past year, though, the mega- and large-cap names contributed more of the Index’s gains and returns were more evenly distributed across its market capitalization spectrum.
Again, the Portfolio is mostly concentrated in the Index’s largest companies; roughly 90% of its holdings fall in the Index’s top half by market capitalization. The Portfolio, therefore, outperformed the Index over the past twelve months because its holdings outperformed the mega-/large-cap segment of the Index.
* | Returns shown do not reflect the deduction of taxes that a shareholder may pay on Portfolio distributions or the redemption of Portfolio shares. |
7
EQUITRUST VARIABLE INSURANCE SERIES FUND
December 31, 2007
Value Growth Portfolio
Portfolio Holdings by Industry Sector
High Grade Bond Portfolio
Portfolio Holdings by Credit Quality and Type of Security**
Strategic Yield Portfolio
Portfolio Holdings by Credit Quality and Type of Security**
* | This category may include short-term investments in commercial paper, money market mutual funds and U.S. government agencies, along with cash, receivables, prepaid expenses and other assets, less liabilities. |
** | Credit quality as reported by Standard and Poor’s. |
8
EQUITRUST VARIABLE INSURANCE SERIES FUND
December 31, 2007
Managed Portfolio
Portfolio Holdings by Industry Sector
Money Market Portfolio
Portfolio Holdings by Asset Type
Blue Chip Portfolio
Portfolio Holdings by Industry Sector
* | This category may include short-term investments in commercial paper, money market mutual funds and U.S. government agencies, along with cash, receivables, prepaid expenses and other assets, less liabilities. |
9
Expense Example:
As a shareholder of the Fund, you incur ongoing costs, including management fees and other Fund expenses. This Example is intended to help you understand your ongoing costs (in dollars) of investing in a given Portfolio of the Fund and to compare these costs with the ongoing costs of investing in other mutual funds. The Example is based on an investment of $1,000 invested on July 1, 2007 and held until December 31, 2007.
Actual Expenses –
The first line for each Portfolio in the table below provides information about actual account values and actual expenses for that Portfolio. You may use the information in this line, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first line under the heading entitled “Expenses Paid During Period” for the same Portfolio to estimate the expenses you paid on your account during this period.
Hypothetical Example for Comparison Purposes –
The second line for each Portfolio in the table below provides information about hypothetical account values and hypothetical expenses based on the actual expense ratio of that Portfolio and an assumed rate of return of 5% per year before expenses, which is not the actual return of the Portfolio. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in a given Portfolio of the Fund with other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Beginning Account Value 7/1/2007 | Ending Account Value 12/31/2007 | Expenses Paid During Period* 7/1/2007 - 12/31/2007 | Annualized Expense Ratio | |||||||||
Value Growth | 0.55 | % | ||||||||||
Actual | $ | 1,000 | $ | 984.30 | $ | 2.75 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,022.23 | $ | 2.80 | ||||||
High Grade Bond | 0.41 | % | ||||||||||
Actual | $ | 1,000 | $ | 1,042.20 | $ | 2.13 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,022.91 | $ | 2.11 | ||||||
Strategic Yield | 0.56 | % | ||||||||||
Actual | $ | 1,000 | $ | 1,018.00 | $ | 2.85 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,022.17 | $ | 2.86 | ||||||
Managed | 0.53 | % | ||||||||||
Actual | $ | 1,000 | $ | 1,013.30 | $ | 2.71 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,022.31 | $ | 2.72 | ||||||
Money Market | 0.42 | % | ||||||||||
Actual | $ | 1,000 | $ | 1,022.90 | $ | 2.13 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,022.90 | $ | 2.13 | ||||||
Blue Chip | 0.28 | % | ||||||||||
Actual | $ | 1,000 | $ | 996.00 | $ | 1.42 | ||||||
Hypothetical** | $ | 1,000 | $ | 1,023.58 | $ | 1.44 |
* | Expenses are equal to the Annualized Expense Ratio as shown in the table for each Portfolio, multiplied by the average account value over the period, multiplied by 184 days divided by 365 to reflect the one-half year period. |
** | Hypothetical examples are based on a 5% return before expenses. |
10
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 2007
Value Growth Portfolio | High Grade Bond Portfolio | Strategic Yield Portfolio | Managed Portfolio | Money Market Portfolio | Blue Chip Portfolio | |||||||||||||||
ASSETS | ||||||||||||||||||||
Investments in securities, at value (cost — $60,470,385; $45,546,216; $45,218,063; $86,879,593; $16,664,265; and $66,160,981, respectively) | $ | 67,710,284 | $ | 45,703,949 | $ | 44,719,667 | $ | 96,939,040 | $ | 16,664,265 | $ | 94,667,386 | ||||||||
Cash | — | — | — | — | 19,759 | — | ||||||||||||||
Receivables: | ||||||||||||||||||||
Accrued dividends and interest | 95,449 | 365,118 | 553,319 | 247,162 | 12,818 | 116,658 | ||||||||||||||
Fund shares sold | 59,577 | 27,353 | 28,442 | 18,861 | 117,814 | 90,748 | ||||||||||||||
Investment securities sold | 100,000 | — | — | — | — | — | ||||||||||||||
Prepaid expense and other assets | 329 | 198 | 210 | 471 | 41 | 453 | ||||||||||||||
Total Assets | 67,965,639 | 46,096,618 | 45,301,638 | 97,205,534 | 16,814,697 | 94,875,245 | ||||||||||||||
LIABILITIES | ||||||||||||||||||||
Payables: | ||||||||||||||||||||
Fund shares redeemed | 60,245 | 48,398 | 45,259 | 97,239 | 340,775 | 93,787 | ||||||||||||||
Investment securities purchased | 23,666 | — | — | 21,049 | — | — | ||||||||||||||
Dividends | — | — | — | — | 4,264 | — | ||||||||||||||
Accrued expenses | 12,206 | 9,028 | 9,238 | 14,478 | 5,804 | 15,330 | ||||||||||||||
Total Liabilities | 96,117 | 57,426 | 54,497 | 132,766 | 350,843 | 109,117 | ||||||||||||||
NET ASSETS | $ | 67,869,522 | $ | 46,039,192 | $ | 45,247,141 | $ | 97,072,768 | $ | 16,463,854 | $ | 94,766,128 | ||||||||
ANALYSIS OF NET ASSETS | ||||||||||||||||||||
Paid-in Capital | $ | 56,481,515 | $ | 45,861,552 | $ | 47,811,465 | $ | 80,177,254 | $ | 16,463,854 | $ | 68,909,818 | ||||||||
Accumulated undistributed net investment income | 1,502,365 | — | — | 3,357,314 | — | 1,916,168 | ||||||||||||||
Accumulated undistributed net realized gain (loss) from investment transactions | 2,645,743 | 19,907 | (2,065,928 | ) | 3,478,753 | — | (4,566,263 | ) | ||||||||||||
Net unrealized appreciation (depreciation) of investments | 7,239,899 | 157,733 | (498,396 | ) | 10,059,447 | — | 28,506,405 | |||||||||||||
NET ASSETS | $ | 67,869,522 | $ | 46,039,192 | $ | 45,247,141 | $ | 97,072,768 | $ | 16,463,854 | $ | 94,766,128 | ||||||||
Shares issued and outstanding as of December 31, 2007 | 4,506,934 | 4,547,331 | 5,063,274 | 6,048,693 | 16,463,854 | 2,234,420 | ||||||||||||||
NET ASSET VALUE PER SHARE | $ | 15.06 | $ | 10.12 | $ | 8.94 | $ | 16.05 | $ | 1.00 | $ | 42.41 | ||||||||
See accompanying notes.
11
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF OPERATIONS
Year Ended December 31, 2007
Value Growth Portfolio | High Grade Bond Portfolio | Strategic Yield Portfolio | Managed Portfolio | Money Market Portfolio | Blue Chip Portfolio | |||||||||||||||||||
INVESTMENT INCOME | ||||||||||||||||||||||||
Dividends | $ | 1,433,883 | $ | 9,776 | $ | 79,107 | $ | 1,780,958 | $ | — | $ | 2,034,072 | ||||||||||||
Interest | 449,885 | 2,416,605 | 2,890,607 | 2,100,564 | 735,387 | 151,418 | ||||||||||||||||||
Less foreign tax withholding | (3,187 | ) | — | — | (4,405 | ) | — | — | ||||||||||||||||
Total Investment Income | 1,880,581 | 2,426,381 | 2,969,714 | 3,877,117 | 735,387 | 2,185,490 | ||||||||||||||||||
EXPENSES | ||||||||||||||||||||||||
Paid to EquiTrust Investment Management Services, Inc.: | ||||||||||||||||||||||||
Investment advisory and management fees | 306,824 | 127,169 | 195,626 | 435,640 | 36,375 | 187,783 | ||||||||||||||||||
Accounting fees | 30,000 | 21,195 | 21,736 | 30,000 | 7,275 | 30,000 | ||||||||||||||||||
Custodial fees | 7,039 | 6,974 | 6,403 | 8,910 | 8,763 | 6,964 | ||||||||||||||||||
Professional fees | 20,138 | 14,551 | 14,717 | 25,070 | 10,018 | 25,069 | ||||||||||||||||||
Reports to shareholders | 3,381 | 2,040 | 2,126 | 4,790 | 585 | 4,620 | ||||||||||||||||||
Trustees’ fees and expenses | 5,348 | 3,349 | 3,433 | 7,607 | 1,209 | 7,370 | ||||||||||||||||||
Insurance and bonds | 2,424 | 1,419 | 1,494 | 3,421 | 302 | 3,331 | ||||||||||||||||||
Miscellaneous | 3,086 | 1,867 | 1,952 | 4,398 | 498 | 4,218 | ||||||||||||||||||
Total Expenses | 378,240 | 178,564 | 247,487 | 519,836 | 65,025 | 269,355 | ||||||||||||||||||
Fees paid indirectly | (24 | ) | (14 | ) | (15 | ) | (33 | ) | (6 | ) | (33 | ) | ||||||||||||
Net Expenses | 378,216 | 178,550 | 247,472 | 519,803 | 65,019 | 269,322 | ||||||||||||||||||
Net Investment Income | 1,502,365 | 2,247,831 | 2,722,242 | 3,357,314 | 670,368 | 1,916,168 | ||||||||||||||||||
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS | ||||||||||||||||||||||||
Net realized gain from investment transactions | 2,409,768 | 29,609 | 1,755 | 3,101,563 | — | 1,455,563 | ||||||||||||||||||
Change in unrealized appreciation (depreciation) of investments | (453,003 | ) | 45,176 | (1,224,366 | ) | (997,219 | ) | — | 2,437,202 | |||||||||||||||
Net Gain (Loss) on Investments | 1,956,765 | 74,785 | (1,222,611 | ) | 2,104,344 | — | 3,892,765 | |||||||||||||||||
Net Increase in Net Assets Resulting from Operations | $ | 3,459,130 | $ | 2,322,616 | $ | 1,499,631 | $ | 5,461,658 | $ | 670,368 | $ | 5,808,933 | ||||||||||||
See accompanying notes.
12
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
Value Growth Portfolio | High Grade Bond Portfolio | Strategic Yield Portfolio | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
OPERATIONS | ||||||||||||||||||||||||
Net investment income | $ | 1,502,365 | $ | 1,163,459 | $ | 2,247,831 | $ | 1,872,291 | $ | 2,722,242 | $ | 2,345,363 | ||||||||||||
Net realized gain from investment transactions | 2,409,768 | 3,278,691 | 29,609 | 11,739 | 1,755 | 192,090 | ||||||||||||||||||
Change in unrealized appreciation (depreciation) of investments | (453,003 | ) | 2,698,622 | 45,176 | (117,348 | ) | (1,224,366 | ) | 59,718 | |||||||||||||||
Net Increase in Net Assets Resulting from Operations | 3,459,130 | 7,140,772 | 2,322,616 | 1,766,682 | 1,499,631 | 2,597,171 | ||||||||||||||||||
DIVIDENDS AND DISTRIBUTIONS TO | ||||||||||||||||||||||||
Net investment income | (1,163,459 | ) | (836,213 | ) | (2,247,831 | ) | (1,872,291 | ) | (2,722,242 | ) | (2,345,363 | ) | ||||||||||||
Net realized gain (loss) from investment transactions | (2,257,123 | ) | — | (21,030 | ) | — | — | — | ||||||||||||||||
Total Dividends and Distributions | (3,420,582 | ) | (836,213 | ) | (2,268,861 | ) | (1,872,291 | ) | (2,722,242 | ) | (2,345,363 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS | 2,118,738 | (815,694 | ) | 6,614,216 | 4,530,988 | 4,988,713 | 4,161,889 | |||||||||||||||||
Total Increase in Net Assets | 2,157,286 | 5,488,865 | 6,667,971 | 4,425,379 | 3,766,102 | 4,413,697 | ||||||||||||||||||
NET ASSETS | ||||||||||||||||||||||||
Beginning of year | 65,712,236 | 60,223,371 | 39,371,221 | 34,945,842 | 41,481,039 | 37,067,342 | ||||||||||||||||||
End of year (including accumulated undistributed net investment income as set forth below) | $ | 67,869,522 | $ | 65,712,236 | $ | 46,039,192 | $ | 39,371,221 | $ | 45,247,141 | $ | 41,481,039 | ||||||||||||
Accumulated Undistributed Net Investment Income | $ | 1,502,365 | $ | 1,163,459 | $ | — | $ | — | $ | — | $ | — | ||||||||||||
See accompanying notes.
13
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS (continued)
Managed Portfolio | Money Market Portfolio | Blue Chip Portfolio | ||||||||||||||||||||||
Year Ended December 31, | Year Ended December 31, | Year Ended December 31, | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2007 | 2006 | |||||||||||||||||||
OPERATIONS | ||||||||||||||||||||||||
Net investment income | $ | 3,357,314 | $ | 2,642,530 | $ | 670,368 | $ | 331,846 | $ | 1,916,168 | $ | 1,750,924 | ||||||||||||
Net realized gain from investment transactions | 3,101,563 | 4,225,459 | — | — | 1,455,563 | 1,052,194 | ||||||||||||||||||
Change in unrealized appreciation (depreciation) of investments | (997,219 | ) | 3,188,122 | — | — | 2,437,202 | 10,911,429 | |||||||||||||||||
Net Increase in Net Assets Resulting from Operations | 5,461,658 | 10,056,111 | 670,368 | 331,846 | 5,808,933 | 13,714,547 | ||||||||||||||||||
DIVIDENDS AND DISTRIBUTIONS TO | ||||||||||||||||||||||||
Net investment income | (2,642,530 | ) | (1,836,551 | ) | (670,368 | ) | (331,846 | ) | (1,750,924 | ) | (1,635,261 | ) | ||||||||||||
Net realized gain (loss) from investment transactions | (3,999,345 | ) | (4,783,738 | ) | — | — | — | — | ||||||||||||||||
Total Dividends and Distributions | (6,641,875 | ) | (6,620,289 | ) | (670,368 | ) | (331,846 | ) | (1,750,924 | ) | (1,635,261 | ) | ||||||||||||
CAPITAL SHARE TRANSACTIONS | 4,457,107 | 6,991,954 | 7,906,872 | 2,269,352 | 447,012 | (4,319,584 | ) | |||||||||||||||||
Total Increase in Net Assets | 3,276,890 | 10,427,776 | 7,906,872 | 2,269,352 | 4,505,021 | 7,759,702 | ||||||||||||||||||
NET ASSETS | ||||||||||||||||||||||||
Beginning of year | 93,795,878 | 83,368,102 | 8,556,982 | 6,287,630 | 90,261,107 | 82,501,405 | ||||||||||||||||||
End of year (including accumulated undistributed net investment income as set forth below) | $ | 97,072,768 | $ | 93,795,878 | $ | 16,463,854 | $ | 8,556,982 | $ | 94,766,128 | $ | 90,261,107 | ||||||||||||
Accumulated Undistributed Net Investment Income | $ | 3,357,314 | $ | 2,642,530 | $ | — | $ | — | $ | 1,916,168 | $ | 1,750,924 | ||||||||||||
See accompanying notes.
