<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-5069
---------------------------------------------
EquiTrust Variable Insurance Series Fund
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
5400 University Ave., West Des Moines Ia 50266-5997
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Kristi Rojohn, 5400 University Avenue, West Des Moines Ia 50266-5997
- -------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 515/225-5400
----------------------------
Date of fiscal year end: Dec 31, 2003
--------------------------
Date of reporting period: June 30, 2003
-------------------------
Form N-CSR is to be used by management investment companies to file reports
with the Commission not later than 10 days after the transmission to
stockholders of any report that is required to be transmitted to stockholders
under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1).
The Commission may use the information provided on Form N-CSR in its
regulatory, disclosure review, inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street,
NW, Washington, DC 20549-0609. The OMB has reviewed this collection of
information under the clearance requirements of 44 U.S.C. Section 3507.
<Page>
ITEM 1. REPORTS TO STOCKHOLDERS.
<Page>
[LOGO]EquiTrust
Financial Services
EquiTrust Variable Insurance Series Fund
SEMI-ANNUAL REPORT
JUNE 30, 2003
INVESTMENT MANAGER AND
PRINCIPAL UNDERWRITER
EQUITRUST INVESTMENT
MANAGEMENT SERVICES, INC.
5400 UNIVERSITY AVENUE
WEST DES MOINES, IA 50266
1-877-860-2904
225-5586 (DES MOINES)
This report is not to be distributed unless preceded or accompanied by a current
prospectus.
<Page>
PRESIDENT'S LETTER
Dear Shareholder:
After three full years of negative equity returns, we are pleased to be able
to report on a period in which the equity markets provided substantial gains to
investors. A weak first quarter left the S&P 500 Stock Composite (the "S&P 500")
and the Dow Jones Industrial Average (the "Dow") down and the NASDAQ Composite
(the "NASDAQ") with only a meager positive return. However, spurred by an early
end to the Iraq war and additional fiscal and monetary stimulus, all three
indices rebounded substantially in the second quarter. For the six-month period
ended June 30, 2003, the S&P 500 returned 11.76%, the Dow climbed 9.01%, and the
NASDAQ led both with a return of 21.82%.
Six-month returns for investment grade and high yield (junk) corporate bonds
rivaled returns in areas of the equity markets, but returns for government
issues and mortgage-backed securities lagged for the same period. The Lehman
Brothers Treasury Index returned 3.75%, while Lehman's Fixed Rate Mortgage
Backed Securities Index returned 1.60%. Due to its heavy weighting in government
issues and mortgage-backed securities, Lehman's Aggregate Index also lagged,
returning 3.93% for the period. Both investment grade and non-investment grade
corporate issues benefited from declining credit spreads, while returns on high
yield bonds were also boosted by increased popularity with investors. The Lehman
Brothers U.S. Corporate Investment Grade Index returned 7.72%, while the Lehman
Brothers U.S. Corporate High Yield Index returned 18.49%.
A run in the equity markets and improvements in credit spreads typically
portend improving economic fundamentals. Currently, though, few indicators
unambiguously support that forecast. According to the government's most recent
assessment of economic growth, the nation's gross domestic product expanded at
an annual rate of just 1.4% in the first quarter of the year. Most economists
expect the same for the second quarter, but also that growth will return to the
long-term average of 3.5% in the second half of the year.
Corporate earnings have improved slightly even with inconsistent and slow
economic growth, primarily due to cost cutting rather than improving sales.
Consequently, equity prices relative to earnings and expected growth potential
have increased rapidly, keeping valuation measures above their long-term
averages.
While the nation's unemployment rate typically lags as an indicator of the
health of the underlying economy, the most recent official measurement of the
unemployment rate increased to 6.4% from 6.1%. This increase indicates that,
even if the economy continues to expand, it has yet to regenerate the millions
of jobs lost in the past several years. This stagnant state of the labor market
continues to wear on consumer confidence, which suffered a sharp decline early
in the year and has improved only modestly since.
In the last several months, the Federal Reserve (the "Fed") has indicated
that it sees moderate signs of economic growth, but it has also expressed
increased concern about deflation and the potential hazards it poses to both
corporations and consumers. As insurance against deflation, the Fed recently cut
the Federal Funds rate target for the 13th consecutive time, to 1.00% from
1.25%. At one time, the Fed also indicated a willingness to move out on the
yield curve to keep interest rates low by purchasing longer-term government
securities.
The dollar declined for much of this half of the year, most notably losing
ground against the Euro. Its decline has been symptomatic of the domestic
economy's trade and current account deficits, as well as the attractiveness of
U.S. financial assets relative to those around the world. U.S. demand for
foreign-made goods has led to trade imbalances whereby imports exceed exports,
while a duet of declining
2
<Page>
equity markets and interest rates has forced foreign investors to look elsewhere
for returns. The weak dollar makes U.S.-made goods more attractive to foreign
purchasers and also benefits U.S. multinationals when they translate overseas
profits into dollars. At the same time, though, the weak dollar threatens the
recovery of other developed market economies, such as that of the European
Union. Many had argued the dollar had become modestly overvalued, and the
decline only a normal correction. The dollar has recently recovered somewhat. So
long as these currency adjustments remain orderly, they should not pose a
substantial threat to the economy.
