Total Return Variable Account NCSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05448

TOTAL RETURN VARIABLE ACCOUNT

(Exact name of registrant as specified in charter)

500 Boylston Street, Boston, Massachusetts 02116

(Address of principal executive offices) (Zip code)

Susan S. Newton

Massachusetts Financial Services Company

500 Boylston Street

Boston, Massachusetts 02116

(Name and address of agents for service)

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

Date of fiscal year end: December 31

Date of reporting period: December 31, 2010

ITEM 1.

REPORTS TO STOCKHOLDERS.

PROFESSIONALLY MANAGED COMBINATION

FIXED/VARIABLE ANNUITIES

FOR PERSONAL INVESTMENTS AND

QUALIFIED RETIREMENT PLANS

ANNUAL REPORT Ÿ December 31, 2010

Capital Appreciation Variable Account

Global Governments Variable Account

Government Securities Variable Account

High Yield Variable Account

Money Market Variable Account

Total Return Variable Account

Issued by

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

A Wholly Owned Subsidiary of

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

Table of Contents



Letter from the CEO of MFS			1

Portfolio Composition			2

Market Environment			9

Portfolio of Investments			10

Statements of Assets and Liabilities			31

Statements of Operations			33

Statements of Changes in Net Assets			34

Financial Highlights			36

Notes to Financial Statements			48

Report of Independent Registered Public Accounting Firm			60

Managers and Officers			61

Board Review of Investment Advisory Agreements			65

MFS® Privacy Notice			68



Proxy Voting Policies and Information			Back Cover

Quarterly Portfolio Disclosure			Back Cover

Further Information			Back Cover

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


NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

Letter from the CEO of MFS

LOGO

Dear Contract Owners:

After an extended rebound in the financial markets, uncertainty returned in 2010 as investors began to question the durability of the recovery for global economies and markets. That uncertainty led to increased risk aversion, especially as investors saw the eurozone struggle with the debt woes of many of its members. In September, the U.S. Federal Reserve Board’s promises to further loosen monetary policy helped assuage market fears and drive asset prices off their recent lows. A combination of solid earnings and improving economic data gave an additional boost to investor sentiment. As we enter 2011, we are cautiously optimistic that economic growth will continue to improve and that the global economies will recover from the shocks of the past few years. We expect the pace of recovery worldwide will be uneven and volatile.

As always, we continue to be mindful of the many economic challenges faced at the local, national, and international levels. It is in times such as these that we want to remind investors of the merits of maintaining a long-term view, adhering to basic investing principles such as asset allocation and diversification, and working closely with their advisors to research and identify appropriate investment opportunities.

Respectfully,

LOGO

Robert J. Manning

Chairman and Chief Executive Officer

MFS Investment Management®

February 14, 2011

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

Portfolio Composition — Capital Appreciation Variable Account

Portfolio structure

LOGO


Top ten holdings
Oracle Corp.			4.3%
Danaher Corp.			4.1%
Cisco Systems, Inc.			3.7%
Accenture Ltd., “A”			3.4%
Apple, Inc.			3.3%
International Business Machines Corp.			3.1%
Schlumberger Ltd.			2.8%
United Technologies Corp.			2.7%
Colgate-Palmolive Co.			2.7%
Visa, Inc., “A”			2.6%


Equity sectors
Technology			25.5%
Health Care			14.0%
Consumer Staples			12.0%
Financial Services			10.3%
Special Products & Services			10.0%
Industrial Goods & Services			7.6%
Energy			7.4%
Retailing			7.1%
Basic Materials			3.3%
Leisure			1.7%

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Portfolio Composition — Global Governments Variable Account

Portfolio structure (i)

LOGO


Fixed income sectors (i)
Non-U.S. Government Bonds			62.6%
U.S. Treasury Securities			26.9%
Mortgage-Backed Securities			3.9%
U.S. Government Agencies			2.9%
Commercial Mortgage-Backed Securities			1.7%
High Grade Corporates			0.2%

Composition including fixed income credit quality (a)(i)
AAA			54.7%
AA			37.6%
U.S. Agency (NR)			5.9%
Cash & Other			1.8%


Portfolio facts (i)
Average Duration (d)			6.5
Average Effective Maturity (m)			8.2 yrs.

Issuer country weightings (i)
United States			37.0%
Japan			24.5%
Italy			10.9%
Germany			8.8%
United Kingdom			4.7%
Netherlands			3.6%
Canada			2.9%
Finland			2.6%
France			2.5%
Other Countries			2.5%

(a)

The rating categories include debt securities and fixed-income structured products where these have long-term public ratings. All ratings are assigned in accordance with the following hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings from Moody’s are shown in the S&P and Fitch scale (e.g., AAA). All ratings are subject to change. U.S. Agency (NR) includes unrated U.S. Agency fixed income securities and collateralized mortgage obligations of U.S. Agency mortgage-backed securities. Cash & Other includes cash, other assets less liabilities, offsets to derivative positions, and short-term securities. The fund may not hold all of these instruments.

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

(i)

For purposes of this presentation, the components include the market value of securities, and reflect the impact of the equivalent exposure of derivative positions, if applicable. These amounts may be negative from time to time. The bond component will include any accrued interest amounts. Equivalent exposure is a calculated amount that translates the derivative position into a reasonable approximation of the amount of the underlying asset that the portfolio would have to hold at a given point in time to have the same price sensitivity that results from the portfolio’s ownership of the derivative contract. When dealing with derivatives, equivalent exposure is a more representative measure of the potential impact of a position on portfolio performance than market value. Where the fund holds convertible bonds, these are treated as part of the equity portion of the portfolio.

(m)

In determining an instrument’s effective maturity for purposes of calculating the fund’s dollar-weighted average effective maturity, MFS uses the instrument’s stated maturity or, if applicable, an earlier date on which MFS believes it is probable that a maturity-shortening device (such as a put, pre-refunding or prepayment) will cause the instrument to be repaid. Such an earlier date can be substantially shorter than the instrument’s stated maturity.

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Portfolio Composition — Government Securities Variable Account

Portfolio structure (i)

LOGO


Fixed income sectors (i)
Mortgage-Backed Securities			47.8%
U.S. Treasury Securities			28.9%
U.S. Government Agencies			11.8%
Municipal Bonds			2.5%
Commercial Mortgage-Backed Securities			2.0%
High Grade Corporates			0.6%


Composition including fixed income credit quality (a)(i)
AAA			36.1%
AA			3.5%
U.S. Agency (NR)			52.3%
Other Fixed Income (NR)			1.7%
Cash & Other			6.4%

Portfolio facts (i)
Average Duration (d)			4.6
Average Effective Maturity (m)			6.6 yrs.

(a)

The rating categories include debt securities and fixed-income structured products where these have long-term public ratings. All ratings are assigned in accordance with the following hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings from Moody’s are shown in the S&P and Fitch scale (e.g., AAA). All ratings are subject to change. U.S. Agency (NR) includes unrated U.S. Agency fixed income securities and collateralized mortgage obligations of U.S. Agency mortgage-backed securities. Other Fixed Income (NR) includes unrated long-term fixed income securities, interest rate swaps and fixed income futures. Cash & Other includes cash, other assets less liabilities, offsets to derivative positions, and short-term securities. The fund may not hold all of these instruments.

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

(i)

(m)

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Portfolio Composition — High Yield Variable Account

Portfolio structure (i)

LOGO


Top five industries (i)
Broadcasting			6.9%
Energy – Independent			6.6%
Medical & Health Technology & Services			6.6%
Gaming & Lodging			5.2%
Telecommunications – Wireless			5.1%


Composition including fixed income credit quality (a)(i)
AA			0.2%
A			0.1%
BBB			3.7%
BB			30.2%
B			44.8%
CCC			16.1%
CC			0.4%
C			0.1%
D (o)			0.0%
Other Fixed Income (NR)			0.9%
Non-Fixed Income (NR)			3.6%
Cash & Other			(0.1)%


Portfolio facts (i)
Average Duration (d)			4.5
Average Effective Maturity (m)			7.2 yrs.

(a)

The rating categories include debt securities and fixed-income structured products where these have long-term public ratings. All ratings are assigned in accordance with the following hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings from Moody’s are shown in the S&P and Fitch scale (e.g., AAA). All ratings are subject to change. Other Fixed Income (NR) includes unrated long-term fixed income securities, interest rate swaps and fixed income futures. Non-Fixed Income (NR) includes equity securities (including convertible bonds and equity derivatives) and commodities. Cash & Other includes cash, other assets less liabilities, offsets to derivative positions, and short-term securities. The fund may not hold all of these instruments.

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

(i)

(m)

(o) Less than 0.1%.

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

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Portfolio Composition — Money Market Variable Account

Portfolio structure (u)

LOGO


Composition including fixed income credit quality (a)(u)
A-1+			3.0%
A-1			97.3%
Not Rated			0.0%
Cash & Other			(0.3)%

Maturity breakdown (u)
0 - 7 days			23.9%
8 - 29 days			32.4%
30 - 59 days			15.4%
60 - 89 days			14.4%
90 - 366 days			14.2%
Other Assets Less Liabilities			(0.3)%

(a)

The composition table shows the percentage of portfolio assets falling within each rating category. Included in each rating category are short-term debt securities, the ratings of which are based on the short-term credit quality ratings of the securities’ issuers. For repurchase agreements, the credit quality is based on the short-term rating of the counterparty with which MFS trades the repurchase agreement. Each short-term debt security is assigned a rating in accordance with the following ratings hierarchy: If the issuer is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Cash and other portfolio assets that are not securities are not included in the categories mentioned above. Ratings are converted to the S&P scale and are subject to change.

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

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

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Portfolio Composition — Total Return Variable Account

Portfolio structure (i)

LOGO


Top ten holdings (i)
Fannie Mae, 5.5%, 30 Years			2.4%
JPMorgan Chase & Co.			2.1%
U.S. Treasury Notes, 3.75%, 2018			1.9%
U.S. Treasury Notes, 1.375%, 2013			1.9%
U.S. Treasury Notes, 1.875%, 2014			1.7%
Exxon Mobil Corp.			1.7%
Philip Morris International Inc.			1.7%
Lockheed Martin Corp.			1.6%
Goldman Sachs Group Inc.			1.6%
AT&T Inc.			1.5%

Composition including fixed income credit quality (a)(i)
AAA			15.0%
AA			1.7%
A			3.2%
BBB			5.7%
BB			0.4%
B (o)			0.0%
CCC			0.2%
C (o)			0.0%
U.S. Agency (NR)			13.4%
Non-Fixed Income (NR)			59.6%
Cash & Other			0.8%


Equity sectors
Financial Services			14.2%
Energy			7.6%
Consumer Staples			6.7%
Health Care			6.3%
Industrial Goods & Services			5.9%
Utilities & Communications			5.1%
Technology			3.6%
Retailing			2.6%
Basic Materials			2.5%
Leisure			2.4%
Autos & Housing			1.1%
Special Products & Services			1.1%
Transportation			0.5%

Fixed income sectors (i)
Mortgage-Backed Securities			13.3%
U.S. Treasury Securities			12.3%
High Grade Corporates			8.5%
Commercial Mortgage-Backed Securities			2.0%
Non-U.S. Government Bonds			0.9%
U.S. Government Agencies			0.8%
Emerging Markets Bonds			0.6%
High Yield Corporates			0.4%
Asset-Backed Securities			0.3%
Collateralized Debt Obligations			0.3%
Municipal Bonds			0.2%
Residential Mortgage-Backed Securities (o)			0.0%

Portfolio Composition — Total Return Variable Account — continued

(a)

The rating categories include debt securities and fixed-income structured products where these have long-term public ratings. All ratings are assigned in accordance with the following hierarchy: If a security is rated by Moody’s, then that rating is used; if not rated by Moody’s, then a Standard & Poor’s rating is used; if not rated by S&P, then a Fitch rating is used. Ratings from Moody’s are shown in the S&P and Fitch scale (e.g., AAA). All ratings are subject to change. U.S. Agency (NR) includes unrated U.S. Agency fixed income securities and collateralized mortgage obligations of U.S. Agency mortgage-backed securities. Non-Fixed Income (NR) includes equity securities (including convertible bonds and equity derivatives) and commodities. Cash & Other includes cash, other assets less liabilities, offsets to derivative positions, and short-term securities. The fund may not hold all of these instruments.

(i)

(o)	Less than 0.1%.

Percentages are based on net assets as of 12/31/10, unless otherwise noted.

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

Market Environment

The first quarter of the reporting period witnessed a continuation of the financial market and macroeconomic rebounds that had begun in early 2009. These recoveries in global activity and asset valuations were generally synchronized around the world, led importantly by emerging Asian economies, but broadening to include most of the global economy to varying degrees. Primary drivers of the recoveries included an unwinding of the inventory destocking that took place earlier, the production of manufacturing and capital goods, as well as massive fiscal and monetary stimulus.

During most of the remainder of the period, heightened risk surrounding the public-debt profiles of several of the peripheral European countries impaired market sentiment. At the same time, the improving trend in global macroeconomic data began to weaken somewhat. These two dynamics caused many asset prices to retrench significantly, as many questioned the durability of the global recovery.

Towards the end of the period, the U.S. Federal Reserve led markets to believe that further monetary loosening would be forthcoming if macroeconomic activity did not show signs of improvement. The prospects for more easing by the Fed improved market sentiment and drove risk-asset prices markedly higher. However, in a text-book case of “buy the rumor, sell the fact,” the weeks following the early November announcement of further quantitative easing saw a sell-off in U.S. Treasury bonds. This rise in Treasury yields occurred despite risk-off behavior in equities and credit markets (which would normally result in Treasury yield compression), and appears to have been the result of a few factors: signs of improved U.S. and global economic activity; opposition to quantitative easing from some quarters; and crowded long positions in U.S. Treasuries. The December agreement on an expansionary U.S. fiscal package also boosted sentiment, leading markets to reach near-term highs in risky asset valuations toward year end.

Portfolio of Investments — December 31, 2010

Capital Appreciation Variable Account


Issuer	Shares/Par		Value ($)


COMMON STOCKS - 98.9%
Aerospace - 3.1%
Precision Castparts Corp.		3,780	$	526,210
United Technologies Corp.		44,090		3,470,765

			$	3,996,975

Alcoholic Beverages - 2.0%
Companhia de Bebidas das Americas, ADR		31,200	$	968,136
Diageo PLC		88,778		1,640,202

			$	2,608,338

Apparel Manufacturers - 2.6%
LVMH Moet Hennessy Louis Vuitton S.A.		8,657	$	1,424,064
NIKE, Inc., “B”		22,580		1,928,784

			$	3,352,848

Broadcasting - 0.4%
Omnicom Group, Inc.		10,440	$	478,152

Brokerage & Asset Managers - 4.5%
Charles Schwab Corp.		123,910	$	2,120,100
CME Group, Inc.		6,800		2,187,900
Franklin Resources, Inc.		13,660		1,519,129

			$	5,827,129

Business Services - 10.0%
Accenture Ltd., “A”		90,430	$	4,384,951
Automatic Data Processing, Inc.		7,880		364,686
Dun & Bradstreet Corp.		35,800		2,938,822
MSCI, Inc., “A” (a)		58,350		2,273,316
Verisk Analytics, Inc., “A” (a)		72,400		2,467,392
Western Union Co.		30,660		569,356

			$	12,998,523

Cable TV - 1.3%
DIRECTV, “A” (a)		41,500	$	1,657,095

Chemicals - 1.2%
Monsanto Co.		21,610	$	1,504,920

Computer Software - 5.6%
Autodesk, Inc. (a)		43,780	$	1,672,396
Oracle Corp.		179,830		5,628,679

			$	7,301,075

Computer Software - Systems - 9.1%
Apple, Inc. (a)		13,380	$	4,315,853
EMC Corp. (a)		64,140		1,468,806
Hewlett-Packard Co.		49,390		2,079,319
International Business Machines Corp.		27,570		4,046,173

			$	11,910,151

Consumer Products - 5.8%
Church & Dwight Co., Inc.		21,510	$	1,484,620
Colgate-Palmolive Co.		42,950		3,451,892
Procter & Gamble Co.		40,060		2,577,060

			$	7,513,572

Electrical Equipment - 4.5%
Danaher Corp.		112,170	$	5,291,059
W.W. Grainger, Inc.		4,310		595,254

			$	5,886,313

Electronics - 4.7%
Microchip Technology, Inc.		72,930	$	2,494,935
Samsung Electronics Co. Ltd., GDR		1,668		703,729
Taiwan Semiconductor Manufacturing Co. Ltd., ADR		235,766		2,956,506

			$	6,155,170


Issuer		Shares/Par		Value ($)

COMMON STOCKS - continued
Energy - Integrated - 2.5%
Chevron Corp.			12,090	$	1,103,213
Exxon Mobil Corp.			18,570		1,357,838
Hess Corp.			10,140		776,116

				$	3,237,167

Food & Beverages - 4.2%
Groupe Danone			29,995	$	1,884,671
Mead Johnson Nutrition Co., “A”			11,070		689,108
PepsiCo, Inc.			43,720		2,856,228

				$	5,430,007

Food & Drug Stores - 0.9%
CVS Caremark Corp.			34,679	$	1,205,789

General Merchandise - 2.8%
Kohl’s Corp. (a)			34,550	$	1,877,447
Target Corp.			29,620		1,781,051

				$	3,658,498

Internet - 2.4%
eBay, Inc. (a)	��		25,530	$	710,500
Google, Inc., “A” (a)			4,160		2,470,915

				$	3,181,415

Major Banks - 2.2%
Bank of New York Mellon Corp.			20,854	$	629,791
State Street Corp.			48,500		2,247,490

				$	2,877,281

Medical & Health Technology & Services - 1.4%
Medco Health Solutions, Inc. (a)			8,340	$	510,992
Patterson Cos., Inc.			31,380		961,169
VCA Antech, Inc. (a)			16,450		383,121

				$	1,855,282

Medical Equipment - 9.5%
Becton, Dickinson & Co.			20,130	$	1,701,388
DENTSPLY International, Inc.			78,110		2,669,019
Medtronic, Inc.			46,970		1,742,117
St. Jude Medical, Inc. (a)			15,470		661,343
Synthes, Inc.			8,966		1,211,129
Thermo Fisher Scientific, Inc. (a)			61,240		3,390,246
Waters Corp. (a)			12,070		937,960

				$	12,313,202

Metals & Mining - 0.9%
BHP Billiton Ltd., ADR			12,200	$	1,133,624

Network & Telecom - 3.7%
Cisco Systems, Inc. (a)			236,490	$	4,784,193

Oil Services - 4.9%
National Oilwell Varco, Inc.			40,130	$	2,698,743
Schlumberger Ltd.			43,740		3,652,290

				$	6,351,033

Other Banks & Diversified Financials - 3.6%
MasterCard, Inc., “A”			5,920	$	1,326,731
Visa, Inc., “A”			48,330		3,401,465

				$	4,728,196

Pharmaceuticals - 3.1%
Abbott Laboratories			22,510	$	1,078,454
Allergan, Inc.			11,560		793,825
Johnson & Johnson			35,860		2,217,941

				$	4,090,220

Specialty Chemicals - 1.2%
Praxair, Inc.			16,840	$	1,607,715

10-CAVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Specialty Stores - 0.8%
Staples, Inc.		45,400	$	1,033,758

Total Common Stocks (Identified Cost, $103,507,920)			$	128,677,641

MONEY MARKET FUNDS (v) - 1.2%
MFS Institutional Money Market Portfolio, 0.18%, at Cost and Net Asset Value		1,555,872	$	1,555,872

Total Investments (Identified Cost, $105,063,792)			$	130,233,513


OTHER ASSETS, LESS LIABILITIES - (0.1)%				(89,483	)

NET ASSETS - 100.0%			$	130,144,030

See portfolio footnotes and notes to financial statements.

11-CAVA

Portfolio of Investments — December 31, 2010

Global Governments Variable Account



Issuer	Shares/Par			Value ($)

BONDS - 97.0%
Foreign Bonds - 62.3%
Austria - 1.0%
Republic of Austria, 4.65%, 2018		EUR	40,000	$	59,021

Belgium - 0.4%
Kingdom of Belgium, 5.5%, 2017		EUR	17,000	$	25,235

Canada - 2.9%
Bayview Commercial Asset Trust, FRN, 1.687%, 2023 (z)		CAD	30,000	$	24,689
Canada Housing Trust, 4.6%, 2011 (n)		CAD	57,000		58,603
Government of Canada, 4.25%, 2018		CAD	72,000		79,152
Government of Canada, 5.75%, 2033		CAD	10,000		13,452

				$	175,896

Finland - 2.6%
Republic of Finland, 3.875%, 2017		EUR	109,000	$	157,041

France - 2.5%
Republic of France, 6%, 2025		EUR	49,000	$	82,827
Republic of France, 4.75%, 2035		EUR	45,000		68,137

				$	150,964

Germany - 8.6%
Federal Republic of Germany, 3.75%, 2013		EUR	185,000	$	263,843
Federal Republic of Germany, 3.75%, 2015		EUR	104,000		150,363
Federal Republic of Germany, 4.25%, 2018		EUR	32,000		47,315
Federal Republic of Germany, 6.25%, 2030		EUR	33,000		60,738

				$	522,259

Italy - 10.7%
Republic of Italy, 4.75%, 2013		EUR	241,000	$	333,758
Republic of Italy, 5.25%, 2017		EUR	226,000		319,731

				$	653,489

Japan - 24.4%
Government of Japan, 1.7%, 2017		JPY	65,550,000	$	862,383
Government of Japan, 2.1%, 2024		JPY	19,050,000		252,415
Government of Japan, 2.2%, 2027		JPY	20,000,000		263,603
Government of Japan, 2.4%, 2037		JPY	8,000,000		107,134

				$	1,485,535

Netherlands - 3.6%
Kingdom of the Netherlands, 3.75%, 2014		EUR	129,000	$	185,749
Kingdom of the Netherlands, 5.5%, 2028		EUR	19,000		31,692

				$	217,441

Norway - 0.6%
Eksportfinans A.S.A., 1.875%, 2013		$	35,000	$	35,408

Spain - 0.4%
Kingdom of Spain, 4.6%, 2019		EUR	22,000	$	27,938

United Kingdom - 4.6%
United Kingdom Treasury, 8%, 2015		GBP	43,000	$	85,104
United Kingdom Treasury, 8%, 2021		GBP	5,100		11,076
United Kingdom Treasury, 4.25%, 2027		GBP	51,000		81,573
United Kingdom Treasury, 4.25%, 2036		GBP	66,000		103,621

				$	281,374

Total Foreign Bonds				$	3,791,601



Issuer	Shares/Par			Value ($)

BONDS - continued
U.S. Bonds - 34.7%
Asset-Backed & Securitized - 1.3%
Commercial Mortgage Asset Trust, FRN, 0.84%, 2032 (i)(z)		$	857,191	$	16,536
Commercial Mortgage Pass-Through Certificates, FRN, 0.45%, 2017 (n)			59,000		56,564
First Union National Bank Commercial Mortgage Trust, FRN, 0.738%, 2043 (i)(n)			572,575		2,277

				$	75,377

Local Authorities - 0.2%
University of California Rev. (Build America Bonds), 5.77%, 2043		$	15,000	$	14,133

Mortgage-Backed - 3.9%
Fannie Mae, 4.771%, 2012		$	37,163	$	38,746
Fannie Mae, 5.371%, 2013			23,380		24,564
Fannie Mae, 4.78%, 2015			22,928		24,727
Fannie Mae, 5.5%, 2015			8,914		9,795
Fannie Mae, 5.09%, 2016			25,000		27,139
Fannie Mae, 5.424%, 2016			22,984		25,157
Fannie Mae, 5.161%, 2018			23,911		26,050
Fannie Mae, 5.1%, 2019			10,784		11,587
Fannie Mae, 5.18%, 2019			10,788		11,611
Fannie Mae, 6.16%, 2019			9,328		10,448
Freddie Mac, 5.085%, 2019			10,000		10,573
Freddie Mac, 5%, 2025 - 2028			15,901		16,217

				$	236,614

U.S. Government Agencies and Equivalents - 2.8%
Aid-Egypt, 4.45%, 2015		$	49,000	$	53,707
Small Business Administration, 4.57%, 2025			29,147		30,732
Small Business Administration, 5.21%, 2026			80,885		86,826

				$	171,265

U.S. Treasury Obligations - 26.5%
U.S. Treasury Bonds, 6.875%, 2025		$	133,000	$	177,784
U.S. Treasury Bonds, 5.25%, 2029			86,000		98,631
U.S. Treasury Bonds, 4.5%, 2039			17,100		17,560
U.S. Treasury Notes, 4.75%, 2012			318,000		332,956
U.S. Treasury Notes, 4.125%, 2015			165,000		181,693
U.S. Treasury Notes, 4.75%, 2017			380,000		430,914
U.S. Treasury Notes, 3.5%, 2020			208,000		213,071
U.S. Treasury Notes, TIPS, 1.25%, 2020			159,456		163,268

				$	1,615,877

Total U.S. Bonds				$	2,113,266

Total Bonds (Identified Cost, $5,573,857)				$	5,904,867

MONEY MARKET FUNDS (v) - 4.0%
MFS Institutional Money Market Portfolio, 0.18%, at Cost and Net Asset Value			246,397	$	246,397

Total Investments (Identified Cost, $5,820,254)				$	6,151,264


OTHER ASSETS, LESS LIABILITIES - (1.0)%					(60,454	)