14
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO
December 31, 2007
Shares Held | Value | ||||
COMMON STOCKS (86.10%) | |||||
BUSINESS SERVICES (5.14%) | |||||
Compuware Corp. (1) | 16,050 | $ | 142,524 | ||
eBay, Inc. (1) | 13,135 | 435,951 | |||
Electronic Data Systems Corp. | 5,745 | 119,094 | |||
Intuit Inc. (1) | 11,555 | 365,254 | |||
Microsoft Corp. | 37,205 | 1,324,498 | |||
Oracle Corp. (1) | 25,000 | 564,500 | |||
Symantec Corp. (1) | 28,002 | 451,952 | |||
Western Union Co. | 3,520 | 85,466 | |||
3,489,239 | |||||
CHEMICALS AND ALLIED PRODUCTS (12.62%) | |||||
Abbott Laboratories | 8,000 | 449,200 | |||
Amgen Inc. (1) | 6,265 | 290,947 | |||
Colgate-Palmolive Co. | 5,355 | 417,476 | |||
Dow Chemical Co. | 5,330 | 210,109 | |||
E.I. du Pont de Nemours & Co. | 14,655 | 646,139 | |||
Genentech, Inc. (1) | 4,600 | 308,522 | |||
GlaxoSmithKline PLC | 5,500 | 277,145 | |||
Johnson & Johnson | 21,600 | 1,440,720 | |||
KV Pharmaceutical Co.-Class A (1) | 12,700 | 362,458 | |||
Mylan, Inc. | 10,205 | 143,482 | |||
Novartis AG | 5,700 | 309,567 | |||
Pfizer, Inc. | 60,886 | 1,383,939 | |||
Procter & Gamble Co. | 11,480 | 842,862 | |||
Schering-Plough Corp. | 14,980 | 399,067 | |||
Teva Pharmaceutical Industries, Ltd. | 17,691 | 822,278 | |||
Wyeth | 5,835 | 257,849 | |||
8,561,760 | |||||
COMMUNICATIONS (3.28%) | |||||
AT&T, Inc. | 17,660 | 733,950 | |||
Comcast Corp.-Class A (1) | 18,765 | 342,649 | |||
Embarq Corp | 6,700 | 331,851 | |||
Sprint Nextel Corp. | 33,013 | 433,461 | |||
Verizon Communications, Inc. | 8,800 | 384,472 | |||
2,226,383 | |||||
DEPOSITORY INSTITUTIONS (5.00%) | |||||
Bank of America Corp. | 16,089 | 663,832 | |||
Bank of New York Mellon Corp. | 18,180 | 886,457 | |||
Citigroup, Inc. | 22,363 | 658,367 | |||
National City Corp. | 6,830 | 112,422 | |||
New York Community Bancorp., Inc. | 23,156 | 407,082 | |||
U. S. Bancorp. | 9,135 | 289,945 | |||
Wachovia Corp. | 9,950 | 378,399 | |||
3,396,504 | |||||
ELECTRIC, GAS AND SANITARY SERVICES (3.16%) | |||||
Atmos Energy Corp. | 11,267 | 315,927 | |||
CMS Energy Corp. | 28,300 | 491,854 | |||
Intergrys Energy Group, Inc. | 9,886 | 511,007 |
Shares Held | Value | ||||
Pinnacle West Capital Corp. | 9,200 | $ | 390,172 | ||
Xcel Energy, Inc. | 19,405 | 437,971 | |||
2,146,931 | |||||
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT (7.88%) | |||||
Adaptec, Inc. (1) | 43,100 | 145,678 | |||
ADC Telecommunications, Inc. (1) | 18,205 | 283,088 | |||
Cisco Systems, Inc. (1) | 30,600 | 828,342 | |||
Emerson Electric Co. | 4,600 | 260,636 | |||
Flextronics Int., Ltd (1) | 6,882 | 82,997 | |||
General Electric Co. | 75,330 | 2,792,483 | |||
Helen of Troy, Ltd. (1) | 8,966 | 153,677 | |||
Intel Corp. | 17,500 | 466,550 | |||
JDS Uniphase Corp. (1) | 12,750 | 169,575 | |||
Qualcomm, Inc. | 4,200 | 165,270 | |||
5,348,296 | |||||
FABRICATED METAL PRODUCTS (0.89%) | |||||
Illinois Tool Works, Inc. | 11,255 | 602,593 | |||
FOOD AND KINDRED PRODUCTS (4.56%) | |||||
Anheuser-Busch Cos., Inc. | 9,930 | 519,736 | |||
Coca-Cola Co. (The) | 16,170 | 992,353 | |||
Coca-Cola Enterprises, Inc. | 17,485 | 455,135 | |||
General Mills, Inc. | 4,110 | 234,270 | |||
Kraft Foods, Inc. | 2,948 | 96,193 | |||
PepsiCo, Inc. | 10,510 | 797,709 | |||
3,095,396 | |||||
FOOD STORES (0.46%) | |||||
Kroger Co. | 11,686 | 312,133 | |||
GENERAL MERCHANDISE STORES (2.05%) | |||||
Target Corp. | 13,790 | 689,500 | |||
Wal-Mart Stores, Inc. | 14,735 | 700,354 | |||
1,389,854 | |||||
HEALTH SERVICES (0.58%) | |||||
Health Management | |||||
Associates, Inc. | 30,000 | 179,400 | |||
Lifepoint Hospitals, Inc. (1) | 7,163 | 213,027 | |||
392,427 | |||||
HOLDING AND OTHER INVESTMENT OFFICES (1.94%) | |||||
Adams Express Co. | 63,254 | 893,146 | |||
H & Q Life Sciences Investors | 32,043 | 424,570 | |||
1,317,716 | |||||
INDUSTRIAL MACHINERY AND EQUIPMENT (5.02%) | |||||
3M Co. | 14,430 | 1,216,737 | |||
EMC Corp. (1) | 53,600 | 993,208 | |||
Hewlett-Packard Co. | 6,000 | 302,880 | |||
Ingersoll-Rand Co., Ltd.-Class A | 19,260 | 895,012 | |||
3,407,837 |
15
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (continued)
Shares Held | Value | ||||
COMMON STOCKS (continued) | |||||
INSTRUMENTS AND RELATED PRODUCTS (5.56%) | |||||
Agilent Technologies, Inc. (1) | 7,000 | $ | 257,180 | ||
Becton Dickinson & Co. | 8,826 | 737,677 | |||
Boston Scientific Corp. (1) | 4,770 | 55,475 | |||
Danaher Corp. | 2,400 | 210,576 | |||
Excel Technology, Inc. (1) | 6,600 | 178,860 | |||
Medtronic, Inc. | 15,340 | 771,142 | |||
Stryker Corp. | 4,330 | 323,538 | |||
Thermo Fisher Scientific, Inc. (1) | 16,352 | 943,183 | |||
Zimmer Holdings, Inc. (1) | 4,480 | 296,352 | |||
3,773,983 | |||||
INSURANCE AGENTS, BROKERS AND SERVICE (0.44%) | |||||
Arthur J. Gallagher & Co. | 12,365 | 299,109 | |||
INSURANCE CARRIERS (3.80%) | |||||
Allstate Corp. | 4,910 | 256,449 | |||
American Equity Investment Life Holding Co. | 39,100 | 324,139 | |||
American International Group, Inc. | 9,740 | 567,842 | |||
EMC Insurance Group, Inc. | 13,620 | 322,385 | |||
MBIA, Inc. | 4,690 | 87,375 | |||
MetLife, Inc. | 7,595 | 468,004 | |||
Safeco Corp. | 3,223 | 179,457 | |||
WellPoint, Inc. (1) | 4,222 | 370,396 | |||
2,576,047 | |||||
METAL MINING (2.41%) | |||||
Barrick Gold Corp. | 24,946 | 1,048,979 | |||
Newmont Mining Corp. | 12,000 | 585,960 | |||
1,634,939 | |||||
MOTION PICTURES (1.23%) | |||||
News Corp.-Class A | 17,040 | 349,149 | |||
Time Warner, Inc. | 29,390 | 485,229 | |||
834,378 | |||||
MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING (0.81%) | |||||
United Parcel Service, Inc.-Class B | 5,675 | 401,336 | |||
Werner Enterprises, Inc. | 8,805 | 149,949 | |||
551,285 | |||||
NONDEPOSITORY INSTITUTIONS (0.37%) | |||||
Federal Home Loan Mortgage Corp. | 4,900 | 166,943 | |||
SLM Corp. | 4,275 | 86,098 | |||
253,041 | |||||
OIL AND GAS EXTRACTION (7.32%) | |||||
Anadarko Petroleum Corp. | 9,700 | 637,193 | |||
Apache Corp. | 5,200 | 559,208 | |||
Baker Hughes, Inc. | 6,200 | 502,820 | |||
BJ Services Co. | 11,500 | 278,990 | |||
Devon Energy Corp. | 4,600 | 408,986 | |||
Helmerich & Payne, Inc. | 14,600 | 585,022 |
Shares Held | Value | ||||
Noble Corp. | 8,600 | $ | 485,986 | ||
Occidental Petroleum Co. | 6,800 | 523,532 | |||
Rowan Cos., Inc. | 12,200 | 481,412 | |||
Weatherford Intl Inc. (1) | 7,300 | 500,780 | |||
4,963,929 | |||||
PAPER AND ALLIED PRODUCTS (1.27%) | |||||
AbitibiBowater, Inc. | 5,797 | 119,476 | |||
Kimberly-Clark Corp. | 10,720 | 743,325 | |||
862,801 | |||||
PERSONAL SERVICES (0.67%) | |||||
Cintas Corp. | 13,560 | 455,887 | |||
PETROLEUM AND COAL PRODUCTS (3.40%) | |||||
BP PLC | 6,000 | 439,020 | |||
Chevron Corp. | 10,300 | 961,299 | |||
ConocoPhillips | 10,257 | 905,693 | |||
2,306,012 | |||||
PRINTING AND PUBLISHING (0.83%) | |||||
Belo Corp.-Series A | 14,835 | 258,722 | |||
R.R. Donnelley & Sons Co. | 8,110 | 306,071 | |||
564,793 | |||||
RAILROAD TRANSPORTATION (0.29%) | |||||
Union Pacific Corp. | 1,570 | 197,223 | |||
RETAIL-DRUG STORES AND PROPRIETARY | |||||
Walgreen Co. | 11,245 | 428,210 | |||
RETAIL-HOME FURNITURE AND FURNISHINGS STORES (0.30%) | |||||
Bed Bath & Beyond, Inc. (1) | 7,010 | 206,024 | |||
RETAIL-LUMBER & OTHER BUILDING MATERIALS DEALERS (0.52%) | |||||
Lowe’s Companies, Inc. | 15,690 | 354,908 | |||
TOBACCO PRODUCTS (0.47%) | |||||
Altria Group, Inc. | 4,260 | 321,971 | |||
TRANSPORTATION EQUIPMENT (2.64%) | |||||
Federal Signal Corp. | 13,300 | 149,226 | |||
Honeywell International, Inc. | 17,735 | 1,091,944 | |||
ITT Corp. | 8,370 | 552,755 | |||
1,793,925 | |||||
WHOLESALE TRADE — NONDURABLE | |||||
SYSCO Corp. | 12,130 | 378,577 | |||
Total Common Stocks | 58,444,111 | ||||
16
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (continued)
Shares Held | Value | |||||
SHORT-TERM INVESTMENTS (13.66%) | ||||||
MONEY MARKET MUTUAL FUND (0.04%) | ||||||
JP Morgan U.S. Treasury Plus | 25,592 | $ | 25,592 | |||
Principal Amount | ||||||
COMMERCIAL PAPER (4.90%) | ||||||
INSURANCE CARRIERS (2.65%) | ||||||
Prudential Funding LLC, | 700,000 | 700,000 | ||||
Prudential Funding LLC, | 1,100,000 | 1,100,000 | ||||
1,800,000 | ||||||
NONDEPOSITORY INSTITUTIONS (2.25%) | ||||||
American Express Credit Corp., | $ | 175,000 | 175,000 | |||
Chevron Corp., | 250,000 | 250,000 | ||||
General Electric Capital Corp., | 1,100,000 | 1,100,000 | ||||
1,525,000 | ||||||
Total Commercial Paper | 3,325,000 | |||||
UNITED STATES GOVERNMENT AGENCIES (8.72%) | ||||||
Federal National Mortgage Assoc., | 825,000 | 824,902 | ||||
Federal National Mortgage Assoc., | 1,100,000 | 1,099,612 | ||||
Federal National Mortgage Assoc., | 900,000 | 899,365 | ||||
Federal National Mortgage Assoc., | 1,100,000 | 1,097,794 | ||||
Federal National Mortgage Assoc., | 1,100,000 | 1,096,849 | ||||
Federal National Mortgage Assoc., | 900,000 | 897,059 | ||||
Total United States Government | 5,915,581 | |||||
Total Short-Term Investments | 9,266,173 | |||||
Total Investments (99.76%) | 67,710,284 |
Value | |||||
OTHER ASSETS LESS LIABILITIES (0.24%) | |||||
Cash, receivables, prepaid expense and other assets, less liabilities | $ | 159,238 | |||
Total Net Assets (100.00%) | $ | 67,869,522 | |||
(1) | Non-income producing securities. |
See accompanying notes.