In spite of substantial fiscal and monetary stimuli, the U.S. economy has
yet to show convincing signs of improvement. The equity and fixed income
markets, though, have responded positively to expectations that the economy will
soon return to a sustainable long-term trend. Since it would appear that greatly
improved second-half performance is reflected in current valuations, the economy
will need to start showing more vigor if this rally is to be sustained.
VALUE GROWTH: The Portfolio performed well relative to its benchmark, the
S&P 500 Stock Composite Index. It did so despite being underweight in two of the
benchmark's best performing sectors for the period: information technology and
consumer discretionary. The Portfolio's energy holdings outperformed the S&P
500's energy constituents, contributing to the good relative performance. Given
the equity market's substantial price gains, our bias is shifting back to a
slightly more defensive posture. We continue to favor the health care, energy
and consumer staples sectors.
HIGH GRADE BOND: Treasury yields finished the first half of 2003 lower than
where they started the year, with the two-year yield dropping 30 basis points
(0.30%) to 1.30%, the ten-year dropping 30 basis points (0.30%) to 3.51% and the
thirty-year dropping 22 basis points (0.22%) to 4.56%. As corporate spreads
continued to narrow due to strong technical factors, as well as fundamental
improvement in the overall credit quality of the investment grade corporate bond
market, the best performing sector of the Lehman Brothers Aggregate Index for
the first half of 2003 was the Investment Grade Credit Index.
The Portfolio's performance slightly exceeded that of the Lehman Brothers
Aggregate Index despite having a lower duration than the Aggregate Index during
a period of declining interest rates.
Given the historically low level of interest rates we continue to feel that
it is not an appropriate time to take on a larger amount of interest rate risk
than the Aggregate Index. However, given the very steep yield curve, it is
extremely costly to remain in cash so we will continue to keep the majority of
the Portfolio invested in intermediate maturity securities.
STRATEGIC YIELD: The Lehman Brothers High Yield Index had an excellent
first half with a return of 18.49%, outperforming duration-neutral Treasuries by
1,505 basis points (15.05%). The option-adjusted spread on the Lehman Brothers
High Yield Index finished the first half of the year at 584 basis points
(5.84%), which was 267 basis points (2.67%) lower than at the start of the year.
On a fundamental basis, a continued decline in defaults and improvement in the
upgrade-to-downgrade ratio helped the high yield market. Technically, the market
has been helped by very strong cash inflows into high yield funds during the
first half of 2003. According to AMG Data Services, $16.3 billion has been
invested in high yield mutual funds year-to-date. The market is on pace to smash
the annual record of $17.3 billion set in 1997.
The Portfolio's performance has lagged the Lehman Brothers High Yield Index.
Its performance was hindered by having less exposure to both high yield issues
and lower rated issues relative to the Index; in general, the lowest rated
issues were the best performers during the period.
The high yield market may have gotten ahead of the fundamentals. Given that
it has dramatically outperformed the broader market, we may be more inclined to
lean toward lower investment grade issues when making new acquisitions.
3
<Page>
MANAGED: The Portfolio's performance lagged the S&P 500, largely due to its
mixed allocation of fixed income securities and yield-oriented equities. It
continues to perform well relative to its peers. The recently rising yield on
the 10-year Treasury has made fixed income securities such as GNMAs stronger
competition even for yield-oriented equities. If equities and interest rates
continue to rise, we may increase the Portfolio's cash balance or add to its
GNMA positions.
MONEY MARKET*: During the first six months of the year, the Fed cut the
Federal Funds rate by 0.25% to 1.00%. It appears that any upward movement in
rates continues to be months away. Federal Reserve Chairman Alan Greenspan has
commented that he plans on keeping the Federal Funds rate low as long as it
takes to return to "satisfactory economic performance." He also said he would
cut the Federal Funds rate further before he would buy bonds to boost the
economy. The focus has returned to economic factors. Geopolitical factors have
waned since Bush declared in May that major combat was over in Iraq. Meanwhile,
money market funds continue to be an attractive investment during this period of
historically low interest rates and high volatility. Our strategy has been, and
will continue to be, minimizing risk while maintaining liquidity. We limit
purchases to top-tier commercial paper and agency discount notes to maximize
yield yet minimize credit risk.
BLUE CHIP: True to its passive strategy, the performance of the Blue Chip
Portfolio over the past six months has reflected that of the large
capitalization market sector it represents. The Portfolio will remain
substantially invested in common stocks of large companies and is designed for
those investors who prefer substantial exposure to common stocks at all times or
who wish to make their own market value judgments.
/s/ Craig A. Lang
CRAIG A. LANG
PRESIDENT
July 30, 2003
* An investment in the Money Market Portfolio is neither insured nor
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Portfolio seeks to preserve the net asset
value of $1.00 per share, it is possible to lose money by investing in the
Portfolio.
Past performance is not a guarantee of future results.
4
<Page>
(This page has been left blank intentionally.)