NET ASSETS - 100.0%				$	6,090,810

12-WGVA

Portfolio of Investments — continued

Derivative Contracts at 12/31/10

Forward Foreign Currency Exchange Contracts at 12/31/10


Type	Currency	Counterparty	Contracts to Deliver/ Receive		Settlement Date Range		In Exchange For		Contracts at Value		Net Unrealized Appreciation (Depreciation)
Asset Derivatives
BUY	AUD	Citibank N.A.		7,000		1/12/11		$6,873		$7,153		$280
BUY	AUD	Credit Suisse Group		7,000		1/12/11		6,869		7,153		284
BUY	AUD	Westpac Banking Corp		46,965		1/12/11		45,649		47,995		2,346
BUY	CAD	Goldman Sachs International		35,889		1/12/11		35,081		36,089		1,008
BUY	CAD	UBS AG		7,000		1/12/11		6,919		7,039		120
BUY	CLP	Barclays Bank PLC		7,406,000		1/10/11		15,526		15,817		291
BUY	CNY	JPMorgan Chase Bank N.A.		102,000		1/14/11-4/18/11		15,417		15,478		61
SELL	DKK	Royal Bank of Scotland PLC		44,000		1/12/11		8,031		7,888		143
BUY	EUR	Citibank N.A.		15,000		1/12/11		19,838		20,044		206
BUY	EUR	Deutsche Bank AG		24,000		1/12/11		31,498		32,071		573
BUY	EUR	HSBC Bank		29,754		1/12/11		39,527		39,759		232
BUY	EUR	JPMorgan Chase Bank N.A.		15,558		1/12/11		20,282		20,790		508
BUY	EUR	UBS AG		12,000		1/12/11		15,915		16,036		121
SELL	EUR	Barclays Bank PLC		8,000		1/12/11		11,009		10,690		319
SELL	EUR	Credit Suisse Group		5,000		1/12/11		6,787		6,681		106
SELL	EUR	Deutsche Bank AG		2,000		1/12/11		2,717		2,673		44
SELL	EUR	Goldman Sachs International		9,000		1/12/11		12,449		12,026		423
SELL	EUR	HSBC Bank		36,000		1/12/11		49,393		48,106		1,287
SELL	EUR	JPMorgan Chase Bank N.A.		48,000		1/12/11		67,464		64,142		3,322
SELL	EUR	UBS AG		18,500		1/12/11		25,237		24,721		516
BUY	GBP	Barclays Bank PLC		1,000		1/12/11		1,541		1,559		18
SELL	GBP	Barclays Bank PLC		2,000		1/12/11		3,151		3,118		33
SELL	GBP	Goldman Sachs International		16,000		1/12/11		25,420		24,945		475
SELL	GBP	UBS AG		13,000		1/12/11		20,912		20,267		645
BUY	JPY	Barclays Bank PLC		176,000		1/12/11		2,125		2,168		43
BUY	JPY	Credit Suisse Group		568,000		1/12/11		6,931		6,996		65
BUY	JPY	HSBC Bank		2,137,820		1/12/11		25,870		26,333		463
BUY	JPY	JPMorgan Chase Bank N.A.		49,121,539		1/12/11		600,633		605,065		4,432
BUY	JPY	UBS AG		1,743,000		1/12/11		20,839		21,470		631
SELL	JPY	HSBC Bank		3,610,000		1/12/11		44,488		44,467		21
SELL	JPY	UBS AG		935,000		1/12/11		11,617		11,517		100
SELL	KRW	JPMorgan Chase Bank N.A.		299,000		1/18/11		264		263		1
BUY	MXN	HSBC Bank		191,000		1/12/11		15,371		15,457		86
BUY	NZD	Barclays Bank PLC		9,000		1/12/11		6,812		7,009		197
BUY	PHP	JPMorgan Chase Bank N.A.		367,000		1/28/11		8,313		8,379		66
SELL	SEK	Barclays Bank PLC		26,000		1/12/11		3,872		3,865		7
BUY	SGD	HSBC Bank		23,000		1/12/11		17,773		17,922		149
BUY	SGD	JPMorgan Chase Bank N.A.		20,000		2/07/11		15,316		15,585		269
SELL	TRY	Barclays Bank PLC		19,000		1/26/11		12,506		12,273		233
SELL	TRY	Deutsche Bank AG		40,000		2/22/11		26,585		25,750		835
BUY	TWD	Barclays Bank PLC		503,000		1/27/11		16,565		17,263		698
BUY	ZAR	Deutsche Bank AG		1,000		1/18/11		141		152		11
											��
												$21,668

Liability Derivatives
SELL	AUD	Citibank N.A.		15,000		1/12/11		14,689		15,328		(639	)
SELL	CAD	Barclays Bank PLC		15,000		1/12/11		14,850		15,084		(234	)
SELL	CAD	Credit Suisse Group		82,381		1/12/11		81,909		82,841		(932	)
BUY	DKK	Credit Suisse Group		257,472		1/12/11		48,046		46,158		(1,888	)
BUY	EUR	Deutsche Bank AG		14,000		1/12/11		19,414		18,708		(706	)
BUY	EUR	Goldman Sachs International		28,311		1/12/11		39,289		37,831		(1,458	)
BUY	EUR	JPMorgan Chase Bank N.A.		169,764		1/12/11		236,704		226,853		(9,851	)
BUY	EUR	UBS AG		16,643		1/12/11		23,640		22,240		(1,400	)
SELL	EUR	Barclays Bank PLC		16,000		1/12/11		20,814		21,381		(567	)
SELL	EUR	Citibank N.A.		8,000		1/12/11		10,585		10,690		(105	)
SELL	EUR	Deutsche Bank AG		20,000		1/12/11		26,573		26,725		(152	)
SELL	EUR	UBS AG		338,227		3/15/11		446,744		451,867		(5,123	)
BUY	GBP	Barclays Bank PLC		23,475		1/12/11		37,325		36,598		(727	)

13-WGVA

Portfolio of Investments — continued

Forward Foreign Currency Exchange Contracts at 12/31/10 — continued


Type	Currency	Counterparty	Contracts to Deliver/ Receive		Settlement Date Range	In Exchange For		Contracts at Value		Net Unrealized Appreciation (Depreciation)
Liability Derivatives - continued
BUY	GBP	Credit Suisse Group		4,000	1/12/11		$6,376		$6,236		$(140	)
BUY	GBP	Deutsche Bank AG		60,964	1/12/11		96,217		95,043		(1,174	)
BUY	GBP	Royal Bank of Scotland PLC		6,000	1/12/11		9,627		9,354		(273	)
BUY	GBP	UBS AG		1,000	1/12/11		1,581		1,559		(22	)
BUY	IDR	Barclays Bank PLC		152,286,000	4/01/11		16,790		16,676		(114	)
BUY	IDR	JPMorgan Chase Bank N.A.		108,538,000	1/14/11		12,069		12,028		(41	)
SELL	IDR	JPMorgan Chase Bank N.A.		261,103,000	1/14/11		28,864		28,935		(71	)
BUY	JPY	Barclays Bank PLC		6,000	1/12/11		75		74		(1	)
BUY	JPY	Goldman Sachs International		3,208,241	1/12/11		39,539		39,520		(19	)
SELL	JPY	Barclays Bank PLC		1,887,000	1/12/11		22,727		23,243		(516	)
SELL	JPY	Citibank N.A.		2,610,000	1/12/11		31,534		32,149		(615	)
SELL	JPY	Credit Suisse Group		100,000	1/12/11		1,230		1,231		(1	)
SELL	JPY	Goldman Sachs International		668,000	1/12/11		8,176		8,228		(52	)
SELL	JPY	HSBC Bank		5,558,000	1/12/11		66,333		68,462		(2,129	)
SELL	JPY	Royal Bank of Scotland PLC		833,000	1/12/11		10,202		10,261		(59	)
SELL	JPY	UBS AG		1,080,000	1/12/11		13,279		13,303		(24	)
BUY	KRW	Barclays Bank PLC		28,689,000	1/05/11-1/18/11		25,545		25,266		(279	)
BUY	KRW	JPMorgan Chase Bank N.A.		299,000	1/05/11		265		264		(1	)
SELL	KRW	Barclays Bank PLC		28,659,000	1/05/11-1/18/11		24,533		25,239		(706	)
SELL	NOK	Deutsche Bank AG		1,000	1/12/11		161		171		(10	)
SELL	NZD	Barclays Bank PLC		9,000	1/12/11		6,940		7,010		(70	)
BUY	PHP	JPMorgan Chase Bank N.A.		1,109,000	1/06/11-1/26/11		25,526		25,318		(208	)
SELL	PHP	JPMorgan Chase Bank N.A.		773,000	1/26/11		17,379		17,649		(270	)
BUY	SEK	Credit Suisse Group		506,807	1/12/11		75,574		75,334		(240	)
SELL	SEK	Barclays Bank PLC		34,000	1/12/11		4,934		5,054		(120	)
BUY	SGD	Deutsche Bank AG		10,000	1/12/11		7,798		7,792		(6	)
SELL	SGD	Deutsche Bank AG		12,000	1/12/11		9,070		9,350		(280	)
BUY	TRY	HSBC Bank		17,000	2/22/11		11,597		10,944		(653	)
BUY	TRY	JPMorgan Chase Bank N.A.		42,000	1/26/11-2/22/11		28,322		27,093		(1,229	)
SELL	TWD	Credit Suisse Group		484,400	1/27/11		16,000		16,624		(624	)
SELL	TWD	JPMorgan Chase Bank N.A.		24,000	1/27/11		817		825		(8	)

											$(33,737	)

At December 31, 2010, the variable account had sufficient cash and/or securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

14-WGVA

Portfolio of Investments — December 31, 2010

Government Securities Variable Account


Issuer	Shares/Par		Value ($)

BONDS - 91.2%
Agency - Other - 5.6%
Financing Corp., 9.4%, 2018	$	1,020,000	$	1,429,367
Financing Corp., 10.35%, 2018		500,000		739,486
Financing Corp., STRIPS, 0%, 2017		1,220,000		981,723

			$	3,150,576

Asset-Backed & Securitized - 2.0%
Citigroup/Deutsche Bank Commercial Mortgage Trust, 5.322%, 2049	$	151,000	$	156,515
Commercial Mortgage Pass-Through Certificates, “A4”, 5.306%, 2046		424,864		443,127
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.817%, 2049		249,825		261,381
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.988%, 2051		242,098		253,571

			$	1,114,594

Local Authorities - 0.5%
Nashville & Davidson County, TN, Metropolitan Government Convention Center Authority (Build America Bonds), 6.731%, 2043	$	180,000	$	177,250
University of California Rev. (Build America Bonds), 5.77%, 2043		125,000		117,775

			$	295,025

Mortgage-Backed - 47.6%
Fannie Mae, 5.503%, 2011	$	79,000	$	81,334
Fannie Mae, 6.088%, 2011		124,000		126,198
Fannie Mae, 4.73%, 2012		87,112		91,392
Fannie Mae, 4.791%, 2012		39,737		41,431
Fannie Mae, 4.542%, 2013		51,739		54,528
Fannie Mae, 4.845%, 2013		240,545		255,605
Fannie Mae, 5%, 2013 - 2039		3,055,850		3,231,732
Fannie Mae, 5.06%, 2013		96,782		100,904
Fannie Mae, 5.159%, 2013		93,012		99,798
Fannie Mae, 4.562%, 2014		77,071		82,395
Fannie Mae, 4.6%, 2014		116,443		124,254
Fannie Mae, 4.61%, 2014		353,052		377,612
Fannie Mae, 4.77%, 2014		98,220		105,677
Fannie Mae, 4.841%, 2014		698,811		751,009
Fannie Mae, 4.872%, 2014		434,288		462,014
Fannie Mae, 5.1%, 2014 - 2015		192,095		206,851
Fannie Mae, 4.56%, 2015		150,475		161,258
Fannie Mae, 4.62%, 2015		167,645		179,930
Fannie Mae, 4.665%, 2015		101,657		109,292
Fannie Mae, 4.7%, 2015		116,855		125,767
Fannie Mae, 4.74%, 2015		94,297		101,549
Fannie Mae, 4.79%, 2015		94,939		102,346
Fannie Mae, 4.81%, 2015		119,509		129,025
Fannie Mae, 4.815%, 2015		116,203		125,417
Fannie Mae, 4.82%, 2015		235,061		253,762
Fannie Mae, 4.89%, 2015		82,428		89,230
Fannie Mae, 4.922%, 2015		291,048		315,980
Fannie Mae, 5.466%, 2015		195,196		213,838
Fannie Mae, 4.5%, 2016 - 2020		1,302,973		1,377,374
Fannie Mae, 5.725%, 2016		93,114		101,715
Fannie Mae, 6.5%, 2016 - 2037		488,009		545,521
Fannie Mae, 5.5%, 2017 - 2035		4,742,783		5,098,617
Fannie Mae, 6%, 2017 - 2037		1,509,601		1,652,548
Fannie Mae, 5.68%, 2018		41,738		45,316
Fannie Mae, 4.874%, 2019		238,927		259,691
Fannie Mae, 5.6%, 2019		53,296		57,730
Fannie Mae, 4.88%, 2020		70,628		74,540
Fannie Mae, 7.5%, 2022 - 2031		78,848		90,384


Issuer	Shares/Par		Value ($)

BONDS - continued
Mortgage-Backed - continued
Freddie Mac, 4.375%, 2015	$	97,457	$	99,348
Freddie Mac, 5%, 2016 - 2040		1,237,331		1,300,812
Freddie Mac, 5.085%, 2019		312,000		329,875
Freddie Mac, 6%, 2019 - 2038		1,213,422		1,325,567
Freddie Mac, 4.224%, 2020		152,529		154,636
Freddie Mac, 4.251%, 2020		119,000		120,681
Freddie Mac, 4.5%, 2022 - 2025		177,475		185,742
Freddie Mac, 5.5%, 2022 - 2036		2,042,079		2,189,130
Freddie Mac, 4%, 2025		502,923		518,088
Freddie Mac, 6.5%, 2032 - 2037		308,966		347,178
Ginnie Mae, 5.5%, 2033		832,769		904,722
Ginnie Mae, 4.5%, 2039 - 2040		655,150		684,442
Ginnie Mae, 5.612%, 2058		572,608		616,025
Ginnie Mae, 6.36%, 2058		335,695		364,898

			$	26,544,708

Municipals - 2.5%
California Educational Facilities Authority Rev. (Stanford University), 5.25%, 2040	$	190,000	$	203,659
Harris County, TX, “C”, AGM, 5.25%, 2027		125,000		137,113
Massachusetts Bay Transportation Authority, Sales Tax Rev., “A-1”, 5.25%, 2028		350,000		373,646
Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 2027		250,000		275,705
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “K”, 5.5%, 2032		245,000		270,980
Massachusetts Water Pollution Abatement Trust, 5.25%, 2033		115,000		122,905

			$	1,384,008

U.S. Government Agencies and Equivalents - 6.0%
Aid-Egypt, 4.45%, 2015	$	335,000	$	367,180
Farmer Mac, 5.5%, 2011 (n)		690,000		708,595
FDIC Structured Sale Guarantee Note, 0%, 2012 (n)		43,000		41,855
Small Business Administration, 6.44%, 2021		257,195		280,512
Small Business Administration, 6.625%, 2021		309,705		338,274
Small Business Administration, 4.98%, 2023		163,334		172,583
Small Business Administration, 4.77%, 2024		360,689		382,410
Small Business Administration, 4.99%, 2024		174,301		185,954
Small Business Administration, 5.11%, 2025		209,718		223,121
U.S. Department of Housing & Urban Development, 6.36%, 2016		500,000		515,645
U.S. Department of Housing & Urban Development, 6.59%, 2016		109,000		107,656

			$	3,323,785

U.S. Treasury Obligations - 27.0%
U.S. Treasury Bonds, 9.25%, 2016	$	19,000	$	25,726
U.S. Treasury Bonds, 7.5%, 2016		218,000		280,181
U.S. Treasury Bonds, 7.875%, 2021		63,000		87,885
U.S. Treasury Bonds, 6.25%, 2023		16,000		20,110

15-GSVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
U.S. Treasury Obligations - continued
U.S. Treasury Bonds, 6.75%, 2026	$	33,000	$	43,818
U.S. Treasury Bonds, 6.375%, 2027		326,000		419,521
U.S. Treasury Bonds, 5.25%, 2029		1,566,000		1,796,006
U.S. Treasury Bonds, 4.375%, 2038		772,000		780,203
U.S. Treasury Bonds, 4.5%, 2039		1,062,200		1,090,747
U.S. Treasury Notes, 1.125%, 2012		1,170,000		1,179,369
U.S. Treasury Notes, 1.375%, 2013		57,000		57,868
U.S. Treasury Notes, 4%, 2014		211,000		229,858
U.S. Treasury Notes, 1.875%, 2014		2,043,000		2,089,446
U.S. Treasury Notes, 4%, 2015		610,000		668,284
U.S. Treasury Notes, 2.625%, 2016		201,000		205,758
U.S. Treasury Notes, 3.75%, 2018 (f)		2,875,000		3,058,057
U.S. Treasury Notes, 2.75%, 2019		778,400		768,366
U.S. Treasury Notes, 3.125%, 2019		417,000		421,398
U.S. Treasury Notes, 3.5%, 2020		965,000		988,527
U.S. Treasury Notes, TIPS, 1.25%, 2020		805,305		824,556

			$	15,035,684

Total Bonds (Identified Cost, $48,771,215)			$	50,848,380


Issuer	Shares/Par		Value ($)

MONEY MARKET FUNDS (v) - 8.0%
MFS Institutional Money Market Portfolio, 0.18%, at Cost and Net Asset Value		4,438,810	$	4,438,810

Total Investments (Identified Cost, $53,210,025)			$	55,287,190


OTHER ASSETS, LESS LIABILITIES - 0.8%				456,726

NET ASSETS - 100.0%			$	55,743,916

Derivative Contracts at 12/31/10

Futures Contracts Outstanding at 12/31/10

Description

Currency

Contracts

Value

Expiration
Date

Unrealized
Appreciation
(Depreciation)

Liability Derivatives

Interest Rate Futures

U.S. Treasury Note 5 yr (Long)

USD

941,750

March-2011

(14,778

)

At December 31, 2010, the variable account had sufficient cash and/or other liquid securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

16-GSVA

Portfolio of Investments — December 31, 2010

High Yield Variable Account



Issuer	Shares/Par			Value ($)

BONDS - 94.2%
Aerospace - 1.4%
Alliant Techsystems, Inc., 6.875%, 2020		$	20,000	$	20,548
BE Aerospace, Inc., 8.5%, 2018			110,000		120,450
Bombardier, Inc., 7.5%, 2018 (n)			185,000		198,413
Hawker Beechcraft Acquisition Co. LLC, 8.5%, 2015			178,000		132,165
Oshkosh Corp., 8.25%, 2017			75,000		81,563

				$	553,139

Airlines - 0.1%
Continental Airlines, Inc., 6.748%, 2018		$	22,636	$	22,466

Apparel Manufacturers - 0.7%
Hanesbrands, Inc., 8%, 2016		$	110,000	$	117,975
Hanesbrands, Inc., 6.375%, 2020 (n)			50,000		47,500
Phillips-Van Heusen Corp., 7.375%, 2020			120,000		127,500

				$	292,975

Asset-Backed & Securitized - 1.2%
ARCap REIT, Inc., CDO, “H”, 6.078%, 2045 (z)		$	165,567	$	9,520
Citigroup Commercial Mortgage Trust, FRN, 5.697%, 2049			148,212		67,694
Crest Ltd., CDO, 7%, 2040			159,437		7,972
First Union National Bank Commercial Mortgage Trust, 6.75%, 2032			165,000		159,973
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 6.06%, 2051			110,000		50,988
Merrill Lynch Mortgage Trust, FRN, “B”, 5.825%, 2050			110,000		55,370
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN, 5.747%, 2050			62,000		53,037
Wachovia Bank Commercial Mortgage Trust, FRN, 5.753%, 2047			87,180		16,692
Wachovia Credit, CDO, FRN, 1.652%, 2026 (z)			250,000		87,500

				$	508,746

Automotive - 2.4%
Accuride Corp., 9.5%, 2018 (n)		$	110,000	$	119,075
Allison Transmission, Inc., 11%, 2015 (n)			115,000		125,350
Ford Motor Credit Co. LLC, 12%, 2015			504,000		634,001
General Motors Corp., 7.125%, 2013 (d)			150,000		50,250
Goodyear Tire & Rubber Co., 10.5%, 2016			30,000		34,200

				$	962,876

Basic Industry - 0.3%
Trimas Corp., 9.75%, 2017		$	115,000	$	125,925

Broadcasting - 6.0%
Allbritton Communications Co., 8%, 2018		$	100,000	$	101,000
Bonten Media Acquisition Co., 9%, 2015 (p)(z)			34,086		17,837
Citadel Broadcasting Corp., 7.75%, 2018 (z)			15,000		15,525
Entravision Communications Corp., 8.75%, 2017 (n)			30,000		31,650
Inmarsat Finance PLC, 7.375%, 2017 (n)			200,000		210,000
Intelsat Bermuda Ltd., 11.25%, 2017			55,000		59,950
Intelsat Jackson Holdings Ltd., 9.5%, 2016			415,000		437,825
Lamar Media Corp., 6.625%, 2015			85,000		87,125
Lamar Media Corp., “C”, 6.625%, 2015			35,000		35,525
LBI Media, Inc., 8.5%, 2017 (z)			100,000		81,250
Local TV Finance LLC, 9.25%, 2015 (p)(z)			143,986		131,027
Newport Television LLC, 13%, 2017 (n)(p)			47,645		42,785
Nexstar Broadcasting, Inc., 0.5% to 2011, 7% to 2014 (p)			202,491		196,444



Issuer	Shares/Par				Value ($)

BONDS - continued
Broadcasting - continued
Nexstar Broadcasting, Inc., 7%, 2014			$	67,000	$	65,493
Salem Communications Corp., 9.625%, 2016				19,000		20,140
Sinclair Broadcast Group, Inc., 9.25%, 2017 (n)				65,000		70,363
Sinclair Broadcast Group, Inc., 8.375%, 2018 (n)				20,000		20,650
SIRIUS XM Radio, Inc., 13%, 2013 (z)				30,000		35,700
SIRIUS XM Radio, Inc., 8.75%, 2015 (n)				120,000		129,900
SIRIUS XM Radio, Inc., 7.625%, 2018 (n)				80,000		82,600
Univision Communications, Inc., 12%, 2014 (n)				28,000		30,660
Univision Communications, Inc., 9.75%, 2015 (n)(p)				478,168		501,080
Univision Communications, Inc., 7.875%, 2020 (n)				55,000		57,750
Young Broadcasting, Inc., 8.75%, 2014 (d)				80,000		0

					$	2,462,279

Brokerage & Asset Managers - 0.9%
E*TRADE Financial Corp., 7.875%, 2015			$	50,000	$	49,625
E*TRADE Financial Corp., 12.5%, 2017				80,000		94,000
Janus Capital Group, Inc., 6.95%, 2017				220,000		229,202

					$	372,827

Building - 1.6%
Building Materials Holding Corp., 6.875%, 2018 (n)			$	85,000	$	84,150
Building Materials Holding Corp., 7%, 2020 (n)				55,000		56,513
CEMEX Finance Europe B.V., 9.625%, 2017 (n)		EUR		75,000		98,770
Nortek, Inc., 11%, 2013			$	175,933		187,369
Nortek, Inc., 10%, 2018 (z)				35,000		36,138
Owens Corning, 9%, 2019				95,000		111,453
Ply Gem Industries, Inc., 11.75%, 2013				85,000		90,950

					$	665,343

Business Services - 2.0%
First Data Corp., 9.875%, 2015			$	155,000	$	147,638
Interactive Data Corp., 10.25%, 2018 (n)				110,000		120,450
Iron Mountain, Inc., 6.625%, 2016				145,000		145,544
Iron Mountain, Inc., 8.375%, 2021				70,000		75,075
SunGard Data Systems, Inc., 10.25%, 2015				156,000		163,995
SunGard Data Systems, Inc., 7.375%, 2018 (n)				50,000		50,250
SunGard Data Systems, Inc., 7.625%, 2020 (n)				60,000		60,750
Terremark Worldwide, Inc., 12%, 2017				45,000		51,525

					$	815,227

Cable TV - 3.5%
Bresnan Broadband Holdings LLC, 8%, 2018 (z)			$	30,000	$	30,900
Cablevision Systems Corp., 8.625%, 2017				85,000		92,544
CCH II LLC, 13.5%, 2016				120,000		143,100

17-HYVA

Portfolio of Investments — continued



Issuer	Shares/Par			Value ($)

BONDS - continued
Cable TV - continued
CCO Holdings LLC, 7.875%, 2018		$	130,000	$	134,550
CCO Holdings LLC, 8.125%, 2020			85,000		89,463
Charter Communications Operating LLC, 10.875%, 2014 (n)			80,000		89,400
CSC Holdings LLC, 8.5%, 2014			190,000		208,763
CSC Holdings LLC, 8.5%, 2015			60,000		65,100
EchoStar Corp., 7.125%, 2016			80,000		82,600
Insight Communications Co., Inc., 9.375%, 2018 (n)			75,000		79,875
Mediacom LLC, 9.125%, 2019			115,000		117,300
Videotron LTEE, 6.875%, 2014			45,000		45,563
Virgin Media Finance PLC, 9.125%, 2016			228,000		242,820

				$	1,421,978

Chemicals - 4.1%
Ashland, Inc., 9.125%, 2017		$	210,000	$	242,025
Celanese U.S. Holdings LLC, 6.625%, 2018 (n)			75,000		77,438
Hexion Specialty Chemicals, Inc., 8.875%, 2018			195,000		208,406
Hexion U.S. Finance Corp/Hexion Nova Scotia Finance, 9%, 2020 (n)			30,000		31,725
Huntsman International LLC, 8.625%, 2021 (n)			110,000		118,800
Lumena Resources Corp., 12%, 2014 (n)			105,000		97,650
Lyondell Chemical Co., 11%, 2018			377,972		428,053
Momentive Performance Materials, Inc., 12.5%, 2014			153,000		170,786
Momentive Performance Materials, Inc., 11.5%, 2016			75,000		81,375
Momentive Performance Materials, Inc., 9%, 2021 (n)			60,000		63,300
Polypore International, Inc., 7.5%, 2017 (z)			20,000		20,400
Solutia, Inc., 7.875%, 2020			125,000		133,750

				$	1,673,708

Computer Software - 0.2%
Syniverse Holdings, Inc., 9.125%, 2019 (z)		$	80,000	$	82,600

Computer Software - Systems - 0.4%
DuPont Fabros Technology, Inc., REIT, 8.5%, 2017		$	165,000	$	176,550

Conglomerates - 0.6%
Amsted Industries, Inc., 8.125%, 2018 (n)		$	115,000	$	122,044
Pinafore LLC, 9%, 2018 (n)			105,000		113,400

				$	235,444

Consumer Products - 1.6%
ACCO Brands Corp., 10.625%, 2015		$	15,000	$	16,875
ACCO Brands Corp., 7.625%, 2015			60,000		60,000
Central Garden & Pet Co., 8.25%, 2018			85,000		86,063
Easton-Bell Sports, Inc., 9.75%, 2016			95,000		104,263
Jarden Corp., 7.5%, 2017			115,000		121,181
Libbey Glass, Inc., 10%, 2015 (n)			100,000		107,500
NBTY, Inc., 9%, 2018 (n)			15,000		16,013
Scotts Miracle-Gro Co., 6.625%, 2020 (z)			20,000		20,000
Visant Corp., 10%, 2017 (n)			100,000		106,250

				$	638,145



Issuer	Shares/Par			Value ($)

BONDS - continued
Consumer Services - 1.7%
KAR Holdings, Inc., 10%, 2015		$	41,000	$	43,460
KAR Holdings, Inc., FRN, 4.286%, 2014			85,000		80,538
Service Corp. International, 6.75%, 2015			55,000		56,375
Service Corp. International, 7%, 2017			190,000		193,800
Service Corp. International, 7%, 2019			160,000		160,000
Ticketmaster Entertainment, Inc., 10.75%, 2016			160,000		173,200

				$	707,373

Containers - 1.5%
Graham Packaging Co. LP/GPC Capital Corp., 9.875%, 2014		$	145,000	$	150,075
Graham Packaging Co. LP/GPC Capital Corp., 8.25%, 2018			20,000		21,000
Greif, Inc., 6.75%, 2017			165,000		172,425
Owens-Illinois, Inc., 7.375%, 2016			75,000		79,688
Reynolds Group, 7.75%, 2016 (n)			100,000		105,750
Reynolds Group, 7.125%, 2019 (n)			100,000		101,750

				$	630,688

Defense Electronics - 0.4%
ManTech International Corp., 7.25%, 2018		$	85,000	$	88,825
MOOG, Inc., 7.25%, 2018			60,000		62,700

				$	151,525

Electronics - 0.9%
Freescale Semiconductor, Inc., 10.125%, 2018 (n)		$	55,000	$	61,875
Freescale Semiconductor, Inc., 9.25%, 2018 (n)			75,000		82,500
Jabil Circuit, Inc., 7.75%, 2016			120,000		134,700
NXP B.V., 7.875%, 2014			75,000		78,000

				$	357,075

Emerging Market Sovereign - 0.1%
Republic of Argentina, FRN, 0.677%, 2012		$	38,175	$	36,157