17
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO
December 31, 2007
Principal Amount | Value | |||||
CORPORATE BONDS (37.04%) | ||||||
DEPOSITORY INSTITUTIONS (10.28%) | ||||||
Comerica Bank, 5.20%, due 08/22/17 | $ | 1,000,000 | $ | 921,570 | ||
Fifth Third Bancorp, | 1,000,000 | 976,480 | ||||
Huntington National Bank, | 700,000 | 689,696 | ||||
PNC Preferred FD, 144A, | 1,500,000 | 1,484,955 | ||||
Washington Mutual Bank, | 750,000 | 660,203 | ||||
4,732,904 | ||||||
ELECTRIC, GAS AND SANITARY SERVICES (6.86%) | ||||||
Maritime & NE Pipeline, 144A, | 700,000 | 791,728 | ||||
Oglethorpe Power Corp., | 563,000 | 586,145 | ||||
PacifiCorp, 6.90%, due 11/15/11 | 750,000 | 801,465 | ||||
Westar Energy, Inc., | 1,000,000 | 978,350 | ||||
3,157,688 | ||||||
FOOD AND KINDRED PRODUCTS (2.16%) | ||||||
Diageo Capital PLC, | 1,000,000 | 994,630 | ||||
FOOD STORES (1.42%) | ||||||
Ahold Finance USA, Inc., | 600,000 | 653,250 | ||||
FURNITURE AND FIXTURES (1.14%) | ||||||
Steelcase, Inc., | 500,000 | 523,060 | ||||
HOLDING AND OTHER INVESTMENT | ||||||
Washington REIT, | 700,000 | 686,280 | ||||
Washington REIT, | 350,000 | 351,936 | ||||
1,038,216 | ||||||
INSURANCE CARRIERS (5.11%) | ||||||
Prudential Financial, Inc., | 1,500,000 | 1,510,785 | ||||
SunAmerica, Inc., | 700,000 | 840,294 | ||||
2,351,079 | ||||||
SECURITY AND COMMODITY BROKERS (4.57%) | ||||||
Goldman Sachs Group, Inc., | 900,000 | 890,946 | ||||
Morgan Stanley-Series MTNC, | 1,300,000 | 1,214,642 | ||||
2,105,588 |
Principal Amount | Value | |||||
TOBACCO PRODUCTS (1.70%) | ||||||
UST, Inc., 7.25%, due 06/01/09 | $ | 750,000 | $ | 781,560 | ||
TRANSPORTATION — BY AIR (1.29%) | ||||||
Continental Airlines, Inc., | 385,951 | 387,785 | ||||
Federal Express, | 188,761 | 206,393 | ||||
594,178 | ||||||
TRANSPORTATION EQUIPMENT (0.26%) | ||||||
Ford Motor Co., | 150,000 | 121,500 | ||||
Total Corporate Bonds | 17,053,653 | |||||
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES (3.17%) | ||||||
TIAA Seasoned Commercial Mortgage Trust 2007-C4, 6.10%, due 08/01/39 | 1,500,000 | 1,458,405 | ||||
MORTGAGE-BACKED SECURITIES (40.92%) | ||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) (13.65%) | ||||||
3023 Class TG, 5.50%, due 08/01/35 | 1,369,737 | 1,351,451 | ||||
3051 Class MY, 5.50%, due 10/01/25 | 1,000,000 | 1,001,240 | ||||
Pool # A69436, 6.00%, due 12/01/37 | 1,000,000 | 1,015,000 | ||||
Pool # G02562, 6.00%, due 01/01/37 | 1,484,891 | 1,507,449 | ||||
Pool # G02648, 5.50%, due 12/01/36 | 1,414,130 | 1,411,610 | ||||
6,286,750 | ||||||
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) (7.04%) | ||||||
Pool # 50276, 9.50%, due 02/01/20 | 810 | 891 | ||||
Pool # 256103, 5.50%, due 02/01/26 | 806,502 | 810,622 | ||||
Pool # 897144, 6.00%, due 09/01/36 | 917,672 | 932,217 | ||||
Pool # 928570, 6.00%, due 08/01/37 | 1,476,401 | 1,499,563 | ||||
3,243,293 | ||||||
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) (20.23%) | ||||||
2003-1 Class PE, | 1,000,000 | 991,863 | ||||
2003-116 Class JC, | 1,000,000 | 994,395 | ||||
Pool # 1512, 7.50%, due 12/01/23 | 13,772 | 14,638 | ||||
Pool # 2631, 7.00%, due 08/01/28 | 19,525 | 20,665 | ||||
Pool # 2658, 6.50%, due 10/01/28 | 36,077 | 37,445 | ||||
Pool # 2701, 6.50%, due 01/01/29 | 45,415 | 47,131 | ||||
Pool # 2796, 7.00%, due 08/01/29 | 35,519 | 37,587 | ||||
Pool # 3039, 6.50%, due 02/01/31 | 14,670 | 15,209 | ||||
Pool # 3040, 7.00%, due 02/01/31 | 23,327 | 24,662 | ||||
Pool # 3188, 6.50%, due 01/01/32 | 83,616 | 86,690 |
18
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO (continued)
Principal Amount | Value | |||||
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) (20.23%) — continued | ||||||
Pool # 3239, 6.50%, due 05/01/32 | $ | 80,221 | $ | 83,171 | ||
Pool # 3261, 6.50%, due 07/01/32 | 151,554 | 157,126 | ||||
Pool # 3320, 5.50%, due 12/01/32 | 644,988 | 647,209 | ||||
Pool # 3333, 5.50%, due 01/01/33 | 532,268 | 533,767 | ||||
Pool # 3375, 5.50%, due 04/01/33 | 80,399 | 80,625 | ||||
Pool # 3390, 5.50%, due 05/01/33 | 354,880 | 355,879 | ||||
Pool # 3403, 5.50%, due 06/01/33 | 596,773 | 598,454 | ||||
Pool # 3458, 5.00%, due 10/01/33 | 531,584 | 519,484 | ||||
Pool # 3499, 5.00%, due 01/01/34 | 825,380 | 806,619 | ||||
Pool # 3556, 5.50%, due 05/01/34 | 835,842 | 838,019 | ||||
Pool # 3623, 5.00%, due 10/01/34 | 1,383,342 | 1,351,898 | ||||
Pool # 22630, 6.50%, due 08/01/28 | 20,823 | 21,612 | ||||
Pool # 276337, | 5,313 | 6,181 | ||||
Pool # 643816, | 1,012,399 | 1,040,321 | ||||
9,310,650 | ||||||
Total Mortgage-Backed Securities | 18,840,693 | |||||
UNITED STATES GOVERNMENT AGENCIES (6.51%) | ||||||
Federal Home Loan Bank, | 1,000,000 | 1,000,121 | ||||
Federal Home Loan Mortgage Corp., 4.65%, due 10/10/13 | 1,000,000 | 994,980 | ||||
Federal National Mortgage Assoc., 5.55%, due 06/08/15 | 1,000,000 | 1,002,696 | ||||
Total United States Government Agencies | 2,997,797 | |||||
SHORT-TERM INVESTMENTS (11.63%) | ||||||
COMMERCIAL PAPER (4.83%) | ||||||
DEPOSITORY INSTITUTIONS (2.71%) | ||||||
Citigroup Corp., | 1,250,000 | 1,250,000 | ||||
NONDEPOSITORY INSTITUTIONS (2.12%) | ||||||
American Express Credit Corp., | 600,000 | 600,000 | ||||
American Express Credit Corp., | 200,000 | 200,000 | ||||
General Electric Capital Corp., | 175,000 | 175,000 | ||||
975,000 | ||||||
Total Commercial Paper | 2,225,000 |
Principal Amount | Value | |||||
UNITED STATES GOVERNMENT AGENCIES (6.73%) | ||||||
Federal Home Loan Bank, | $ | 1,100,000 | $ | 1,099,870 | ||
Federal Home Loan Bank, | 1,100,000 | 1,098,696 | ||||
Federal National Mortgage Assoc., | 900,000 | 899,683 | ||||
Total United States Government Agencies | 3,098,249 | |||||
Shares Held | ||||||
MONEY MARKET MUTUAL FUND (0.07%) | ||||||
JPMorgan U.S. Treasury Plus | 30,152 | 30,152 | ||||
Total Short-Term Investments | 5,353,401 | |||||
Total Investments (99.27%) | 45,703,949 | |||||
OTHER ASSETS LESS LIABILITIES (0.73%) | ||||||
Cash, receivables, prepaid expense and other assets, less liabilities | 335,243 | |||||
Total Net Assets (100.00%) | $ | 46,039,192 | ||||
(1) | Restricted Securities: |
PNC Preferred FD, was purchased at 100.000 on 11/29/06. As of 12/31/07, the carrying value of each unit was 98.997, representing $1,484,955 or 3.23% of total net assets. |
Maritime & NE Pipeline was purchased at 104.481 on 04/20/01. As of 12/31/07, the carrying value of each unit was 113.104, representing $791,728 or 1.72% of total net assets. |
As of 12/31/07, the carrying value of all restricted securities was $2,276,683 or 4.95% of total net assets. |
See accompanying notes.
19
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
STRATEGIC YIELD PORTFOLIO
December 31, 2007
Shares Held | Value | |||||
PREFERRED STOCKS (1.49%) | ||||||
DEPOSITORY INSTITUTIONS | ||||||
Sovereign Capital Trust V, 7.75% | 32,000 | $ | 672,000 | |||
Principal Amount | ||||||
CORPORATE BONDS (60.37%) | ||||||
APPAREL AND ACCESSORY STORES (2.86%) | ||||||
Woolworth (FW) Corp., | $ | 1,400,000 | 1,295,000 | |||
CHEMICALS AND ALLIED PRODUCTS (5.15%) | ||||||
Chemtura Corp., | 1,700,000 | 1,589,500 | ||||
Nova Chemicals, Ltd., | 800,000 | 740,000 | ||||
2,329,500 | ||||||
DEPOSITORY INSTITUTIONS (3.28%) | ||||||
PNC Preferred FD, 144A, | 1,500,000 | 1,484,955 | ||||
ELECTRIC, GAS AND SANITARY SERVICES (6.49%) | ||||||
Bruce Mansfield Unit 1, | 1,500,000 | 1,548,840 | ||||
ESI Tractebel, 7.99%, due 12/30/11 | 230,000 | 233,538 | ||||
Sabine Pass LNG, LP., | 1,000,000 | 960,000 | ||||
Waterford 3 Nuclear Power Plant, | 187,287 | 194,202 | ||||
2,936,580 | ||||||
FURNITURE AND FIXTURES (3.01%) | ||||||
Steelcase Inc., | 1,300,000 | 1,359,956 | ||||
HOLDING AND OTHER INVESTMENT OFFICES (19.89%) | ||||||
Federal Realty Investment Trust, | 600,000 | 650,173 | ||||
First Industrial LP, | 700,000 | 754,186 | ||||
First Industrial LP, | 500,000 | 550,340 | ||||
HRPT Properties, | 1,075,000 | 1,046,480 | ||||
Hospitality Properties Trust, | 1,300,000 | 1,358,474 | ||||
iStar Financial, Inc., | 300,000 | 301,164 | ||||
iStar Financial, Inc.-Series B, | 1,171,000 | 978,382 |
Principal Amount | Value | |||||
Price Development Co., | $ | 112,500 | $ | 112,798 | ||
Realty Income Corp., | 1,500,000 | 1,504,800 | ||||
Rouse Company, LP (The), | 2,000,000 | 1,741,600 | ||||
8,998,397 | ||||||
INSURANCE CARRIERS (1.47%) | ||||||
PXRE Capital Trust, | 670,000 | 665,813 | ||||
MOTION PICTURES (2.08%) | ||||||
Time Warner, Inc., | 800,000 | 941,512 | ||||
PAPER AND ALLIED PRODUCTS (5.83%) | ||||||
AbitibiBowater, Inc., | 900,000 | 679,500 | ||||
Cascades, Inc., 7.25%, due 02/15/13 | 1,000,000 | 942,500 | ||||
Potlatch Corp., 9.125%, due 12/01/09 | 900,000 | 1,017,000 | ||||
2,639,000 | ||||||
TRANSPORTATION — BY AIR (2.47%) | ||||||
Continental Airlines, Inc., | 1,149,206 | 1,118,235 | ||||
WATER TRANSPORTATION (4.96%) | ||||||
Overseas Shipholding Group, Inc., 8.75%, due 12/01/13 | 1,100,000 | 1,168,750 | ||||
Windsor Petroleum Transportation, 144A, 7.84%, due 01/15/21 (1) | 1,000,000 | 1,076,310 | ||||
2,245,060 | ||||||
WHOLESALE TRADE-NONDURABLE GOODS (2.88%) | ||||||
Safeway, Inc., 7.45%, due 09/15/27 | 1,200,000 | 1,301,604 | ||||
Total Corporate Bonds | 27,315,612 | |||||
MORTGAGE-BACKED SECURITIES (18.10%) | ||||||
FEDERAL HOME LOAN MORTGAGE CORPORATION (FHLMC) (10.94%) | ||||||
Pool # A69436, 6.00%, due 12/01/37 | 1,500,000 | 1,522,500 | ||||
Pool # G02648, 5.50%, due 12/01/36 | 1,414,130 | 1,411,610 | ||||
Pool # 3023, 5.50%, due 08/01/35 | 1,027,303 | 1,013,588 | ||||
Pool # 3051, 5.50%, due 10/01/25 | 1,000,000 | 1,001,240 | ||||
4,948,938 | ||||||
FEDERAL NATIONAL MORTGAGE ASSOCIATION (FNMA) (7.16%) | ||||||
Pool # 256103, 5.50%, due 02/01/26 | 806,502 | 810,622 | ||||
Pool # 897144, 6.00%, due 09/01/36 | 917,672 | 932,217 | ||||
Pool # 928570, 6.00%, due 08/01/37 | 1,476,401 | 1,499,563 | ||||
3,242,402 | ||||||
Total Mortgage-Backed Securities | 8,191,340 |
20
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
STRATEGIC YIELD PORTFOLIO (continued)
Principal Amount | Value | |||||
UNITED STATES GOVERNMENT AGENCIES (4.42%) | ||||||
Federal Home Loan Bank, | $ | 1,000,000 | $ | 1,000,121 | ||
Federal National Mortgage Assoc., 5.55%, due 06/08/15 | 1,000,000 | 1,002,696 | ||||
Total United States Government Agencies | 2,002,817 | |||||
SHORT-TERM INVESTMENTS (14.45%) | ||||||
COMMERCIAL PAPER (4.25%) | ||||||
INSURANCE CARRIERS (2.04%) | ||||||
Prudential Funding LLC, 4.26%, due 01/15/08 | 325,000 | 325,000 | ||||
Prudential Funding LLC, 4.21%, due 01/18/08 | 600,000 | 600,000 | ||||
925,000 | ||||||
NONDEPOSITORY INSTITUTIONS (2.21%) | ||||||
American Express Credit Corp., | 800,000 | 800,000 | ||||
General Electric Capital Corp., | 200,000 | 200,000 | ||||
1,000,000 | ||||||
Total Commercial Paper | 1,925,000 | |||||
UNITED STATES GOVERNMENT AGENCIES (10.16%) | ||||||
Federal Home Loan Bank due 01/07/08 | 950,000 | 949,327 | ||||
Federal National Mortgage Assoc., due 01/02/08 | 1,000,000 | 999,881 | ||||
Federal National Mortgage Assoc., due 01/04/08 | 1,000,000 | 999,645 | ||||
Federal National Mortgage Assoc., due 01/11/08 | 1,000,000 | 998,831 | ||||
Federal National Mortgage Assoc., due 01/24/08 | 650,000 | 648,255 | ||||
Total United States Government Agencies (Cost $4,595,939) | 4,595,939 | |||||
Shares Held | ||||||
MONEY MARKET MUTUAL FUND (0.04%) | ||||||
JPMorgan U.S. Treasury Plus | 16,959 | 16,959 | ||||
Total Short-Term Investments | 6,537,898 | |||||
Total Investments (98.83%) | 44,719,667 |
Principal Amount | Value | ||||
OTHER ASSETS LESS LIABILITIES (1.17%) | |||||
Cash, receivables, prepaid expense and other assets, less liabilities | $ | 527,474 | |||
Total Net Assets (100.00%) | $ | 45,247,141 | |||
(1) | Restricted Securities: |
PNC Preferred FD, was purchased at 100.000 on 11/29/2006. As of 12/31/07, the carrying value of each unit was 98.997, representing $1,484,955 or 3.28% of total net assets. |
Windsor Petroleum Transportation was purchased at 80.500 on 08/26/99. As of 12/31/07, the carrying value of each unit was 107.631, $1,076,310 or 2.38% of total net assets. |
As of 12/31/07, the carrying value of all restricted securities was $2,561,265 or 5.66% of total net assets. |
See accompanying notes.