5
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF ASSETS AND LIABILITIES
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
HIGH
VALUE GROWTH GRADE BOND
PORTFOLIO PORTFOLIO
------------- -------------
ASSETS
Investments in securities, at value
(cost -- $46,294,730; $27,540,423;
$23,458,457; $54,291,700; $6,535,338;
and $67,384,688, respectively)......... $ 45,028,337 $ 28,780,455
Cash.................................... -- 41,959
Accrued dividends and interest
receivable............................. 59,629 216,012
Prepaid expense and other assets........ 603 399
------------ ------------
Total Assets............................ $ 45,088,569 $ 29,038,825
============ ============
LIABILITIES AND NET ASSETS
Liabilities:
Investment securities purchased....... $ -- $ 2,015,188
Net outstanding redemptions in excess
of bank balance...................... 39,574 --
Accrued expenses...................... 3,798 3,898
------------ ------------
Total Liabilities....................... 43,372 2,019,086
Net assets applicable to shares of
beneficial interest.................... 45,045,197 27,019,739
------------ ------------
Total Liabilities and Net Assets........ $ 45,088,569 $ 29,038,825
============ ============
Shares issued and outstanding as of
June 30, 2003.......................... 4,490,357 2,568,356
NET ASSET VALUE PER SHARE............... $ 10.03 $ 10.52
============ ============
</Table>
SEE ACCOMPANYING NOTES.
6
<Page>
<Table>
<Caption>
STRATEGIC
YIELD MANAGED MONEY MARKET BLUE CHIP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
ASSETS
Investments in securities, at value
(cost -- $46,294,730; $27,540,423;
$23,458,457; $54,291,700; $6,535,338;
and $67,384,688, respectively)......... $ 23,515,388 $ 58,522,532 $ 6,535,338 $ 69,825,072
Cash.................................... 45,464 62,838 112,161 --
Accrued dividends and interest
receivable............................. 528,505 145,587 878 84,427
Prepaid expense and other assets........ 1,210 811 114 935
------------ ------------ ------------ ------------
Total Assets............................ $ 24,090,567 $ 58,731,768 $ 6,648,491 $ 69,910,434
============ ============ ============ ============
LIABILITIES AND NET ASSETS
Liabilities:
Investment securities purchased....... $ -- $ -- $ -- $ --
Net outstanding redemptions in excess
of bank balance...................... -- -- -- 94,121
Accrued expenses...................... 3,612 5,118 3,846 4,956
------------ ------------ ------------ ------------
Total Liabilities....................... 3,612 5,118 3,846 99,077
Net assets applicable to shares of
beneficial interest.................... 24,086,955 58,726,650 6,644,645 69,811,357
------------ ------------ ------------ ------------
Total Liabilities and Net Assets........ $ 24,090,567 $ 58,731,768 $ 6,648,491 $ 69,910,434
============ ============ ============ ============
Shares issued and outstanding as of
June 30, 2003.......................... 2,663,262 4,459,346 6,644,645 2,349,522
NET ASSET VALUE PER SHARE............... $ 9.04 $ 13.17 $ 1.00 $ 29.71
============ ============ ============ ============
</Table>
7
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
HIGH GRADE
VALUE GROWTH BOND
PORTFOLIO PORTFOLIO
------------- -------------
INVESTMENT INCOME
Dividends............................... $ 345,081 $ 49,963
Interest................................ 36,810 594,610
Foreign tax withholding................. (2,172) --
------------ ------------
Total Investment Income................. 379,719 644,573
EXPENSES
Paid to EquiTrust Investment Management
Services, Inc.:
Investment advisory and management
fees.................................. 92,128 38,910
Accounting fees........................ 10,236 6,485
Custodial fees.......................... 4,463 3,909
Professional fees....................... 8,138 5,253
Proxy expense........................... 9,836 4,007
Reports to shareholders................. 1,960 1,250
Trustees' fees and expenses............. 1,694 1,053
Insurance and bonds..................... 459 286
Miscellaneous........................... 2,970 3,328
------------ ------------
Total Expenses.......................... 131,884 64,481
Expense reimbursement................... -- --
Fees paid indirectly.................... (193) (184)
------------ ------------
Net Expenses............................ 131,691 64,297
------------ ------------
Net Investment Income................... 248,028 580,276
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from investment
transactions........................... (195,023) 3,506
Change in unrealized
appreciation/depreciation of
investments............................ 4,579,909 462,731
------------ ------------
Net Gain (Loss) on Investments.......... 4,384,886 466,237
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. $ 4,632,914 $ 1,046,513
============ ============
</Table>
SEE ACCOMPANYING NOTES.