Energy - Independent - 6.5%
Anadarko Petroleum Corp., 8.7%, 2019		$	60,000	$	73,272
Carrizo Oil & Gas, Inc., 8.625%, 2018 (n)			135,000		139,050
Concho Resources, Inc., 8.625%, 2017			30,000		32,700
Denbury Resources, Inc., 8.25%, 2020			110,000		119,350
Energy XXI Gulf Coast, Inc., 9.25%, 2017 (z)			130,000		135,200
Harvest Operations Corp., 6.875%, 2017 (n)			115,000		118,450
Hilcorp Energy I LP, 9%, 2016 (n)			200,000		211,500
Linn Energy LLC, 8.625%, 2020 (n)			35,000		37,713
Linn Energy LLC, 7.75%, 2021 (n)			88,000		90,200
Newfield Exploration Co., 6.625%, 2014			125,000		127,500
Newfield Exploration Co., 6.625%, 2016			60,000		61,650
OPTI Canada, Inc., 9.75%, 2013 (n)			90,000		90,000
OPTI Canada, Inc., 8.25%, 2014			205,000		146,063
Penn Virginia Corp., 10.375%, 2016			175,000		195,125
Pioneer Natural Resources Co., 6.875%, 2018			130,000		138,204
Pioneer Natural Resources Co., 7.5%, 2020			135,000		148,234
Plains Exploration & Production Co., 7%, 2017			210,000		215,775
QEP Resources, Inc., 6.875%, 2021			120,000		126,000
Quicksilver Resources, Inc., 8.25%, 2015			115,000		119,313
Quicksilver Resources, Inc., 9.125%, 2019			105,000		115,238
Range Resources Corp., 8%, 2019			75,000		81,656

18-HYVA

Portfolio of Investments — continued



Issuer	Shares/Par				Value ($)

BONDS - continued
Energy - Independent - continued
SandRidge Energy, Inc., 8%, 2018 (n)			$	135,000	$	137,025

					$	2,659,218

Entertainment - 1.2%
AMC Entertainment, Inc., 11%, 2016			$	150,000	$	159,000
AMC Entertainment, Inc., 8.75%, 2019				120,000		128,100
AMC Entertainment, Inc., 9.75%, 2020 (z)				60,000		62,400
Cinemark USA, Inc., 8.625%, 2019				95,000		102,838
NAI Entertainment Holdings LLC, 8.25%, 2017 (z)				50,000		52,500

					$	504,838

Financial Institutions - 4.9%
American General Finance Corp., 5.375%, 2012			$	55,000	$	51,975
American General Finance Corp., 6.9%, 2017				100,000		80,750
CIT Group, Inc., 7%, 2014				150,000		151,500
CIT Group, Inc., 7%, 2016				185,000		185,694
CIT Group, Inc., 7%, 2017				510,000		511,275
General Electric Capital Corp., 6.375% to 2017, FRN to 2067				70,000		69,300
GMAC, Inc., 6.75%, 2014				270,000		284,175
International Lease Finance Corp., 5.625%, 2013				75,000		75,375
International Lease Finance Corp., 8.75%, 2017 (n)				155,000		166,238
International Lease Finance Corp., 7.125%, 2018 (n)				154,000		163,625
International Lease Finance Corp., 8.25%, 2020				30,000		30,900
Nationstar Mortgage LLC, 10.875%, 2015 (z)				75,000		73,688
SLM Corp., 8%, 2020				155,000		157,155

					$	2,001,650

Food & Beverages - 2.3%
ARAMARK Corp., 8.5%, 2015			$	115,000	$	120,175
B&G Foods, Inc., 7.625%, 2018				85,000		89,463
CEDC Finance Corp. International, Inc., 9.125%, 2016 (n)				200,000		212,500
Constellation Brands, Inc., 7.25%, 2016				60,000		63,600
Del Monte Foods Co., 6.75%, 2015				185,000		188,931
Pinnacle Foods Finance LLC, 9.25%, 2015				155,000		161,394
TreeHouse Foods, Inc., 7.75%, 2018				95,000		102,956

					$	939,019

Forest & Paper Products - 2.2%
Boise, Inc., 8%, 2020			$	115,000	$	123,050
Cascades, Inc., 7.75%, 2017				80,000		83,400
Georgia-Pacific Corp., 7.125%, 2017 (n)				65,000		69,225
Georgia-Pacific Corp., 8%, 2024				140,000		159,950
Georgia-Pacific Corp., 7.25%, 2028				35,000		37,888
Graphic Packaging Holding Co., 7.875%, 2018				75,000		78,563
JSG Funding PLC, 7.75%, 2015				35,000		35,875
Millar Western Forest Products Ltd., 7.75%, 2013				135,000		127,913
Sappi Papier Holding GmbH, 6.75%, 2012 (z)				60,000		61,527
Smurfit Kappa Group PLC, 7.75%, 2019 (n)		EUR		100,000		140,311

					$	917,702



Issuer	Shares/Par			Value ($)

BONDS - continued
Gaming & Lodging - 4.7%
Firekeepers Development Authority, 13.875%, 2015 (n)		$	100,000	$	118,250
Fontainebleau Las Vegas Holdings LLC, 10.25%, 2015 (d)(n)			180,000		630
Gaylord Entertainment Co., 6.75%, 2014			105,000		103,425
GWR Operating Partnership LLP, 10.875%, 2017			80,000		84,400
Harrah’s Operating Co., Inc., 11.25%, 2017			245,000		275,625
Harrah’s Operating Co., Inc., 10%, 2018			55,000		50,188
Harrah’s Operating Co., Inc., 10%, 2018			128,000		116,800
Host Hotels & Resorts, Inc., 6.75%, 2016			140,000		142,975
Host Hotels & Resorts, Inc., 9%, 2017			135,000		149,850
MGM Mirage, 10.375%, 2014			20,000		22,450
MGM Mirage, 11.125%, 2017			60,000		69,000
MGM Mirage, 9%, 2020 (n)			115,000		126,500
MGM Resorts International, 11.375%, 2018			105,000		113,925
Penn National Gaming, Inc., 8.75%, 2019			125,000		137,813
Royal Caribbean Cruises Ltd., 11.875%, 2015			50,000		61,750
Starwood Hotels & Resorts Worldwide, Inc., 6.75%, 2018			65,000		71,175
Station Casinos, Inc., 6.5%, 2014 (d)			330,000		33
Station Casinos, Inc., 6.875%, 2016 (d)			380,000		38
Station Casinos, Inc., 7.75%, 2016 (d)			70,000		7
Wyndham Worldwide Corp., 6%, 2016			85,000		88,947
Wyndham Worldwide Corp., 7.375%, 2020			110,000		120,928
Wynn Las Vegas LLC, 7.75%, 2020			55,000		59,538

				$	1,914,247

Industrial - 1.0%
Altra Holdings, Inc., 8.125%, 2016		$	85,000	$	90,100
Diversey, Inc., 8.25%, 2019			80,000		86,800
Great Lakes Dredge & Dock Corp., 7.75%, 2013			100,000		100,875
Mueller Water Products, Inc., 7.375%, 2017			85,000		82,025
Mueller Water Products, Inc., 8.75%, 2020			60,000		66,300

				$	426,100

Insurance - 1.6%
American International Group, Inc., 8.175% to 2038, FRN to 2068		$	390,000	$	415,276
ING Capital Funding Trust III, FRN, 3.902%, 2049			95,000		87,638
ING Groep N.V., 5.775% to 2015, FRN to 2049			190,000		163,400

				$	666,314

Insurance - Property & Casualty - 1.1%
Liberty Mutual Group, Inc., 10.75% to 2038, FRN to 2058 (n)		$	180,000	$	217,800
USI Holdings Corp., 9.75%, 2015 (z)			160,000		161,600
XL Group PLC, 6.5% to 2017, FRN to 2049			100,000		86,000

				$	465,400

Machinery & Tools - 1.0%
Case Corp., 7.25%, 2016		$	60,000	$	64,800
Case New Holland, Inc., 7.875%, 2017 (n)			245,000		267,663
Rental Service Corp., 9.5%, 2014			80,000		84,000

				$	416,463

19-HYVA

Portfolio of Investments — continued



Issuer	Shares/Par			Value ($)

BONDS - continued
Major Banks - 1.6%
Bank of America Corp., 8% to 2018, FRN to 2049		$	185,000	$	186,443
JPMorgan Chase & Co., 7.9% to 2018, FRN to 2049			175,000		186,023
Royal Bank of Scotland Group PLC, 7.648% to 2031, FRN to 2049			345,000		288,506

				$	660,972

Medical & Health Technology & Services - 6.5%
Biomet, Inc., 10%, 2017		$	170,000	$	185,725
Biomet, Inc., 10.375%, 2017 (p)			55,000		60,088
Community Health Systems, Inc., 8.875%, 2015			220,000		231,000
Cooper Cos., Inc., 7.125%, 2015			130,000		133,900
Davita, Inc., 6.375%, 2018			105,000		104,475
Davita, Inc., 6.625%, 2020			50,000		49,500
Fresenius Medical Care AG & Co. KGaA, 9%, 2015 (n)			125,000		143,125
HCA, Inc., 9.25%, 2016			455,000		485,428
HCA, Inc., 8.5%, 2019			105,000		114,975
HealthSouth Corp., 8.125%, 2020			195,000		209,625
Tenet Healthcare Corp., 9.25%, 2015			195,000		207,675
Tenet Healthcare Corp., 8%, 2020 (n)			40,000		40,600
United Surgical Partners International, Inc., 8.875%, 2017			65,000		66,950
United Surgical Partners International, Inc., 9.25%, 2017 (p)			90,000		93,600
Universal Hospital Services, Inc., 8.5%, 2015 (p)			175,000		179,813
Universal Hospital Services, Inc., FRN, 3.834%, 2015			45,000		41,175
Vanguard Health Systems, Inc., 8%, 2018			130,000		133,250
VWR Funding, Inc., 10.25%, 2015 (p)			147,375		154,744

				$	2,635,648

Metals & Mining - 2.1%
Arch Coal, Inc., 7.25%, 2020		$	55,000	$	58,025
Arch Western Finance LLC, 6.75%, 2013			57,000		57,570
Cloud Peak Energy, Inc., 8.25%, 2017			120,000		128,850
Cloud Peak Energy, Inc., 8.5%, 2019			130,000		142,350
CONSOL Energy, Inc., 8%, 2017 (n)			85,000		90,525
CONSOL Energy, Inc., 8.25%, 2020 (n)			55,000		59,400
Novelis, Inc., 8.375%, 2017 (z)			60,000		62,100
Novelis, Inc., 8.75%, 2020 (z)			30,000		31,125
Peabody Energy Corp., 7.375%, 2016			165,000		183,150
U.S. Steel Corp., 7.375%, 2020			60,000		61,500

				$	874,595

Natural Gas - Distribution - 1.0%
AmeriGas Partners LP, 7.125%, 2016		$	145,000	$	150,075
Ferrellgas Partners LP, 8.625%, 2020			120,000		129,000
Inergy LP, 6.875%, 2014			120,000		121,800

				$	400,875

Natural Gas - Pipeline - 2.2%
Atlas Pipeline Partners LP, 8.125%, 2015		$	65,000	$	66,950
Atlas Pipeline Partners LP, 8.75%, 2018			90,000		94,050
Crosstex Energy, Inc., 8.875%, 2018			125,000		133,906
El Paso Corp., 7%, 2017			175,000		184,680
El Paso Corp., 7.75%, 2032			60,000		59,684
Energy Transfer Equity LP, 7.5%, 2020			185,000		190,550
Enterprise Products Partners LP, FRN, 8.375%, 2066			73,000		78,384
Enterprise Products Partners LP, FRN, 7.034%, 2068			44,000		45,650



Issuer	Shares/Par			Value ($)

BONDS - continued
Natural Gas - Pipeline - continued
MarkWest Energy Partners LP, 8.75%, 2018		$	30,000	$	32,475

				$	886,329

Network & Telecom - 2.7%
CenturyLink, Inc., 7.6%, 2039		$	80,000	$	80,632
Cincinnati Bell, Inc., 8.25%, 2017			35,000		34,650
Cincinnati Bell, Inc., 8.75%, 2018			140,000		131,250
Citizens Communications Co., 9%, 2031			50,000		51,375
Frontier Communications Corp., 8.25%, 2017			30,000		32,925
Frontier Communications Corp., 8.5%, 2020			140,000		152,950
Qwest Communications International, Inc., 8%, 2015			55,000		59,125
Qwest Communications International, Inc., 7.125%, 2018 (n)			185,000		191,475
Windstream Corp., 8.625%, 2016			270,000		284,175
Windstream Corp., 8.125%, 2018			20,000		21,000
Windstream Corp., 7.75%, 2020			60,000		61,800

				$	1,101,357

Oil Services - 1.3%
Basic Energy Services, Inc., 7.125%, 2016		$	35,000	$	33,950
Edgen Murray Corp., 12.25%, 2015			75,000		65,250
Expro Finance Luxembourg, 8.5%, 2016 (n)			200,000		191,000
McJunkin Red Man Holding Corp., 9.5%, 2016 (n)			65,000		61,425
Pioneer Drilling Co., 9.875%, 2018			125,000		132,188
Trinidad Drilling Ltd., 7.875%, 2019 (z)			60,000		60,600

				$	544,413

Oils - 0.2%
Petroplus Holdings AG, 9.375%, 2019 (n)		$	100,000	$	92,500

Other Banks & Diversified Financials - 2.1%
Capital One Financial Corp., 10.25%, 2039		$	150,000	$	160,500
Citigroup Capital XXI, 8.3% to 2037, FRN to 2057			240,000		249,600
Groupe BPCE S.A., 12.5% to 2019, FRN to 2049 (n)			100,000		114,934
LBG Capital No.1 PLC, 7.875%, 2020 (n)			100,000		91,000
Santander UK PLC, 8.963% to 2030, FRN to 2049			210,000		221,550

				$	837,584

Pharmaceuticals - 0.1%
Valeant Pharmaceuticals International, Inc., 6.75%, 2017 (n)		$	35,000	$	34,825
Valeant Pharmaceuticals International, Inc., 7%, 2020 (n)			10,000		9,875

				$	44,700

Printing & Publishing - 0.6%
American Media, Inc., 13.5%, 2018 (z)		$	14,489	$	14,721
McClatchy Co., 11.5%, 2017			35,000		39,331
Nielsen Finance LLC, 11.5%, 2016			100,000		115,500
Nielsen Finance LLC, 0% to 2011, 12.5% to 2016			28,000		29,400
Nielsen Finance LLC, 7.75%, 2018 (n)			50,000		51,750

				$	250,702

Railroad & Shipping - 0.4%
Kansas City Southern Railway, 8%, 2015		$	155,000	$	166,625

20-HYVA

Portfolio of Investments — continued



Issuer	Shares/Par			Value ($)

BONDS - continued
Real Estate - 0.6%
CB Richard Ellis Group, Inc., 11.625%, 2017		$	45,000	$	52,144
Developers Diversified Realty Corp., REIT, 7.875%, 2020			45,000		50,394
Entertainment Properties Trust, REIT, 7.75%, 2020 (n)			130,000		137,475

				$	240,013

Restaurants - 0.1%
Dunkin Finance Corp., 9.625%, 2018 (n)		$	55,000	$	55,550

Retailers - 2.4%
Express LLC/Express Finance Corp., 8.75%, 2018		$	75,000	$	79,688
Limited Brands, Inc., 6.9%, 2017			85,000		90,313
Limited Brands, Inc., 6.95%, 2033			50,000		46,750
Neiman Marcus Group, Inc., 10.375%, 2015			115,000		121,469
QVC, Inc., 7.375%, 2020 (n)			135,000		141,413
Rent-A-Center, Inc., 6.625%, 2020			20,000		19,900
Sally Beauty Holdings, Inc., 10.5%, 2016			145,000		159,863
Toys “R” Us Property Co. II LLC, 8.5%, 2017			75,000		80,625
Toys “R” Us, Inc., 10.75%, 2017			215,000		245,100

				$	985,121

Specialty Stores - 1.0%
Giraffe Acquisition Corp., 9.125%, 2018 (n)		$	75,000	$	78,188
Michaels Stores, Inc., 11.375%, 2016			80,000		87,200
Michaels Stores, Inc., 7.75%, 2018 (n)			85,000		84,788
Payless ShoeSource, Inc., 8.25%, 2013			142,000		144,485

				$	394,661

Telecommunications - Wireless - 5.0%
Clearwire Corp., 12%, 2015 (n)		$	230,000	$	247,825
Cricket Communications, Inc., 7.75%, 2016			95,000		98,563
Crown Castle International Corp., 9%, 2015			75,000		82,688
Crown Castle International Corp., 7.125%, 2019			190,000		200,925
Digicel Group Ltd., 8.25%, 2017 (n)			135,000		138,375
Digicel Group Ltd., 10.5%, 2018 (n)			130,000		143,000
MetroPCS Wireless, Inc., 7.875%, 2018			50,000		51,875
Nextel Communications, 7.375%, 2015			110,000		110,138
NII Holdings, Inc., 10%, 2016			115,000		127,363
NII Holdings, Inc., 8.875%, 2019			65,000		70,038
SBA Communications Corp., 8%, 2016			40,000		43,300
SBA Communications Corp., 8.25%, 2019			75,000		81,938
Sprint Capital Corp., 6.875%, 2028			60,000		52,500
Sprint Nextel Corp., 8.375%, 2017			230,000		246,675
Sprint Nextel Corp., 8.75%, 2032			140,000		141,400
Wind Acquisition Finance S.A., 7.25%, 2018 (n)			200,000		203,500

				$	2,040,103

Telephone Services - 0.4%
Frontier Communications Corp., 8.125%, 2018		$	135,000	$	148,163

Transportation - Services - 2.0%
American Petroleum Tankers LLC, 10.25%, 2015 (n)		$	60,000	$	62,100
Commercial Barge Line Co., 12.5%, 2017			195,000		225,225
Hertz Corp., 8.875%, 2014			129,000		131,903



Issuer	Shares/Par			Value ($)

BONDS - continued
Transportation - Services - continued
Hertz Corp., 7.5%, 2018 (n)		$	80,000	$	83,000
Hertz Corp., 7.375%, 2021 (z)			110,000		111,100
Navios Maritime Acquisition Corp., 8.625%, 2017 (n)			50,000		51,125
Navios Maritime Holdings, Inc., 8.875%, 2017			60,000		64,950
Swift Services Holdings, Inc., 10%, 2018 (z)			80,000		83,800

				$	813,203

Utilities - Electric Power - 3.8%
AES Corp., 8%, 2017		$	285,000	$	301,388
Calpine Corp., 8%, 2016 (n)			130,000		138,125
Calpine Corp., 7.875%, 2020 (n)			65,000		65,813
Covanta Holding Corp., 7.25%, 2020			50,000		50,689
Dynegy Holdings, Inc., 7.75%, 2019			155,000		103,463
Edison Mission Energy, 7%, 2017			200,000		158,500
Energy Future Holdings Corp., 10%, 2020 (n)			145,000		149,172
Energy Future Holdings Corp., 10%, 2020			225,000		232,036
Genon Escrow Corp., 9.875%, 2020 (n)			155,000		153,838
NRG Energy, Inc., 7.375%, 2016			115,000		117,875
Texas Competitive Electric Holdings LLC, 10.25%, 2015			120,000		67,800

				$	1,538,699

Total Bonds (Identified Cost, $37,519,628)				$	38,515,810

FLOATING RATE LOANS (g)(r) - 1.4%
Aerospace - 0.2%
Hawker Beechcraft Acquisition Co. LLC, Term Loan, 10.5%, 2014		$	77,272	$	76,740

Automotive - 0.1%
Ford Motor Co., Term Loan B-1, 3.02%, 2013		$	75,104	$	74,739

Broadcasting - 0.3%
Gray Television, Inc., Term Loan B, 3.78%, 2014		$	52,038	$	50,685
Local TV Finance LLC, Term Loan B, 2.31%, 2013			11,694		11,090
New Young Broadcasting Holding Co., Inc., Term Loan, 8%, 2015			55,005		55,074

				$	116,849

Building - 0.0%
Goodman Global Holdings, Inc., 2nd Lien Term Loan, 9%, 2017		$	6,641	$	6,839

Consumer Services - 0.1%
Realogy Corp., Letter of Credit, 3.3%, 2013		$	7,791	$	7,291
Realogy Corp., Term Loan, 3.28%, 2013			57,192		53,524

				$	60,815

Financial Institutions - 0.1%
American General Financial Corp., Term Loan B, 7.25%, 2015		$	21,917	$	22,205

Gaming & Lodging - 0.4%
Green Valley Ranch Gaming LLC, Second Lien Term Loan, 3.5%, 2014 (d)		$	248,868	$	4,355
MGM Mirage, Term Loan, 7%, 2014 (o)			163,529		154,413

				$	158,768

21-HYVA

Portfolio of Investments — continued



Issuer	Shares/Par			Value ($)

FLOATING RATE LOANS (g)(r) - continued
Utilities - Electric Power - 0.2%
Texas Competitive Electric Holdings Co. LLC, Term Loan B-2, 3.76%, 2014		$	98,785	$	76,200

Total Floating Rate Loans (Identified Cost, $722,990)				$	593,155

COMMON STOCKS - 0.5%
Automotive - 0.1%
Accuride Corp. (a)			2,953	$	46,894
Oxford Automotive, Inc. (a)			53		0

				$	46,894

Broadcasting - 0.1%
New Young Broadcasting Holding Co., Inc. (a)			25	$	59,375

Construction - 0.1%
Nortek, Inc. (a)			764	$	27,504

Gaming & Lodging - 0.1%
Ameristar Casinos, Inc.			1,600	$	25,008

Printing & Publishing - 0.1%
American Media Operations, Inc. (a)			3,713	$	52,985
Golden Books Family Entertainment, Inc. (a)			21,250		0
Quad/Graphics, Inc. (a)			156		6,437

				$	59,422

Special Products & Services - 0.0%
Mark IV Industries LLC, Common Units, “A” (a)			113	$	5,664

Total Common Stocks (Identified Cost, $335,835)				$	223,867

CONVERTIBLE PREFERRED STOCKS - 0.3%
Automotive - 0.3%
General Motors Co., 4.75%, (Identified Cost, $111,000)			2,220	$	120,124

Issuer

Shares/Par

Value ($)

PREFERRED STOCKS - 0.1%

Other Banks & Diversified Financials - 0.1%

Citigroup Capital XIII, 7.875%
(Identified Cost, $23,750)

950

25,565



	Strike Price		First Exercise
WARRANTS - 0.4%
Broadcasting - 0.4%
New Young Broadcasting Holding Co., Inc. (1 share for 1 warrant) (Identified Cost, $131,145) (a)		$0.10		7/14/10	67	$	159,125



Issuer/Expiration Date/ Strike Price	Number of Contracts
CALL OPTIONS PURCHASED - 0.2%
S&P 500 Index - March 2011 @ $1,225 (Premiums Paid, $46,836)		12	$	69,600


Issuer	Shares/Par
MONEY MARKET FUNDS (v) - 1.1%
MFS Institutional Money Market Portfolio, 0.18%, at Cost and Net Asset Value		459,698	$	459,698

Total Investments (Identified Cost, $39,350,882)			$	40,166,944


OTHER ASSETS, LESS LIABILITIES - 1.8%				726,503

NET ASSETS - 100.0%			$	40,893,447

Derivative Contracts at 12/31/10

Futures Contracts Outstanding at 12/31/10

Description

Currency

Contracts

Value

Expiration
Date

Unrealized
Appreciation
(Depreciation)

Asset Derivatives - continued

Interest Rate Futures

U.S. Treasury Note 10 yr (Short)

USD

$361,313

March-2011

$11,966

Forward Foreign Currency Exchange Contracts at 12/31/10

Type

Currency

Counterparty

Contracts
to
Deliver/
Receive

Settlement
Date Range

In
Exchange
For

Contracts at
Value

Net
Unrealized
Appreciation
(Depreciation)

Liability Derivatives

SELL

EUR

UBS AG

179,478

3/15/11

$237,040

$239,781

$(2,741

)

At December 31, 2010, the variable account had sufficient cash and/or securities to cover any commitments under these derivative contracts.

See portfolio footnotes and notes to financial statements.

22-HYVA

Portfolio of Investments — December 31, 2010

Money Market Variable Account


Issuer	Shares/Par		Value ($)

CERTIFICATES OF DEPOSIT - 6.4%
Major Banks - 6.4%
Abbey National Treasury Services PLC (US Branch), 0.3%, due 1/21/11	$	861,000	$	861,000
BNP Paribas/New York Branch, 0.69%, due 1/14/11		930,000		930,000

Total Certificates of Deposit, at Amortized Cost and Value			$	1,791,000

COMMERCIAL PAPER (y) - 49.4%
Automotive - 3.0%
Toyota Motor Credit Corp., 0.22%, due 1/13/11	$	843,000	$	842,938
Toyota Motor Credit Corp., 0.27%, due 2/25/11		1,000		1,000

			$	843,938

Food & Beverages - 8.9%
Coca-Cola Co., 0.23%, due 3/16/11 (t)	$	853,000	$	852,597
Nestle Capital Corp., 0.21%, due 1/11/11 (t)		797,000		796,954
Pepsico, Inc., 0.17%, due 2/11/11 (t)		844,000		843,837

			$	2,493,388

Machinery & Tools - 1.9%
Deere and Co., 0.2%, due 1/27/11 (t)	$	534,000	$	533,923

Major Banks - 17.3%
ANZ National (International) Ltd., 0.29%, due 1/24/11 (t)	$	889,000	$	888,835
Bank of America Corp., 0.28%, due 1/10/11		865,000		864,939
Barclays U.S. Funding Corp., 0.18%, due 1/03/11		563,000		562,994
HSBC USA, Inc., 0.24%, due 2/14/11		850,000		849,751
JPMorgan Chase & Co., 0.23%, due 5/16/11		843,000		842,273
Toronto Dominion Holdings (USA), Inc., 0.21%, due 1/18/11 (t)		844,000		843,916

			$	4,852,708

Network & Telecom - 0.9%
AT&T Inc., 0.21%, due 1/12/11 (t)	$	253,000	$	252,984

Other Banks & Diversified Financials - 13.8%
Bank of Montreal, 0.24%, due 3/01/11	$	478,000	$	477,812
Bank of Nova Scotia, 0.235%, due 2/15/11		323,000		322,905
Bank of Nova Scotia, 0.26%, due 3/29/11		521,000		520,673
Citigroup Funding, Inc., 0.29%, due 1/19/11		862,000		861,875
Rabobank USA Financial Corp., 0.3%, due 5/10/11		844,000		843,093
UBS Finance (Delaware) LLC, 0.22%, due 1/18/11		852,000		851,911

			$	3,878,269

Pharmaceuticals - 1.6%
Johnson & Johnson, 0.2%, due 3/09/11 (t)	$	435,000	$	434,838

Tobacco - 2.0%
Philip Morris International, Inc., 0.21%, due 1/18/11 (t)	$	563,000	$	562,944

Total Commercial Paper, at Amortized Cost and Value			$	13,852,992


Issuer	Shares/Par		Value ($)

U.S. GOVERNMENT AGENCIES AND EQUIVALENTS (y) - 22.7%
Fannie Mae, 0.21%, due 2/09/11	$	920,000	$	919,791
Fannie Mae, 0.2%, due 2/22/11		920,000		919,734
Federal Home Loan Bank, 0.16%, due 3/02/11		860,000		859,771
Federal Home Loan Bank, 0.23%, due 6/01/11		900,000		899,132
Freddie Mac, 0.18%, due 3/07/11		108,000		107,965
Freddie Mac, 0.165%, due 3/14/11		771,000		770,746
Freddie Mac, 0.17%, due 3/14/11		488,000		487,834
Freddie Mac, 0.3%, due 4/26/11		750,000		749,281
Freddie Mac, 0.21%, due 6/07/11		320,000		319,705
Freddie Mac, 0.24%, due 8/16/11		330,000		329,501

Total U.S. Government Agencies and Equivalents, at Amortized Cost and Value			$	6,363,460

FLOATING RATE DEMAND NOTES - 2.8%
East Baton Rouge, LA, Pollution Control Rev. (Exxon Mobil Corp.), 0.22%, due 1/03/11		500,000	$	500,000
Lincoln County, WY, Pollution Control Rev. (Exxon Mobil Corp.), 0.22%, due 1/03/11		300,000		300,000

Total Floating Rate Demand Notes, at Cost and Value			$	800,000

REPURCHASE AGREEMENTS - 19.0%
Bank of America Corp., 0.15%, dated 12/31/10, due 1/03/11, total to be received $2,518,031 (secured by U.S. Treasury and Federal Agency obligations valued at $2,568,360 in a jointly traded account)	$	2,518,000	$	2,518,000
Goldman Sachs, 0.15%, dated 12/31/10, due 1/03/11, total to be received $2,812,035 (secured by U.S. Treasury and Federal Agency obligations valued at $2,868,251 in a jointly traded account)		2,812,000		2,812,000

Total Repurchase Agreements, at Cost and Value			$	5,330,000

Total Investments, at Amortized Cost and Value			$	28,137,452


OTHER ASSETS, LESS LIABILITIES - (0.3)%				(75,252	)

NET ASSETS - 100.0%			$	28,062,200

See portfolio footnotes and notes to financial statements.