21
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO
December 31, 2007
Shares Held | Value | ||||
COMMON STOCKS (60.29%) | |||||
BUSINESS SERVICES (0.56%) | |||||
Electronic Data Systems Corp. | 7,500 | $ | 155,475 | ||
Microsoft Corp. | 10,800 | 384,480 | |||
539,955 | |||||
CHEMICALS AND ALLIED PRODUCTS (10.19%) | |||||
Abbott Laboratories | 19,800 | 1,111,770 | |||
Amgen Inc. (1) | 3,900 | 181,116 | |||
Colgate-Palmolive Co. | 7,430 | 579,243 | |||
Dow Chemical Co. | 13,965 | 550,500 | |||
E.I. du Pont de Nemours & Co. | 16,475 | 726,383 | |||
GlaxoSmithKline PLC | 4,700 | 236,833 | |||
Johnson & Johnson | 30,612 | 2,041,820 | |||
KV Pharmaceutical Co.-Class A (1) | 12,600 | 359,604 | |||
Mylan, Inc. | 11,890 | 167,173 | |||
Novartis Ag | 8,060 | 437,739 | |||
Pfizer, Inc. | 76,984 | 1,749,846 | |||
Procter & Gamble Co. | 12,225 | 897,560 | |||
Schering-Plough Corp. | 15,700 | 418,248 | |||
Teva Pharmaceutical Industries, Ltd. | 9,399 | 436,866 | |||
9,894,701 | |||||
COMMUNICATIONS (2.44%) | |||||
AT&T, Corp. | 12,600 | 523,656 | |||
Comcast Corp.-Class A (1) | 13,590 | 248,153 | |||
Embarq Corp. | 9,600 | 475,488 | |||
Sprint Nextel Corp. | 46,171 | 606,225 | |||
Verizon Communications, Inc. | 11,800 | 515,542 | |||
2,369,064 | |||||
DEPOSITORY INSTITUTIONS (3.57%) | |||||
Bank of America Corp. | 17,202 | 709,755 | |||
Bank of New York Mellon Corp. | 10,593 | 516,515 | |||
Citigroup, Inc. | 19,822 | 583,560 | |||
National City Corp. | 8,695 | 143,120 | |||
New York Community Bancorp., Inc. | 44,834 | 788,182 | |||
U. S. Bancorp. | 12,895 | 409,287 | |||
Wachovia Corp. | 8,328 | 316,714 | |||
3,467,133 | |||||
ELECTRIC, GAS AND SANITARY SERVICES (4.20%) | |||||
Atmos Energy Corp. | 22,952 | 643,574 | |||
Integrys Energy Group, Inc. | 14,304 | 739,374 | |||
Pinnacle West Capital Corp. | 24,200 | 1,026,322 | |||
Tortoise Energy Capital Corp. | 43,948 | 1,109,687 | |||
Xcel Energy, Inc. | 24,690 | 557,253 | |||
4,076,210 | |||||
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT (5.28%) | |||||
Cisco Systems, Inc. (1) | 20,100 | 544,107 | |||
Emerson Electric Co. | 1,600 | 90,656 | |||
General Electric Co. | 106,965 | 3,965,193 |
Shares Held | Value | ||||
Helen of Troy, Ltd. (1) | 12,334 | $ | 211,405 | ||
Intel Corp. | 11,900 | 317,254 | |||
5,128,615 | |||||
FABRICATED METAL PRODUCTS (0.56%) | |||||
Illinois Tool Works, Inc. | 10,155 | 543,699 | |||
FOOD AND KINDRED PRODUCTS (2.28%) | |||||
Anheuser-Busch Cos., Inc. | 11,995 | 627,818 | |||
Coca-Cola Co. (The) | 10,380 | 637,021 | |||
Kraft Foods, Inc. | 2,799 | 91,331 | |||
PepsiCo, Inc. | 11,320 | 859,188 | |||
2,215,358 | |||||
GENERAL MERCHANDISE STORES (1.24%) | |||||
Target Corp. | 4,760 | 238,000 | |||
Wal-Mart Stores, Inc. | 20,290 | 964,384 | |||
1,202,384 | |||||
HEALTH SERVICES (0.55%) | |||||
Health Management | |||||
Associates, Inc. | 47,700 | 285,246 | |||
Lifepoint Hospitals, Inc. (1) | 8,429 | 250,678 | |||
535,924 | |||||
HOLDING AND OTHER INVESTMENT OFFICES (0.71%) | |||||
H & Q Life Sciences Investors | 17,736 | 235,002 | |||
iShares MSCI Japan Index | 34,030 | 450,217 | |||
685,219 | |||||
INDUSTRIAL MACHINERY AND EQUIPMENT (2.76%) | |||||
3M Co. | 20,305 | 1,712,118 | |||
Hewlett-Packard Co. | 6,900 | 348,312 | |||
Ingersoll-Rand Co., Ltd.-Class A | 13,334 | 619,631 | |||
2,680,061 | |||||
INSTRUMENTS AND RELATED PRODUCTS (2.18%) | |||||
Becton Dickinson & Co. | 6,235 | 521,121 | |||
Medtronic, Inc. | 10,150 | 510,241 | |||
Stryker Corp. | 3,590 | 268,245 | |||
Thermo Fisher Scientific, Inc. (1) | 7,840 | 452,211 | |||
Zimmer Holdings, Inc. (1) | 5,500 | 363,825 | |||
2,115,643 | |||||
INSURANCE AGENTS, BROKERS AND SERVICE (0.43%) | |||||
Arthur J. Gallagher & Co. | 17,455 | 422,236 | |||
INSURANCE CARRIERS (3.09%) | |||||
Allstate Corp. | 7,140 | 372,922 | |||
American International Group, Inc. | 6,170 | 359,711 | |||
EMC Insurance Group Inc. | 19,208 | 454,653 | |||
MetLife, Inc. | 9,755 | 601,103 | |||
Old Republic International Corp. | 31,100 | 479,251 | |||
Safeco Corp. | 4,693 | 261,306 | |||
WellPoint, Inc. (1) | 5,328 | 467,425 | |||
2,996,371 |
22
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (continued)
Shares Held | Value | ||||
COMMON STOCKS (Continued) | |||||
METAL MINING (3.39%) | |||||
Barrick Gold Corp. | 57,916 | $ | 2,435,368 | ||
Newmont Mining Corp. | 17,500 | 854,525 | |||
3,289,893 | |||||
MOTOR FREIGHT TRANSPORTATION AND WAREHOUSING (0.49%) | |||||
United Parcel Service, Inc.-Class B | 6,720 | 475,238 | |||
NONDEPOSITORY CREDIT INSTITUTIONS (0.11%) | |||||
SLM Corp. | 5,095 | 102,613 | |||
OIL AND GAS EXTRACTION (6.17%) | |||||
Anadarko Petroleum Corp. | 13,700 | 899,953 | |||
Apache Corp. | 6,700 | 720,518 | |||
Baker Hughes, Inc. | 8,700 | 705,570 | |||
Devon Energy Corp. | 6,400 | 569,024 | |||
Occidental Petroleum Co. | 22,250 | 1,713,027 | |||
Rowan Cos., Inc. | 16,700 | 658,982 | |||
Weatherford International, Inc. (1) | 10,500 | 720,300 | |||
5,987,374 | |||||
PAPER AND ALLIED PRODUCTS (1.25%) | |||||
AbitibiBowater, Inc. | 8,358 | 172,258 | |||
Kimberly-Clark Corp. | 15,015 | 1,041,140 | |||
1,213,398 | |||||
PERSONAL SERVICES (0.67%) | |||||
Cintas Corp. | 19,235 | 646,681 | |||
PETROLEUM AND COAL PRODUCTS (2.17%) | |||||
BP PLC | 8,100 | 592,677 | |||
ConocoPhillips | 17,170 | 1,516,111 | |||
2,108,788 | |||||
PIPELINES, EXCEPT NATURAL GAS (1.43%) | |||||
Kinder Morgan Management, LLC (1) | 26,165 | 1,385,175 | |||
PRINTING AND PUBLISHING (0.74%) | |||||
Belo Corp.-Series A | 17,370 | 302,933 | |||
R.R. Donnelley & Sons Co. | 10,925 | 412,309 | |||
715,242 | |||||
RETAIL-DRUG STORES AND PROPRIETARY STORES (0.61%) | |||||
Walgreen Co. | 15,560 | 592,525 | |||
RETAIL-LUMBER & OTHER BUILDING MATERIAL DEALERS (0.17%) | |||||
Lowe’s Companies , Inc. | 7,525 | 170,216 | |||
TOBACCO PRODUCTS (0.31%) | |||||
Altria Group, Inc. | 4,045 | 305,721 | |||
TRANSPORTATION EQUIPMENT (2.19%) | |||||
Federal Signal Corp. | 36,400 | 408,408 | |||
Honeywell International, Inc. | 16,905 | 1,040,841 | |||
ITT Corp. | 10,190 | 672,948 | |||
2,122,197 |
Shares Held | Value | |||||
WHOLESALE TRADE — NONDURABLE GOODS (0.55%) | ||||||
SYSCO Corp. | 17,085 | $ | 533,223 | |||
Total Common Stocks | 58,520,857 | |||||
Principal Amount | ||||||
MORTGAGE-BACKED SECURITIES (29.60%) | ||||||
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) | ||||||
2003-1 Class PE, | $ | 2,250,000 | 2,231,692 | |||
2003-11 Class QC, | 2,500,000 | 2,387,150 | ||||
2003-52 Class PL, | 1,064,000 | 1,001,806 | ||||
2003-71 Class AK, | 600,000 | 603,547 | ||||
2003-101 Class PC, | 2,000,000 | 2,001,972 | ||||
2006-116 Class JC, | 1,560,000 | 1,551,256 | ||||
2004-22 Class BK, | 309,666 | 304,402 | ||||
2004-26 Class GC, | 1,300,000 | 1,296,495 | ||||
2004-69 Class JC, | 1,300,000 | 1,305,022 | ||||
2004-72 Class DE, | 500,000 | 474,456 | ||||
2004-76 Class VG, | 700,000 | 702,543 | ||||
2004-89 Class KC, | 608,743 | 600,691 | ||||
2004-105 Class PB, | 1,693,200 | 1,666,661 | ||||
2004-105 Class VE, | 2,000,000 | 1,987,688 | ||||
2004-109 Class WE, | 780,000 | 760,527 | ||||
2005-26 Class VE, | 1,000,000 | 976,025 | ||||
2005-44 Class KC, | 1,500,000 | 1,498,902 | ||||
2005-80 Class VC, | 1,000,000 | 967,613 | ||||
2005-98 Class DA, | 2,000,000 | 1,968,816 | ||||
2006-38 Class OG, | 1,448,667 | 1,405,924 | ||||
Pool #2796, 7.00%, due 08/01/29 | 53,279 | 56,380 |
23
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (continued)
Principal Amount | Value | |||||
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (GNMA) — continued | ||||||
Pool #3040, 7.00%, due 02/01/31 | $ | 29,158 | $ | 30,827 | ||
Pool #3188, 6.50%, due 01/01/32 | 83,616 | 86,690 | ||||
Pool #3239, 6.50%, due 05/01/32 | 134,353 | 139,293 | ||||
Pool #3333, 5.50%, due 01/01/33 | 232,867 | 233,523 | ||||
Pool #3403, 5.50%, due 06/01/33 | 188,124 | 188,653 | ||||
Pool #3442, 5.00%, due 09/01/33 | 798,411 | 780,238 | ||||
Pool #3459, 5.50%, due 10/01/33 | 529,146 | 530,636 | ||||
Pool #672081, 6.00%, due 08/01/37 | 972,197 | 995,626 | ||||
Total Mortgage-Backed Securities | 28,735,054 | |||||
SHORT-TERM INVESTMENTS (9.97%) | ||||||
COMMERCIAL PAPER (3.22%) | ||||||
DEPOSITORY INSTITUTIONS (1.13%) | ||||||
Citigroup CP, 4.77%, due 01/15/08 | 1,100,000 | 1,100,000 | ||||
INSURANCE CARRIERS (1.06%) | ||||||
Prudential Funding LLC., | 650,000 | 650,000 | ||||
Prudential Funding LLC., | 375,000 | 375,000 | ||||
1,025,000 | ||||||
NONDEPOSITORY INSTITUTIONS (1.03%) | ||||||
American Express Credit Corp., | 1,000,000 | 1,000,000 | ||||
Total Commercial Paper | 3,125,000 | |||||
UNITED STATES GOVERNMENT AGENCIES (6.63%) | ||||||
Federal Home Loan Mortgage Corp., due 01/07/08 | 950,000 | 949,327 | ||||
Federal National Mortgage Assoc., due 01/02/08 | 800,000 | 799,906 | ||||
Federal National Mortgage Assoc., due 01/04/08 | 1,000,000 | 999,650 | ||||
Federal National Mortgage Assoc., due 01/11/08 | 1,400,000 | 1,398,363 | ||||
Federal National Mortgage Assoc., due 01/22/08 | 1,400,000 | 1,396,484 | ||||
Federal National Mortgage Assoc., due 01/29/08 | 900,000 | 897,058 | ||||
Total United States Government Agencies (Cost $6,440,788) | 6,440,788 |
Shares Held | Value | ||||
MONEY MARKET MUTUAL FUND (0.12%) | |||||
JPMorgan U.S. Treasury Plus | 117,341 | $ | 117,341 | ||
Total Short-Term Investments | 9,683,129 | ||||
Total Investments (99.86%) | 96,939,040 | ||||
OTHER ASSETS LESS LIABILITIES (0.14%) | |||||
Cash, receivables, prepaid expense and other assets, less liabilities | 133,728 | ||||
Total Net Assets (100.00%) | $ | 97,072,768 | |||
(1) | Non-income producing securities. |
See accompanying notes.