8
<Page>
<Table>
<Caption>
STRATEGIC
YIELD MANAGED MONEY MARKET BLUE CHIP
PORTFOLIO PORTFOLIO PORTFOLIO PORTFOLIO
------------- ------------- ------------- -------------
INVESTMENT INCOME
Dividends............................... $ 52,229 $ 597,419 $ -- $ 639,321
Interest................................ 909,988 241,646 42,499 18,900
Foreign tax withholding................. -- (3,335) -- --
------------ ------------ ------------ ------------
Total Investment Income................. 962,217 835,730 42,499 658,221
EXPENSES
Paid to EquiTrust Investment Management
Services, Inc.:
Investment advisory and management
fees.................................. 51,421 122,500 8,840 64,129
Accounting fees........................ 5,713 13,611 1,768 15,012
Custodial fees.......................... 3,356 4,454 3,607 3,429
Professional fees....................... 4,715 10,491 1,961 12,237
Proxy expense........................... 4,574 9,954 643 14,460
Reports to shareholders................. 1,096 2,595 331 3,114
Trustees' fees and expenses............. 921 2,231 282 2,621
Insurance and bonds..................... 256 606 85 725
Miscellaneous........................... 3,116 4,565 3,203 4,378
------------ ------------ ------------ ------------
Total Expenses.......................... 75,168 171,007 20,720 120,105
Expense reimbursement................... (866) -- -- --
Fees paid indirectly.................... (242) (174) (250) (229)
------------ ------------ ------------ ------------
Net Expenses............................ 74,060 170,833 20,470 119,876
------------ ------------ ------------ ------------
Net Investment Income................... 888,157 664,897 22,029 538,345
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) from investment
transactions........................... 53,671 27,853 -- (4,690,809)
Change in unrealized
appreciation/depreciation of
investments............................ 722,286 4,490,226 -- 11,000,379
------------ ------------ ------------ ------------
Net Gain (Loss) on Investments.......... 775,957 4,518,079 -- 6,309,570
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. $ 1,664,114 $ 5,182,976 $ 22,029 $ 6,847,915
============ ============ ============ ============
</Table>
9
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS
<Table>
<Caption>
VALUE GROWTH
PORTFOLIO
-----------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002
-------------- -------------
OPERATIONS
Net investment income................... $ 248,028 $ 632,800
Net realized gain (loss) from investment
transactions........................... (195,023) 1,208,684
Change in unrealized
appreciation/depreciation of
investments............................ 4,579,909 (6,690,817)
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. 4,632,914 (4,849,333)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income................... (632,800) (815,691)
Net realized gain from investment
transactions........................... -- --
------------ ------------
Total Dividends and Distributions....... (632,800) (815,691)
CAPITAL SHARE TRANSACTIONS.............. 91,978 1,095,790
------------ ------------
Total Increase (Decrease) in Net
Assets................................. 4,092,092 (4,569,234)
NET ASSETS
Beginning of period..................... 40,953,105 45,522,339
------------ ------------
End of period (including undistributed
net investment income as set forth
below)................................. $ 45,045,197 $ 40,953,105
============ ============
Undistributed Net Investment Income..... $ 248,028 $ 632,800
============ ============
</Table>
SEE ACCOMPANYING NOTES.
10
<Page>
<Table>
<Caption>
HIGH STRATEGIC
GRADE BOND YIELD
PORTFOLIO PORTFOLIO
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31, JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002 (UNAUDITED) 2002
-------------- ------------- -------------- -------------
OPERATIONS
Net investment income................... $ 580,276 $ 1,099,597 $ 888,157 $ 1,537,019
Net realized gain (loss) from investment
transactions........................... 3,506 126,083 53,671 (227,764)
Change in unrealized
appreciation/depreciation of
investments............................ 462,731 558,780 722,286 (151,342)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. 1,046,513 1,784,460 1,664,114 1,157,913
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income................... (580,276) (1,099,597) (888,157) (1,537,019)
Net realized gain from investment
transactions........................... (126,083) (19,864) -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions....... (706,359) (1,119,461) (888,157) (1,537,019)
CAPITAL SHARE TRANSACTIONS.............. 1,695,112 5,411,928 915,567 2,592,491
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets................................. 2,035,266 6,076,927 1,691,524 2,213,385
NET ASSETS
Beginning of period..................... 24,984,473 18,907,546 22,395,431 20,182,046
------------ ------------ ------------ ------------
End of period (including undistributed
net investment income as set forth
below)................................. $ 27,019,739 $ 24,984,473 $ 24,086,955 $ 22,395,431
============ ============ ============ ============
Undistributed Net Investment Income..... $ -- $ -- $ -- $ --
============ ============ ============ ============
</Table>
11
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
STATEMENTS OF CHANGES IN NET ASSETS (CONTINUED)
<Table>
<Caption>
MANAGED
PORTFOLIO
-----------------------------
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002
-------------- -------------
OPERATIONS
Net investment income................... $ 664,897 $ 1,494,900
Net realized gain (loss) from investment
transactions........................... 27,853 1,015,684
Change in unrealized
appreciation/depreciation of
investments............................ 4,490,226 (3,624,741)
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. 5,182,976 (1,114,157)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income................... (1,494,900) (1,801,236)
Net realized gain from investment
transactions........................... -- --
------------ ------------
Total Dividends and Distributions....... (1,494,900) (1,801,236)
CAPITAL SHARE TRANSACTIONS.............. 610,771 3,548,291
------------ ------------
Total Increase (Decrease) in Net
Assets................................. 4,298,847 632,898
NET ASSETS
Beginning of period..................... 54,427,803 53,794,905
------------ ------------
End of period (including undistributed
net investment income as set forth
below)................................. $ 58,726,650 $ 54,427,803
============ ============
Undistributed Net Investment Income..... $ 664,897 $ 1,494,900
============ ============
</Table>
SEE ACCOMPANYING NOTES.