23-MMVA

Portfolio of Investments — December, 31, 2010

Total Return Variable Account


Issuer	Shares/Par		Value ($)

COMMON STOCKS - 59.3%
Aerospace - 4.1%
Honeywell International, Inc.		8,460	$	449,734
Lockheed Martin Corp.		22,860		1,598,143
Northrop Grumman Corp.		6,970		451,517
Precision Castparts Corp.		1,220		169,836
United Technologies Corp.		17,370		1,367,366

			$	4,036,596

Alcoholic Beverages - 0.8%
Diageo PLC		34,200	$	631,856
Heineken N.V.		2,891		141,742

			$	773,598

Apparel Manufacturers - 0.2%
NIKE, Inc., “B”		2,750	$	234,905

Automotive - 0.4%
General Motors Co. (a)		4,040	$	148,914
Johnson Controls, Inc.		6,760		258,232

			$	407,146

Broadcasting - 1.4%
Omnicom Group, Inc.		11,770	$	539,066
Time Warner, Inc.		4,750		152,808
Walt Disney Co.		19,900		746,449

			$	1,438,323

Brokerage & Asset Managers - 0.7%
Blackrock, Inc.		933	$	177,811
Charles Schwab Corp.		12,540		214,559
Deutsche Boerse AG		1,716		118,782
Franklin Resources, Inc.		2,030		225,756

			$	736,908

Business Services - 1.1%
Accenture Ltd., “A”		14,770	$	716,197
Dun & Bradstreet Corp.		2,180		178,956
Western Union Co.		9,440		175,301

			$	1,070,454

Cable TV - 0.3%
Comcast Corp., “Special A”		16,790	$	349,400

Chemicals - 1.7%
3M Co.		9,020	$	778,426
E.I. du Pont de Nemours & Co.		3,870		193,036
PPG Industries, Inc.		9,090		764,196

			$	1,735,658

Computer Software - 1.0%
Oracle Corp.		31,100	$	973,430

Computer Software - Systems - 1.5%
Hewlett-Packard Co.		13,100	$	551,510
International Business Machines Corp.		6,150		902,574

			$	1,454,084

Construction - 0.6%
Pulte Homes, Inc. (a)		10,430	$	78,434
Sherwin-Williams Co.		4,340		363,475
Stanley Black & Decker, Inc.		3,003		200,811

			$	642,720

Consumer Products - 1.0%
Avon Products, Inc.		2,480	$	72,069
Clorox Co.		2,510		158,833
Procter & Gamble Co.		11,263		724,549

			$	955,451

Electrical Equipment - 1.0%
Danaher Corp.		17,900	$	844,343
General Electric Co.		8,860		162,049

			$	1,006,392


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Electronics - 0.6%
Intel Corp.		26,150	$	549,935

Energy - Independent - 3.1%
Anadarko Petroleum Corp.		2,920	$	222,387
Apache Corp.		10,850		1,293,646
EOG Resources, Inc.		4,280		391,235
Noble Energy, Inc.		3,500		301,280
Occidental Petroleum Corp.		5,990		587,619
QEP Resources, Inc.		2,840		103,120
Southwestern Energy Co. (a)		4,450		166,564

			$	3,065,851

Energy - Integrated - 3.6%
Chevron Corp.		12,135	$	1,107,319
Exxon Mobil Corp.		22,682		1,658,508
Hess Corp.		8,750		669,725
TOTAL S.A., ADR		3,220		172,206

			$	3,607,758

Engineering - Construction - 0.3%
Fluor Corp.		4,490	$	297,507

Food & Beverages - 3.0%
General Mills, Inc.		18,610	$	662,330
Groupe Danone		2,565		161,166
J.M. Smucker Co.		2,438		160,055
Kellogg Co.		4,470		228,328
Nestle S.A.		17,216		1,008,103
PepsiCo, Inc.		11,600		757,828

			$	2,977,810

Food & Drug Stores - 0.9%
CVS Caremark Corp.		11,434	$	397,560
Kroger Co.		6,520		145,787
Walgreen Co.		9,830		382,977

			$	926,324

Gaming & Lodging - 0.1%
Starwood Hotels & Resorts Worldwide, Inc.		1,090	$	66,250

General Merchandise - 1.0%
Kohl’s Corp. (a)		7,750	$	421,135
Target Corp.		8,760		526,739

			$	947,874

Insurance - 4.4%
ACE Ltd.		7,450	$	463,763
Aflac, Inc.		3,370		190,169
Allstate Corp.		5,930		189,048
Aon Corp.		11,180		514,392
Chubb Corp.		3,410		203,372
MetLife, Inc.		28,210		1,253,652
Prudential Financial, Inc.		14,340		841,901
Travelers Cos., Inc.		12,590		701,389

			$	4,357,686

Leisure & Toys - 0.3%
Hasbro, Inc.		5,550	$	261,849

Machinery & Tools - 0.5%
Eaton Corp.		4,550	$	461,871

Major Banks - 8.3%
Bank of America Corp.		74,440	$	993,030
Bank of New York Mellon Corp.		46,314		1,398,683
Goldman Sachs Group, Inc.		9,190		1,545,390
JPMorgan Chase & Co.		49,802		2,112,601
PNC Financial Services Group, Inc.		6,730		408,646
State Street Corp.		15,730		728,928
Wells Fargo & Co.		35,840		1,110,682

			$	8,297,960

24-TRVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Medical & Health Technology & Services - 0.1%
Quest Diagnostics, Inc.		2,270	$	122,512

Medical Equipment - 2.3%
Becton, Dickinson & Co.		6,040	$	510,501
Covidien PLC		3,580		163,463
Medtronic, Inc.		16,050		595,295
St. Jude Medical, Inc. (a)		11,930		510,008
Thermo Fisher Scientific, Inc. (a)		7,130		394,717
Waters Corp. (a)		1,630		126,667

			$	2,300,651

Metals & Mining - 0.1%
United States Steel Corp.		2,360	$	137,871

Natural Gas - Distribution - 0.1%
Sempra Energy		2,290	$	120,179

Natural Gas - Pipeline - 0.2%
Williams Cos., Inc.		9,950	$	245,964

Network & Telecom - 0.5%
Cisco Systems, Inc. (a)		24,610	$	497,860

Oil Services - 0.8%
Halliburton Co.		2,400	$	97,992
National Oilwell Varco, Inc.		2,320		156,020
Noble Corp.		3,150		112,676
Schlumberger Ltd.		1,830		152,805
Transocean, Inc. (a)		3,340		232,163

			$	751,656

Other Banks & Diversified Financials - 0.8%
Marshall & Ilsley Corp.		19,370	$	134,040
MasterCard, Inc., “A”		1,550		347,371
Visa, Inc., “A”		1,700		119,646
Zions Bancorporation		6,220		150,711

			$	751,768

Pharmaceuticals - 3.9%
Abbott Laboratories		17,770	$	851,361
Bayer AG		1,914		141,440
GlaxoSmithKline PLC		6,155		118,994
Johnson & Johnson		22,690		1,403,377
Merck & Co., Inc.		3,700		133,348
Pfizer, Inc.		61,277		1,072,960
Roche Holding AG		964		141,249

			$	3,862,729

Railroad & Shipping - 0.3%
Canadian National Railway Co.		2,240	$	148,893
Union Pacific Corp.		1,210		112,119

			$	261,012

Restaurants - 0.3%
McDonald’s Corp.		3,800	$	291,688

Specialty Chemicals - 0.7%
Air Products & Chemicals, Inc.		7,590	$	690,311

Specialty Stores - 0.5%
Advance Auto Parts, Inc.		1,510	$	99,887
Best Buy Co., Inc.		1,990		68,237
Staples, Inc.		13,200		300,564

			$	468,688

Telecommunications - Wireless - 0.8%
Vodafone Group PLC		316,045	$	816,972

Telephone Services - 1.7%
AT&T, Inc.		49,574	$	1,456,484
CenturyLink, Inc.		5,325		245,855

			$	1,702,339


Issuer	Shares/Par		Value ($)

COMMON STOCKS - continued
Tobacco - 1.9%
Altria Group, Inc.		3,450	$	84,939
Philip Morris International, Inc.		28,290		1,655,814
Reynolds American, Inc.		3,170		103,405

			$	1,844,158

Trucking - 0.2%
United Parcel Service, Inc., “B”		3,060	$	222,095

Utilities - Electric Power - 2.2%
American Electric Power Co., Inc.		5,720	$	205,806
CenterPoint Energy, Inc.		2,700		42,444
Dominion Resources, Inc.		3,324		142,001
Entergy Corp.		4,650		329,360
NextEra Energy, Inc.		2,870		149,211
NRG Energy, Inc. (a)		7,090		138,539
PG&E Corp.		9,320		445,869
PPL Corp.		12,820		337,422
Public Service Enterprise Group, Inc.		13,380		425,618

			$	2,216,270

Total Common Stocks (Identified Cost, $47,809,137)			$	58,938,463

BONDS - 39.2%
Agency - Other - 0.1%
Financing Corp., 9.65%, 2018	$	45,000	$	64,716

Asset-Backed & Securitized - 2.7%
Anthracite Ltd., “A”, CDO, FRN, 0.71%, 2017 (z)	$	112,137	$	106,530
Banc of America Commercial Mortgage, Inc., FRN, 5.742%, 2051		210,000		223,688
Bayview Financial Revolving Mortgage Loan Trust, FRN, 1.86%, 2040 (z)		187,219		85,353
BlackRock Capital Finance LP, 7.75%, 2026 (n)		29,856		4,022
Citigroup Commercial Mortgage Trust, FRN, 5.697%, 2049		142,000		151,794
Citigroup/Deutsche Bank Commercial Mortgage Trust, 5.322%, 2049		237,638		246,317
Countrywide Asset-Backed Certificates, FRN, 5.689%, 2046		90,000		60,459
Credit Suisse Mortgage Capital Certificate, 5.695%, 2040		152,515		156,589
Crest G-Star, CDO, FRN, 0.761%, 2016		197,987		196,007
GMAC Mortgage Corp. Loan Trust, FRN, 5.805%, 2036		87,346		52,711
JPMorgan Chase Commercial Mortgage Securities Corp., 4.78%, 2042		152,000		153,621
JPMorgan Chase Commercial Mortgage Securities Corp., 5.552%, 2045		97,000		103,634
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.232%, 2041		39,903		42,470
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.872%, 2045		110,000		120,297
JPMorgan Chase Commercial Mortgage Securities Corp., FRN, 5.817%, 2049		200,000		209,251
Merrill Lynch Mortgage Trust, FRN, 5.825%, 2050		84,000		24,617
Merrill Lynch Mortgage Trust, FRN, “A3”, 5.825%, 2050		28,792		30,314
Merrill Lynch/Countrywide Commercial Mortgage Trust, FRN, 5.747%, 2050		152,515		157,137
Morgan Stanley Capital I, Inc., FRN, 1.007%, 2030 (i)(n)		1,002,415		26,353

25-TRVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Asset-Backed & Securitized - continued
Residential Asset Mortgage Products, Inc., FRN, 4.97%, 2034	$	83,011	$	83,892
Residential Funding Mortgage Securities, Inc., 5.32%, 2035		129,000		46,764
Spirit Master Funding LLC, 5.05%, 2023 (z)		146,696		128,186
Structured Asset Securities Corp., FRN, 4.67%, 2035		25,191		25,031
Wachovia Bank Commercial Mortgage Trust, FRN, 5.902%, 2051		245,000		254,279

			$	2,689,316

Automotive - 0.1%
Toyota Motor Credit Corp., 3.2%, 2015	$	50,000	$	51,647

Broadcasting - 0.1%
News America, Inc., 8.5%, 2025	$	99,000	$	120,981

Cable TV - 0.4%
Cox Communications, Inc., 4.625%, 2013	$	115,000	$	123,067
DIRECTV Holdings LLC, 4.6%, 2021		110,000		108,569
Time Warner Entertainment Co. LP, 8.375%, 2033		110,000		138,817

			$	370,453

Conglomerates - 0.2%
Kennametal, Inc., 7.2%, 2012	$	211,000	$	222,450

Consumer Services - 0.2%
Western Union Co., 5.4%, 2011	$	165,000	$	171,530

Defense Electronics - 0.1%
BAE Systems Holdings, Inc., 5.2%, 2015 (n)	$	103,000	$	109,847

Electronics - 0.1%
Tyco Electronics Group S.A., 6.55%, 2017	$	128,000	$	145,461

Emerging Market Quasi-Sovereign - 0.2%
Petroleos Mexicanos, 8%, 2019	$	66,000	$	79,530
Qtel International Finance Ltd., 7.875%, 2019 (n)		100,000		119,477

			$	199,007

Emerging Market Sovereign - 0.2%
Russian Federation, 3.625%, 2015 (z)	$	200,000	$	200,260

Energy - Independent - 0.1%
Anadarko Petroleum Corp., 6.45%, 2036	$	120,000	$	119,687

Energy - Integrated - 0.4%
BP Capital Markets PLC, 4.5%, 2020	$	25,000	$	24,940
Hess Corp., 8.125%, 2019		20,000		25,267
Husky Energy, Inc., 5.9%, 2014		69,000		75,830
Husky Energy, Inc., 7.25%, 2019		71,000		84,306
Petro-Canada, 6.05%, 2018		148,000		168,152

			$	378,495

Food & Beverages - 0.3%
Anheuser-Busch Cos., Inc., 8%, 2039 (n)	$	110,000	$	146,966
Miller Brewing Co., 5.5%, 2013 (n)		126,000		136,760

			$	283,726

Food & Drug Stores - 0.1%
CVS Caremark Corp., 6.125%, 2016	$	110,000	$	124,804

Gaming & Lodging - 0.1%
Wyndham Worldwide Corp., 6%, 2016	$	100,000	$	104,644


Issuer	Shares/Par		Value ($)

BONDS - continued
Insurance - 0.3%
ING Groep N.V., 5.775% to 2015, FRN to 2049	$	133,000	$	114,380
Metropolitan Life Global Funding, 5.125%, 2013 (n)		100,000		107,672
Metropolitan Life Global Funding, 5.125%, 2014 (n)		40,000		43,510
Prudential Financial, Inc., 5.375%, 2020		20,000		20,899
Prudential Financial, Inc., 6.625%, 2040		30,000		33,474

			$	319,935

Insurance - Property & Casualty - 0.2%
Chubb Corp., 6.375% to 2017, FRN to 2067	$	200,000	$	208,500

International Market Quasi-Sovereign - 0.8%
Achmea Hypotheekbank N.V., 3.2%, 2014 (n)	$	110,000	$	114,447
ING Bank N.V., 3.9%, 2014 (n)		110,000		118,188
Irish Life & Permanent PLC, 3.6%, 2013 (e)(n)		100,000		89,702
KFW International Finance, Inc., 4.875%, 2019		120,000		133,061
Royal Bank of Scotland Group PLC, 2.625%, 2012 (n)		200,000		204,732
Societe Financement de l’ Economie Francaise, 3.375%, 2014 (n)		107,000		112,693

			$	772,823

Local Authorities - 0.1%
New Jersey Turnpike Authority Rev. (Build America Bonds), “F”, 7.414%, 2040	$	90,000	$	98,784

Machinery & Tools - 0.1%
Atlas Copco AB, 5.6%, 2017 (n)	$	90,000	$	96,968

Major Banks - 1.6%
Bank of America Corp., 7.375%, 2014	$	40,000	$	44,463
Bank of America Corp., 5.49%, 2019		100,000		97,546
Bank of America Corp., 7.625%, 2019		60,000		69,086
BNP Paribas, 7.195% to 2037, FRN to 2049 (n)		100,000		95,500
Commonwealth Bank of Australia, 5%, 2019 (n)		60,000		62,803
Credit Suisse New York, 5.5%, 2014		120,000		131,598
DBS Group Holdings Ltd., 7.657% to 2011, FRN to 2049 (n)		115,000		116,150
Goldman Sachs Group, Inc., 5.625%, 2017		101,000		106,801
JPMorgan Chase & Co., 6.3%, 2019		100,000		113,826
JPMorgan Chase Capital XXII, 6.45%, 2037		47,000		46,817
JPMorgan Chase Capital XXVII, 7%, 2039		13,000		13,611
Merrill Lynch & Co., Inc., 6.15%, 2013		100,000		107,301
Morgan Stanley, 5.75%, 2016		100,000		106,648
Morgan Stanley, 6.625%, 2018		140,000		151,868
PNC Funding Corp., 5.625%, 2017		90,000		96,204
UniCredito Luxembourg Finance S.A., 6%, 2017 (n)		100,000		97,790
Wachovia Corp., 5.25%, 2014		81,000		86,386

			$	1,544,398

Medical & Health Technology & Services - 0.2%
CareFusion Corp., 6.375%, 2019	$	100,000	$	112,979
Hospira, Inc., 6.05%, 2017		93,000		104,190

			$	217,169

26-TRVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
Metals & Mining - 0.1%
ArcelorMittal, 6.125%, 2018	$	55,000	$	58,602
ArcelorMittal, 5.25%, 2020		90,000		88,976

			$	147,578

Mortgage-Backed - 13.1%
Fannie Mae, 4.01%, 2013	$	17,547	$	18,374
Fannie Mae, 4.562%, 2014		83,386		89,147
Fannie Mae, 4.63%, 2014		43,630		46,627
Fannie Mae, 4.841%, 2014		55,936		60,114
Fannie Mae, 4.56%, 2015		36,467		39,080
Fannie Mae, 4.78%, 2015		36,684		39,563
Fannie Mae, 4.922%, 2015		90,317		98,054
Fannie Mae, 5.09%, 2016		40,000		43,422
Fannie Mae, 5.5%, 2016 - 2038		2,491,063		2,684,572
Fannie Mae, 5.725%, 2016		23,279		25,429
Fannie Mae, 4.99%, 2017		79,973		87,359
Fannie Mae, 5.05%, 2017		38,539		41,829
Fannie Mae, 6%, 2017 - 2037		1,373,315		1,510,220
Fannie Mae, 4.5%, 2018		134,480		142,466
Fannie Mae, 5%, 2018 - 2039		1,351,427		1,431,597
Fannie Mae, 6.5%, 2031 - 2037		427,009		479,874
Fannie Mae, 7.5%, 2031		13,985		16,055
Freddie Mac, 6%, 2016 - 2037		633,653		695,085
Freddie Mac, 4.5%, 2018 - 2039		873,924		907,860
Freddie Mac, 5%, 2018 - 2039		839,110		886,390
Freddie Mac, 5.085%, 2019		106,000		112,073
Freddie Mac, 3.808%, 2020		86,000		84,547
Freddie Mac, 5.5%, 2021 - 2034		488,205		525,062
Freddie Mac, 6.5%, 2034 - 2037		196,546		219,912
Freddie Mac, TBA, 4%, 2040		747,000		748,204
Ginnie Mae, 4.5%, 2033 - 2040		446,587		466,591
Ginnie Mae, 5%, 2033 - 2039		583,494		621,054
Ginnie Mae, 5.5%, 2033 - 2035		263,675		286,399
Ginnie Mae, 6%, 2033 - 2038		277,917		308,935
Ginnie Mae, TBA, 4%, 2040		285,000		286,650

			$	13,002,544

Municipals - 0.2%
California Educational Facilities Authority Rev. (Stanford University), “T-1”, 5%, 2039	$	10,000	$	10,244
Massachusetts Health & Educational Facilities Authority Rev. (Boston College), 5.5%, 2030		65,000		69,930
Massachusetts Health & Educational Facilities Authority Rev. (Massachusetts Institute of Technology), “K”, 5.5%, 2032		100,000		110,604

			$	190,778

Natural Gas - Pipeline - 0.5%
CenterPoint Energy, Inc., 7.875%, 2013	$	112,000	$	126,609
Enterprise Products Operating LLC, 6.5%, 2019		76,000		86,295
Kinder Morgan Energy Partners LP, 6.75%, 2011		165,000		166,832
Kinder Morgan Energy Partners LP, 7.75%, 2032		71,000		82,390
Spectra Energy Capital LLC, 8%, 2019		53,000		64,568

			$	526,694

Network & Telecom - 0.4%
AT&T, Inc., 6.55%, 2039	$	100,000	$	108,845
Telecom Italia Capital, 5.25%, 2013		60,000		62,508
Verizon New York, Inc., 6.875%, 2012		196,000		209,083

			$	380,436


Issuer	Shares/Par		Value ($)

BONDS - continued
Other Banks & Diversified Financials - 1.1%
American Express Co., 5.5%, 2016	$	96,000	$	105,464
Banco Santander U.S. Debt S.A.U., 3.781%, 2015 (n)		100,000		93,958
Capital One Financial Corp., 6.15%, 2016		130,000		140,741
Groupe BPCE S.A., 12.5% to 2019, FRN to 2049 (n)		118,000		135,622
Nordea Bank AB, 5.424% to 2015, FRN to 2049 (n)		100,000		94,778
Svenska Handelsbanken AB, 4.875%, 2014 (n)		120,000		127,559
UBS Preferred Funding Trust V, 6.243% to 2016, FRN to 2049		190,000		182,400
Woori Bank, 6.125% to 2011, FRN to 2016 (n)		220,000		222,766

			$	1,103,288

Pharmaceuticals - 0.3%
Pfizer, Inc., 7.2%, 2039	$	50,000	$	64,702
Roche Holdings, Inc., 6%, 2019 (n)		160,000		186,054

			$	250,756

Real Estate - 0.3%
Boston Properties, Inc., REIT, 5%, 2015	$	42,000	$	45,040
HRPT Properties Trust, REIT, 6.25%, 2016		180,000		187,808
WEA Finance LLC, REIT, 6.75%, 2019 (n)		31,000		34,535

			$	267,383

Retailers - 0.2%
Limited Brands, Inc., 5.25%, 2014	$	36,000	$	37,260
Wal-Mart Stores, Inc., 5.25%, 2035		194,000		195,232

			$	232,492

Supranational - 0.1%
Asian Development Bank, 2.75%, 2014	$	80,000	$	83,294

Telecommunications - Wireless - 0.3%
Crown Castle Towers LLC, 6.113%, 2020 (n)	$	105,000	$	109,549
Crown Castle Towers LLC, 4.883%, 2020 (n)		20,000		19,222
Rogers Communications, Inc., 6.8%, 2018		132,000		158,698

			$	287,469

Transportation - Services - 0.1%
Erac USA Finance Co., 7%, 2037 (n)	$	98,000	$	105,529

U.S. Government Agencies and Equivalents - 0.7%
Aid-Egypt, 4.45%, 2015	$	152,000	$	166,601
Small Business Administration, 4.35%, 2023		25,181		26,431
Small Business Administration, 4.77%, 2024		63,651		67,484
Small Business Administration, 5.18%, 2024		103,629		110,546
Small Business Administration, 5.52%, 2024		150,509		161,251
Small Business Administration, 4.99%, 2024		89,151		95,111
Small Business Administration, 4.95%, 2025		62,597		66,748

			$	694,172

U.S. Treasury Obligations - 12.2%
U.S. Treasury Bonds, 2%, 2013	$	197,000	$	202,818
U.S. Treasury Bonds, 8.5%, 2020		50,000		71,539

27-TRVA

Portfolio of Investments — continued


Issuer	Shares/Par		Value ($)

BONDS - continued
U.S. Treasury Obligations - continued
U.S. Treasury Bonds, 8%, 2021	$	37,000	$	52,332
U.S. Treasury Bonds, 6%, 2026		125,000		154,551
U.S. Treasury Bonds, 6.75%, 2026		32,000		42,490
U.S. Treasury Bonds, 5.25%, 2029		424,000		486,275
U.S. Treasury Bonds, 5.375%, 2031		79,000		92,220
U.S. Treasury Bonds, 4.5%, 2036		94,000		97,319
U.S. Treasury Bonds, 5%, 2037		440,000		490,944
U.S. Treasury Bonds, 4.5%, 2039		648,300		665,723
U.S. Treasury Notes, 1.375%, 2012		459,000		465,760
U.S. Treasury Notes, 1.375%, 2013		733,000		744,167
U.S. Treasury Notes, 3.875%, 2013		614,000		656,069
U.S. Treasury Notes, 1.375%, 2013		1,884,000		1,911,525
U.S. Treasury Notes, 3.5%, 2013		420,000		447,825
U.S. Treasury Notes, 3.125%, 2013		57,000		60,469
U.S. Treasury Notes, 2.75%, 2013		138,000		145,062
U.S. Treasury Notes, 1.5%, 2013		280,000		284,025
U.S. Treasury Notes, 1.875%, 2014		1,630,000		1,667,056
U.S. Treasury Notes, 4.75%, 2014		150,000		167,543
U.S. Treasury Notes, 2.625%, 2016		68,000		69,790
U.S. Treasury Notes, 4.75%, 2017		146,000		165,562
U.S. Treasury Notes, 3.75%, 2018		1,807,000		1,922,055
U.S. Treasury Notes, 2.75%, 2019		1,084,100		1,070,125

			$	12,133,244

Utilities - Electric Power - 0.9%
Bruce Mansfield Unit, 6.85%, 2034	$	206,032	$	218,671
MidAmerican Funding LLC, 6.927%, 2029		54,000		62,456
Oncor Electric Delivery Co., 7%, 2022		76,000		89,275
PSEG Power LLC, 6.95%, 2012		111,000		119,676
PSEG Power LLC, 5.32%, 2016		91,000		99,572
System Energy Resources, Inc., 5.129%, 2014 (z)		45,945		47,434
Waterford 3 Funding Corp., 8.09%, 2017		264,256		267,282

			$	904,366

Total Bonds (Identified Cost, $37,740,427)			$	38,925,624


Issuer	Shares/Par		Value ($)

CONVERTIBLE PREFERRED STOCKS - 0.3%
Automotive - 0.1%
General Motors Co., 4.75%		3,100	$	167,741

Energy - Independent - 0.1%
Apache Corp., 6%		880	$	58,309

Utilities - Electric Power - 0.1%
PPL Corp., 9.5%		960	$	52,771

Total Convertible Preferred Stocks (Identified Cost, $249,035)			$	278,821

MONEY MARKET FUNDS (v) - 1.6%
MFS Institutional Money Market Portfolio, 0.18%, at Cost and Net Asset Value		1,598,744	$	1,598,744

Total Investments (Identified Cost, $87,397,343)			$	99,741,652


OTHER ASSETS, LESS LIABILITIES - (0.4)%				(402,931	)

NET ASSETS - 100.0%			$	99,338,721

See portfolio footnotes and notes to financial statements.