24
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO
December 31, 2007
Annualized Yield on Purchase Date | Principal Amount | Value | |||||||
SHORT-TERM INVESTMENTS (101.22%) | |||||||||
COMMERCIAL PAPER (25.33%) | |||||||||
INSURANCE CARRIERS (4.95%) | |||||||||
Prudential Funding LLC, 4.443%, due 01/11/08 | 4.443 | % | $ | 300,000 | $ | 300,000 | |||
Prudential Funding LLC, 4.427%, due 01/23/08 | 4.427 | 240,000 | 240,000 | ||||||
Prudential Funding LLC, 4.347%, due 03/17/08 | 4.347 | 275,000 | 275,000 | ||||||
815,000 | |||||||||
NONDEPOSITORY INSTITUTIONS (15.37%) | |||||||||
American Express Credit Corp., 4.309%, due 02/07/08 | 4.309 | 300,000 | 300,000 | ||||||
American Express Credit Corp., 4.600%, due 02/08/08 | 4.601 | 250,000 | 250,000 | ||||||
American Express Credit Corp., 4.292%, due 03/12/08 | 4.292 | 300,000 | 300,000 | ||||||
American General Finance Corp., 5.013%, due 01/17/08 | 5.013 | 250,000 | 250,000 | ||||||
American General Finance Corp., 4.933%, due 01/24/08 | 4.933 | 300,000 | 300,000 | ||||||
American General Finance Corp., 4.329%, due 02/05/08 | 4.329 | 285,000 | 285,000 | ||||||
General Electric Capital Corp., 4.521%, due 01/03/08 | 4.521 | 300,000 | 300,000 | ||||||
General Electric Capital Corp., 4.523%, due 01/07/08 | 4.523 | 250,000 | 250,000 | ||||||
General Electric Capital Corp., 4.417%, due 03/24/08 | 4.417 | 295,000 | 295,000 | ||||||
2,530,000 | |||||||||
PETROLEUM AND COAL PRODUCTS (5.01%) | |||||||||
Chevron Corp., 4.453%, due 01/10/08 | 4.453 | 275,000 | 275,000 | ||||||
Chevron Corp., 4.269%, due 01/25/08 | 4.269 | 300,000 | 300,000 | ||||||
Chevron Corp., 4.387%, due 02/21/08 | 4.387 | 250,000 | 250,000 | ||||||
825,000 | |||||||||
Total Commercial Paper (Cost $4,170,000) | 4,170,000 | ||||||||
UNITED STATES GOVERNMENT AGENCIES (75.89%) | |||||||||
Federal Farm Credit Bank, due 01/04/08 | 4.273 | 300,000 | 299,895 | ||||||
Federal Farm Credit Bank, due 01/08/08 | 4.367 | 350,000 | 349,707 | ||||||
Federal Farm Credit Bank, due 02/14/08 | 4.146 | 300,000 | 298,508 | ||||||
Federal Home Loan Bank, due 01/09/08 | 4.535 | 300,000 | 299,702 | ||||||
Federal Home Loan Bank, due 01/11/08 | 4.360 | 100,000 | 99,881 | ||||||
Federal Home Loan Bank, due 01/16/08 | 4.431 | 350,000 | 349,364 | ||||||
Federal Home Loan Bank, due 01/25/08 | 4.459 | 275,000 | 274,196 | ||||||
Federal Home Loan Bank, due 01/30/08 | 4.308 | 450,000 | 448,465 | ||||||
Federal Home Loan Bank, due 02/01/08 | 4.319 | 450,000 | 448,355 | ||||||
Federal Home Loan Bank, due 02/06/08 | 4.355 | 500,000 | 497,862 | ||||||
Federal Home Loan Bank, due 02/13/08 | 4.427 | 375,000 | 373,054 | ||||||
Federal Home Loan Bank, due 02/27/08 | 4.309 | 325,000 | 322,827 | ||||||
Federal Home Loan Bank, due 02/28/08 | 4.331 | 350,000 | 347,608 | ||||||
Federal Home Loan Bank, due 03/07/08 | 4.277 | 300,000 | 297,698 | ||||||
Federal Home Loan Bank, due 03/19/08 | 4.252 | 300,000 | 297,299 | ||||||
Federal Home Loan Mortgage Corp., due 01/10/08 | 4.350 | 425,000 | 424,545 | ||||||
Federal Home Loan Mortgage Corp., due 01/14/08 | 4.361 | 300,000 | 299,535 | ||||||
Federal Home Loan Mortgage Corp., due 01/22/08 | 4.286 | 400,000 | 399,016 | ||||||
Federal Home Loan Mortgage Corp., due 01/28/08 | 4.326 | 300,000 | 299,043 | ||||||
Federal Home Loan Mortgage Corp., due 01/31/08 | 4.384 | 525,000 | 523,115 | ||||||
Federal Home Loan Mortgage Corp., due 02/04/08 | 4.349 | 350,000 | 348,588 | ||||||
Federal Home Loan Mortgage Corp., due 02/11/08 | 4.298 | 300,000 | 298,559 |
25
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO (continued)
Annualized Yield on Purchase Date | Principal Amount | Value | ||||||||
UNITED STATES GOVERNMENT AGENCIES (75.89%) — continued | ||||||||||
Federal Home Loan Mortgage Corp., due 02/19/08 | 4.408 | % | $ | 450,000 | $ | 447,353 | ||||
Federal Home Loan Mortgage Corp., due 02/29/08 | 4.353 | 295,000 | 292,939 | |||||||
Federal National Mortgage Assoc., due 01/02/08 | 4.337 | 500,000 | 499,941 | |||||||
Federal National Mortgage Assoc., due 01/04/08 | 4.336 | 375,000 | 374,866 | |||||||
Federal National Mortgage Assoc., due 01/15/08 | 4.375 | 300,000 | 299,497 | |||||||
Federal National Mortgage Assoc., due 01/16/08 | 4.303 | 350,000 | 349,382 | |||||||
Federal National Mortgage Assoc., due 01/18/08 | 4.377 | 300,000 | 299,390 | |||||||
Federal National Mortgage Assoc., due 01/29/08 | 4.306 | 400,000 | 398,683 | |||||||
Federal National Mortgage Assoc., due 01/31/08 | 4.019 | 550,000 | 548,189 | |||||||
Federal National Mortgage Assoc., due 02/12/08 | 4.317 | 370,000 | 368,171 | |||||||
Federal National Mortgage Assoc., due 02/15/08 | 4.326 | 225,000 | 223,806 | |||||||
Federal National Mortgage Assoc., due 02/20/08 | 4.296 | 400,000 | 397,660 | |||||||
Federal National Mortgage Assoc., due 02/22/08 | 4.297 | 400,000 | 397,566 | |||||||
Total United States Government Agencies (Cost $12,494,265) | 12,494,265 | |||||||||
Total Short-Term Investments (Cost $16,664,265) | 16,664,265 | |||||||||
OTHER ASSETS LESS LIABILITIES (-1.22%) | ||||||||||
Cash, receivables, prepaid expense and other assets, less liabilities | (200,411 | ) | ||||||||
Total Net Assets (100.00%) | $ | 16,463,854 | ||||||||
See accompanying notes.
26
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO
December 31, 2007
Shares Held | Value | ||||
COMMON STOCKS (94.19%) | |||||
BUSINESS SERVICES (4.81%) | |||||
Microsoft Corp. | 91,883 | $ | 3,271,035 | ||
Oracle Corp. (1) | 57,149 | 1,290,424 | |||
4,561,459 | |||||
CHEMICALS AND ALLIED PRODUCTS (14.99%) | |||||
Abbott Laboratories | 24,755 | 1,389,993 | |||
Amgen Inc. (1) | 17,835 | 828,258 | |||
Bristol-Myers Squibb Co. | 35,343 | 937,297 | |||
Colgate-Palmolive Co. | 6,950 | 541,822 | |||
Dow Chemical Co. | 10,505 | 414,107 | |||
E.I. du Pont de Nemours & Co. | 15,756 | 694,682 | |||
Eli Lilly & Co. | 17,662 | 942,974 | |||
Johnson & Johnson | 42,710 | 2,848,757 | |||
Merck & Co., Inc. | 28,348 | 1,647,302 | |||
Pfizer, Inc. | 44,377 | 1,008,689 | |||
Procter & Gamble Co. | 40,222 | 2,953,099 | |||
14,206,980 | |||||
COMMUNICATIONS (4.76%) | |||||
AT&T, Inc. | 34,855 | 1,448,574 | |||
CBS Corp.-Class B | 12,084 | 329,289 | |||
Comcast Corp.-Class A (1) | 33,054 | 603,566 | |||
Verizon Communications | 36,562 | 1,597,394 | |||
Viacom, Inc.-Class B (1) | 12,084 | 530,729 | |||
4,509,552 | |||||
DEPOSITORY INSTITUTIONS (7.89%) | |||||
Bank of America Corp. | 45,666 | 1,884,179 | |||
Citigroup, Inc. | 48,341 | 1,423,159 | |||
J. P. Morgan Chase & Co. | 46,325 | 2,022,086 | |||
Wachovia Corp. | 25,460 | 968,244 | |||
Wells Fargo Co. | 39,005 | 1,177,561 | |||
7,475,229 | |||||
EATING AND DRINKING PLACES (2.25%) | |||||
McDonald’s Corp. | 36,117 | 2,127,653 | |||
ELECTRIC, GAS AND SANITARY SERVICES (2.94%) | |||||
Exelon Corp. | 24,105 | 1,967,932 | |||
Southern Co. | 21,215 | 822,081 | |||
2,790,013 | |||||
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT (8.21%) | |||||
Cisco Systems, Inc. (1) | 61,023 | 1,651,893 | |||
General Electric Co. | 84,256 | 3,123,370 | |||
Intel Corp. | 57,041 | 1,520,713 | |||
Motorola, Inc. | 37,189 | 596,512 | |||
Texas Instruments, Inc. | 26,461 | 883,797 | |||
7,776,285 | |||||
FOOD AND KINDRED PRODUCTS (4.42%) | |||||
Anheuser Busch Cos., Inc. | 11,202 | 586,313 | |||
Coca-Cola Co. (The) | 25,859 | 1,586,967 |
Shares Held | Value | ||||
Kraft Foods, Inc. | 26,424 | $ | 862,215 | ||
PepsiCo, Inc. | 15,208 | 1,154,287 | |||
4,189,782 | |||||
FORESTRY (0.49%) | |||||
Weyerhaeuser Co. | 6,270 | 462,350 | |||
GENERAL MERCHANDISE STORES (2.72%) | |||||
Target Corp. | 11,900 | 595,000 | |||
Wal-Mart Stores, Inc. | 41,773 | 1,985,471 | |||
2,580,471 | |||||
INDUSTRIAL MACHINERY AND EQUIPMENT (9.47%) | |||||
3M Co. | 17,453 | 1,471,637 | |||
Applied Materials, Inc. | 23,520 | 417,715 | |||
Caterpillar, Inc. | 28,044 | 2,034,873 | |||
Dell, Inc. (1) | 30,585 | 749,638 | |||
EMC Corp. (1) | 37,308 | 691,317 | |||
Hewlett-Packard Co. | 40,454 | 2,042,118 | |||
International Business Machines Corp. | 14,526 | 1,570,261 | |||
8,977,559 | |||||
INSURANCE CARRIERS (2.29%) | |||||
American International Group, Inc. | 37,204 | 2,168,993 | |||
MOTION PICTURES (2.09%) | |||||
Disney (Walt) Co. | 36,092 | 1,165,050 | |||
Time Warner, Inc. | 49,492 | 817,113 | |||
1,982,163 | |||||
NONDEPOSITORY INSTITUTIONS (3.44%) | |||||
American Express Co. | 51,742 | 2,691,619 | |||
Federal National Mortgage Assoc. | 14,090 | 563,318 | |||
3,254,937 | |||||
PETROLEUM AND COAL PRODUCTS (10.56%) | |||||
Chevron Corp. | 38,610 | 3,603,471 | |||
Exxon Mobil Corp. | 68,376 | 6,406,148 | |||
10,009,619 | |||||
PRIMARY METAL INDUSTRIES (1.17%) | |||||
Alcoa, Inc. | 30,278 | 1,106,661 | |||
SECURITY AND COMMODITY BROKERS (0.60%) | |||||
Ameriprise Financial, Inc. | 10,349 | 570,333 | |||
TOBACCO PRODUCTS (3.05%) | |||||
Altria Group, Inc. | 38,185 | 2,886,022 | |||
TRANSPORTATION EQUIPMENT (8.04%) | |||||
Boeing Co. (The) | 26,912 | 2,353,723 | |||
General Motors Corp. | 16,365 | 407,325 | |||
Honeywell International, Inc. | 29,204 | 1,798,090 | |||
United Technologies Corp. | 40,007 | 3,062,136 | |||
7,621,274 | |||||
Total Common Stocks | 89,257,335 |
27
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO (continued)
Shares Held | Value | |||||
SHORT-TERM INVESTMENTS (5.71%) | ||||||
MONEY MARKET MUTUAL FUND (0.02%) | ||||||
JPMorgan U.S. Treasury Plus | 17,535 | $ | 17,535 | |||
Principal Amount | ||||||
COMMERCIAL PAPER (2.03%) | ||||||
NONDEPOSITORY INSTITUTIONS | ||||||
American Express Credit Corp. | $ | 400,000 | 400,000 | |||
American Express Credit Corp. | 250,000 | 250,000 | ||||
American Express Credit Corp. | 475,000 | 475,000 | ||||
American General Finance Corp., | 300,000 | 300,000 | ||||
General Electric Capital Corp., | 250,000 | 250,000 | ||||
General Electric Capital Corp., | 250,000 | 250,000 | ||||
Total Commercial Paper | 1,925,000 | |||||
UNITED STATES GOVERNMENT AGENCIES (3.66%) | ||||||
Federal National Mortgage Assoc., | 300,000 | 299,786 | ||||
Federal National Mortgage Assoc., | 700,000 | 699,342 | ||||
Federal National Mortgage Assoc., | 400,000 | 399,532 | ||||
Federal National Mortgage Assoc., | 700,000 | 698,773 | ||||
Federal National Mortgage Assoc., | 250,000 | 249,284 | ||||
Federal National Mortgage Assoc., | 700,000 | 697,502 | ||||
Federal National Mortgage Assoc., | 425,000 | 423,297 | ||||
Total United States Government Agencies (Cost $3,467,516) | 3,467,516 | |||||
Total Short-Term Investments | 5,410,051 | |||||
Total Investments (99.90%) | 94,667,386 |
Value | |||
OTHER ASSETS LESS LIABILITIES (0.10%) | |||
Cash, receivables, prepaid expense and other assets, less liabilities | $ | 98,742 | |
Total Net Assets (100.00%) | $ | 94,766,128 | |
(1) | Non-income producing securities. |
See accompanying notes.
28
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
December 31, 2007
1. | Significant Accounting Policies |
Organization
EquiTrust Variable Insurance Series Fund (the “Fund”) is registered under the Investment Company Act of 1940, as amended, as a no-load, open-end diversified management investment company, or mutual fund. The Fund is authorized to issue an unlimited number of shares of beneficial interest with no par value. The Fund currently consists of six portfolios (known as the Value Growth, High Grade Bond, Strategic Yield, Managed, Money Market and Blue Chip Portfolios). Shares of the Fund are sold only to certain life insurance companies’ separate accounts to fund the benefits under variable insurance contracts issued by such life insurance companies, including Farm Bureau Life Insurance Company and EquiTrust Life Insurance Company (see Note 3).
Security Valuation
All Portfolios, other than the Money Market Portfolio, value their investment securities that are traded on any national exchange at the last sale price on the day of valuation or, lacking any sales, at the mean between the closing bid and asked prices. Investments traded in the over-the-counter market are valued at the mean between the bid and asked prices or yield equivalent as obtained from one or more dealers that make markets in the securities. In situations where market quotations are not readily available or quoted market prices are not reliable, investments are valued at fair value in accordance with the procedures adopted by the Fund’s Board of Trustees. Short-term investments are valued at market value, except that obligations maturing in 90 days or less are valued using the amortized cost method of valuation described below with respect to the Money Market Portfolio, which approximates market value.
The Money Market Portfolio values investments at amortized cost, which approximates market value. Under the amortized cost method, a security is valued at its cost on the date of purchase and thereafter is adjusted to reflect a constant amortization to maturity of the difference between the principal amount due at maturity and the cost of the investment to the Portfolio.
Income and Investment Transactions
For financial reporting purposes, investment transactions are recorded on the trade date. The identified cost basis has been used in determining the net realized gain or loss from investment transactions and unrealized appreciation or depreciation on investments. Dividend income is recorded on the ex-dividend date and interest is recognized on an accrual basis. Discounts and premiums on investments purchased are amortized over the life of the respective investments.
Dividends and Distributions to Shareholders
On each day that the net asset value per share is calculated in the High Grade Bond and Strategic Yield Portfolios, that Portfolio’s net investment income will be declared, as of the close of the New York Stock Exchange, as a dividend to shareholders of record prior to the declaration. With respect to the Money Market Portfolio, each day the net asset value per share is calculated, net investment income and any realized gains and losses from investment transactions will be declared, as of the close of the New York Stock Exchange, as a dividend to shareholders of record prior to the declaration. With respect to the High Grade Bond and Strategic Yield Portfolios, any net short-term and long-term gains will be declared and distributed periodically, but in no event less frequently than annually. Dividends and distributions of the other Portfolios are recorded on the ex-dividend date. Dividends and distributions from net investment income and net realized gain from investments are determined in accordance with federal tax regulations, which may differ from U.S. generally accepted accounting principles. These differences are primarily due to differing treatments for certain basis adjustments resulting from a taxable spin-off and taxable mergers. Permanent book and tax basis differences are reclassified within the capital accounts based on their federal tax-basis treatment; temporary differences do not require reclassification.
Dividends and distributions which exceed current and accumulated earnings and profits for federal income tax purposes are reported as return of capital distributions.
29
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
1. | Significant Accounting Policies (continued) |
Use of Estimates
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.
Indemnifications
Under the Fund’s organizational documents, its present and past officers and trustees are indemnified against certain liability arising out of the performance of their duties to the Fund. At the discretion of the Board of Trustees, employees and agents may also be indemnified. In addition, in the normal course of business the Fund enters into contracts that contain a variety of representations and warranties which provide general indemnifications. The Fund’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Fund that have not yet occurred.