12
<Page>
<Table>
<Caption>
MONEY MARKET BLUE CHIP
PORTFOLIO PORTFOLIO
----------------------------- -----------------------------
SIX MONTHS SIX MONTHS
ENDED YEAR ENDED ENDED YEAR ENDED
JUNE 30, 2003 DECEMBER 31, JUNE 30, 2003 DECEMBER 31,
(UNAUDITED) 2002 (UNAUDITED) 2002
-------------- ------------- -------------- -------------
OPERATIONS
Net investment income................... $ 22,029 $ 95,445 $ 538,345 $ 1,066,311
Net realized gain (loss) from investment
transactions........................... -- -- (4,690,809) (1,786,208)
Change in unrealized
appreciation/depreciation of
investments............................ -- -- 11,000,379 (14,510,432)
------------ ------------ ------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.............. 22,029 95,445 6,847,915 (15,230,329)
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM
Net investment income................... (22,029) (95,445) (1,066,311) (1,156,568)
Net realized gain from investment
transactions........................... -- -- -- --
------------ ------------ ------------ ------------
Total Dividends and Distributions....... (22,029) (95,445) (1,066,311) (1,156,568)
CAPITAL SHARE TRANSACTIONS.............. (1,504,896) (1,170,621) 331,135 961,297
------------ ------------ ------------ ------------
Total Increase (Decrease) in Net
Assets................................. (1,504,896) (1,170,621) 6,112,739 (15,425,600)
NET ASSETS
Beginning of period..................... 8,149,541 9,320,162 63,698,618 79,124,218
------------ ------------ ------------ ------------
End of period (including undistributed
net investment income as set forth
below)................................. $ 6,644,645 $ 8,149,541 $ 69,811,357 $ 63,698,618
============ ============ ============ ============
Undistributed Net Investment Income..... $ -- $ -- $ 538,345 $ 1,066,311
============ ============ ============ ============
</Table>
13
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
COMMON STOCKS (88.11%)
- ---------------------------
BUSINESS SERVICES (2.98%)
AOL Time Warner, Inc............................................ 9,600(1) $ 154,465
Computer Associates International, Inc.......................... 12,055 268,585
Compuware Corp.................................................. 16,050(1) 92,609
Microsoft Corp.................................................. 14,800 379,028
Oracle Corp..................................................... 12,300(1) 147,846
Symantec Corp................................................... 6,800(1) 298,248
-------------
1,340,781
CHEMICALS AND ALLIED PRODUCTS (9.38%)
Abbott Laboratories............................................. 8,000 350,080
Bristol-Myers Squibb Co......................................... 12,540 340,461
E.I. du Pont de Nemours & Co.................................... 6,400 266,496
GlaxoSmithKline plc............................................. 5,500 222,970
IVAX Corp....................................................... 17,800(1) 317,730
Johnson & Johnson............................................... 5,400 279,180
KV Pharmaceutical Co.-Class A................................... 12,800(1) 355,840
Lyondell Chemical Co............................................ 9,800 132,594
Merck & Co., Inc................................................ 6,850 414,768
Mylan Laboratories, Inc......................................... 14,550 505,904
Olin Corp....................................................... 6,400 109,440
Pfizer, Inc..................................................... 19,449 664,183
Wyeth........................................................... 5,835 265,784
-------------
4,225,430
COMMUNICATIONS (2.09%)
ADC Telecommunications, Inc..................................... 67,700(1) 157,606
Centurytel, Inc................................................. 14,200 494,870
Comcast Corp.-Class A........................................... 3,235(1) 97,632
SBC Communications, Inc......................................... 7,500 191,625
-------------
941,733
DEPOSITORY INSTITUTIONS (6.71%)
Associated Banc-Corp............................................ 8,627 318,164
Astoria Financial Corp.......................................... 7,700 215,061
Citigroup, Inc.................................................. 7,430 318,004
Community Bank Systems, Inc..................................... 4,710 178,980
FleetBoston Financial Corp...................................... 18,760 557,359
U. S. Bancorp................................................... 34,796 852,502
Wachovia Corp................................................... 7,650 305,694
Wilmington Trust Corp........................................... 9,500 278,825
-------------
3,024,589
</Table>
14
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
EATING & DRINKING PLACES (0.54%)
Wendy's International, Inc...................................... 8,400 $ 243,348
ELECTRIC, GAS AND SANITARY SERVICES (6.87%)
Alliant Energy Corp............................................. 8,660 164,800
Atmos Energy Corp............................................... 21,912 543,418
Black Hills Corp................................................ 8,920 273,844
Laclede Group, Inc.............................................. 15,675 420,090
Nisource, Inc................................................... 24,800 471,200
Northwest Natural Gas Co........................................ 21,000 572,250
Puget Energy, Inc............................................... 14,330 342,057
Xcel Energy, Inc................................................ 20,305 305,387
-------------
3,093,046
ELECTRONIC AND OTHER ELECTRICAL EQUIPMENT (2.22%)
Acuity Brands, Inc.............................................. 18,500 336,145
Adaptec, Inc.................................................... 23,150(1) 180,107
ECI Telecom, Ltd................................................ 10,000(1) 29,400
Electronic Data Systems Corp.................................... 11,445 245,495
Intel Corp...................................................... 8,900 184,978
Roxio, Inc...................................................... 3,810(1) 25,489
-------------
1,001,614
ENGINEERING & MANAGEMENT SERVICES (0.28%)
Affymetrix, Inc................................................. 3,400(1) 67,014
Monsanto Co..................................................... 2,778 60,116
-------------
127,130
FABRICATED METAL PRODUCTS (1.18%)
Cooper Industries, Ltd.......................................... 6,738 278,279
Shaw Group, Inc................................................. 10,400(1) 125,320
Stanley Works (The)............................................. 4,600 126,960
-------------
530,559
FOOD AND KINDRED PRODUCTS (5.90%)
ConAgra Foods, Inc.............................................. 46,616 1,100,137
Dean Foods Co................................................... 16,986(1) 535,059
Sara Lee Corp................................................... 23,400 440,154
Sensient Technologies Corp...................................... 25,405 584,061
-------------
2,659,411
FOOD STORES (4.29%)
7-Eleven, Inc................................................... 72,380(1) 763,609
Casey's General Stores, Inc..................................... 39,632 560,396
Kroger Co....................................................... 10,900(1) 181,812