28-TRVA

Portfolio of Investments — continued

Portfolio Footnotes:

(a)	Non-income producing security.

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

(e)	Guaranteed by Minister for Finance of Ireland.

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

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

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

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


Variable Account	Value		% of Net Assets
Global Governments Variable Account	$	117,444		1.9	%
Government Securities Variable Account		750,450		1.3
High Yield Variable Account		8,926,330		21.8
Total Return Variable Account		2,933,152		3.0

(o)	All or a portion of this position has not settled. Upon settlement date, interest rate for unsettled amounts will be determined. The rate shown represents the weighted average coupon rate for settled amounts.

(p)	Payment-in-kind security.

(r)

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

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

(v)	Underlying fund that is available only to investment companies managed by MFS. The rate quoted is the annualized seven-day yield of the fund at period end.

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

(z)

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


Variable Account	Restricted Securities	Acquisition Date	Cost		Value
Global Governments	Bayview Commercial Asset Trust, FRN, 1.687%, 2023	5/25/06	$	27,125	$	24,689
Variable Account	Commercial Mortgage Asset Trust, FRN, 0.84%, 2032	8/25/03		16,163		16,536


	Total Restricted Securities				$	41,225

	% of Net Assets					0.7%

High Yield Variable	AMC Entertainment, Inc., 9.75%, 2020	12/01/10	$	60,000	$	62,400
Account	American Media, Inc., 13.5%, 2018	12/22/10		14,721		14,721
	ARCap REIT, Inc., CDO, “H”, 6.078%, 2045	9/21/04		145,354		9,520
	Bonten Media Acquisition Co., 9%, 2015	5/22/07 - 11/15/10		34,160		17,837
	Bresnan Broadband Holdings LLC, 8%, 2018	12/01/10		30,000		30,900
	Citadel Broadcasting Corp., 7.75%, 2018	12/06/10		15,000		15,525
	Energy XXI Gulf Coast, Inc., 9.25%, 2017	12/03/10		130,000		135,200
	Hertz Corp., 7.375%, 2021	12/06/10		110,000		111,100
	LBI Media, Inc., 8.5%, 2017	7/18/07		98,766		81,250
	Local TV Finance LLC, 9.25%, 2015	11/09/07 - 11/30/10		140,697		131,027
	NAI Entertainment Holdings LLC, 8.25%, 2017	12/02/10 -12/20/10		51,595		52,500
	Nationstar Mortgage LLC, 10.875%, 2015	3/23/10 - 12/08/10		73,152		73,688
	Nortek, Inc., 10%, 2018	11/18/10		35,000		36,138
	Novelis, Inc., 8.375%, 2017	12/10/10		60,448		62,100
	Novelis, Inc., 8.75%, 2020	12/10/10		30,000		31,125
	Polypore International, Inc., 7.5%, 2017	11/10/10		20,000		20,400
	SIRIUS XM Radio, Inc., 13%, 2013	12/15/10		35,608		35,700
	Sappi Papier Holdings GmbH, 6.75%, 2012	7/29/10 - 8/02/10		60,335		61,527
	Scotts Miracle-Gro Co., 6.625%, 2020	12/13/10		20,000		20,000
	Swift Services Holdings Inc., 10%, 2018	12/15/10		80,000		83,800
	Syniverse Holdings, Inc., 9.125%, 2019	12/16/10		81,609		82,600
	Trinidad Drilling Ltd., 7.875%, 2019	12/09/10		59,549		60,600
	USI Holdings Corp., 9.75%, 2015	5/07/07 - 11/28/07		156,407		161,600
	Wachovia Credit, CDO, FRN, 1.652%, 2026	6/08/06		250,000		87,500


	Total Restricted Securities				$	1,478,758

	% of Net Assets					3.6%

Portfolio of Investments — continued


Variable Account	Restricted Securities	Acquisition Date	Cost		Value
Total Return	Anthracite Ltd., “A”, CDO, FRN, 0.71%, 2017	3/19/10	$	104,568	$	106,530
Variable Account	Bayview Financial Revolving Mortgage Loan Trust, FRN, 1.86%, 2040	3/01/06		187,219		85,353
	Russian Federation, 3.625%, 2015	4/22/10		199,081		200,260
	Spirit Master Funding LLC, 5.05%, 2023	10/04/05		145,290		128,186
	System Energy Resources, Inc., 5.129%, 2014	4/16/04		45,945		47,434


	Total Restricted Securities				$	567,763

	% of Net Assets					0.6%

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

ADR	American Depository Receipt

CDO	Collateralized Debt Obligation

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

GDR	Global Depository Receipt

PLC	Public Limited Company

REIT	Real Estate Investment Trust

STRIPS

Separate Trading of Registered Interest and Principal of Securities

TBA	To Be Announced

TIPS	Treasury Inflation Protected Security


Insurers
AGM		Assured Guaranty Municipal

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

AUD	Australian Dollar

CAD	Canadian Dollar

CLP	Chilean Peso

CNY	Chinese Yuan Renminbi

DKK	Danish Krone

EUR

Euro

GBP	British Pound

IDR	Indonesian Rupiah

JPY	Japanese Yen

KRW	Korean Won

MXN	Mexican Peso

NOK	Norwegian Krone

NZD	New Zealand Dollar

PHP	Philippine Peso

SEK	Swedish Krona

SGD	Singapore Dollar

TRY	Turkish Lira

TWD	Taiwan Dollar

ZAR	South African Rand

See notes to financial statements.

Statements of Assets and Liabilities — December 31, 2010

(000 Omitted)


	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Assets:
Investments —
Non-affiliated issuers, at identified cost	$	103,508		$	5,574		$	48,771		$	38,891		$	22,807		$	85,798
Underlying funds, at cost and net asset value		1,556			246			4,439			460			—			1,599
Repurchase agreements, at cost and value		—			—			—			—			5,330			—

Total investments, at identified cost	$	105,064		$	5,820		$	53,210		$	39,351		$	28,137		$	87,397
Unrealized appreciation		25,170			331			2,077			816			—			12,345

Total investments, at value	$	130,234		$	6,151		$	55,287		$	40,167		$	28,137		$	99,742
Cash		—			—			—			31			1			1
Restricted Cash		—			—			—			5			—			—
Foreign currency, at value (identified cost, $-, $0*, $-, $-, $-, $-)		—			0	*		—			—			—			—
Receivables for
Forward foreign currency exchange contracts		—			22			—			—			—			—
Daily variation margin on open futures contracts		—			—			3			—			—			—
Investments sold		—			—			—			80			—			208
Units sold		26			—			94			—			23			69
Interest and dividends		117			75			401			715			3			414
Receivable from investment adviser		7			9			—			9			7			11
Receivable from sponsor		6			—			7			—			—			1
Other assets		4			0	*		2			1			1			3

Total assets	$	130,394		$	6,257		$	55,794		$	41,008		$	28,172		$	100,449

Liabilities:
Payables for
Forward foreign currency exchange contracts	$	—		$	34		$	—		$	3		$	—		$	—
Daily variation margin on open futures contracts		—			—			—			1			—			—
Investments purchased		—			—			—			54			—			1,020
Units surrendered		209			92			9			6			85			35
Payable to affiliates —
Investment adviser		5			0	*		2			2			1			4
Administrative fee		0	*		0	*		0	*		0	*		0	*		0	*
Sponsor		—			0	*		—			4			5			—
Board of Managers fees		0	*		0	*		0	*		0	*		0	*		0	*
Accrued expenses and other liabilities		36			40			39			45			19			51

Total liabilities	$	250		$	166		$	50		$	115		$	110		$	1,110

Net assets	$	130,144		$	6,091		$	55,744		$	40,893		$	28,062		$	99,339

*	Amount is less than $500.

See notes to financial statements.

Statements of Assets and Liabilities — December 31, 2010 — continued

(000 Omitted except for unit values which are rounded for presentation purposes)


	Unit		Unit Value		Capital Appreciation Variable Account		Global Governments Variable Account		Government Securities Variable Account		High Yield Variable Account		Money Market Variable Account		Total Return Variable Account
Net assets applicable to contract owners:
Capital Appreciation Variable Account —
Compass 2		1,360	$	61.454	$	83,568
Compass 3		20		40.282		807
Compass 3 – Level 2		2,588		16.917		43,779
Global Governments Variable Account —
Compass 2		55	$	31.477			$	1,732
Compass 3		6		30.421				175
Compass 3 – Level 2		230		18.003				4,134
Government Securities Variable Account —
Compass 2		889	$	46.717					$	41,534
Compass 3		3		32.441						104
Compass 3 – Level 2		667		19.168						12,778
High Yield Variable Account —
Compass 2		662	$	48.077							$	31,826
Compass 3		6		35.117								218
Compass 3 – Level 2		428		18.963								8,115
Money Market Variable Account —
Compass 2		621	$	21.247									$	13,177
Compass 3		11		17.302										187
Compass 3 – Level 2		1,106		13.086										14,474
Total Return Variable Account —
Compass 2		587	$	51.412											$	30,186
Compass 3		23		49.689												1,122
Compass 3 – Level 2		2,757		24.238												66,832

Net assets applicable to owners of deferred contracts						128,154		6,041		54,416		40,159		27,838		98,140
Reserve for variable annuities —
Compass 2 Contracts						1,764		11		1,289		698		181		887
Compass 3 Contracts						—		—		—		—		—		—
Compass 3 – Level 2 Contracts						226		39		39		36		43		312

Net assets					$	130,144	$	6,091	$	55,744	$	40,893	$	28,062	$	99,339

See notes to financial statements.

Statements of Operations — Year Ended December 31, 2010

(000 Omitted)


	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Net Investment income (loss):
Income —
Interest	$	—		$	172		$	2,569		$	3,444		$	82		$	1,829
Dividends		1,736			—			—			8			—			1,411
Dividends from underlying funds		2			1			9			2			—			2
Foreign taxes withheld		(37	)		—			—			—			—			(12	)

Total investment income	$	1,701		$	173		$	2,578		$	3,454		$	82		$	3,230

Expenses —
Mortality and expense risk charges	$	1,569		$	84		$	738		$	511		$	395		$	1,243
Management fee		937			51			325			304			157			759
Boards of Managers fees		17			1			8			5			5			14
Distribution expense charge		1			0	*		0	*		0	*		0	*		3
Administrative fee		46			10			23			17			14			38
Custodian fee		31			28			30			26			9			51
Printing		8			11			10			10			14			11
Auditing fees		39			50			45			56			24			52
Legal fees		7			7			7			8			7			7
Miscellaneous		14			5			11			9			7			12

Total expenses	$	2,669		$	247		$	1,197		$	946		$	632		$	2,190
Fees paid indirectly		(0	)*		(0	)*		(0	)*		(0	)*		(0	)*		(0	)*
Reduction of expenses by investment adviser		(73	)		(78	)		—			(69	)		(155	)		(83	)

Net expenses	$	2,596		$	169		$	1,197		$	877		$	477		$	2,107

Net investment income (loss)	$	(895	)	$	4		$	1,381		$	2,577		$	(395	)	$	1,123

Realized and unrealized gain (loss) on investments:
Realized gain (loss) (identified cost basis) —
Investment transactions	$	9,743		$	84		$	682		$	1,215		$	0	*	$	1,585
Futures contracts		—			—			115			15			—			—
Foreign currency transactions		(3	)		89			—			33			—			(1	)

Net realized gain (loss) on investments and foreign currency transactions	$	9,740		$	173		$	797		$	1,263		$	0	*	$	1,584

Change in unrealized appreciation (depreciation) —
Investments	$	4,764		$	30		$	(124	)	$	1,265		$	—		$	5,662
Futures contracts		—			—			24			12			—			—
Translation of assets and liabilities in foreign currencies		7			11			—			(10	)		—			4

Net unrealized gain (loss) on investments and foreign currency translation	$	4,771		$	41		$	(100	)	$	1,267		$	—		$	5,666

Net realized and unrealized gain (loss) on investments and foreign currency	$	14,511		$	214		$	697		$	2,530		$	0	*	$	7,250

Change in net assets from operations	$	13,616		$	218		$	2,078		$	5,107		$	(395	)	$	8,373

*	Amount is less than $500.

See notes to financial statements.

Statements of Changes in Net Assets

(000 Omitted)


	Capital Appreciation Variable Account						Global Governments Variable Account						Government Securities Variable Account
	Years Ended December 31,						Years Ended December 31,						Years Ended December 31,
	2010			2009			2010			2009			2010			2009
Change in net assets:
From operations:
Net investment income (loss)	$	(895	)	$	(690	)	$	4		$	37		$	1,381		$	1,734
Net realized gain (loss) on investments and foreign currency transactions		9,740			(10,643	)		173			59			797			658
Net unrealized gain (loss) on investments and foreign currency translation		4,771			49,716			41			14			(100	)		(224	)

Change in net assets from operations	$	13,616		$	38,383		$	218		$	110		$	2,078		$	2,168

Participant transactions:
Accumulation activity:
Purchase payments received	$	753		$	754		$	19		$	18		$	696		$	601
Net transfers between variable and fixed accumulation accounts		(1,374	)		(2,491	)		(241	)		85			144			(462	)
Withdrawals, surrenders, annuitizations, and contract charges		(14,998	)		(13,276	)		(1,531	)		(956	)		(7,933	)		(8,599	)

Net accumulation activity	$	(15,619	)	$	(15,013	)	$	(1,753	)	$	(853	)	$	(7,093	)	$	(8,460	)

Annuitization activity:
Annuitizations	$	76		$	2		$	—		$	—		$	28		$	259
Annuity payments and contract charges		(302	)		(261	)		(5	)		(6	)		(261	)		(211	)
Adjustments to annuity reserves		5			(77	)		(11	)		11			0	*		20

Net annuitization activity	$	(221	)	$	(336	)	$	(16	)	$	5		$	(233	)	$	68

Change in net assets from participant transactions	$	(15,840	)	$	(15,349	)	$	(1,769	)	$	(848	)	$	(7,326	)	$	(8,392	)

Total change in net assets	$	(2,224	)	$	23,034		$	(1,551	)	$	(738	)	$	(5,248	)	$	(6,224	)
Net assets:
At beginning of period		132,368			109,334			7,642			8,380			60,992			67,216

At end of period	$	130,144		$	132,368		$	6,091		$	7,642		$	55,744		$	60,992

*	Amount is less than $500.

See notes to financial statements.

Statements of Changes in Net Assets — continued

(000 Omitted)


	High Yield Variable Account						Money Market Variable Account						Total Return Variable Account
	Years Ended December 31,						Years Ended December 31,						Years Ended December 31,
	2010			2009			2010			2009			2010			2009
Change in net assets:
From operations:
Net investment income (loss)	$	2,577		$	2,962		$	(395	)	$	(472	)	$	1,123		$	1,626
Net realized gain (loss) on investments and foreign currency transactions		1,263			(2,734	)		0	*		—			1,584			(7,657	)
Net unrealized gain (loss) on investments and foreign currency translation		1,267			13,451			—			—			5,666			21,444

Change in net assets from operations	$	5,107		$	13,679		$	(395	)	$	(472	)	$	8,373		$	15,413

Participant transactions:
Accumulation activity:
Purchase payments received	$	255		$	175		$	235		$	192		$	510		$	764
Net transfers between variable and fixed accumulation accounts		(510	)		(1,074	)		927			2,040			(1,099	)		(2,849	)
Withdrawals, surrenders, annuitizations, and contract charges		(4,980	)		(3,856	)		(6,646	)		(8,583	)		(14,004	)		(12,313	)

Net accumulation activity	$	(5,235	)	$	(4,755	)	$	(5,484	)	$	(6,351	)	$	(14,593	)	$	(14,398	)

Annuitization activity:
Annuitizations	$	31		$	—		$	18		$	5		$	16		$	24
Annuity payments and contract charges		(127	)		(110	)		(44	)		(55	)		(167	)		(161	)
Adjustments to annuity reserves		(0	)*		(1	)		(1	)		(6	)		46			(61	)

Net annuitization activity	$	(96	)	$	(111	)	$	(27	)	$	(56	)	$	(105	)	$	(198	)

Change in net assets from participant transactions	$	(5,331	)	$	(4,866	)	$	(5,511	)	$	(6,407	)	$	(14,698	)	$	(14,596	)

Total change in net assets	$	(224	)	$	8,813		$	(5,906	)	$	(6,879	)	$	(6,325	)	$	817
Net assets:
At beginning of period		41,117			32,304			33,968			40,847			105,664			104,847

At end of period	$	40,893		$	41,117		$	28,062		$	33,968		$	99,339		$	105,664

*	Amount is less than $500.

See notes to financial statements.

Financial Highlights

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


	Capital Appreciation Variable Account
	Compass 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	55.063		$	39.750		$	63.669		$	58.101		$	55.446

Investment income	$	0.768		$	0.685		$	0.780		$	0.751		$	0.560
Expenses		(1.176	)		(0.965	)		(1.154	)		(1.319	)		(1.198	)

Net investment loss	$	(0.408	)	$	(0.280	)	$	(0.374	)	$	(0.568	)	$	(0.638	)
Net realized and unrealized gain (loss) on investments and foreign currency		6.799			15.593			(23.545	)		6.136			3.293

Change in unit value	$	6.391		$	15.313		$	(23.919	)	$	5.568		$	2.655

Unit value:
Net asset value — end of period	$	61.454		$	55.063		$	39.750		$	63.669		$	58.101

Total Return (%) (k)(r)(s)		11.61			38.52			(37.57	)		9.58			4.79
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.18			2.18			2.17			2.15			2.15
Expenses after expense reductions (f)		2.12			2.12			2.12			2.14			N/A
Net investment loss		(0.72	)		(0.60	)		(0.68	)		(0.91	)		(1.11	)
Portfolio turnover (%)		43			47			49			63			61
Number of units outstanding at end of period (000 Omitted)		1,360			1,539			1,761			1,980			2,419

	Capital Appreciation Variable Account
	Compass 3
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	36.129		$	26.107		$	41.858		$	38.235		$	36.524

Investment income	$	0.488		$	0.425		$	0.497		$	0.490		$	0.355
Expenses		(0.796	)		(0.635	)		(0.783	)		(0.903	)		(0.807	)

Net investment loss	$	(0.308	)	$	(0.210	)	$	(0.286	)	$	(0.413	)	$	(0.452	)
Net realized and unrealized gain (loss) on investments and foreign currency		4.461			10.232			(15.465	)		4.036			2.163

Change in unit value	$	4.153		$	10.022		$	(15.751	)	$	3.623		$	1.711

Unit value:
Net asset value — end of period	$	40.282		$	36.129		$	26.107		$	41.858		$	38.235

Total Return (%) (k)(r)(s)		11.49			38.39			(37.63	)		9.48			4.69
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.28			2.28			2.27			2.25			2.25
Expenses after expense reductions (f)		2.22			2.22			2.22			2.24			N/A
Net investment loss		(0.85	)		(0.73	)		(0.81	)		(1.04	)		(1.30	)
Portfolio turnover (%)		43			47			49			63			61
Number of units outstanding at end of period (000 Omitted)		20			27			46			73			128

Financial Highlights — continued


	Capital Appreciation Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	15.151		$	10.932		$	17.501		$	15.963		$	15.226

Investment income	$	0.208		$	0.186		$	0.211		$	0.203		$	0.152
Expenses		(0.314	)		(0.258	)		(0.308	)		(0.352	)		(0.320	)

Net investment loss	$	(0.106	)	$	(0.072	)	$	(0.097	)	$	(0.149	)	$	(0.168	)
Net realized and unrealized gain (loss) on investments and foreign currency		1.872			4.291			(6.472	)		1.687			0.905

Change in unit value	$	1.766		$	4.219		$	(6.569	)	$	1.538		$	0.737

Unit value:
Net asset value — end of period	$	16.917		$	15.151		$	10.932		$	17.501		$	15.963

Total Return (%) (k)(r)(s)		11.66			38.59			(37.54	)		9.64			4.84
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.13			2.13			2.12			2.10			2.10
Expenses after expense reductions (f)		2.07			2.07			2.07			2.09			N/A
Net investment loss		(0.70	)		(0.58	)		(0.65	)		(0.88	)		(1.13	)
Portfolio turnover (%)		43			47			49			63			61
Number of units outstanding at end of period (000 Omitted)		2,588			2,945			3,335			3,671			4,378

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

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

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

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

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

See notes to financial statements.

Financial Highlights — continued


	Global Governments Variable Account
	Compass 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	30.488		$	29.979		$	27.622		$	25.732		$	24.865

Investment income	$	0.781		$	0.885		$	0.944		$	1.052		$	1.003
Expenses		(0.763	)		(0.742	)		(0.716	)		(0.653	)		(0.629	)

Net investment income	$	0.018		$	0.143		$	0.228		$	0.399		$	0.374
Net realized and unrealized gain (loss) on investments and foreign currency		0.971			0.366			2.129			1.491			0.493

Change in unit value	$	0.989		$	0.509		$	2.357		$	1.890		$	0.867

Unit value:
Net asset value — end of period	$	31.477		$	30.488		$	29.979		$	27.622		$	25.732

Total Return (%) (k)(r)(s)		3.24			1.70			8.54			7.34			3.49
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.64			3.33			3.50			3.35			3.39
Expenses after expense reductions (f)		2.50			2.50			2.50			2.50			2.50
Net investment income		0.06			0.48			0.79			1.52			1.48
Portfolio turnover (%)		55			87			111			141			118
Number of units outstanding at end of period (000 Omitted)		55			85			91			85			104

	Global Governments Variable Account
	Compass 3
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	29.508		$	29.059		$	26.814		$	25.017		$	24.209

Investment income	$	0.740		$	0.834		$	0.904		$	1.044		$	1.025
Expenses		(0.768	)		(0.746	)		(0.727	)		(0.678	)		(0.659	)

Net investment income (loss)	$	(0.028	)	$	0.088		$	0.177		$	0.366		$	0.366
Net realized and unrealized gain (loss) on investments and foreign currency		0.941			0.361			2.068			1.431			0.442

Change in unit value	$	0.913		$	0.449		$	2.245		$	1.797		$	0.808

Unit value:
Net asset value — end of period	$	30.421		$	29.508		$	29.059		$	26.814		$	25.017

Total Return (%) (k)(r)(s)		3.09			1.55			8.38			7.18			3.34
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.79			3.48			3.65			3.50			3.54
Expenses after expense reductions (f)		2.65			2.65			2.65			2.65			2.65
Net investment income (loss)		(0.09	)		0.31			0.65			1.44			1.41
Portfolio turnover (%)		55			87			111			141			118
Number of units outstanding at end of period (000 Omitted)		6			7			11			15			18

Financial Highlights — continued


	Global Governments Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	17.438		$	17.147		$	15.798		$	14.718		$	14.221

Investment income	$	0.454		$	0.508		$	0.541		$	0.608		$	0.574
Expenses		(0.444	)		(0.426	)		(0.410	)		(0.377	)		(0.361	)

Net investment income	$	0.010		$	0.082		$	0.131		$	0.231		$	0.213
Net realized and unrealized gain (loss) on investments and foreign currency		0.555			0.209			1.218			0.849			0.284

Change in unit value	$	0.565		$	0.291		$	1.349		$	1.080		$	0.497

Unit value:
Net asset value — end of period	$	18.003		$	17.438		$	17.147		$	15.798		$	14.718

Total Return (%) (k)(r)(s)		3.24			1.70			8.54			7.34			3.49
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		3.64			3.33			3.50			3.35			3.39
Expenses after expense reductions (f)		2.50			2.50			2.50			2.50			2.50
Net investment income		0.06			0.48			0.79			1.53			1.47
Portfolio turnover (%)		55			87			111			141			118
Number of units outstanding at end of period (000 Omitted)		230			274			306			332			403

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

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

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

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

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

See notes to financial statements.

Financial Highlights — continued


	Government Securities Variable Account
	Compass 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	45.185		$	43.715		$	40.804		$	38.619		$	37.679

Investment income	$	2.100		$	2.152		$	2.116		$	2.117		$	2.024
Expenses		(0.976	)		(0.917	)		(0.860	)		(0.802	)		(0.757	)

Net investment income	$	1.124		$	1.235		$	1.256		$	1.315		$	1.267
Net realized and unrealized gain (loss) on investments		0.408			0.235			1.655			0.870			(0.327	)

Change in unit value	$	1.532		$	1.470		$	2.911		$	2.185		$	0.940

Unit value:
Net asset value — end of period	$	46.717		$	45.185		$	43.715		$	40.804		$	38.619

Total Return (%) (k)(s)		3.39			3.36			7.14			5.66			2.50
Ratios (%) (to average net assets):
Expenses (f)		2.07			2.04			2.05			2.02			2.01
Net investment income		2.33			2.70			2.93			3.26			3.28
Portfolio turnover (%)		33			27			45			35			17
Number of units outstanding at end of period (000 Omitted)		889			1,010			1,151			1,269			1,538

	Government Securities Variable Account
	Compass 3
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	31.409		$	30.417		$	28.419		$	26.924		$	26.295

Investment income	$	1.401		$	1.442		$	1.427		$	1.470		$	1.352
Expenses		(0.671	)		(0.651	)		(0.618	)		(0.583	)		(0.538	)

Net investment income	$	0.730		$	0.791		$	0.809		$	0.887		$	0.814
Net realized and unrealized gain (loss) on investments		0.302			0.201			1.189			0.608			(0.185	)

Change in unit value	$	1.032		$	0.992		$	1.998		$	1.495		$	0.629

Unit value:
Net asset value — end of period	$	32.441		$	31.409		$	30.417		$	28.419		$	26.924

Total Return (%) (k)(s)		3.29			3.26			7.03			5.55			2.40
Ratios (%) (to average net assets):
Expenses (f)		2.17			2.14			2.15			2.12			2.11
Net investment income		2.34			2.60			2.80			3.25			3.15
Portfolio turnover (%)		33			27			45			35			17
Number of units outstanding at end of period (000 Omitted)		3			10			20			28			40

Financial Highlights — continued


	Government Securities Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	18.530		$	17.918		$	16.717		$	15.814		$	15.421

Investment income	$	0.837		$	0.862		$	0.848		$	0.848		$	0.813
Expenses		(0.387	)		(0.364	)		(0.342	)		(0.318	)		(0.300	)

Net investment income	$	0.450		$	0.498		$	0.506		$	0.530		$	0.513
Net realized and unrealized gain (loss) on investments		0.188			0.114			0.695			0.373			(0.120	)

Change in unit value	$	0.638		$	0.612		$	1.201		$	0.903		$	0.393

Unit value:
Net asset value — end of period	$	19.168		$	18.530		$	17.918		$	16.717		$	15.814

Total Return (%) (k)(s)		3.44			3.41			7.19			5.71			2.55
Ratios (%) (to average net assets):
Expenses (f)		2.02			1.99			2.00			1.97			1.96
Net investment income		2.34			2.72			2.94			3.29			3.30
Portfolio turnover (%)		33			27			45			35			17
Number of units outstanding at end of period (000 Omitted)		667			731			831			889			1,054

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

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

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

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

See notes to financial statements.