New Accounting Pronouncements
Effective January 1, 2007 the Fund adopted Financial Accounting Standards Board (FASB) Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not determined to meet the more-likely-than-not threshold would be recorded as a benefit or expense in the current year. The adoption of FIN 48 during the current fiscal year resulted in no impact to the financial statements. The Fund is no longer subject to U.S. federal, state and local income tax examinations by tax authorities for tax years prior to 2004.
In September 2006, the FASB issued Statement on Financial Accounting Standards No. 157 “Fair Value Measurements” (SFAS 157). This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007 and interim periods within those financial statements. As of December 31, 2007, the Fund does not believe the adoption of SFAS 157 will impact the financial statement amounts, however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements on changes in net assets for the period.
2. | Federal Income Taxes |
No provision for federal income taxes is considered necessary because the Fund is qualified as a “regulated investment company” under the Internal Revenue Code and intends to distribute each year substantially all of its net investment income and realized capital gains to shareholders.
As of December 31, 2007, the following Portfolios had approximate net capital loss carryforwards set forth below:
Portfolio | ||||||
Net Capital Loss Carryforwards Expire In: | Strategic Yield | Blue Chip | ||||
2010 | $ | 1,495,000 | $ | — | ||
2011 | 571,000 | 3,950,000 | ||||
2012 | — | 556,000 | ||||
2013 | — | 60,000 | ||||
$ | 2,066,000 | $ | 4,566,000 | |||
30
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
2. | Federal Income Taxes (continued) |
For the year ended December 31, 2007, the Strategic Yield and Blue Chip Portfolios utilized approximately $2,000 and $1,450,000, respectively, of capital loss carryforwards.
As of December 31, 2007, the Value Growth and Managed Portfolios have post-October capital losses of $294,228 and $56,445, respectively, which will be deferred to the first day of the next fiscal year.
As of December 31, 2007, the components of accumulated earnings and capital gains (losses) on a tax basis were identical to those reported in the statements of assets and liabilities, except as follows:
Portfolio | ||||||||
Value Growth | Managed | |||||||
Undistributed ordinary income | $ | 1,619,864 | $ | 3,407,968 | ||||
Undistributed capital gains | 2,618,688 | 3,312,666 | ||||||
Accumulated capital losses | (294,228 | ) | (56,445 | ) | ||||
Net unrealized appreciation of investments | 7,443,683 | 10,231,325 | ||||||
Total accumulated earnings | $ | 11,388,007 | $ | 16,895,514 | ||||
Differences between book and tax amounts are primarily attributable to short-term capital gains, taxable spin-offs, mergers and corporate inversions.
3. | Management Contract and Transactions with Affiliates |
The Fund has entered into agreements with EquiTrust Investment Management Services, Inc. (“EquiTrust Investment”) relating to the management of the Portfolios and the investment of their assets. Pursuant to these agreements, fees paid to EquiTrust Investment are as follows: (1) annual investment advisory and management fees, which are based on each Portfolio’s average daily net assets as follows: Value Growth Portfolio — 0.45%; High Grade Bond Portfolio — 0.30%; Strategic Yield Portfolio — 0.45%; Managed Portfolio — 0.45%; Money Market Portfolio — 0.25% ; and Blue Chip Portfolio — 0.20%, and (2) accounting fees, which are based on each Portfolio’s daily net assets at an annual rate of 0.05%, with a maximum per Portfolio annual expense of $30,000.
The Fund has entered into an agreement with EquiTrust Investment whereby EquiTrust Investment also serves as the Fund’s shareholder service, transfer and dividend disbursing agent. EquiTrust Marketing Services, LLC serves as the principal underwriter and distributor. There are no fees paid by the Fund associated with these services.
EquiTrust Investment has agreed to reimburse the Portfolios annually for total expenses (excluding brokerage, interest, taxes and extraordinary expenses) in excess of 1.50% of each Portfolio’s average daily net assets. The amount reimbursed, however, shall not exceed the amount of the investment advisory and management fee paid by the Portfolio for such period. During the year ended December 31, 2007, EquiTrust Investment further agreed to reimburse any Portfolio, to the extent that annual operating expenses, including the investment advisory fee, exceed 0.65%. For the year ended December 31, 2007, no expense reimbursements were made to the Fund by EquiTrust Investment.
31
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
3. | Management Contract and Transactions with Affiliates (continued) |
Certain officers and trustees of the Fund are also officers of EquiTrust Investment, Farm Bureau Life Insurance Company and other affiliated entities. As of December 31, 2007, the total number of the shares of each Portfolio owned by Farm Bureau Life Insurance Company, EquiTrust Life Insurance Company and related separate accounts were as follows:
Portfolio | Shares | |
Value Growth | 4,398,791 | |
High Grade Bond | 4,007,621 | |
Strategic Yield | 4,281,596 | |
Managed | 5,676,367 | |
Money Market | 14,051,275 | |
Blue Chip | 2,144,691 |
4. | Expense Offset Arrangements |
The Fund and other mutual funds managed by EquiTrust Investment have an agreement with the custodian bank to indirectly pay a portion of the custodian’s fees through credits earned by the Funds’ cash on deposit with the bank. This deposit agreement is an alternative to overnight investments. Custodial fees have been adjusted to reflect amounts that would have been paid without this agreement, with a corresponding adjustment reflected as fees paid indirectly in the statements of operations.
5. | Capital Share Transactions |
Transactions in shares of beneficial interest for each Portfolio were as follows:
Shares Sold | Shares Issued In Reinvestment of Dividends and Distributions | Shares Redeemed | Net Increase (Decrease) | |||||||||||||||||||
Portfolio | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||
Year ended December 31, 2007: | ||||||||||||||||||||||
Value Growth | 315,759 | $ | 4,743,978 | 238,534 | $ | 3,420,582 | 401,982 | $ | 6,045,822 | 152,311 | $ | 2,118,738 | ||||||||||
High Grade Bond | 823,371 | 8,291,582 | 225,005 | 2,268,861 | 391,457 | 3,946,227 | 656,919 | 6,614,216 | ||||||||||||||
Strategic Yield | 757,336 | 6,886,780 | 299,636 | 2,722,242 | 507,961 | 4,620,309 | 549,011 | 4,988,713 | ||||||||||||||
Managed | 364,695 | 5,762,999 | 438,408 | 6,641,875 | 501,851 | 7,947,767 | 301,252 | 4,457,107 | ||||||||||||||
Money Market | 59,151,850 | 59,151,850 | 611,918 | 611,918 | 51,856,896 | 51,856,896 | 7,906,872 | 7,906,872 | ||||||||||||||
Blue Chip | 162,130 | 6,821,860 | 43,697 | 1,750,924 | 194,153 | 8,125,772 | 11,674 | 447,012 | ||||||||||||||
Year ended December 31, 2006: | ||||||||||||||||||||||
Value Growth | 255,896 | $ | 3,609,647 | 60,639 | $ | 836,213 | 373,100 | $ | 5,261,554 | (56,565 | ) | $ | (815,694 | ) | ||||||||
High Grade Bond | 596,516 | 5,992,257 | 186,353 | 1,872,291 | 332,120 | 3,333,560 | 450,749 | 4,530,988 | ||||||||||||||
Strategic Yield | 717,781 | 6,518,284 | 258,257 | 2,345,363 | 518,599 | 4,701,758 | 457,439 | 4,161,889 | ||||||||||||||
Managed | 468,970 | 7,173,849 | 445,511 | 6,620,289 | 442,686 | 6,802,184 | 471,795 | 6,991,954 | ||||||||||||||
Money Market | 36,344,869 | 36,344,869 | 276,847 | 276,847 | 34,352,364 | 34,352,364 | 2,269,352 | 2,269,352 | ||||||||||||||
Blue Chip | 101,702 | 3,765,368 | 46,259 | 1,635,261 | 264,053 | 9,720,213 | (116,092 | ) | (4,319,584 | ) |
32
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
6. | Investment Transactions |
For the year ended December 31, 2007, the cost of investment securities purchased and proceeds from investment securities sold (not including short-term investments and U.S. Government securities) by Portfolio, were as follows:
Portfolio | Purchases | Sales | ||||
Value Growth | $ | 10,593,092 | $ | 9,873,718 | ||
High Grade Bond | 2,979,373 | 831,814 | ||||
Strategic Yield | 4,912,445 | 3,839,318 | ||||
Managed | 13,476,955 | 10,004,631 | ||||
Blue Chip | 1,627,849 | 4,022,173 |
The basis of the Fund’s investments in securities and the net unrealized appreciation of investments for U.S. federal income tax purposes as of December 31, 2007, by Portfolio, was composed of the following:
Portfolio | Tax Cost of Investments in Securities | Gross Unrealized | Net Unrealized Appreciation (Depreciation) of Investments | ||||||||||
Appreciation | Depreciation | ||||||||||||
Value Growth | $ | 60,266,601 | $ | 12,570,709 | $ | 5,127,026 | $ | 7,443,683 | |||||
High Grade Bond | 45,546,216 | 495,670 | 337,937 | 157,733 | |||||||||
Strategic Yield | 45,218,063 | 763,975 | 1,262,371 | (498,396 | ) | ||||||||
Managed | 86,707,715 | 14,358,243 | 4,126,918 | 10,231,325 | |||||||||
Blue Chip | 66,160,981 | 34,987,536 | 6,481,131 | 28,506,405 |
The basis for U.S. federal income tax purposes and financial reporting purposes for investments in the Money Market Portfolio is the same and is equal to the underlying investments’ carrying value.
7. | Dividends and Distributions to Shareholders |
Dividends from net investment income for the following Portfolios are declared daily and were payable on the last business day of the month as follows:
Portfolio | |||||||||
Payable Date | High Grade Bond | Strategic Yield | Money Market | ||||||
January 31, 2007 | $ | 0.0479 | $ | 0.0587 | $ | 0.0041 | |||
February 28, 2007 | 0.0450 | 0.0622 | 0.0037 | ||||||
March 30, 2007 | 0.0425 | 0.0434 | 0.0039 | ||||||
April 30, 2007 | 0.0458 | 0.0446 | 0.0040 | ||||||
May 31, 2007 | 0.0437 | 0.0473 | 0.0041 | ||||||
June 29, 2007 | 0.0426 | 0.0426 | 0.0038 | ||||||
July 31, 2007 | 0.0470 | 0.0456 | 0.0042 | ||||||
August 31, 2007 | 0.0440 | 0.0475 | 0.0041 | ||||||
September 28, 2007 | 0.0414 | 0.0415 | 0.0036 | ||||||
October 31, 2007 | 0.0468 | 0.0468 | 0.0040 | ||||||
November 30, 2007 | 0.0436 | 0.0465 | 0.0034 | ||||||
December 31, 2007 | 0.0437 | 0.0435 | 0.0034 | ||||||
Total dividends per share | $ | 0.5340 | $ | 0.5702 | $ | 0.0463 | |||
None of the ordinary income dividends qualify for the dividends received deduction by corporate shareholders for the High Grade Bond, Strategic Yield and Money Market Portfolios.
33
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (continued)
7. | Dividends and Distributions to Shareholders (continued) |
In addition, dividends and distributions to shareholders from net investment income and net realized gain on investment transactions were paid during the year ended December 31, 2007 for the following Portfolios:
Ordinary Income Dividends:
Portfolio | Declaration Date | Record Date | Payable Date | Amount Per Share | Percent Qualifying for Deductions by Corporations | |||||||
Value Growth | 1/17/07 | 1/17/07 | 1/18/07 | $ | 0.2670 | 79 | % | |||||
Managed | 1/17/07 | 1/17/07 | 1/18/07 | 0.4611 | 37 | % | ||||||
Blue Chip | 1/17/07 | 1/17/07 | 1/18/07 | 0.7877 | 100 | % |
Short-Term Capital Gains Distributions:
Portfolio | Declaration Date | Record Date | Payable Date | Amount Per Share | |||||
Managed | 1/17/07 | 1/17/07 | 1/18/07 | $ | 0.0640 |
The character of the short-term capital gain distributions were treated as ordinary for tax purposes.
Long-Term Capital Gains Distributions:
Portfolio | Declaration Date | Record Date | Payable Date | Amount Per Share | |||||
Value Growth | 1/17/07 | 1/17/07 | 1/18/07 | $ | 0.5181 | ||||
High Grade Bond | 1/17/07 | 1/17/07 | 1/18/07 | 0.0054 | |||||
Managed | 1/17/07 | 1/17/07 | 1/18/07 | 0.6339 |
The Fund designates long-term capital gain distributions in accordance with Section 852(b)(3) of the Internal Revenue Code.
The federal income tax character of dividends and distributions to shareholders during 2007 and 2006 was the same for financial reporting purposes, except for short-term capital gain distributions which are classified as ordinary for federal income tax purposes.
34
EQUITRUST VARIABLE INSURANCE SERIES FUND
FINANCIAL HIGHLIGHTS
Years Ended December 31, 2007, 2006, 2005, 2004 and 2003
Value Growth Portfolio | High Grade Bond Portfolio | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||
Net asset value, beginning of year | $ | 15.09 | $ | 13.65 | $ | 12.98 | $ | 11.76 | $ | 9.14 | $ | 10.12 | $ | 10.16 | $ | 10.38 | $ | 10.42 | $ | 10.39 | ||||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income | 0.33 | 0.27 | 0.19 | 0.15 | 0.12 | 0.53 | 0.51 | 0.47 | 0.45 | 0.47 | ||||||||||||||||||||||||||||||
Net gains (losses) on securities (both realized and unrealized) | 0.43 | 1.36 | 0.63 | 1.20 | 2.64 | 0.01 | (0.04 | ) | (0.20 | ) | — | 0.08 | ||||||||||||||||||||||||||||
Total from investment operations | 0.76 | 1.63 | 0.82 | 1.35 | 2.76 | 0.54 | 0.47 | 0.27 | 0.45 | 0.55 | ||||||||||||||||||||||||||||||
Less Distributions | ||||||||||||||||||||||||||||||||||||||||
Dividends (from net investment income) | (0.27 | ) | (0.19 | ) | (0.15 | ) | (0.13 | ) | (0.14 | ) | (0.53 | ) | (0.51 | ) | (0.47 | ) | (0.45 | ) | (0.47 | ) | ||||||||||||||||||||
Distributions (from capital gains) | (0.52 | ) | — | — | — | — | (0.01 | ) | — | (0.02 | ) | (0.04 | ) | (0.05 | ) | |||||||||||||||||||||||||
Total distributions | (0.79 | ) | (0.19 | ) | (0.15 | ) | (0.13 | ) | (0.14 | ) | (0.54 | ) | (0.51 | ) | (0.49 | ) | (0.49 | ) | (0.52 | ) | ||||||||||||||||||||
Net asset value, end of year | $ | 15.06 | $ | 15.09 | $ | 13.65 | $ | 12.98 | $ | 11.76 | $ | 10.12 | $ | 10.12 | $ | 10.16 | $ | 10.38 | $ | 10.42 | ||||||||||||||||||||
Total Return: | ||||||||||||||||||||||||||||||||||||||||
Total investment return based on net asset value (1) | 5.27 | % | 12.07 | % | 6.41 | % | 11.53 | % | 30.68 | % | 5.48 | % | 4.78 | % | 2.65 | % | 4.30 | % | 5.43 | % | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of year (000’s omitted) | $ | 67,870 | $ | 65,712 | $ | 60,223 | $ | 58,354 | $ | 52,812 | $ | 46,039 | $ | 39,371 | $ | 34,946 | $ | 29,980 | $ | 26,659 | ||||||||||||||||||||
Ratio of total expenses to average net assets | 0.55 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.63 | % | 0.42 | % | 0.44 | % | 0.45 | % | 0.45 | % | 0.49 | % | ||||||||||||||||||||
Ratio of net expenses to average net assets | 0.55 | % | 0.58 | % | 0.58 | % | 0.58 | % | 0.63 | % | 0.42 | % | 0.44 | % | 0.45 | % | 0.45 | % | 0.49 | % | ||||||||||||||||||||
Ratio of net investment income to average net assets | 2.20 | % | 1.88 | % | 1.42 | % | 1.22 | % | 1.26 | % | 5.30 | % | 5.08 | % | 4.63 | % | 4.34 | % | 4.51 | % | ||||||||||||||||||||
Portfolio turnover rate | 17 | % | 30 | % | 18 | % | 17 | % | 17 | % | 11 | % | 17 | % | 12 | % | 26 | % | 28 | % |
Note: Net investment income per share amounts have been calculated based on average shares outstanding for the year.