Safeway, Inc.................................................... 20,730(1) 424,136
-------------
1,929,953
</Table>
15
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
GENERAL MERCHANDISE STORES (1.15%)
Federated Department Stores, Inc................................ 8,608 $ 317,205
Target Corp..................................................... 5,300 200,552
-------------
517,757
HEALTH SERVICES (6.07%)
Laboratory Corp. of America Holdings............................ 18,500(1) 557,775
Province Healthcare Co.......................................... 35,900(1) 397,413
Schering-Plough Corp............................................ 23,200 431,520
Select Medical Corp............................................. 24,700(1) 613,301
Taro Pharmaceutical Industries, Ltd............................. 6,600(1) 362,208
Universal Health Services, Inc.-Class B......................... 9,420(1) 373,220
-------------
2,735,437
HOLDING AND OTHER INVESTMENT OFFICES (3.74%)
Highwoods Properties, Inc....................................... 17,500 390,250
MBIA, Inc....................................................... 18,700 911,625
Reckson Assoc. Realty Corp.-Class A............................. 9,125 190,348
Reckson Assoc. Realty Corp.-Class B............................. 9,125 194,362
-------------
1,686,585
INDUSTRIAL MACHINERY AND EQUIPMENT (2.65%)
Cisco Systems, Inc.............................................. 6,500(1) 108,485
EMC Corp........................................................ 22,500(1) 235,575
Hewlett-Packard Co.............................................. 6,000 127,800
Ingersoll-Rand Co. Ltd.-Class A................................. 13,450 636,454
Solectron Corp.................................................. 22,500(1) 84,150
-------------
1,192,464
INSTRUMENTS AND RELATED PRODUCTS (4.56%)
Agilent Technologies, Inc....................................... 7,000(1) 136,850
Becton Dickinson & Co........................................... 22,800 885,780
JDS Uniphase Corp............................................... 16,400(1) 57,564
Pall Corp....................................................... 35,980 809,550
Perkinelmer, Inc................................................ 11,900 164,339
-------------
2,054,083
INSURANCE CARRIERS (2.93%)
Allstate Corp................................................... 18,100 645,265
American International Group, Inc............................... 7,450 411,091
Protective Life Corp............................................ 9,300 248,775
Travelers Property Casualty Corp.-Class A....................... 321 5,104
Travelers Property Casualty Corp.-Class B....................... 659 10,392
-------------
1,320,627
METAL MINING (0.80%)
Barrick Gold Corp............................................... 20,000 358,000
</Table>
16
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
MISCELLANEOUS MANUFACTURING INDUSTRY (0.76%)
Emerson Electric Co............................................. 2,300 $ 117,530
Hasbro, Inc..................................................... 12,900 225,621
-------------
343,151
NONDEPOSITORY INSTITUTIONS (0.74%)
Federal Home Loan Mortgage Corp................................. 6,500 330,005
OIL AND GAS EXTRACTION (4.60%)
Burlington Resources, Inc....................................... 10,000 540,700
EOG Resources, Inc.............................................. 5,800 242,672
Occidental Petroleum Co......................................... 10,400 348,920
Offshore Logistics, Inc......................................... 18,500(1) 402,375
Rowan Companies, Inc............................................ 16,900(1) 378,560
Veritas DGC, Inc................................................ 13,800(1) 158,700
-------------
2,071,927
PAPER AND ALLIED PRODUCTS (1.90%)
Abitibi Consolidated, Inc....................................... 92,600 593,566
Sonoco Products Co.............................................. 10,900 261,818
-------------
855,384
PETROLEUM AND COAL PRODUCTS (4.58%)
BP Amoco........................................................ 6,000 252,120
ChevronTexaco Corp.............................................. 7,050 509,010
ConocoPhillips.................................................. 16,833 922,448
Marathon Oil Corp............................................... 14,400 379,440
-------------
2,063,018
PRIMARY METAL INDUSTRIES (0.82%)
Northwest Pipe Co............................................... 26,100(1) 370,359
PRINTING AND PUBLISHING (2.30%)
Belo Corp....................................................... 26,400 590,304
Mail-Well, Inc.................................................. 79,200(1) 199,584
R.R. Donnelley & Sons Co........................................ 9,400 245,716
-------------
1,035,604
TOBACCO PRODUCTS (1.49%)
Altria Group, Inc............................................... 14,800 672,512
TRANSPORTATION -- BY AIR (0.98%)
Petroleum Helicopters, Inc. (Non-Voting)........................ 14,690(1) 442,904
TRANSPORTATION EQUIPMENT (3.17%)
Genuine Parts Co................................................ 3,300 105,633
Honeywell International, Inc.................................... 23,500 630,975
ITT Industries, Inc............................................. 4,185 273,950
SPX Corp........................................................ 9,514(1) 419,187
-------------
1,429,745
</Table>
17
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
VALUE GROWTH PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
WHOLESALE -- DURABLE GOODS (0.65%)
Apogent Technologies, Inc....................................... 14,600(1) $ 292,000
MISCELLANEOUS EQUITIES (1.78%)
H & Q Life Sciences Investors................................... 21,424 320,717
NASDAQ-100 Trust................................................ 16,100(1) 482,195
-------------
802,912
-------------
Total Common Stocks............................................... 39,692,068
SHORT-TERM INVESTMENTS (11.85%)
- ------------------------------------
MONEY MARKET MUTUAL FUND (1.64%)
Blackrock Provident Institutional Funds, T-Fund Portfolio....... 736,649 736,649
<Caption>
PRINCIPAL
AMOUNT
-------------
COMMERCIAL PAPER (7.55%)
DEPOSITORY INSTITUTIONS (2.22%)
Wells Fargo Corp., 1.01%, due 7/07/03......................... $1,000,000 1,000,000
NONDEPOSITORY INSTITUTIONS (5.33%)
American General Finance Corp., 1.00%, due 7/03/03............ 1,400,000 1,400,000
General Electric Capital Corp., 1.05%, due 7/01/03............ 1,000,000 1,000,000
-------------
2,400,000
-------------
Total Commercial Paper.......................................... 3,400,000
UNITED STATES GOVERNMENT AGENCIES (2.66%)
Federal Home Loan Bank, due 7/11/03............................. 750,000 749,802
Federal National Mortgage Assoc., due 7/17/03................... 450,000 449,818
-------------
1,199,620
-------------
Total Short-Term Investments...................................... 5,336,269
-------------
Total Investments (99.96%)........................................ 45,028,337
OTHER ASSETS LESS LIABILITIES (0.04%)
- -----------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... 16,860
-------------
Total Net Assets (100.00%)........................................ $ 45,045,197
=============
</Table>
(1) Non-income producing securities.