Financial Highlights — continued


	High Yield Variable Account
	Compass 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	42.360		$	29.057		$	40.344		$	40.172		$	36.840

Investment income	$	3.913		$	3.733		$	3.568		$	3.391		$	3.121
Expenses		(0.995	)		(0.781	)		(0.817	)		(0.901	)		(0.847	)

Net investment income	$	2.918		$	2.952		$	2.751		$	2.490		$	2.274
Net realized and unrealized gain (loss) on investments and foreign currency		2.799			10.351			(14.038	)		(2.318	)		1.058

Change in unit value	$	5.717		$	13.303		$	(11.287	)	$	0.172		$	3.332

Unit value:
Net asset value — end of period	$	48.077		$	42.360		$	29.057		$	40.344		$	40.172

Total Return (%) (k)(r)(s)		13.50			45.78			(27.98	)		0.43			9.04
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.37			2.35			2.36			2.25			2.32
Expenses after expense reductions (f)		2.20			2.20			2.20			2.20			2.22
Net investment income		6.36			8.18			7.28			5.96			5.84
Portfolio turnover (%)		66			56			62			66			88
Number of units outstanding at end of period (000 Omitted)		662			753			862			958			1,119

	High Yield Variable Account
	Compass 3
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	30.972		$	21.266		$	29.556		$	29.459		$	27.043

Investment income	$	2.791		$	2.629		$	2.515		$	2.445		$	2.212
Expenses		(0.749	)		(0.580	)		(0.613	)		(0.681	)		(0.635	)

Net investment income	$	2.042		$	2.049		$	1.902		$	1.764		$	1.577
Net realized and unrealized gain (loss) on investments and foreign currency		2.103			7.657			(10.192	)		(1.667	)		0.839

Change in unit value	$	4.145		$	9.706		$	(8.290	)	$	0.097		$	2.416

Unit value:
Net asset value — end of period	$	35.117		$	30.972		$	21.266		$	29.556		$	29.459

Total Return (%) (k)(r)(s)		13.38			45.64			(28.05	)		0.33			8.94
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.47			2.45			2.46			2.35			2.42
Expenses after expense reductions (f)		2.30			2.30			2.30			2.30			2.32
Net investment income		6.26			8.08			7.09			5.93			5.71
Portfolio turnover (%)		66			56			62			66			88
Number of units outstanding at end of period (000 Omitted)		6			8			13			21			34

Financial Highlights — continued


	High Yield Variable Account
	Compass 3 – Level 2
	Years Ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	16.700		$	11.450		$	15.890		$	15.814		$	14.495

Investment income	$	1.507		$	1.416		$	1.380		$	1.310		$	1.202
Expenses		(0.379	)		(0.298	)		(0.313	)		(0.344	)		(0.323	)

Net investment income	$	1.128		$	1.118		$	1.067		$	0.966		$	0.879
Net realized and unrealized gain (loss) on investments and foreign currency		1.135			4.132			(5.507	)		(0.890	)		0.440

Change in unit value	$	2.263		$	5.250		$	(4.440	)	$	0.076		$	1.319

Unit value:
Net asset value — end of period	$	18.963		$	16.700		$	11.450		$	15.890		$	15.814

Total Return (%) (k)(r)(s)		13.55			45.86			(27.94	)		0.48			9.10
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.32			2.30			2.31			2.20			2.27
Expenses after expense reductions (f)		2.15			2.15			2.15			2.15			2.17
Net investment income		6.37			8.03			7.27			5.98			5.86
Portfolio turnover (%)		66			56			62			66			88
Number of units outstanding at end of period (000 Omitted)		428			493			558			579			774

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

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

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

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

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

See notes to financial statements.

Financial Highlights — continued


	Money Market Variable Account
	Compass 2
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	21.523		$	21.803		$	21.676		$	20.979		$	20.331

Investment income	$	0.058		$	0.078		$	0.567		$	1.145		$	1.051
Expenses		(0.334	)		(0.357	)		(0.432	)		(0.431	)		(0.403	)

Net investment income (loss)	$	(0.276	)	$	(0.279	)	$	0.135		$	0.714		$	0.648
Net realized and unrealized gain (loss) on investments		0.000	(w)		(0.001	)		(0.008	)		(0.017	)(g)		—

Change in unit value	$	(0.276	)	$	(0.280	)	$	0.127		$	0.697		$	0.648

Unit value:
Net asset value — end of period	$	21.247		$	21.523		$	21.803		$	21.676		$	20.979

Total Return (%) (k)(r)(s)		(1.28	)		(1.28	)		0.58			3.32			3.19
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.06			2.01			1.99			2.00			1.95
Expenses after expense reductions (f)		1.56			1.66			1.97			N/A			N/A
Net investment income (loss)		(1.28	)		(1.27	)		0.61			3.29			3.15
Number of units outstanding at end of period (000 Omitted)		621			732			793			887			928

	Money Market Variable Account
	Compass 3
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	17.544		$	17.790		$	17.704		$	17.152		$	16.638

Investment income	$	0.045		$	0.066		$	0.468		$	0.902		$	0.852
Expenses		(0.284	)		(0.308	)		(0.364	)		(0.356	)		(0.338	)

Net investment income (loss)	$	(0.239	)	$	(0.242	)	$	0.104		$	0.546		$	0.514
Net realized and unrealized gain (loss) on investments		(0.003	)		(0.004	)		(0.018	)		0.006	(g)		—

Change in unit value	$	(0.242	)	$	(0.246	)	$	0.086		$	0.552		$	0.514

Unit value:
Net asset value — end of period	$	17.302		$	17.544		$	17.790		$	17.704		$	17.152

Total Return (%) (k)(r)(s)		(1.38	)		(1.38	)		0.49			3.22			3.09
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.16			2.11			2.09			2.10			2.05
Expenses after expense reductions (f)		1.66			1.76			2.07			N/A			N/A
Net investment income (loss)		(1.39	)		(1.38	)		0.59			3.20			3.00
Number of units outstanding at end of period (000 Omitted)		11			18			45			64			131

Financial Highlights — continued


	Money Market Variable Account
	Compass 3 – Level 2
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	13.249		$	13.415		$	13.330		$	12.895		$	12.491

Investment income	$	0.036		$	0.048		$	0.344		$	0.695		$	0.644
Expenses		(0.199	)		(0.213	)		(0.257	)		(0.257	)		(0.240	)

Net investment income (loss)	$	(0.163	)	$	(0.165	)	$	0.087		$	0.438		$	0.404
Net realized and unrealized gain (loss) on investments		0.000	(w)		(0.001	)		(0.002	)		(0.003	)(g)		—

Change in unit value	$	(0.163	)	$	(0.166	)	$	0.085		$	0.435		$	0.404

Unit value:
Net asset value — end of period	$	13.086		$	13.249		$	13.415		$	13.330		$	12.895

Total Return (%) (k)(r)(s)		(1.23	)		(1.23	)		0.63			3.38			3.24
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.01			1.96			1.94			1.95			1.90
Expenses after expense reductions (f)		1.51			1.61			1.92			N/A			N/A
Net investment income (loss)		(1.24	)		(1.24	)		0.65			3.32			3.18
Number of units outstanding at end of period (000 Omitted)		1,106			1,332			1,673			1,871			1,969

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

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

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

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

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

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

(w)	Per unit amount was less than $0.001.

See notes to financial statements.

Financial Highlights — continued


	Total Return Variable Account
	Compass 2
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	47.266		$	40.464		$	52.709		$	51.373		$	46.459

Investment income	$	1.590		$	1.601		$	1.748		$	1.832		$	1.749
Expenses		(1.026	)		(0.892	)		(1.008	)		(1.126	)		(1.033	)

Net investment income	$	0.564		$	0.709		$	0.740		$	0.706		$	0.716
Net realized and unrealized gain (loss) on investments and foreign currency		3.582			6.093			(12.985	)		0.630			4.198

Change in unit value	$	4.146		$	6.802		$	(12.245	)	$	1.336		$	4.914

Unit value:
Net asset value — end of period	$	51.412		$	47.266		$	40.464		$	52.709		$	51.373

Total Return (%) (k)(r)(s)		8.77			16.81			(23.23	)		2.60			10.58
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.18			2.18			2.16			2.12			2.14
Expenses after expense reductions (f)		2.10			2.10			2.10			2.11			N/A
Net investment income		1.13			1.64			1.52			1.30			1.46
Portfolio turnover (%)		32			41			57			54			45
Number of units outstanding at end of period (000 Omitted)		587			685			807			948			1,156

	Total Return Variable Account
	Compass 3
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	45.750		$	39.224		$	51.169		$	49.947		$	45.236

Investment income	$	1.485		$	1.505		$	1.645		$	1.770		$	1.645
Expenses		(1.038	)		(0.902	)		(1.033	)		(1.165	)		(1.051	)

Net investment income	$	0.447		$	0.603		$	0.612		$	0.605		$	0.594
Net realized and unrealized gain (loss) on investments and foreign currency		3.492			5.923			(12.557	)		0.617			4.117

Change in unit value	$	3.939		$	6.526		$	(11.945	)	$	1.222		$	4.711

Unit value:
Net asset value — end of period	$	49.689		$	45.750		$	39.224		$	51.169		$	49.947

Total Return (%) (k)(r)(s)		8.61			16.64			(23.34	)		2.45			10.42
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.33			2.33			2.31			2.27			2.29
Expenses after expense reductions (f)		2.25			2.25			2.25			2.26			N/A
Net investment income		0.96			1.50			1.33			1.18			1.28
Portfolio turnover (%)		32			41			57			54			45
Number of units outstanding at end of period (000 Omitted)		23			48			74			107			142

Financial Highlights — continued


	Total Return Variable Account
	Compass 3 – Level 2
	Years ended 12/31
	2010			2009			2008			2007			2006
Per unit data: (d)
Net asset value — beginning of period	$	22.284		$	19.077		$	24.850		$	24.220		$	21.903

Investment income	$	0.732		$	0.740		$	0.807		$	0.849		$	0.812
Expenses		(0.479	)		(0.417	)		(0.471	)		(0.527	)		(0.484	)

Net investment income	$	0.253		$	0.323		$	0.336		$	0.322		$	0.328
Net realized and unrealized gain (loss) on investments and foreign currency		1.701			2.884			(6.109	)		0.308			1.989

Change in unit value	$	1.954		$	3.207		$	(5.773	)	$	0.630		$	2.317

Unit value:
Net asset value — end of period	$	24.238		$	22.284		$	19.077		$	24.850		$	24.220

Total Return (%) (k)(r)(s)		8.77			16.81			(23.23	)		2.60			10.58
Ratios (%) (to average net assets):
Expenses before expense reductions (f)		2.18			2.18			2.16			2.12			2.14
Expenses after expense reductions (f)		2.10			2.10			2.10			2.11			N/A
Net investment income		1.10			1.61			1.49			1.28			1.44
Portfolio turnover (%)		32			41			57			54			45
Number of units outstanding at end of period (000 Omitted)		2,757			3,136			3,572			4,116			4,695

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

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

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

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

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

See notes to financial statements.

Notes to Financial Statements

(1)

Business and Organization

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

(2)

Significant Accounting Policies

General – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. In the preparation of these financial statements, management has evaluated subsequent events occurring after the date of the variable accounts’ Statements of Assets and Liabilities through the date that the financial statements were issued. The High Yield Variable Account invests in high-yield securities rated below investment grade. Investments in high-yield securities involve greater degrees of credit and market risk than investments in higher-rated securities and tend to be more sensitive to economic conditions. The Government Securities Variable Account and Total Return Variable Account invest a significant portion of its assets in asset-backed and/or mortgage-backed securities. The value of these securities may depend, in part, on the issuer’s or borrower’s credit quality or ability to pay principal and interest when due and may fall if an issuer or borrower defaults on its obligation to pay principal or interest or if the instrument’s credit rating is downgraded by a credit rating agency. U.S. Government securities not supported as to the payment of principal or interest by the U.S. Treasury, such as those issued by Fannie Mae, Freddie Mac, and the Federal Home Loan Banks, are subject to greater credit risk than are U.S. Government securities supported by the U.S. Treasury, such as those issued by Ginnie Mae. The Capital Appreciation Variable Account, Global Governments Variable Account, High Yield Variable Account, and Total Return Variable Account invest in foreign securities, including securities of emerging market issuers. Investments in foreign securities are vulnerable to the effects of changes in the relative values of the local currency and the U.S. dollar and to the effects of changes in each country’s legal, political, and economic environment. The markets of emerging markets countries are generally more volatile than the markets of developed countries with more mature economies. All of the risks of investing in foreign securities previously described are heightened when investing in emerging markets countries.

Investment Valuations – Pursuant to procedures approved by the Board of Managers, investments held by the Money Market Variable Account are generally valued at amortized cost, which approximates market value. Amortized cost involves valuing an instrument at its cost as adjusted for amortization of premium or accretion of discount rather than its current market value. The amortized cost value of an instrument can be different from the market value of an instrument. Equity securities, including restricted equity securities, are generally valued at the last sale or official closing price as provided by a third-party pricing service on the market or exchange on which they are primarily traded. Equity securities, for which there were no sales reported that day, are generally valued at the last quoted daily bid quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. Equity securities held short, for which there were no sales reported for that day, are generally valued at the last quoted daily ask quotation as provided by a third-party pricing service on the market or exchange on which such securities are primarily traded. Debt instruments and floating rate loans (other than short-term instruments), including restricted debt instruments, are generally valued at an evaluated or composite bid as provided by a third-party pricing service. Short-term instruments with a maturity at issuance of 60 days or less generally are valued at amortized cost, which approximates market value. Exchange-traded options are generally valued at the last sale or official closing price as provided by a third-party pricing service on the exchange on which such options are primarily traded. Exchange-traded options for which there were no sales reported that day are generally valued at the last daily bid quotation as provided by a third-party pricing service on the exchange on which such options are primarily traded. Options not traded on an exchange are generally valued at a broker/dealer bid quotation. Foreign currency options are generally valued at valuations provided by a third-party pricing service. Futures contracts are generally valued at last posted settlement price as provided by a third-party pricing service on the market on which they are primarily traded. Futures contracts for which there were no trades that day for a particular position are generally valued at the closing bid quotation as provided by a third-party pricing service on the market on which such futures contracts are primarily traded. Forward foreign currency contracts are generally valued at the mean of bid and asked prices for the time period interpolated from rates provided by a third-party pricing service for proximate time periods. Open-end investment companies are generally valued at net asset value per share. Securities and other assets generally valued on the basis of information from a third-party pricing service may also be valued at a broker/dealer bid quotation. Values obtained from third-party pricing services can utilize both transaction data and market information such as yield, quality, coupon rate, maturity, type of issue, trading characteristics, and other market data. The values of foreign securities and other assets and liabilities expressed in foreign currencies are converted to U.S. dollars using the mean of bid and asked prices for rates provided by a third-party pricing service.

The Board of Managers has delegated primary responsibility for determining or causing to be determined the value of the variable accounts’ investments (including any fair valuation) to the adviser pursuant to valuation policies and procedures approved by the Board. If the adviser determines that reliable market quotations are not readily available, investments are valued at fair value as determined in good faith by the adviser in accordance with such procedures under the oversight of the Board of Managers. Under the variable accounts’ valuation policies and procedures, market quotations are not considered to be readily available for most types of debt instruments and floating rate loans and many types of derivatives. These investments are generally valued at fair value based on information from third-party pricing services. In addition, investments may be valued

Notes to Financial Statements — continued

at fair value if the adviser determines that an investment’s value has been materially effected by events occurring after the close of the exchange or market on which the investment is principally traded (such as foreign exchange or market) and prior to the determination of the variable accounts’ net asset value, or after the halting of trading of a specific security where trading does not resume prior to the close of the exchange or market on which the security is principally traded. Events that occur on a frequent basis after foreign markets close (such as developments in foreign markets and significant movements in the U.S. markets) and prior to the determination of the variable accounts’ net asset value may be deemed to have a material effect on the value of securities traded in foreign markets. Accordingly, the variable accounts’ foreign equity securities may often be valued at fair value. The adviser generally relies on third-party pricing services or other information (such as the correlation with price movements of similar securities in the same or other markets; the type, cost and investment characteristics of the security; the business and financial condition of the issuer; and trading and other market data) to assist in determining whether to fair value and at what value to fair value an investment. The value of an investment for purposes of calculating each variable accounts’ net asset value can differ depending on the source and method used to determine value. When fair valuation is used, the value of an investment used to determine each variable accounts’ net asset value may differ from quoted or published prices for the same investment. There can be no assurance that the variable accounts could obtain the fair value assigned to an investment if it were to sell the investment at the same time at which each variable account determines its net asset value per share.

Various inputs are used in determining the value of each variable account’s assets or liabilities. These inputs are categorized into three broad levels. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment’s level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The variable accounts’ assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment, and considers factors specific to the investment. Level 1 includes unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 includes other significant observable market-based inputs (including quoted prices for similar securities, interest rates, prepayment speed, and credit risk). Level 3 includes unobservable inputs, which may include the adviser’s own assumptions in determining the fair value of investments. Other financial instruments are derivative instruments not reflected in total investments, such as futures and forwards. The following is a summary of the levels used as of December 31, 2010 in valuing each variable account’s assets or liabilities:

Capital Appreciation Variable Account


Investments at Value	Level 1		Level 2		Level 3		Total
Equity Securities		$128,677,641		$—		$—		$128,677,641
Mutual Funds		1,555,872		—		—		1,555,872

Total Investments		$130,233,513		$—		$—		$130,233,513

Global Governments Variable Account


Investments at Value	Level 1		Level 2			Level 3		Total
U.S. Treasury Bonds & U.S. Government Agency & Equivalents		$—		$1,787,142			$—		$1,787,142
Non-U.S. Sovereign Debt		—		3,766,912			—		3,766,912
Corporate Bonds		—		14,133			—		14,133
Residential Mortgage-Backed Securities		—		236,614			—		236,614
Commercial Mortgage-Backed Securities		—		100,066			—		100,066
Mutual Funds		246,397		—			—		246,397

Total Investments		$246,397		$5,904,867			$—		$6,151,264


Other Financial Instruments	Level 1		Level 2			Level 3		Total
Forward Currency Contracts		$—		$(12,069	)		$—		$(12,069	)

Government Securities Variable Account


Investments at Value	Level 1			Level 2		Level 3		Total
U.S. Treasury Bonds & U.S. Government Agency & Equivalents		$—			$21,510,045		$—		$21,510,045
Municipal Bonds		—			1,384,008		—		1,384,008
Corporate Bonds		—			295,025		—		295,025
Residential Mortgage-Backed Securities		—			26,544,708		—		26,544,708
Commercial Mortgage-Backed Securities		—			1,114,594		—		1,114,594
Mutual Funds		4,438,810			—		—		4,438,810

Total Investments		$4,438,810			$50,848,380		$—		$55,287,190


Other Financial Instruments	Level 1			Level 2		Level 3		Total
Futures		$(14,778	)		$—		$—		$(14,778	)

Notes to Financial Statements — continued

High Yield Variable Account


Investments at Value	Level 1		Level 2			Level 3		Total
Equity Securities:
United States		$321,132		$277,149			$—		$598,281
Non-U.S. Sovereign Debt		—		36,157			—		36,157
Corporate Bonds		—		33,124,092			14,721		33,138,813
Commercial Mortgage-Backed Securities		—		403,755			—		403,755
Floating Rate Loans		—		593,155			—		593,155
Asset-Backed Securities (including CDO’s)		—		104,992			—		104,992
Foreign Bonds		—		4,832,093			—		4,832,093
Mutual Funds		459,698		—			—		459,698

Total Investments		$780,830		$39,371,393			$14,721		$40,166,944


Other Financial Instruments	Level 1		Level 2			Level 3		Total
Futures		$11,966		$—			$—		$11,966
Forward Currency Contracts		—		(2,741	)		—		(2,741	)

The following is a reconciliation of level 3 assets for which significant unobservable inputs were used to determine fair value. The table presents the activity of level 3 securities held at the beginning and the end of the period.


	Equity Securities			Corporate Bonds		Total
Balance as of 12/31/09		$6,948			$—		$6,948
Accrued discounts/premiums		—			—		—
Realized gain (loss)		(5,181	)		—		(5,181	)
Change in unrealized appreciation (depreciation)		(1,767	)		—		(1,767	)
Purchases		—			—		—
Sales		—			—		—
Transfers into Level 3		—			14,721		14,721
Transfers out of Level 3		—			—		—

Balance as of 12/31/10		$0			$14,721		$14,721

The net change in unrealized appreciation (depreciation) from investments still held as level 3 at December 31, 2010 is $0.

Money Market Variable Account


Investments at Value	Level 1		Level 2		Level 3		Total
Short Term Securities		$—		$28,137,452		$—		$28,137,452

Total Return Variable Account


Investments at Value	Level 1		Level 2		Level 3		Total
Equity Securities		$59,217,284		$—		$—		$59,217,284
U.S. Treasury Bonds & U.S. Government Agency & Equivalents		—		12,892,132		—		12,892,132
Non-U.S. Sovereign Debt		—		1,255,384		—		1,255,384
Municipal Bonds		—		190,778		—		190,778
Corporate Bonds		—		6,560,644		—		6,560,644
Residential Mortgage-Backed Securities		—		13,275,423		—		13,275,423
Commercial Mortgage-Backed Securities		—		2,028,547		—		2,028,547
Asset-Backed Securities (including CDOs)		—		387,890		—		387,890
Foreign Bonds		—		2,334,826		—		2,334,826
Mutual Funds		1,598,744		—		—		1,598,744

Total Investments		$60,816,028		$38,925,624		$—		$99,741,652

For further information regarding security characteristics, see the Portfolios of Investments.

Repurchase Agreements – The Money Market Variable Account entered into repurchase agreements with approved counterparties. Each repurchase agreement is recorded at cost. The variable account requires that the securities collateral in a repurchase transaction be transferred to a custodian. The variable account monitors, on a daily basis, the value of the collateral to ensure that its value, including accrued interest, is greater than amounts owed to the variable account under each such repurchase agreement. The variable account and other funds managed by MFS may utilize a joint trading account for the purpose of entering into one or more repurchase agreements.

Inflation-Adjusted Debt Securities – The Global Governments Variable Account, Government Securities Variable Account, and Total Return Variable Account invest in inflation-adjusted debt securities issued by the U.S. Treasury. The variable accounts may also invest in inflation-adjusted debt

Notes to Financial Statements — continued

securities issued by U.S. Government agencies and instrumentalities other than the U.S. Treasury and by other entities such as U.S. and foreign

corporations and foreign governments. The principal value of these debt securities is adjusted through income according to changes in the Consumer Price Index or another general price or wage index. These debt securities typically pay a fixed rate of interest, but this fixed rate is applied to the inflation-adjusted principal amount. The principal paid at maturity of the debt security is typically equal to the inflation-adjusted principal amount, or the security’s original par value, whichever is greater. Other types of inflation-adjusted securities may use other methods to adjust for other measures of inflation.

Foreign Currency Translation – Purchases and sales of foreign investments, income, and expenses are converted into U.S. dollars based upon currency exchange rates prevailing on the respective dates of such transactions or on the reporting date for foreign denominated receivables and payables. Gains and losses attributable to foreign currency exchange rates on sales of securities are recorded for financial statement purposes as net realized gains and losses on investments. Gains and losses attributable to foreign exchange rate movements on receivables, payables, income and expenses are recorded for financial statement purposes as foreign currency transaction gains and losses. That portion of both realized and unrealized gains and losses on investments that results from fluctuations in foreign currency exchange rates is not separately disclosed.

Derivatives – The Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account use derivatives for different purposes, including to earn income and enhance returns, to increase or decrease exposure to a particular market, to manage or adjust the risk profile of the variable accounts, or as alternatives to direct investments. Derivatives may be used for hedging or non-hedging purposes. While hedging can reduce or eliminate losses, it can also reduce or eliminate gains. When the variable accounts use derivatives as an investment to increase market exposure, or for hedging purposes, gains and losses from derivative instruments may be substantially greater than the derivative’s original cost.

Derivative instruments used by the variable accounts during the period include purchased options, futures contracts, and forward foreign currency exchange contracts. The Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account period end derivatives, as presented in the Portfolios of Investments and the associated Derivative Contract Tables, generally are indicative of the volume of their derivative activity during the period.

The following tables present, by major type of derivative contract, the fair value, on a gross basis, of the asset and liability components of derivatives held by the Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account at December 31, 2010 as reported in the Statements of Assets and Liabilities:

Global Governments Variable Account


		Fair Value
Risk	Derivative	Asset Derivatives		Liability Derivatives
Foreign Exchange Contracts	Forward Foreign Currency Exchange Contracts		$21,668		$(33,737	)

Government Securities Variable Account


		Fair Value (a)
Risk	Derivative	Liability Derivatives
Interest Rate Contracts	Interest Rate Futures		$(14,778	)

High Yield Variable Account


		Fair Value (a)
Risk	Derivative	Asset Derivatives		Liability Derivatives
Interest Rate Contracts	Interest Rate Futures		$11,966		$—
Foreign Exchange Contracts	Forward Foreign Currency Exchange Contracts		—		(2,741	)
Equity Contracts	Purchased Equity Options		69,600		—

Total			$81,566		$(2,741	)

(a)

The value of purchased options outstanding is included in total investments, at value, within the variable account’s Statement of Assets and Liabilities. The value of futures contracts outstanding includes cumulative appreciation (depreciation) as reported in the variable account’s Portfolio of Investments. Only the current day variation margin for futures contracts is separately reported within the variable account’s Statement of Assets and Liabilities.

Notes to Financial Statements — continued

The following tables present, by major type of derivative contract, the realized gain (loss) on derivatives held by the Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account for the year ended December 31, 2010 as reported in the Statements of Operations:

Global Governments Variable Account


Risk	Foreign Currency Transactions		Investment Transactions (Purchased Options)
Foreign Exchange Contracts		$91,642		$(889	)
Interest Rate Contracts		—		(452	)

Total		$91,642		$(1,341	)

Government Securities Variable Account


Risk	Futures Contracts
Interest Rate Contracts		$115,051

High Yield Variable Account


Risk	Futures Contracts		Foreign Currency Transactions		Investment Transactions (Purchased Options)
Interest Rate Contracts		$15,154		$—		$—
Foreign Exchange Contracts		—		32,710		—
Equity Contracts		—		—		9,278

Total		$15,154		$32,710		$9,278

The following tables present, by major type of derivative contract, the change in unrealized appreciation (depreciation) on derivatives held by the Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account for the year ended December 31, 2010 as reported in the Statements of Operations:

Global Governments Variable Account


Risk	Translation of Assets and Liabilities in Foreign Currencies
Foreign Exchange Contracts		$10,431

Government Securities Variable Account


Risk	Futures Contracts
Interest Rate Contracts		$24,279

High Yield Variable Account


Risk	Futures Contracts		Translation of Assets and Liabilities in Foreign Currencies			Investments (Purchased Options)
Interest Rate Contracts		$11,966		$—			$—
Foreign Exchange Contracts		—		(9,060	)		—
Equity Contracts		—		—			22,764

Total		$11,966		$(9,060	)		$22,764

For the year ended December 31, 2010, the Capital Appreciation Variable Account, Money Market Variable Account, and Total Return Variable Account did not invest in any derivative instruments.