(1) | Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the year, reinvestment of all dividends and distributions at net asset value during the year, redemption on the last day of the year. |
See accompanying notes.
35
EQUITRUST VARIABLE INSURANCE SERIES FUND
FINANCIAL HIGHLIGHTS (continued)
Strategic Yield Portfolio | Managed Portfolio | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||
Net asset value, beginning of year | $ | 9.19 | $ | 9.14 | $ | 9.37 | $ | 9.13 | $ | 8.75 | $ | 16.32 | $ | 15.80 | $ | 15.67 | $ | 14.73 | $ | 12.34 | ||||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income . | 0.57 | 0.55 | 0.53 | 0.55 | 0.63 | 0.56 | 0.49 | 0.35 | 0.27 | 0.30 | ||||||||||||||||||||||||||||||
Net gains (losses) on securities (both realized and unrealized) | (0.25 | ) | 0.05 | (0.23 | ) | 0.24 | 0.38 | 0.33 | 1.28 | 0.32 | 0.97 | 2.43 | ||||||||||||||||||||||||||||
Total from investment operations | 0.32 | 0.60 | 0.30 | 0.79 | 1.01 | 0.89 | 1.77 | 0.67 | 1.24 | 2.73 | ||||||||||||||||||||||||||||||
Less Distributions | ||||||||||||||||||||||||||||||||||||||||
Dividends (from net investment income) | (0.57 | ) | (0.55 | ) | (0.53 | ) | (0.55 | ) | (0.63 | ) | (0.46 | ) | (0.37 | ) | (0.27 | ) | (0.30 | ) | (0.34 | ) | ||||||||||||||||||||
Distributions (from capital gains) | — | — | — | — | — | (0.70 | ) | (0.88 | ) | (0.27 | ) | — | — | |||||||||||||||||||||||||||
Total distributions | (0.57 | ) | (0.55 | ) | (0.53 | ) | (0.55 | ) | (0.63 | ) | (1.16 | ) | (1.25 | ) | (0.54 | ) | (0.30 | ) | (0.34 | ) | ||||||||||||||||||||
Net asset value, end of year | $ | 8.94 | $ | 9.19 | $ | 9.14 | $ | 9.37 | $ | 9.13 | $ | 16.05 | $ | 16.32 | $ | 15.80 | $ | 15.67 | $ | 14.73 | ||||||||||||||||||||
Total Return: | ||||||||||||||||||||||||||||||||||||||||
Total investment return based on net asset value (1) | 3.56 | % | 6.79 | % | 3.26 | % | 8.94 | % | 11.97 | % | 5.87 | % | 11.99 | % | 4.53 | % | 8.58 | % | 22.72 | % | ||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of year (000’s omitted) | $ | 45,247 | $ | 41,481 | $ | 37,067 | $ | 30,637 | $ | 25,498 | $ | 97,073 | $ | 93,796 | $ | 83,368 | $ | 74,876 | $ | 66,733 | ||||||||||||||||||||
Ratio of total expenses to average net assets | 0.57 | % | 0.58 | % | 0.59 | % | 0.59 | % | 0.65 | % | 0.54 | % | 0.55 | % | 0.56 | % | 0.56 | % | 0.62 | % | ||||||||||||||||||||
Ratio of net expenses to average net assets | 0.57 | % | 0.58 | % | 0.59 | % | 0.59 | % | 0.65 | % | 0.54 | % | 0.55 | % | 0.56 | % | 0.56 | % | 0.62 | % | ||||||||||||||||||||
Ratio of net investment income to average net assets | 6.26 | % | 6.04 | % | 5.71 | % | 5.98 | % | 7.07 | % | 3.47 | % | 2.98 | % | 2.34 | % | 1.87 | % | 2.35 | % | ||||||||||||||||||||
Portfolio turnover rate | 17 | % | 16 | % | 1 | % | 34 | % | 32 | % | 14 | % | 24 | % | 24 | % | 26 | % | 24 | % |
Note: Net investment income per share amounts have been calculated based on average shares outstanding for the year.
(1) | Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the year, reinvestment of all dividends and distributions at net asset value during the year, redemption on the last day of the year. |
See accompanying notes.
36
EQUITRUST VARIABLE INSURANCE SERIES FUND
FINANCIAL HIGHLIGHTS (continued)
Money Market Portfolio | Blue Chip Portfolio | |||||||||||||||||||||||||||||||||||||||
2007 | 2006 | 2005 | 2004 | 2003 | 2007 | 2006 | 2005 | 2004 | 2003 | |||||||||||||||||||||||||||||||
Net asset value, beginning of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 40.61 | $ | 35.27 | $ | 35.17 | $ | 33.65 | $ | 27.22 | ||||||||||||||||||||
Income From Investment Operations | ||||||||||||||||||||||||||||||||||||||||
Net investment income . | 0.05 | 0.04 | 0.02 | 0.01 | 0.01 | 0.86 | 0.79 | 0.70 | 0.67 | 0.50 | ||||||||||||||||||||||||||||||
Net gains (losses) on securities (both realized and unrealized) | — | — | — | — | — | 1.73 | 5.25 | 0.07 | 1.35 | 6.38 | ||||||||||||||||||||||||||||||
Total from investment operations | 0.05 | 0.04 | 0.02 | 0.01 | 0.01 | 2.59 | 6.04 | 0.77 | 2.02 | 6.88 | ||||||||||||||||||||||||||||||
Less Distributions | ||||||||||||||||||||||||||||||||||||||||
Dividends (from net investment income) | (0.05 | ) | (0.04 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | (0.79 | ) | (0.70 | ) | (0.67 | ) | (0.50 | ) | (0.45 | ) | ||||||||||||||||||||
Distributions (from capital gains) | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||
Total distributions | (0.05 | ) | (0.04 | ) | (0.02 | ) | (0.01 | ) | (0.01 | ) | (0.79 | ) | (0.70 | ) | (0.67 | ) | (0.50 | ) | (0.45 | ) | ||||||||||||||||||||
Net asset value, end of year | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 1.00 | $ | 42.41 | $ | 40.61 | $ | 35.27 | $ | 35.17 | $ | 33.65 | ||||||||||||||||||||
Total Return: | ||||||||||||||||||||||||||||||||||||||||
Total investment return based on net asset value (1) | 4.71 | % | 4.43 | % | 2.50 | % | 0.74 | %0.52 | % | 6.49 | % | 17.42 | % | 2.29 | % | 6.07 | % | 25.70 | % | |||||||||||||||||||||
Ratios/Supplemental Data: | ||||||||||||||||||||||||||||||||||||||||
Net assets, end of year (000’s omitted) | $ | 16,464 | $ | 8,557 | $ | 6,288 | $ | 6,592 | $ | 6,728 | $ | 94,766 | $ | 90,261 | $ | 82,501 | $ | 84,960 | $ | 79,832 | ||||||||||||||||||||
Ratio of total expenses to average net assets | 0.45 | % | 0.54 | % | 0.61 | % | 0.56 | % | 0.59 | % | 0.29 | % | 0.31 | % | 0.31 | % | 0.30 | % | 0.36 | % | ||||||||||||||||||||
Ratio of net expenses to average net assets | 0.45 | % | 0.54 | % | 0.61 | % | 0.56 | % | 0.59 | % | 0.29 | % | 0.31 | % | 0.31 | % | 0.30 | % | 0.36 | % | ||||||||||||||||||||
Ratio of net investment income to average net assets | 4.60 | % | 4.37 | % | 2.47 | % | 0.72 | % | 0.53 | % | 2.04 | % | 2.07 | % | 1.98 | % | 2.00 | % | 1.72 | % | ||||||||||||||||||||
Portfolio turnover rate | — | % | — | % | — | % | — | % | — | % | 2 | % | — | % | — | % | 1 | % | 17 | % |
Note: Net investment income per share amounts have been calculated based on average shares outstanding for the year.
(1) | Total investment return is calculated assuming an initial investment made at the net asset value at the beginning of the year, reinvestment of all dividends and distributions at net asset value during the year, redemption on the last day of the year. |
See accompanying notes.
37
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Trustees and Shareholders
EquiTrust Variable Insurance Series Fund
We have audited the accompanying statements of assets and liabilities, including the schedules of investments, of EquiTrust Variable Insurance Series Fund [comprised of the Value Growth, High Grade Bond, Strategic Yield, Managed, Money Market and Blue Chip Portfolios] as of December 31, 2007, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian and brokers. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the respective portfolios constituting the EquiTrust Variable Insurance Series Fund at December 31, 2007, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Des Moines, Iowa
February 1, 2008
38
OFFICERS AND TRUSTEES
Name, Address and Age | Position(s) Held with Fund | Term of Office & Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | |||||
Interested Persons(2) | ||||||||||
Craig A. Lang (56) | President and Trustee | Since 2002 | Dairy Farmer; Chairman and Director, FBL Financial Group, Inc.; President and Director, Iowa Farm Bureau Federation and other affiliates of the foregoing; Director, Western Agricultural Insurance Company and other affiliates of the foregoing; Chairman, FBL Executive Committee; President, Farm Bureau Life Insurance Company; Member, Growmark, Inc. Coordinating Committee and American Farm Bureau Federation Board of Directors; past member, Cattlemen’s Beef Board; past Chairman, Grow Iowa Values Fund; past Director, Iowa Department of Economic Development | 13 | Director, Farm Bureau Bank (San Antonio, Texas); Director, Iowa Telecommunications Services, Inc. (Newton, Iowa); Member, Iowa Board of Regents | |||||
James W. Noyce (52) | Vice President and Trustee
Chief Financial Officer and Treasurer | Since 2007
1996-2007 | Chief Executive Officer and Class A Director, FBL Financial Group, Inc.; Chief Executive Officer, Farm Bureau Life Insurance Company and other affiliates of the foregoing; Chief Executive Officer and Director, EquiTrust Life Insurance Company and other affiliates of the foregoing; Vice President and Director, EquiTrust Series Fund, Inc. and EquiTrust Money Market Fund, Inc.; President and Director, FBL Real Estate Ventures, Ltd. | 13 | Director, Berthel Fisher & Company, Inc. and Berthel Fisher & Company Financial Services, Inc. | |||||
Dennis M. Marker (56) | Chief Executive Officer | Since 1982 | Vice President-Investment Administration, FBL Financial Group, Inc. and other affiliates of the foregoing; President and Director, EquiTrust Investment Management Services, Inc.; Chief Compliance Officer, Vice President-Investment Administration and Manager, EquiTrust Marketing Services, LLC; Chief Executive Officer, EquiTrust Mutual Funds; Vice President and Director, FBL Leasing Services, Inc. | |||||||
James P. Brannen (45) | Chief Financial Officer and Treasurer | Since 2007 | Chief Financial Officer and Chief Administrative Officer, FBL Financial Group, Inc. and other affiliates of the foregoing; Chief Financial Officer, Treasurer and Director, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing; President, Treasurer and Director, FBL Leasing Services, Inc.; Chief Financial Officer and Chief Administrative Officer, Western Computer Services, Inc.; Chief Financial Officer and Treasurer, EquiTrust Mutual Funds | |||||||
Richard J. Kypta (55) | Senior Vice President and General Counsel | Since 2007 | Senior Vice President and General Counsel, FBL Financial Group, Inc. and other affiliates of the foregoing; Senior Vice President, General Counsel and Director, EquiTrust Investment Management Services, Inc.; former Senior Vice President and Chief Operating Officer, Aviva USA Corporation; former Senior Vice President, General Counsel and Secretary, Aviva USA Corporation | |||||||
JoAnn Rumelhart (54) | Executive Vice President | Since 2000 | Executive Vice President, Farm Bureau Life Insurance Company and other affiliates of the foregoing; Executive Vice President and Director, EquiTrust Investment Management Services, Inc.; Executive Vice President and Manager, EquiTrust Marketing Services, LLC; Executive Vice President, EquiTrust Money Market Fund, Inc. and EquiTrust Series Fund, Inc.; Vice President, EquiTrust Life Insurance Company | |||||||
John M. Paule (51) | Vice President | Since 2000 | Executive Vice President, FBL Financial Group, Inc. and other affiliates of the foregoing; Executive Vice President and Director, EquiTrust Investment Management Services, Inc.; Executive Vice President and Manager, EquiTrust Marketing Services, LLC | |||||||
Lou Ann Sandburg (59) | Vice President-Investments and Assistant Treasurer | Since 1999 | Vice President-Investments and Assistant Treasurer FBL Financial Group, Inc. and other affiliates of the foregoing; Chief Compliance Officer, Vice President-Investments, Assistant Treasurer and Director, EquiTrust Investment Management Services, Inc.; Vice President, Assistant Treasurer and Manager, EquiTrust Marketing Services, LLC; Vice President, FBL Financial Services, Inc. and other affiliates of the foregoing; Vice President and Director, FBL Leasing Services, Inc.; Vice President, Secretary and Director, FBL Real Estate Ventures, Ltd. |
39
Name, Address and Age | Position(s) Held with Fund | Term of Office & Length of Time Served(1) | Principal Occupation(s) During Past Five Years | Number of Portfolios in Fund Complex Overseen by Trustee | Other Directorships Held by Trustee | |||||
Kristi Rojohn (45) | Chief Compliance Officer, Investment Compliance Vice President and Secretary | Since 1990 | Chief Compliance Officer, Investment Compliance, Vice President and Secretary, EquiTrust Mutual Funds; Investment Compliance Vice President and Secretary, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing | |||||||
Rob Ruisch (41) | Mutual Fund Accounting Director | Since 2005 | Mutual Fund Accounting Director, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing | |||||||
Jennifer Morgan (37) | Assistant Secretary | Since 2005 | Assistant Secretary, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing | |||||||
Sara Welp (25) | Assistant Secretary | Since 2006 | Assistant Secretary, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing | |||||||
Jodi Winslow (32) | Assistant Secretary | Since 2005 | Assistant Secretary, EquiTrust Investment Management Services, Inc. and other affiliates of the foregoing | |||||||
Non-Interested Persons(2) | ||||||||||
Erwin H. Johnson (64) 1841 March Avenue Charles City, Iowa 50616-9115 | Trustee | Since 1989 | Farmer; Owner and Manager, Center View Farms Co.; Farm Financial Planner, Iowa State University Cooperative Extension Service; Seed Sales, Syngenta | 13 | Director, First Security Bank and Trust Co. (Charles City, Iowa) | |||||
Kenneth Kay (64) 51606 590th Street Atlantic, Iowa 50022-8233 | Trustee | Since 1996 | President, K-Ranch Inc. | 13 | Director, First Whitney Bank & Trust (Atlantic, Iowa) | |||||
Steven W. Plate (51) c/o Plate, Baker & Co. 1003 Main Street Grinnell, Iowa 50112 | Trustee | Since 2003 | CPA/Owner, Plate, Baker & Co., P.C., Certified Public Accountants | 13 | None | |||||
James D. Wallace (52) 1111 Ashworth Road West Des Moines, Iowa 50265 | Trustee | Since 2004 | President and CEO, GuideOne Insurance and various subsidiaries | 13 | GuideOne Insurance and various subsidiaries | |||||
Erlin J. Weness (63) 1620 Pinewood Drive Worthington, Minnesota 56187 | Trustee | Since 2003 | Owner and Operator, Weness Consulting; former Extension Educator—Farm Management, University of Minnesota | 13 | Director, First State Bank Southwest (Worthington, Minnesota), First State Insurance Agency (Worthington, Minnesota), First Rushmore Bancorporation (Worthington, Minnesota), Pioneer Public Television and Community Wind South, LLP |
1 | Officers are elected annually by the Board of Trustees and their terms continue until they are replaced or resign. Each trustee shall serve as trustee until the next meeting of shareholders called for the purpose of conducting the election of such trustee or a successor to such trustee and until a successor is elected and qualified, or until such trustee sooner dies, resigns or is removed. |
2 | All interested persons maintain the same business address of 5400 University Avenue, West Des Moines, Iowa 50266. Messrs. Lang and Oddy are interested trustees of the Fund by virtue of their positions with the Adviser, Distributor and/or affiliated persons of the Adviser and Distributor. |
The Statement of Additional Information (“SAI”) includes additional information about Fund trustees and is available upon request without charge. To request a copy of the SAI, please call 1-877-860-2904 M-F 8:00 AM to 4:30 PM.