SEE ACCOMPANYING NOTES.
18
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
PREFERRED STOCKS (5.48%)
- -----------------------------
DEPOSITORY INSTITUTIONS (1.68%)
Chase Capital V, 7.03%, due 3/31/28............................. 18,000 $ 452,880
ELECTRIC, GAS AND SANITARY SERVICES (3.04%)
Virginia Electric & Power-Series A, 6.70%, due 6/30/09.......... 32,000 822,080
HOLDING AND OTHER INVESTMENT OFFICES (0.76%)
New Plan Excel Realty Trust-Series D, 7.80%..................... 4,000 204,625
-------------
Total Preferred Stocks............................................ 1,479,585
<Caption>
PRINCIPAL
AMOUNT
-------------
CORPORATE BONDS (26.40%)
- -----------------------------
ELECTRIC, GAS AND SANITARY SERVICES (7.80%)
Maritime & NE Pipeline, 144A, 7.70%, due 11/30/19............... $ 700,000 872,823
Oglethorpe Power (OPC Scherer), 6.974%, due 6/30/11............. 300,000 332,820
PacifiCorp, 6.90%, due 11/15/11................................. 750,000 902,467
-------------
2,108,110
FOOD STORES (2.29%)
Ahold Finance USA, Inc., 8.25%, due 7/15/10..................... 600,000 618,000
GENERAL MERCHANDISE STORES (1.08%)
J.C. Penney & Co., 8.25%, due 8/15/22........................... 300,000 291,000
HOLDING AND OTHER INVESTMENT OFFICES (3.11%)
Meditrust, 7.60%, due 9/13/05................................... 150,000 156,375
Security Capital Pacific, 7.20%, due 3/01/13.................... 275,000 318,824
Washington REIT, 6.898%, due 2/15/18............................ 350,000 365,568
-------------
840,767
TEXTILE MILL PRODUCTS (0.88%)
Unifi, 6.50%, due 2/01/08....................................... 280,000 238,000
TOBACCO PRODUCTS (3.29%)
UST, Inc., 7.25%, due 6/01/09................................... 750,000 888,128
TRANSPORTATION -- BY AIR (7.36%)
Continental Airlines, Inc., 6.545%, due 8/02/20................. 435,525 419,193
Federal Express, 7.50%, due 1/15/18............................. 207,691 249,215
Northwest Airlines, 7.575%, due 3/01/19......................... 718,258 720,054
US Air, Inc., 8.36%, due 1/20/19................................ 636,268 599,683
-------------
1,988,145
TRANSPORTATION EQUIPMENT (0.59%)
Ford Motor Co., 9.215%, due 9/15/21............................. 150,000 160,433
-------------
Total Corporate Bonds............................................. 7,132,583
</Table>
19
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------------- --------------
MORTGAGE-BACKED SECURITIES (47.23%)
- ------------------------------------------
FEDERAL NATIONAL MORTGAGE ASSOCIATION
(FNMA) (0.02%)
Pool #50276, 9.50%, due 2/01/20................................. $ 3,839 $ 4,273
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) (47.21%)
Pool #1512, 7.50%, due 12/20/23................................. 78,887 84,009
Pool #2631, 7.00%, due 8/01/28.................................. 165,100 174,017
Pool #2658, 6.50%, due 10/01/28................................. 260,472 272,694
Pool #2701, 6.50%, due 1/20/29.................................. 297,091 310,949
Pool #2796, 7.00%, due 8/01/29.................................. 287,912 303,233
Pool #3039, 6.50%, due 2/01/31.................................. 133,833 139,909
Pool #3040, 7.00%, due 2/01/31.................................. 255,496 268,891
Pool #3188, 6.50%, due 2/20/32.................................. 785,312 820,923
Pool #3239, 6.50%, due 5/01/32.................................. 714,212(2) 746,599
Pool #3261, 6.50%, due 7/20/32.................................. 1,336,609(2) 1,397,219
Pool #3320, 5.50%, due 12/01/32................................. 2,372,789 2,466,642
Pool #3333, 5.50%, due 1/01/33.................................. 1,902,502 1,977,714
Pool #3375, 5.50%, due 4/01/33.................................. 282,823 294,003
Pool #3390, 5.50%, due 5/01/33.................................. 1,204,997 1,252,634
Pool #4567, 5.50%, due 6/20/33.................................. 2,000,000(1) 2,080,625
Pool #22630, 6.50%, due 8/01/28................................. 142,289 148,965
Pool #276337, 10.00%, due 8/15/19............................... 15,817 18,233
-------------
12,757,259
-------------
Total Mortgage-Backed Securities.................................. 12,761,532
UNITED STATES TREASURY OBLIGATION (1.58%)
- ------------------------------------------------
U.S. Treasury Note, 7.25%, due 8/15/04.......................... 400,000 427,752