Derivative counterparty credit risk is managed through formal evaluation of the creditworthiness of all potential counterparties. On certain over-the-counter derivatives, Global Governments Variable Account, Government Securities Variable Account, and High Yield Variable Account attempt to reduce its exposure to counterparty credit risk whenever possible by entering into an International Swaps and Derivatives Association (ISDA) Master Agreement on a bilateral basis with each of the counterparties with whom it undertakes a significant volume of transactions. The ISDA Master Agreement gives each party to the agreement the right to terminate all transactions traded under such agreement if there is a certain deterioration in the credit quality of the other party. The ISDA Master Agreement gives the variable accounts the right, upon an event of default by

Notes to Financial Statements — continued

the applicable counterparty or a termination of the agreement, to close out all transactions traded under such agreement and to net amounts owed under each transaction to one net amount payable by one party to the other. This right to close out and net payments across all transactions traded under the ISDA Master Agreement could result in a reduction of the variable accounts’ credit risk to such counterparty equal to any amounts payable by the variable account under the applicable transactions, if any. However, absent an event of default by the counterparty or a termination of the agreement, the ISDA Master Agreement does not result in an offset of reported amounts of assets and liabilities in the Statements of Assets and Liabilities across transactions between the variable accounts and the applicable counterparty.

Collateral requirements differ by type of derivative. Collateral or margin requirements are set by the broker or exchange clearing house for exchange traded derivatives (i.e., futures and exchange-traded options) while collateral terms are contract specific for over-the-counter traded derivatives (i.e., forwards, swaps and over-the-counter options). For derivatives traded under an ISDA Master Agreement, the collateral requirements are netted across all transactions traded under such agreement and one amount is posted from one party to the other to collateralize such obligations. Cash collateral that has been pledged to cover obligations of the variable accounts under derivative contracts, if any, will be reported separately on the Statements of Assets and Liabilities as restricted cash. Securities collateral pledged for the same purpose, if any, is noted in the Portfolios of Investments.

Purchased Options – The Global Governments Variable Account and High Yield Variable Account purchased call and/or put options for a premium. Purchased call and put options entitle the holder to buy and sell a specified number of shares or units of a particular security, currency or index at a specified price at a specified date or within a specified period of time. Purchasing call options may be used to hedge against an anticipated increase in the dollar cost of securities or currency to be acquired or to increase the variable accounts’ exposure to an underlying instrument. Purchasing put options may hedge against a decline in the value of portfolio securities or currency.

The premium paid is initially recorded as an investment in the Statements of Assets and Liabilities. That investment is subsequently marked-to-market daily with the difference between the premium paid and the market value of the purchased option being recorded as unrealized appreciation or depreciation. Premiums paid for purchased call and put options which have expired are treated as realized losses on investments in the Statements of Operations. Upon the exercise or closing of a purchased call option, the premium paid is added to the cost of the security or financial instrument. Upon the exercise or closing of a purchased put option, the premium paid is offset against the proceeds on the sale of the underlying security or financial instrument in order to determine the realized gain or loss on investments.

The risk in purchasing an option is that the variable accounts pay a premium whether or not the option is exercised. The variable accounts’ maximum risk of loss due to counterparty credit risk is limited to the market value of the option. For over-the-counter options, this risk is mitigated in cases where there is an ISDA Master Agreement between the variable accounts and the counterparty providing for netting as described above and for posting of collateral by the counterparty to the variable accounts to cover the variable accounts’ exposure to the counterparty under such ISDA Master Agreement.

Futures Contracts – The Government Securities Variable Account and High Yield Variable Account entered into futures contracts which may be used to gain or to hedge against broad market, interest rate or currency exposure. A futures contract represents a commitment for the future purchase or sale of an asset at a specified price on a specified date.

Upon entering into a futures contract, the variable accounts are required to deposit with the broker, either in cash or securities, an initial margin in an amount equal to a certain percentage of the notional amount of the contract. Subsequent payments (variation margin) are made or received by the variable accounts each day, depending on the daily fluctuations in the value of the contract, and are recorded for financial statement purposes as unrealized gain or loss by the variable accounts until the contract is closed or expires at which point the gain or loss on futures is realized.

The variable accounts bear the risk of interest rates, exchange rates or securities prices moving unexpectedly, in which case, the variable accounts may not achieve the anticipated benefits of the futures contracts and may realize a loss. While futures may present less counterparty risk to the variable accounts since the contracts are exchange traded and the exchange’s clearinghouse guarantees payments to the broker, there is still counterparty credit risk due to the insolvency of the broker. The variable accounts’ maximum risk of loss due to counterparty credit risk is equal to the margin posted by the variable accounts to the broker plus any gains or minus any losses on the outstanding futures contracts.

Forward Foreign Currency Exchange Contracts – The Global Governments Variable Account and High Yield Variable Account entered into forward foreign currency exchange contracts for the purchase or sale of a specific foreign currency at a fixed price on a future date. These contracts may be used to hedge the variable accounts’ currency risk or for non-hedging purposes. For hedging purposes, the variable accounts may enter into contracts to deliver or receive foreign currency that the variable accounts will receive from or use in its normal investment activities. The variable accounts may also use contracts to hedge against declines in the value of foreign currency denominated securities due to unfavorable exchange rate movements. For non-hedging purposes, the variable accounts may enter into contracts with the intent of changing the relative exposure of the variable accounts’ portfolio of securities to different currencies to take advantage of anticipated exchange rate changes.

Forward foreign currency exchange contracts are adjusted by the daily exchange rate of the underlying currency and any unrealized gains or losses are recorded as a receivable or payable for forward foreign currency exchange contracts until the contract settlement date. On contract settlement date, any gain or loss on the contract is recorded as realized gains or losses on foreign currency transactions.

Risks may arise upon entering into these contracts from unanticipated movements in the value of the contract and from the potential inability of counterparties to meet the terms of their contracts. Generally, the variable accounts’ maximum risk due to counterparty credit risk is the unrealized

Notes to Financial Statements — continued

gain on the contract due to our use of continuous linked settlement, an industry accepted settlement system. This risk is mitigated in cases where there is an ISDA Master Agreement between the variable accounts and the counterparty providing for netting as described above and for posting of collateral by the counterparty to the variable accounts to cover the variable accounts’ exposure to the counterparty under such ISDA Master Agreement.

Loans and Other Direct Debt Instruments – The High Yield Variable Account invests in loans and loan participations or other receivables. These investments may include standby financing commitments, including revolving credit facilities, which obligate the variable account to supply additional cash to the borrower on demand. Loan participations involve a risk of insolvency of the lending bank or other financial intermediary.

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

Investment Transactions and Income – Investment transactions are recorded on the trade date. Interest income is recorded on the accrual basis. All premium and discount is amortized or accreted for financial statement purposes in accordance with U.S. generally accepted accounting principles. Certain variable accounts earn certain fees in connection with its floating rate loan purchasing activities. These fees are in addition to interest payments earned and may include amendment fees, commitment fees, facility fees, consent fees, and prepayment fees. Commitment fees are recorded on an accrual basis as income in the accompanying financial statements. Inflation-indexed bonds are fixed-income securities whose principal value is periodically adjusted upward or downward to the rate of inflation. Interest is accrued based on the principal value, which is adjusted for inflation. Any increase or decrease in the principal amount of an inflation-indexed bond is generally recorded as an increase or decrease in interest income, respectively, even though the adjusted principal is not received until maturity. Dividends received in cash are recorded on the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. Dividends received in cash are recorded on the ex-dividend date. Certain dividends from foreign securities will be recorded when the variable account is informed of the dividend if such information is obtained subsequent to the ex-dividend date. Dividend and interest payments received in additional securities are recorded on the ex-dividend or ex-interest date in an amount equal to the value of the security on such date. Debt obligations may be placed on non-accrual status or set to accrue at a rate of interest less than the contractual coupon when the collection of all or a portion of interest has become doubtful. Interest income for those debt obligations may be further reduced by the write-off of the related interest receivables when deemed uncollectible.

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

The Global Governments Variable Account, Government Securities Variable Account, and Total Return Variable Account entered into “TBA” (to be announced) purchase commitments to purchase securities for a fixed unit price at a future date. Although the unit price has been established, the principal value has not been finalized. However, the principal amount of the commitments will not fluctuate more than 0.01%. The variable accounts hold, and maintains until settlement date, cash or high-grade debt obligations in an amount sufficient to meet the purchase price, or the variable account may enter into offsetting contracts for the forward sale of other securities it owns. Income on the securities will not be earned until settlement date. TBA purchase commitments may be considered securities in themselves, and involve a risk of loss if the value of the security to be purchased declines prior to settlement date, which is in addition to the risk of decline in the value of the variable accounts’ other assets. Unsettled TBA purchase commitments are valued at the current market value of the underlying securities.

The Global Governments Variable Account, Government Securities Variable Account, and Total Return Variable Account entered into “TBA” (to be announced) sale commitments to hedge its portfolio positions or to sell mortgage-backed securities it owns under delayed delivery arrangements. Proceeds of TBA sale commitments are not received until the contractual settlement date. During the time a TBA sale commitment is outstanding, equivalent deliverable securities, or an offsetting TBA purchase commitment deliverable on or before the sale commitment date, are held as “cover” for the transaction.

Fees Paid Indirectly – The variable accounts’ custody fee may be reduced according to an arrangement that measures the value of cash deposited with the custodian by the variable accounts. This amount, for the year ended December 31, 2010, is shown as a reduction of total expenses on the Statements of Operations.

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

Notes to Financial Statements — continued

(3)

Annuity Reserves

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

(4)

Transactions with Affiliates

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


	Annual Rate of Management Fee Based on Average Daily Net Assets Not Exceeding $300 Million			Annual Rate of Management Fee Based on Average Daily Net Assets In Excess of $300 Million			Effective Management Fees
Capital Appreciation Variable Account		0.75	%		0.675	%		0.75	%
Global Governments Variable Account		0.75	%		0.675	%		0.75	%
Government Securities Variable Account		0.55	%		0.495	%		0.55	%
High Yield Variable Account		0.75	%(a)		0.675	%		0.70	%
Money Market Variable Account		0.50	%		0.500	%(b)		0.11	%(c)
Total Return Variable Account		0.75	%		0.675	%		0.75	%

(a)

The investment adviser has agreed in writing to reduce its management fee to 0.70% for the first $300 million of average daily net assets. This written agreement will continue until modified or rescinded by the variable account’s Board of Managers, but such agreement will continue at least until April 30, 2012. This management fee reduction amounted to $20,289, which is shown as a reduction of total expenses in the Statement of Operations.

(b)

The investment adviser has agreed in writing to reduce its management fee to 0.45% of average daily net assets in excess of $500 million. This written agreement will continue until modified or rescinded by the variable account’s contract holders. For the year ended December 31, 2010, the variable account’s average daily net assets did not exceed $500 million, and therefore, the management fee was not reduced under this agreement.

(c)

During the year ended December 31, 2010, MFS voluntarily waived receipt of $122,209, of the variable account’s management fee in order to avoid a negative yield. For the year ended December 31, 2010, this voluntary waiver had the effect of reducing the management fee by 0.39% of average daily net assets on an annualized basis.

The investment adviser has agreed in writing to pay the variable accounts’ total annual operating expenses, exclusive of interest, taxes, brokerage commissions, to the extent permitted, extraordinary expenses, mortality and expense risk and distribution expense risk charges, and contract maintenance charges, such that total annual operating expenses do not exceed 1.25% annually of the average daily net assets of each variable account. These agreements are contained in the investment advisory agreement between MFS and the variable accounts and may not be rescinded without contract holder approval. For the year ended December 31, 2010, this reduction amounted to $77,670 for the Global Governments Variable Account and is reflected as a reduction of total expenses in the Statements of Operations. Each of the other variable accounts did not exceed the limit and therefore, the investment adviser did not pay any portion of the variable accounts’ expenses under this agreement. In addition, the investment adviser has agreed in writing to pay a portion of total annual operating expenses of the variable accounts listed below, exclusive of interest, taxes, extraordinary expenses, brokerage and transaction costs, mortality and expense risk and distribution expense risk charges, contract maintenance charges, and investment-related expenses, such that the total annual operating expenses of these variable accounts do not exceed the expense limitations indicated below, based on the average daily net assets of such variable accounts. These written agreements will continue until April 30, 2012, except for the Capital Appreciation Variable Account whose written agreement will terminate on April 30, 2011. For the year ended December 31, 2010, these reductions under this agreement amounted to the following for each variable account and are reflected as a reduction of total expenses in the Statements of Operations:


	Expense Limitation			Expense Reduction
Capital Appreciation Variable Account		0.82	%	$	73,102
High Yield Variable Account		0.90	%		48,361
Money Market Variable Account		0.65	%		32,691
Total Return Variable Account		0.85	%		83,336

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

For assuming the distribution expense risk under Compass 3 contracts, the Sponsor makes a deduction from the variable accounts at the end of each valuation period for the first seven contract years at an effective annual rate of 0.15% of the net assets of the variable accounts attributable to

Notes to Financial Statements — continued

such contracts. Contracts are transferred from Compass 3 to Compass 3 – Level 2 in the month following the seventh contract anniversary. No deduction is made after the seventh contract anniversary. No deduction is made with respect to assets attributable to Compass 2 contracts.

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

The Sponsor does not deduct a sales charge from purchase payments. However, a withdrawal charge (contingent deferred sales charge) may be deducted to cover certain expenses relating to the sale of the contract. In no event shall the aggregate withdrawal charges (including the distribution expense charge described above applicable to Compass 3 contracts) exceed 5% of the purchase payments made under a Compass 2 contract or 9% of the purchase payments made under a Compass 3 contract.

Administrator – MFS provides certain financial, legal, shareholder communications, compliance, and other administrative services to the variable accounts. Under an administrative services agreement, the variable accounts partially reimburse MFS the costs incurred to provide these services. The variable accounts are charged an annual fixed amount of $10,000 plus a fee based on average daily net assets. The administrative services fee incurred for the year ended December 31, 2010 was equivalent to the following annual effective rate of each variable account’s average daily net assets:


	Capital Appreciation Variable Account			Global Governments Variable Account			Government Securities Variable Account			High Yield Variable Account			Money Market Variable Account			Total Return Variable Account
Percent of average daily net assets		0.0369	%		0.1469	%		0.0397	%		0.0421	%		0.0443	%		0.0375	%

Managers’ and Officers’ Compensation – Each variable account pays compensation to managers in the form of a retainer, attendance fees, and additional compensation to the Board chairperson. Each variable account does not pay compensation directly to officers who are affiliated with the Investment Adviser or the Sponsor all of whom receive remuneration for their services to the variable account from MFS. Certain officers of the variable accounts are officers or directors of MFS, MFD (MFS Distributors, Inc.), and MFSC (MFS Service Center, Inc.).

Other – These variable accounts and certain other funds managed by MFS (the funds) have entered into services agreements (the Agreements) which provide for payment of fees by the funds to Tarantino LLC and Griffin Compliance LLC in return for the provision of services of an Independent Chief Compliance Officer (ICCO) and Assistant ICCO, respectively, for the funds. The ICCO and Assistant ICCO are officers of the funds and the sole members of Tarantino LLC and Griffin Compliance LLC, respectively. The funds can terminate the Agreements with Tarantino LLC and Griffin Compliance LLC at any time under the terms of the Agreements. MFS has agreed to bear all expenses associated with office space, other administrative support, and supplies provided to the ICCO and Assistant ICCO. For the year ended December 31, 2010, the aggregate fees paid by the variable accounts to Tarantino LLC and Griffin Compliance LLC which are included in miscellaneous expense on the Statements of Operations were as follows:


Capital Appreciation Variable Account			$2,122
Global Governments Variable Account			118
Government Securities Variable Account			1,013
High Yield Variable Account			697
Money Market Variable Account			535
Total Return Variable Account			1,722

All variable accounts, except the Money Market Variable Account invest in the MFS Institutional Money Market Portfolio which is managed by MFS and seeks a high level of current income consistent with preservation of capital and liquidity. Income earned on this investment is included in dividends from underlying funds on the Statements of Operations. This money market fund does not pay a management fee to MFS.

(5)

Portfolio Securities

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


	Purchases		Sales
Capital Appreciation Variable Account	$	52,580,854	$	68,115,033
Global Governments Variable Account		1,605,823		2,928,557
Government Securities Variable		944,178		2,478,120
High Yield Variable Account		25,547,306		28,056,679
Total Return Variable Account		21,511,723		30,927,214

Purchases and sales of money market securities for the Money Market Variable Account, exclusive of securities subject to repurchase agreements, aggregated $1,691,117,654 and $1,697,032,558, respectively.

Notes to Financial Statements — continued

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


	Purchases		Sales
Global Governments Variable Account		$1,924,852		$1,859,115
Government Securities Variable Account		17,064,266		23,305,104
Total Return Variable Account		10,160,541		14,143,415

(6)

Participant Transactions

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


	Year Ended 12/31/10 (000 Omitted)
	Purchase Payments Received						Transfers Between Variable Accounts and Fixed Accumulation Account						Withdrawals, Surrenders, Annuitizations, and Contract Charges						Net Accumulation Activity						Net Annuitization Activity			Net Increases (Decrease)
	Units			Dollars			Units			Dollars			Units			Dollars			Units			Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts		10		$	452			(16	)	$	(763	)		(173	)	$	(9,653	)		(179	)	$	(9,964	)	$	(223	)	$	(10,187	)
Compass 3 Contracts		3			108			(7	)		(265	)		(3	)		(75	)		(7	)		(232	)		—			(232	)
Compass 3 Level 2 Contracts		18			193			(28	)		(346	)		(347	)		(5,270	)		(357	)		(5,423	)		2			(5,421	)

				$	753					$	(1,374	)				$	(14,998	)				$	(15,619	)	$	(221	)	$	(15,840	)

Global Governments Variable Account
Compass 2 Contracts		0	*	$	0	*		(3	)	$	(85	)		(27	)	$	(835	)		(30	)	$	(920	)	$	(3	)	$	(923	)
Compass 3 Contracts		0	*		13			(0	)*		(40	)		(1	)		(17	)		(1	)		(44	)		—			(44	)
Compass 3 Level 2 Contracts		1			6			(7	)		(116	)		(38	)		(679	)		(44	)		(789	)		(13	)		(802	)

				$	19					$	(241	)				$	(1,531	)				$	(1,753	)	$	(16	)	$	(1,769	)

Government Securities Variable Account
Compass 2 Contracts		14		$	628			(8	)	$	(346	)		(127	)	$	(5,906	)		(121	)	$	(5,624	)	$	(229	)	$	(5,853	)
Compass 3 Contracts		0	*		14			(7	)		(232	)		(0	)*		(7	)		(7	)		(225	)		—			(225	)
Compass 3 Level 2 Contracts		4			54			37			722			(105	)		(2,020	)		(64	)		(1,244	)		(4	)		(1,248	)

				$	696					$	144					$	(7,933	)				$	(7,093	)	$	(233	)	$	(7,326	)

High Yield Variable Account
Compass 2 Contracts		5		$	223			(10	)	$	(435	)		(86	)	$	(3,880	)		(91	)	$	(4,092	)	$	(85	)	$	(4,177	)
Compass 3 Contracts		0	*		18			(1	)		(45	)		(1	)		(39	)		(2	)		(66	)		—			(66	)
Compass 3 Level 2 Contracts		1			14			(6	)		(30	)		(60	)		(1,061	)		(65	)		(1,077	)		(11	)		(1,088	)

				$	255					$	(510	)				$	(4,980	)				$	(5,235	)	$	(96	)	$	(5,331	)

Money Market Variable Account
Compass 2 Contracts		4		$	76			38		$	828			(153	)	$	(3,286	)		(111	)	$	(2,382	)	$	(23	)	$	(2,405	)
Compass 3 Contracts		1			14			(6	)		(107	)		(2	)		(38	)		(7	)		(131	)		—			(131	)
Compass 3 Level 2 Contracts		13			145			13			206			(252	)		(3,322	)		(226	)		(2,971	)		(4	)		(2,975	)

				$	235					$	927					$	(6,646	)				$	(5,484	)	$	(27	)	$	(5,511	)

Total Return Variable Account
Compass 2 Contracts		4		$	211			(10	)	$	(495	)		(92	)	$	(4,488	)		(98	)	$	(4,772	)	$	(73	)	$	(4,845	)
Compass 3 Contracts		2			96			(21	)		(984	)		(6	)		(295	)		(25	)		(1,183	)		—			(1,183	)
Compass 3 Level 2 Contracts		14			203			11			380			(404	)		(9,221	)		(379	)		(8,638	)		(32	)		(8,670	)

				$	510					$	(1,099	)				$	(14,004	)				$	(14,593	)	$	(105	)	$	(14,698	)

*	Amount is less than $500

Notes to Financial Statements — continued


	Year Ended 12/31/09 (000 Omitted)
	Purchase Payments Received						Transfers Between Variable Accounts and Fixed Accumulation Account						Withdrawals, Surrenders, Annuitizations, and Contract Charges						Net Accumulation Activity						Net Annuitization Activity			Net Increases (Decrease)
	Units			Dollars			Units			Dollars			Units			Dollars			Units			Dollars			Dollars			Dollars
Capital Appreciation Variable Account
Compass 2 Contracts		12		$	446			(41	)	$	(1,617	)		(193	)	$	(8,537	)		(222	)	$	(9,708	)	$	(316	)	$	(10,024	)
Compass 3 Contracts		4			104			(19	)		(517	)		(4	)		(116	)		(19	)		(529	)		(1	)		(530	)
Compass 3 Level 2 Contracts		26			204			(37	)		(357	)		(379	)		(4,623	)		(390	)		(4,776	)		(19	)		(4,795	)

				$	754					$	(2,491	)				$	(13,276	)				$	(15,013	)	$	(336	)	$	(15,349	)

Global Governments Variable Account
Compass 2 Contracts		0	*	$	0	*		3		$	90			(9	)	$	(282	)		(6	)	$	(192	)	$	(3	)	$	(195	)
Compass 3 Contracts		0	*		13			(3	)		(78	)		(1	)		(41	)		(4	)		(106	)		(1	)		(107	)
Compass 3 Level 2 Contracts		1			5			4			73			(37	)		(633	)		(32	)		(555	)		9			(546	)

				$	18					$	85					$	(956	)				$	(853	)	$	5		$	(848	)

Government Securities Variable Account
Compass 2 Contracts		9		$	385			(21	)	$	(926	)		(129	)	$	(5,776	)		(141	)	$	(6,317	)	$	72		$	(6,245	)
Compass 3 Contracts		1			43			(6	)		(198	)		(5	)		(161	)		(10	)		(316	)		—			(316	)
Compass 3 Level 2 Contracts		11			173			35			662			(146	)		(2,662	)		(100	)		(1,827	)		(4	)		(1,831	)

				$	601					$	(462	)				$	(8,599	)				$	(8,460	)	$	68		$	(8,392	)

High Yield Variable Account
Compass 2 Contracts		5		$	139			(30	)	$	(1,030	)		(84	)	$	(2,920	)		(109	)	$	(3,811	)	$	(103	)	$	(3,914	)
Compass 3 Contracts		1			17			(3	)		(76	)		(3	)		(58	)		(5	)		(117	)		(1	)		(118	)
Compass 3 Level 2 Contracts		2			19			(0	)*		32			(67	)		(878	)		(65	)		(827	)		(7	)		(834	)

				$	175					$	(1,074	)				$	(3,856	)				$	(4,755	)	$	(111	)	$	(4,866	)

Money Market Variable Account
Compass 2 Contracts		5		$	86			93		$	2,026			(159	)	$	(3,444	)		(61	)	$	(1,332	)	$	(44	)	$	(1,376	)
Compass 3 Contracts		1			23			(22	)		(389	)		(6	)		(105	)		(27	)		(471	)		(1	)		(472	)
Compass 3 Level 2 Contracts		13			83			23			403			(377	)		(5,034	)		(341	)		(4,548	)		(11	)		(4,559	)

				$	192					$	2,040					$	(8,583	)				$	(6,351	)	$	(56	)	$	(6,407	)

Total Return Variable Account
Compass 2 Contracts		6		$	259			(32	)	$	(1,219	)		(96	)	$	(3,902	)		(122	)	$	(4,862	)	$	(142	)	$	(5,004	)
Compass 3 Contracts		3			87			(20	)		(796	)		(9	)		(347	)		(26	)		(1,056	)		(2	)		(1,058	)
Compass 3 Level 2 Contracts		28			418			(56	)		(834	)		(408	)		(8,064	)		(436	)		(8,480	)		(54	)		(8,534	)

				$	764					$	(2,849	)				$	(12,313	)				$	(14,398	)	$	(198	)	$	(14,596	)

*	Amount is less than $500

(7)

Line of Credit

The variable accounts and certain other funds managed by MFS participate in a $1.1 billion unsecured committed line of credit, subject to a $1 billion sublimit, provided by a syndication of banks under a credit agreement. Borrowings may be made for temporary financing needs. Interest is charged to each fund, based on its borrowings, generally at a rate equal to the higher of the Federal Reserve funds rate or one month LIBOR plus an agreed upon spread. A commitment fee, based on the average daily, unused portion of the committed line of credit, is allocated among the participating funds at the end of each calendar quarter. In addition, the variable accounts and other funds managed by MFS have established unsecured uncommitted borrowing arrangements with certain banks for temporary financing needs. Interest is charged to each fund, based on its borrowings, at a rate equal to the Federal Reserve funds rate plus an agreed upon spread. For the year ended December 31, 2010, the variable accounts’ commitment fee and interest expense are included in miscellaneous expense on the Statements of Operations and were as follows:


	Commitment fee		Interest expense
Capital Appreciation Variable Account		$1,396		$—
Global Governments Variable Account		76		—
Government Securities Variable Account		663		—
High Yield Variable Account		452		—
Money Market Variable Account		354		—
Total Return Variable Account		1,131		—

Notes to Financial Statements — continued

(8)

Transactions in Underlying Funds – Affiliated Issuers

An affiliated issuer may be considered one in which the variable account owns 5% or more of the outstanding voting securities, or a company which is under common control. For the purposes of this report, For the purposes of this report, the variable accounts assume the MFS Institutional Money Market Portfolio to be an affiliated issuer. The variable accounts’ transactions in the MFS Institutional Money Market Portfolio for the year ended December 31, 2010 are as follows:


	Underlying Funds – MFS Institutional Money Market Portfolio
	Beginning Share/Par Amount		Acquisitions Share/Par Amount		Dispositions Share/Par Amount			Ending Share/Par Amount
Capital Appreciation Variable Account		1,026,944		20,629,778		(20,100,850	)		1,555,872
Global Governments Variable Account		444,688		3,532,631		(3,730,922	)		246,397
Government Securities Variable Account		2,776,082		24,895,830		(23,233,102	)		4,438,810
High Yield Variable Account		996,965		17,139,907		(17,677,174	)		459,698
Total Return Variable Account		654,933		24,396,617		(23,452,806	)		1,598,744

	Underlying Funds – MFS Institutional Money Market Portfolio

	Realized Gain (Loss)		Capital Gain Distributions		Dividend Income			Ending Value
Capital Appreciation Variable Account		$—		$—		$2,430			$1,555,872
Global Governments Variable Account		$—		$—		$786			$246,397
Government Securities Variable Account		$—		$—		$8,688			$4,438,810
High Yield Variable Account		$—		$—		$2,045			$459,698
Total Return Variable Account		$—		$—		$2,031			$1,598,744

Report of Independent Registered Public Accounting Firm

To the Participants in and the Board of Managers of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account and the Board of Directors of Sun Life Assurance Company of Canada (U.S.):

We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account (the “Variable Accounts”) as of December 31, 2010, 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 Variable Accounts’ 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. The Variable Accounts are not required to have, nor were we engaged to perform, an audit of their 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 Variable Accounts’ 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2010, by correspondence with the custodian and brokers; where replies were not received from brokers, we performed other auditing procedures. 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 positions of Capital Appreciation Variable Account, Global Governments Variable Account, Government Securities Variable Account, High Yield Variable Account, Money Market Variable Account and Total Return Variable Account as of December 31, 2010, 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 accounting principles generally accepted in the United States of America.