The officers and trustees of the Fund also serve in similar capacities as officers and directors of EquiTrust Series Fund, Inc. and EquiTrust Money Market Fund, Inc. All, except one, of the Fund’s officers and interested trustees are officers and directors of the Adviser and/or the Distributor or an affiliate thereof. Interested trustees serve without any compensation from the Fund. Each of the trustees not affiliated with the Adviser and/or the Distributor or an affiliate thereof will be compensated by the Fund. During the fiscal year ended December 31, 2007, each unaffiliated trustee received an annual retainer of $8,000 for serving on the boards of all EquiTrust Mutual Funds, and a fee of $1,500 plus expenses for each trustees’ meeting of the EquiTrust Mutual Funds attended. A fee of $1,000 was paid for each committee meeting attended. The chairperson of a committee was paid $1,250 for each committee meeting attended. For the fiscal year ended December 31, 2007, the Fund paid trustees’ fees totaling $26,833.
40
APPROVAL OF THE INVESTMENT ADVISORY CONTRACT
On November 15, 2007 the Board of Trustees, including a majority of the trustees who are not parties to or “interested persons” of either party to the investment advisory contract (the “independent trustees”), approved for continuance the Investment Advisory and Management Services Agreement dated November 11, 1987 between the Blue Chip Portfolio of EquiTrust Series Fund, Inc. (the “Fund”) and EquiTrust Investment Management Services, Inc. (“Adviser”), and the Agreement as amended and restated June 25, 2003 and July 3, 2003 between all Portfolios of the Fund except the Blue Chip Portfolio and the Adviser (collectively the “Agreement”).
The Board of Trustees, including a majority of the independent trustees, determined that approval of the Agreement was in the best interests of the Fund. The independent trustees were assisted by independent legal counsel in making their determination.
The Board noted that the Adviser has managed each Portfolio since its inception. The Board recognizes that a long-term relationship with a capable, conscientious investment adviser is in the best interests of shareholders and that shareholders have invested in the Portfolios knowing that the Adviser managed the Portfolios and knowing the investment advisory fee schedule.
Nature, Quality and Extent of Services. With respect to the nature, quality and extent of the services provided by the Adviser to the Portfolios, the Board considered the functions performed by the Adviser and the personnel providing such services, the Adviser’s financial condition and the compliance regime created by the Adviser, including the fact that the Fund has had no material compliance issues.
The Board also reviewed and discussed reports prepared by the Adviser containing information on each Portfolio’s total returns and average annual total returns over various periods of time. The Board also considered for each Portfolio, with the exception of the Money Market Portfolio, the Portfolio’s Morningstar “snapshot” report which includes various peer group data and the Morningstar rating. The Board concluded that as to each Portfolio, the investment performance was satisfactory, and in some cases, good relative to the peer group of mutual funds included in the reports. Based on the information provided, the Board concluded that the nature and extent of services provided to each Portfolio were appropriate and that the quality was good.
Fees and Expenses. The Board reviewed the amounts paid to the Adviser for advisory services. The Board compared expense ratios with other registered funds pursuing broadly similar strategies as included in reports prepared by the Adviser. The Board also reviewed a report management uses to review and evaluate expenses. This information showed that the advisory fee of each Portfolio was below average compared to other mutual funds pursuing broadly similar strategies. This information also showed that the expense ratios of each Portfolio were below average compared to similar mutual funds. The Board received information from the Adviser regarding the Adviser’s standard advisory fee schedules for the Adviser’s other clients. With respect to the Adviser’s other clients, the Board considered that the mix of services provided and the level of responsibility required under the Agreement with the Fund were different than the Adviser’s obligations for similar client accounts and that the advisory fees of such accounts are less relevant to the Board’s consideration because they reflect different competitive forces than those in the mutual fund marketplace. With respect to other EquiTrust funds, the Board considered differences in fund and fee structures in light of the different distribution channels of the funds.
The Board also considered that the Adviser has reimbursed expenses for the Portfolios over various periods of time. Based on the information considered, the Board concluded that each Portfolio’s advisory fee was reasonable and appropriate in amount given the quality of services provided.
Profitability. With respect to the costs of services provided and profits realized by the Adviser, the Board considered the advisory fees received by the Adviser from each Portfolio, and requested and received from the Adviser information on each Portfolio’s net assets and expense ratios over a ten-year period. The Board also considered the fact that the Adviser continues to be subject to an expense reimbursement agreement and that the Adviser has kept expenses at a reasonable level. Based on this information, the Board concluded for each Portfolio that the Adviser’s profitability was not unreasonable.
Economies of Scale. The Board considered the extent to which economies of scale would be realized as each Portfolio grows and whether fee levels reflect economies of scale for the benefit of Portfolio shareholders. The Board reviewed each Portfolio’s net assets and expense ratios over a ten-year period. The Board noted that the High Grade Bond, Managed, Strategic Yield and Value Growth Portfolios have advisory fee breakpoints designed to share economies of scale with shareholders. The Board also considered that the current size of each Portfolio does not lend itself to economies of scale. The Board concluded with respect to each of the Portfolios, that the total expense ratios were reasonable.
41
Other Benefits to the Adviser and its Affiliates. The Board considered the character and amount of other incidental benefits received by the Adviser and its affiliates from their relationship with the Fund, including fees received by the Adviser for accounting services, shareholder services, dividend disbursing and transfer agent services and fees received by an affiliate of the Adviser for distribution services. The Board also considered the Adviser’s placement of trades for certain of the Fund’s portfolios with broker-dealers that provide research products and services, in addition to the execution of the securities transactions. In doing so, the Board considered the Adviser’s determination that the level and amount of such commissions were reasonable in relation to the value and type of research received, the benefit of the research to the portfolio managers in the performance of their investment decision-making responsibilities and, in turn, the Portfolios, the research is eligible for purchase with hard dollars, and the use of traders and quality of execution and other brokerage services available through such broker-dealers. The Board concluded that, taking into account these benefits, the Portfolios’ advisory fees were reasonable.
Based on all of the information considered and the conclusions reached, the Board determined to approve the Agreement. The Board of Trustees, including the independent trustees, did not identify any single factor or group of factors as all important or controlling and considered all factors together.
Information on Proxy Voting:
EquiTrust Variable Insurance Series Fund, Inc. (the “Fund”) has delegated the authority to vote proxies related to the Fund’s Portfolio securities to the Fund’s investment adviser, EquiTrust Investment Management Services, Inc. (the “Adviser”). A description of the policies and procedures that the Adviser uses in fulfilling this responsibility is available, without charge, upon request by calling 1-877-860-2904. It also appears in the Fund’s Statement of Additional Information, which can be found on the SEC’s website at http://www.sec.gov. The Fund’s proxy voting record for the most recent 12-month period ended June 30, 2007 is available without charge, by calling the toll-free number listed above or by accessing the SEC’s website.
Form N-Q Disclosure:
The Fund files a complete schedule of Portfolio holdings for its first and third quarters of each fiscal year with the SEC on Form N-Q. The Fund’s Forms N-Q are available on the SEC’s website at http://www.sec.gov or may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information regarding the operation of the Public Reference Room may be obtained by calling 1-800-SEC-0330. A copy of Form N-Q is also available, without charge, by calling the Fund at 1-877-860-2904.
42
Item 2. | Code of Ethics. |
(a) | The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of the code of ethics may be obtained upon request, without charge, by contacting the registrant at its principal executive office. |
Item 3. | Audit Committee Financial Expert. |
(a) | (1) The registrant’s board of directors has determined that the registrant has at least one audit committee financial expert serving on the audit committee. |
(2) The audit committee financial expert is James D. Wallace. Mr. Wallace is independent as defined in Form N-CSR Item 3(a)(2).
Item 4. | Principal Accountant Fees and Services. |
(a) | Audit Fees: For the Fund’s fiscal years ended December 31, 2006 and December 31, 2007, the aggregate fees billed by the Fund’s principal accountant for the audit of the Fund’s financial statements were $56,200 and $59,000, respectively. |
(b) | Audit-Related Fees: There were no audit-related fees billed to the Fund for the fiscal years ended December 31, 2006 and December 31, 2007. |
(c) | Tax Fees: None. |
(d) | All Other Fees: For the Fund’s fiscal years ended December 31, 2006 and December 31, 2007, the aggregate fees billed by the Fund’s principal accountant included fees related to the audits of EquiTrust Series Fund, Inc. and EquiTrust Money Market Fund, Inc.; as well as fees for services performed by the principal accountant for EquiTrust Investment Management Services, Inc. and EquiTrust Marketing Services, LLC, affiliates of the Fund that provide support for the operations of the Fund. The amounts of these fees are as follows: |
Fiscal Year Ended: | December 31, 2006 | December 31, 2007 | ||||
Fees related to audits of EquiTrust Series Fund, Inc. and EquiTrust Money Market Fund, Inc. and for research and consultation on miscellaneous accounting matters | $ | 79,800 | $ | 80,100 | ||
Services performed for EquiTrust Marketing Services, LLC and EquiTrust Investment Management Services, Inc. related to the audits of these entities and for research and consultation on miscellaneous accounting matters | $ | 43,200 | $ | 40,800 |
(e) | (1) The Fund’s Audit Committee adopted the following pre-approval policies and procedures: |
IV. RESPONSIBILITIES AND DUTIES
To fulfill its responsibilities and duties the Audit Committee shall:
C. Independent registered public accounting firm
2. | Pre-approve any engagement of the independent registered public accounting firm to provide any services to the Fund, including the fees and other compensation to be paid to the independent registered public accounting firm. Notwithstanding the above, the independent registered public accounting firm shall not perform any of the following non-audit services for the Fund (“prohibited non-audit services”): |
a. | bookkeeping or other services related to the accounting records or financial statements of the Fund; |
b. | financial information systems design and implementation; |
c. | appraisal or valuation services, fairness opinions, or contribution-in-kind reports; |
d. | actuarial services; |
e. | internal audit outsourcing services; |
f. | management functions or human resources; |
g. | broker or dealer, investment adviser, or investment banking services; |
h. | legal services and expert services unrelated to the audit; and |
i. | any other services that the Public Company Accounting Oversight Board determines are impermissible. |
3. | Pre-approve any engagement of the independent registered public accounting firm, including the fees and other compensation to be paid to the independent registered public accounting firm, to provide any non-audit services to the Adviser (or any “control affiliate”1 of the Adviser providing ongoing services to the Fund), if the engagement relates directly to the operations and financial reporting of the Fund. |
1 | “Control affiliate” means any entity controlling, controlled by, or under common control with the Adviser. |
• | The Chairman of the Audit Committee (or in his absence, any member of the Audit Committee) may grant the pre-approval referenced in Sections IV.C. 2 and 3 above for non-prohibited services for engagements of less than $5000. Each member of the Audit Committee shall be notified in writing of the pre-approval promptly following the granting of such approval. In addition, all such delegated pre-approvals shall be presented to the Audit Committee no later than the next Audit Committee meeting. |
• | Pre-approval of non-audit services for the Fund pursuant to Section IV.C. 2 above is not required, if: |
(a) | the aggregate amount of all non-audit services provided to the Fund is less than 5% of the total fees paid by the Fund to the independent registered public accounting firm during the fiscal year in which the non-audit services are provided; |
(b) | the services were not recognized by Fund management at the time of the engagement as non-audit services; and |
(c) | such services are promptly brought to the attention of the Audit Committee by Fund management and the Audit Committee approves them (which may be by delegation) prior to the completion of the audit. |
• | Pre-approval of non-audit services for the Adviser (or any affiliate of the Adviser providing ongoing services to the Fund) pursuant to Section IV.C.3 above is not required, if: |
(a) | the aggregate amount of all non-audit services provided is less than 5% of the total fees paid by the Fund, the Adviser and any “control affiliate” of the Adviser providing ongoing services to the Fund to the independent registered public accounting firm during the fiscal year in which the non-audit services are provided; |
(b) | the services were not recognized by Fund management at the time of the engagement as non-audit services; and |
(c) | such services are promptly brought to the attention of the Audit Committee by Fund management and the Audit Committee approves them (which may be by delegation) prior to the completion of the audit. |
(e) | (2) Not applicable. |
(f) | Not applicable. |
(g) | Aggregate Non-audit Fees: There were no non-audit fees billed for the fiscal years ended December 31, 2006 and December 31, 2007. |
(h) | The Audit Committee of the Board of Trustees of the Fund has reviewed the statement of independence provided by Ernst & Young, the Fund’s principal accountant, considered whether the provision of non-audit services by the firm to the Fund’s investment adviser and any entity controlling, controlled by, or under common control with the adviser is compatible with such firm’s independence with respect to the Fund, and concluded that the non-audit services provided by Ernst & Young does not compromise that firm’s independence with regard to the Fund. |
Item 5. | Audit Committee of Listed Registrant. |
Not applicable.
Item 6. | Schedule of Investments. |
See Item 1.
Item 7. | Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. |
Not applicable.
Item 8. | Portfolio Managers of Closed-End Management Investment Companies. |
Not applicable.
Item 9. | Purchases of Equity Securities by Closed-End Management Investment Companies and Affiliated Purchasers. |
Not applicable.
Item 10. | Submission of Matters to a Vote of Security Holders. |
There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant’s board of trustees since the registrant last provided disclosure in response to this Item.
Item 11. | Controls and Procedures |
(a) | The registrant’s principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the “1940 Act”) (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of the report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). |
(b) | There has been no change to the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
Item 12. | Exhibits. |
(a)(1) | Not applicable. See Item 2(a). | |
(a)(2) | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 are filed as exhibits hereto. | |
(a)(3) | Not applicable. | |
(b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are filed as exhibits 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) EquiTrust Variable Insurance Series Fund | ||
By: | /s/ Dennis M. Marker | |
Name: | Dennis M. Marker | |
Title: | Chief Executive Officer | |
Date: | 02/22/08 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Dennis M. Marker | |
Name: | Dennis M. Marker | |
Title: | Chief Executive Officer | |
Date: | 02/22/08 | |
By: | /s/ James P. Brannen | |
Name: | James P. Brannen | |
Title: | Chief Financial Officer | |
Date: | 02/25/08 |