DELOITTE & TOUCHE LLP

Boston, Massachusetts

February 14, 2011

Compass Variable Accounts

Members of Boards of Managers and Officers — Identification and Background

The Members of the Boards of Managers (“Managers”) and the officers of each Account, as of February 1, 2011, are listed below, together with their principal occupations during the past five years. (Their titles may have varied during that period.) The address of each Manager and officer is 500 Boylston Street, Boston, Massachusetts 02116.



Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(h)	Principal Occupation During the Past Five Years and Other Directorships(j)
INTERESTED MANAGERS
David D. Horn(k) (born 6/07/41)	Board Member	April 1986	Private investor; Sun Life Assurance Company of Canada, Senior Vice President and General Manager for the United States (until 1997); Director (until March 2004)

INDEPENDENT MANAGERS
J. Kermit Birchfield (born 1/08/40)	Chairman	May 1997	Consultant; Century Partners, Inc. (investments), Director; Displaytech, Inc. (technology), Chairman; Dessin Fournir LLC (furniture manufacturer), Director; Site Watch LLC (software to monitor oil tanks), Managing Director (2006 to present); Juridica Investments (fund investing in judicial matters), Director (2007 to present), Immuno Science, Inc. (medical research), Independent Director ( 2009 to present), Intermountain Industries, Inc. (oil & gas exploration and production), Director (until February 2009)

Robert C. Bishop (born 1/13/43)	Board Member	May 2001	AutoImmune, Inc. (pharmaceutical product development), Chairman, President and Chief Executive Officer; Caliper Life Sciences Corp. (laboratory analytical instruments), Chairman; Optobionics Corporation (ophthalmic devices), Director (until 2007); Millipore Corporation (purification/filtration products), Director (until July 2010); Waterstreet Capital (leverage buyouts), Advisory Board (until August 2010)

Frederick H. Dulles (born 3/12/42)	Board Member	May 2001	Dulles International Law LLC (law firm), Senior Lawyer (since 2009); Juridica Capital Management (US) Inc. (litigation financing), Vice President and General Counsel (since 2009); Dulles Properties LLC (real estate), Broker (since 2008); The Citadel School of Business Administration (education), Adjunct Professor (since 2003); Disher, Hamrick & Myers Residential, Inc. (real estate), Broker (until 2006); Frederick H. Dulles Law Practice (law firm), (until 2006); Charlestown School of Law (education), Adjunct Professor (until 2007); Prudential Carolina Real Estate, (real estate), Broker (until 2008); Free Enterprise Foundation Inc. (research institute), Director & Secretary (until 2008); Ten State International Law PLLP (law firm), Of Counsel (until 2009)

Marcia A. Kean (born 6/30/48)	Board Member	April 2005	Feinstein Kean Healthcare (consulting), Chief Executive Officer

Members of Boards of Managers and Officers — continued



Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(h)	Principal Occupation During the Past Five Years and Other Directorships(j)

Ronald G. Steinhart (born 6/15/40)	Board Member	May 2001	Private investor; Penske Automotive Group (automotive retailer), Director; Animal Health International, Inc. (animal health products), Director (since 2007); Texas Industries (concrete/aggregates/cement), Director (since 2007); Susser Holdings Corporation (retail convenience stores and distributor of wholesale motor fuel), Director (since 2009); Prentiss Properties Trust (real estate investment trust), Director (until 2006); Penson Worldwide, Inc. (securities clearance), Director (until 2008)

Haviland Wright (born 7/21/48)	Board Member	May 2001	X-Change Corp. (multi-media web services), Director (since 2010); Nano Loa Inc. (liquid crystal displays), Director (until 2009); Profitability of Hawaii (software), Chief Development Officer (until 2010); Elixir Technologies Corporation (software), Director (until 2010)

OFFICERS
Maria F. DiOrioDwyer(n) (born 12/01/58)	President	November 2005	Massachusetts Financial Services Company, Executive Vice President and Chief Regulatory Officer; Chief Compliance Officer (since December 2006)

Christopher R. Bohane(n) (born 1/18/74)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel

John M. Corcoran(n) (born 4/13/65)	Treasurer	October 2008	Massachusetts Financial Services Company, Senior Vice President (since October 2008); State Street Bank and Trust (financial services provider), Senior Vice President, (until September 2008)

Ethan D. Corey(n) (born 11/21/63)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel

David L. DiLorenzo(n) (born 8/10/68)	Assistant Treasurer	July 2005	Massachusetts Financial Services Company, Vice President

Timothy M. Fagan(n) (born 7/10/68)	Assistant Secretary and Assistant Clerk	September 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel

Mark D. Fischer(n) (born 10/27/70)	Assistant Treasurer	July 2005	Massachusetts Financial Services Company, Vice President

Members of Boards of Managers and Officers — continued



Name, Date of Birth	Position(s) Held with Fund	Manager/Officer Since(h)	Principal Occupation During the Past Five Years and Other Directorships(j)

Robyn L. Griffin (born 7/04/75)	Assistant Independent Chief Compliance Officer	August 2008	Griffin Compliance LLC (provider of compliance services), Principal (since August 2008); State Street Corporation (financial services provider), Mutual Fund Administration Assistant Vice President (October 2006 – July 2008); Liberty Mutual Group (insurance), Personal Market Assistant Controller (April 2006 – October 2006); Deloitte & Touche LLP (professional services firm), Senior Manager (prior to April 2006))

Brian E. Langenfeld(n) (born 3/07/73)	Assistant Secretary and Assistant Clerk	May 2006	Massachusetts Financial Services Company, Vice President and Senior Counsel (since May 2006); John Hancock Advisers, LLC, Assistant Vice President and Counsel (until April 2006)

Ellen Moynihan(n) (born 11/13/57)	Assistant Treasurer	May 1997	Massachusetts Financial Services Company, Senior Vice President

Susan S. Newton(n) (born 3/07/50)	Assistant Secretary and Assistant Clerk	May 2005	Massachusetts Financial Services Company, Senior Vice President and Associate General Counsel

Susan A. Pereira(n) (born 11/05/70)	Assistant Secretary and Assistant Clerk	July 2005	Massachusetts Financial Services Company, Vice President and Senior Counsel

Mark N. Polebaum(n) (born 5/01/52)	Secretary and Clerk	February 2006	Massachusetts Financial Services Company, Executive Vice President, General Counsel and Secretary (since January 2006); Wilmer Cutler Pickering Hale and Dorr LLP (law firm), Partner (until January 2006)

Frank L. Tarantino (born 3/07/44)	Independent Chief Compliance Officer	September 2004	Tarantino LLC (provider of compliance services), Principal

Richard S. Weitzel(n) (born 7/16/70)	Assistant Secretary and Assistant Clerk	October 2007	Massachusetts Financial Services Company, Vice President and Assistant General Counsel

James O. Yost(n) (born 6/12/60)	Assistant Treasurer	April 1992	Massachusetts Financial Services Company, Senior Vice President

(h)	Date first appointed to serve as Manager/Trustee/Officer of an MFS/Sun Life Product. Each Manager has served continuously since appointment. For the period March 2008 until October 2008, Ms. DiOrioDwyer served as Treasurer of the Funds.

(j)	Directorships or trusteeships of companies required to report to the Securities and Exchange Commission (i.e., “public companies”).

(k)

“Interested person” of Sun Life of Canada (U.S.), within the meaning of the Investment Company Act of 1940 (referred to as the 1940 Act), which is the principal federal law governing investment companies like the Accounts. The address of Sun Life of Canada (U.S.) is One Sun Life Executive Park, Wellesley Hills, Massachusetts 02481.

(n)	“Interested person” of MFS within the meaning of the 1940 Act. The address of MFS is 500 Boylston Street, Boston, Massachusetts 02116.

The Accounts do not hold annual meetings for the purpose of electing Managers, and Managers are not elected for fixed terms. Each Manager and officer holds office until his or her successor is chosen and qualified, or until his or her earlier death, resignation, retirement or removal.

Members of Boards of Managers and Officers — continued

All Managers currently serve as Managers of each Account and have served in that capacity since originally elected or appointed. All of the Managers are also Trustees of the MFS Variable Insurance Trust II. The executive officers of the Compass Variable Accounts hold similar offices for the MFS Variable Insurance Trust II and other funds in the MFS fund complex. Each Manager serves as a Trustee or Manager of 31 Accounts/Portfolios.

The Statement of Additional Information contains further information about the Managers and is available without charge upon request by calling 1-800-752-7215.

Board Review of Investment Advisory Agreements

The Investment Company Act of 1940 requires that both the full Board of Managers and a majority of the non-interested (“independent”) Managers, voting separately, annually approve the continuation of each Variable Account’s investment advisory agreement with Massachusetts Financial Services Company (“MFS”). The Managers consider matters bearing on the Variable Accounts and their advisory arrangements at their meetings throughout the year, including a review of performance data at each regular meeting. In addition, the independent Managers met in person in May and again in July 2010 (“contract review meetings”) for the specific purpose of considering whether to approve the continuation of the investment advisory agreements for the Variable Accounts. The independent Managers were assisted in their evaluation of the investment advisory agreements by independent legal counsel, from whom they received separate legal advice and with whom they met separately from MFS management during various contract review meetings. The independent Managers were also assisted in this process by the Variable Accounts’ Independent Chief Compliance Officer, a full-time senior officer appointed by and reporting to the independent Managers.

In connection with their deliberations, the Managers, including the independent Managers, considered such information and factors as they believed, in light of the legal advice furnished to them and their own business judgment, to be relevant. Each investment advisory agreement was considered separately for each Variable Account, although the Managers also took into account the common interests of all Variable Accounts in their review. As described below, the Managers considered the nature, quality, and extent of the various investment advisory, administrative, and shareholder services performed by MFS under the existing investment advisory agreements and other arrangements with the Variable Accounts.

In connection with their contract review meetings, the Managers received and relied upon materials which included, among other items: (i) information provided by Lipper Inc. (“Lipper”) on the investment performance of each Variable Account for various time periods ended December 31, 2009, compared to the investment performance of a group of funds with substantially similar investment classifications/objectives (the “Lipper performance universe”), (ii) information provided by Lipper on each Variable Account’s advisory fees and other expenses compared to the advisory fees and other expenses of comparable funds identified by Lipper (the “Lipper expense group”), (iii) information provided by MFS on the advisory fees of comparable portfolios of its other clients, including institutional separate account and other clients, (iv) information as to whether, and to what extent applicable, expense waivers, reimbursements or fee “breakpoints” are observed for a Variable Account, (v) information regarding MFS’ financial results and financial condition, including MFS’ and certain of its affiliates’ estimated profitability from services performed for the Variable Accounts, (vi) MFS’ views regarding the outlook for the mutual fund industry and its strategic business plans, (vii) descriptions of various functions performed by MFS for the Variable Accounts, such as compliance monitoring and portfolio trading practices, and (viii) information regarding the overall organization of MFS, including information about MFS’ senior management and other personnel providing investment advisory, administrative and other services to the Variable Accounts. The comparative performance, fee and expense information prepared and provided by Lipper was not independently verified, and the independent Managers did not independently verify any information provided to them by MFS.

The Managers’ conclusions as to the continuation of the investment advisory agreements were based on comprehensive consideration of all information provided to the Managers and were not the result of any single factor. Some of the factors that figured particularly in the Managers’ deliberations are described below for each Variable Account, while individual Managers may have given different weight to various factors and evaluated the information presented as a whole differently than another Manager. The Managers recognized that the fee arrangements for the Variable Accounts reflect years of review and discussion between the independent Managers and MFS, that certain aspects of such arrangements may receive greater scrutiny in some years than others, and that the Managers’ conclusions may be based, in part, on their consideration of these same arrangements during the course of the year and in prior years.

Based on information provided by Lipper, the Managers compared each Variable Account’s total return investment performance to the performance of its Lipper performance universe over the one-, three- and five-year periods ended December 31, 2009. The Managers did not rely on performance results for more recent periods, including those shown elsewhere in this report.

In the course of their deliberations, the Managers took into account information provided by MFS during contract review meetings, as well as during investment review meetings conducted with portfolio management personnel during the course of the year. For Variable Accounts whose performance lagged their peer groups, they discussed the factors that contributed thereto and MFS’ efforts to improve such Variable Account’s performance. After reviewing this information, the Managers concluded, within the context of their overall conclusions regarding the investment advisory agreements, that they were satisfied with MFS’ responses and efforts relating to investment performance.

In assessing the reasonableness of each Variable Account’s advisory fee, the Managers considered, among other information, each Variable Account’s advisory fee and the total expense ratio as a percentage of average daily net assets, compared to the advisory fees and total expense ratios of peer groups of funds based on information provided by Lipper. The Managers also considered the advisory fees charged by MFS to institutional accounts. In comparing these fees, the Managers considered the generally broader scope of services provided by MFS to the Variable Accounts than those provided to institutional accounts. The Managers also considered the higher demands placed on MFS’ investment personnel and trading infrastructure as a result of the daily cash in-flows and out-flows of the Variable Accounts, and the impact on MFS and related expenses due to the more extensive regulatory regime to which the Variable Accounts are subject, compared to institutional accounts.

The Managers also considered whether a Variable Account is likely to benefit from any economies of scale due to future asset growth. In this regard, the Managers reviewed the adequacy of breakpoints and discussed with MFS any adjustments necessary for the shareholders’ benefit.

Board Review of Investment Advisory Agreements — continued

The Managers also considered information prepared by MFS relating to its costs and profits with respect to each Variable Account and other investment companies and accounts advised by MFS, as well as MFS’ methodologies used to determine and allocate its costs to the Variable Accounts and other accounts and products for purposes of estimating profitability.

After reviewing these and other factors described below, the Managers concluded that the advisory fees charged to the Variable Accounts represent reasonable compensation in light of the nature and quality of the services being provided by MFS.

In addition, the Managers considered MFS’ resources and related efforts to continue to retain, attract and motivate capable personnel to serve the Variable Accounts. The Managers also considered the financial resources of MFS and its parent, Sun Life Financial Inc. The Managers further considered any advantages and possible disadvantages of having an adviser which also serves other investment companies as well as institutional accounts.

The Managers also considered the nature, quality, cost, and extent of administrative, transfer agency, and distribution services provided to the Variable Accounts by MFS and its affiliates under agreements and plans other than the investment advisory agreements. The Managers also considered the nature, extent and quality of certain other services MFS performs or arranges on the Variable Accounts’ behalf, which may include securities lending programs, directed expense payment programs, class action recovery programs, and MFS’ interaction with third-party service providers, principally custodians and sub-custodians. The Managers concluded that the various non-advisory services provided by MFS and its affiliates on behalf of the Variable Accounts were satisfactory. The Managers also considered the benefits to MFS from the use of the Variable Accounts’ portfolio brokerage commissions to pay for investment research and various other factors. Additionally, the Managers considered so-called “fall-out benefits” to MFS such as reputational value derived from serving as investment manager to the Variable Accounts, and determined that any such benefits derived by MFS were reasonable and fair.

Based on their evaluation of factors that they deemed to be material, including those factors described above, the Board of Managers, including a majority of the independent Managers, concluded that the investment advisory agreements should be continued for an additional one-year period, commencing September 1, 2010.

Capital Appreciation Variable Account

The Managers noted the Variable Account’s performance was in the 3rd quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 1st quintile for the three-year period and the 3rd quintile for the five-year period ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was satisfactory.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee and total expense ratio were each approximately at the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue its expense limitation for the Variable Account. The Managers further concluded that the existing breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Global Governments Variable Account

The Managers noted the Variable Account’s performance was in the 5th quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 3rd quintile for the three-year period and the 5th quintile for the five-year period ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate was below the median and total expense ratio was above the median of such fees and expenses of funds in the Lipper expense group. The Managers further concluded that the existing breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Government Securities Variable Account

The Managers noted the Variable Account’s performance was in the 3rd quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 1st quintile for the three and the five-year periods ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was satisfactory.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each above the median of such fees and expenses of funds in the Lipper expense group. The Managers further concluded that the existing

Board Review of Investment Advisory Agreements — continued

breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

High Yield Variable Account

The Managers noted the Variable Account’s performance was in the 2nd quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 4th quintile for the three-year and the five-year periods ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS and MFS’ explanation of steps taken to improve performance, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each approximately at the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers noted that MFS agreed to continue its waiver to reduce its advisory fee on average daily net assets up to $300 million, and they accepted MFS’ offer to continue the expense limitation for the Variable Account. The Managers further concluded that the existing breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Money Market Variable Account

The Managers noted the Variable Account’s performance was in the 5th quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 5th quintile for the three-year period and the 4th quintile for the five-year period ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate and total expense ratio were each below the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers noted that MFS agreed to reduce its advisory fee on average daily net assets over $500 million on a permanent basis, requiring shareholder approval for any modification or termination, and they accepted MFS’ offer to continue the expense limitation for the Variable Account. The Managers further concluded that the existing breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

Total Return Variable Account

The Managers noted the Variable Account’s performance was in the 5th quintile relative to the other funds in the Lipper performance universe for the one-year period (the 1st quintile being the best performers and the 5th quintile being the worst performers). The total return performance of the Variable Account was in the 4th quintile for the three-year and the five-year periods ended December 31, 2009, relative to the Lipper performance universe. Based on the nature and quality of services provided by MFS, the Board of Managers concluded that the Variable Account’s performance was adequate.

In considering the fees, the Managers noted from the Lipper data that the Variable Account’s effective advisory fee rate was above the median and total expense ratio was approximately at the median of such fees and expenses of funds in the Lipper expense group. In addition, the Managers accepted MFS’ offer to continue the expense limitation for the Variable Account. The Managers further concluded that the existing breakpoint was sufficient to allow the Variable Account to benefit from economies of scale as its assets grow. The Managers concluded that the fees were reasonable in light of the nature and quality of services provided.

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

MFS® Privacy Notice

Privacy is a concern for every investor today. At MFS Investment Management® and the MFS funds, we take this concern very seriously. We want you to understand our policies about the investment products and services that we offer, and how we protect the nonpublic personal information of investors who have a direct relationship with us and our wholly owned subsidiaries.

Throughout our business relationship, you provide us with personal information. We maintain information and records about you, your investments, and the services you use. Examples of the nonpublic personal information we maintain include

•

data from investment applications and other forms

•

share balances and transactional history with us, our affiliates, or others

•

facts from a consumer reporting agency

We do not disclose any nonpublic personal information about our customers or former customers to anyone, except as permitted by law. We may share nonpublic personal information with third parties or certain of our affiliates in connection with servicing your account or processing your transactions. We may share information with companies or financial institutions that perform marketing services on our behalf or with other financial institutions with which we have joint marketing arrangements, subject to any legal requirements.

Authorization to access your nonpublic personal information is limited to appropriate personnel who provide products, services, or information to you. We maintain physical, electronic, and procedural safeguards to help protect the personal information we collect about you.

If you have any questions about the MFS privacy policy, please call 1-800-225-2606 any business day.

Note: If you own MFS products or receive MFS services in the name of a third party such as a bank or broker-dealer, their privacy policy may apply to you instead of ours.

Investment Adviser

Massachusetts Financial Services Company

500 Boylston Street, Boston, MA 02116-3741

Custodian and Dividend Disbursing Agent

State Street Bank and Trust

1 Lincoln Street, Boston, MA 02111-2900

Proxy Voting Policies and Information

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

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

Quarterly Portfolio Disclosure

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

Public Reference Room

Securities and Exchange Commission

Washington, D.C. 20549 0102

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

Further Information

From time to time, MFS may post important information about a variable account or the MFS funds on the MFS web site (mfs.com). This information is available by visiting the “News & Commentary” section of mfs.com or by clicking on the variable account’s name under “Compass” in the “Products and Performance” section of mfs.com.

cous-ann-2/11

Sun Life Financial Distributors Inc.

ITEM 2.

CODE OF ETHICS.

The Registrant has adopted a Code of Ethics pursuant to Section 406 of the Sarbanes-Oxley Act and as defined in Form N-CSR that applies to the Registrant’s principal executive officer and principal financial and accounting officer. During the period covered by this report, the Registrant has not amended any provision in its Code of Ethics (the “Code”) that relates to an element of the Code’s definitions enumerated in paragraph (b) of Item 2 of this Form N-CSR. During the period covered by this report, the Registrant did not grant a waiver, including an implicit waiver, from any provision of the Code.

ITEM 3.

AUDIT COMMITTEE FINANCIAL EXPERT.

Messrs. J. Kermit Birchfield, Robert C. Bishop, and Haviland Wright, members of the Audit Committee, have been determined by the Board of Managers in their reasonable business judgment to meet the definition of “audit committee financial expert” as such term is defined in Form N-CSR. In addition, Messrs. J. Kermit Birchfield, Robert C. Bishop, and Haviland Wright are “independent” members of the Audit Committee as defined in Form N-CSR.

ITEM 4.

PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Items 4(a) through 4(d) and 4(g):

The Board of Managers has appointed Deloitte & Touche LLP (“Deloitte”) to serve as independent accountants to the Registrant (hereinafter referred to as the “Account”). The tables below set forth the audit fees billed to the Account as well as fees for non-audit services provided to the Account and/or to the Account’s investment adviser, Massachusetts Financial Services Company (“MFS”), and to various entities either controlling, controlled by, or under common control with MFS that provide ongoing services to the Account (“MFS Related Entities”).

For the fiscal years ended December 31, 2010 and 2009, audit fees billed to the Account by Deloitte were as follows:


	Audit Fees
	2010		2009
Fees billed by Deloitte:
Total Return Variable Account		50,159		49,192

For the fiscal years ended December 31, 2010 and 2009, fees billed by Deloitte for audit-related, tax and other services provided to the Account and for audit-related, tax and other services provided to MFS and MFS Related Entities were as follows:


	Audit-Related Fees¹				Tax Fees²				All Other Fees³
	2010		2009		2010		2009		2010		2009
Fees billed by Deloitte:
To Total Return Variable Account		0		0		0		0		1,376		1,166
To MFS and MFS Related Entities of Total Return Variable Account*		1,241,490		1,061,841		0		0		60,000		59,174

	2010				2009
Aggregate fees for non-audit services:
To Total Return Variable Account, MFS and MFS Related Entities#		1,903,662				1,361,346

*	This amount reflects the fees billed to MFS and MFS Related Entities for non-audit services relating directly to the operations and financial reporting of the Account (portions of which services also related to the operations and financial reporting of other funds within the MFS Funds complex).

#	This amount reflects the aggregate fees billed by Deloitte for non-audit services rendered to the Account and for non-audit services rendered to MFS and the MFS Related Entities.

The fees included under “Audit-Related Fees” are fees related to assurance and related services that are reasonably related to the performance of the audit or review of financial statements, but not reported under “Audit Fees,” including accounting consultations, agreed-upon procedure reports, attestation reports, comfort letters and internal control reviews.

²	The fees included under “Tax Fees” are fees associated with tax compliance, tax advice and tax planning, including services relating to the filing or amendment of federal, state or local income tax returns, regulated investment company qualification reviews and tax distribution and analysis.

The fees included under “All Other Fees” are fees for products and services provided by Deloitte other than those reported under “Audit Fees,” “Audit-Related Fees” and “Tax Fees,” including fees for services related to analysis of certain portfolio holdings and, review of internal controls and review of Rule 38a-1 compliance program.

Item 4(e)(1):

Set forth below are the policies and procedures established by the Audit Committee of the Board of Managers relating to the pre-approval of audit and non-audit related services:

To the extent required by applicable law, pre-approval by the Audit Committee of the Board is needed for all audit and permissible non-audit services rendered to the Funds and all permissible non-audit services rendered to MFS or MFS Related Entities if the services

relate directly to the operations and financial reporting of the Registrant. Pre-approval is currently on an engagement-by-engagement basis. In the event pre-approval of such services is necessary between regular meetings of the Audit Committee and it is not practical to wait to seek pre-approval at the next regular meeting of the Audit Committee, pre-approval of such services may be referred to the Chair of the Audit Committee for approval; provided that the Chair may not pre-approve any individual engagement for such services exceeding $50,000 or multiple engagements for such services in the aggregate exceeding $100,000 in each period between regular meetings of the Audit Committee. Any engagement pre-approved by the Chair between regular meetings of the Audit Committee shall be presented for ratification by the entire Audit Committee at its next regularly scheduled meeting.

Item 4(e)(2):

None, or 0%, of the services relating to the Audit-Related Fees, Tax Fees and All Other Fees paid by the Account and MFS and MFS Related Entities relating directly to the operations and financial reporting of the Registrant disclosed above were approved by the audit committee pursuant to paragraphs (c)(7)(i)(C) of Rule 2-01 of Regulation S-X (which permits audit committee approval after the start of the engagement with respect to services other than audit, review or attest services, if certain conditions are satisfied).

Item 4(f): Not applicable.

Item 4(h): The Registrant’s Audit Committee has considered whether the provision by a Registrant’s independent registered public accounting firm of non-audit services to MFS and MFS Related Entities that were not pre-approved by the Committee (because such services did not relate directly to the operations and financial reporting of the Registrant) was compatible with maintaining the independence of the independent registered public accounting firm as the Registrant’s principal auditors.

ITEM 5.

AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to the Registrant.

ITEM 6.

SCHEDULE OF INVESTMENTS

None. The Registrant did not have any investments as of period end.

ITEM 7.

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

Not applicable to the Registrant.

ITEM 8.

PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to the Registrant.

ITEM 9.

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

Not applicable to the Registrant.

ITEM 10.

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

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

ITEM 11.

CONTROLS AND PROCEDURES.

(a)

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

(b)

There were no changes in the registrant’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter covered by the report that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

ITEM 12.

EXHIBITS.

(a)	File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated.

(1)

Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Code of Ethics attached hereto.

(2)

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

(b)

If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph

will not be deemed “filed” for the purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference: Attached hereto.

SIGNATURES

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

(Registrant) TOTAL RETURN VARIABLE ACCOUNT


By (Signature and Title)*		MARIA F. DIORIODWYER
		Maria F. DiOrioDwyer, President

Date: February 14, 2011

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By (Signature and Title)*		MARIA F. DIORIODWYER
		Maria F. DiOrioDwyer, President (Principal Executive Officer)

Date: February 14, 2011


By (Signature and Title)*		JOHN M. CORCORAN
		John M. Corcoran, Treasurer (Principal Financial Officer and Accounting Officer)

Date: February 14, 2011

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

Total Return Variable Account Inactive N-CSRCertified annual shareholder report (management investment company)