SHORT-TERM INVESTMENTS (25.83%)
- ------------------------------------
COMMERCIAL PAPER (8.51%)
DEPOSITORY INSTITUTIONS (1.85%)
Wells Fargo Corp., 1.01%, due 7/21/03......................... 500,000 500,000
NONDEPOSITORY INSTITUTIONS (5.18%)
American General Finance Corp., 1.00%, due 7/01/03............ 900,000 900,000
General Electric Capital Corp., 1.10%, due 7/10/03............ 500,000 500,000
-------------
1,400,000
PETROLEUM AND COAL PRODUCTS (1.48%)
ChevronTexaco Corp., 1.20%, due 7/07/03....................... 400,000 400,000
-------------
Total Commercial Paper.......................................... 2,300,000
</Table>
20
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
HIGH GRADE BOND PORTFOLIO (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------------- --------------
UNITED STATES GOVERNMENT AGENCIES (15.73%)
Federal Home Loan Bank, due 7/01/03............................. $1,900,000 $ 1,900,000
Federal Home Loan Bank, due 7/14/03............................. 500,000 499,809
Federal National Mortgage Assoc., due 7/07/03................... 350,000 349,932
Federal National Mortgage Assoc., due 7/11/03................... 500,000 499,872
Federal National Mortgage Assoc., due 7/17/03................... 1,000,000 999,595
-------------
4,249,208
<Caption>
SHARES
HELD
-------------
MONEY MARKET MUTUAL FUND (1.59%)
Blackrock Provident Institutional Funds, T-Fund Portfolio ...... 429,795 429,795
-------------
Total Short-Term Investments...................................... 6,479,003
-------------
Total Investments (106.52%)....................................... 28,780,455
OTHER ASSETS LESS LIABILITIES (-6.52%)
- ------------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... (1,760,716)
-------------
Total Net Assets (100.00%)........................................ $ 27,019,739
=============
</Table>
(1) Firm commitment to purchase on July 22, 2003.
(2) Trade restricted and held in a segregated account to cover firm commitment.
SEE ACCOMPANYING NOTES.
21
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
STRATEGIC YIELD PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
PREFERRED STOCKS (5.31%)
- -----------------------------
HOLDING AND OTHER INVESTMENT OFFICES (1.49%)
New Plan Excel Realty Trust -- Series D, 7.80%.................. 7,000 $ 358,094
METAL MINING (3.82%)
Cameco Corp., 8.75%, due 9/30/47................................ 36,000 919,800
-------------
Total Preferred Stocks............................................ 1,277,894
<Caption>
PRINCIPAL
AMOUNT
-------------
CORPORATE BONDS (83.43%)
- -----------------------------
CHEMICALS AND ALLIED PRODUCTS (9.67%)
Lyondell Chemical Co., 9.625%, due 5/01/07...................... $ 900,000 891,000
Nova Chemicals, Ltd., 7.875%, due 9/15/25....................... 800,000 731,040
Polyone Corp., 8.875%, due 5/01/12.............................. 750,000 708,000
-------------
2,330,040
COMMUNICATIONS (2.33%)
Telephone & Data Systems, Inc., 7.00%, due 8/01/06.............. 500,000 560,075
ELECTRIC, GAS AND SANITARY SERVICES (25.82%)
Alliant Energy Resources, Inc., 9.75%, due 1/15/13.............. 1,000,000 1,320,630
Allied Waste North America, 10.00%, due 8/01/09................. 800,000 856,000
Cleveland Electric Illuminating Co., 9.00%, due 7/01/23......... 1,000,000 1,039,840
ESI Tractebel, 7.99%, due 12/30/11.............................. 320,000 322,000
Gulf States Utilities, 8.94%, due 1/01/22....................... 700,000 731,192
Northwestern Corp., 8.75%, due 3/15/12.......................... 1,000,000 775,000
Semco Energy, Inc., 144A, 7.125%, due 5/15/08................... 900,000 940,500
Waterford 3 Nuclear Power Plant, 8.09%, due 1/02/17............. 213,225 235,121
-------------
6,220,283
FOOD STORES (0.12%)
Penn Traffic Co., 11.00%, due 6/29/09........................... 47,850 28,949
GENERAL MERCHANDISE STORES (1.76%)
DR Structured Finance, 8.35%, due 2/15/04....................... 376,794 131,878
J.C. Penney & Co., 8.25%, due 8/15/22........................... 300,000 291,000
-------------
422,878
HOLDING AND OTHER INVESTMENT OFFICES (9.31%)
Bradley Operating, L.P., 7.20%, due 1/15/08..................... 450,000 450,581
Federal Realty Investment Trust, 7.48%, due 8/15/26............. 600,000 679,549
iStar Financial Inc., 7.00%, due 3/15/08........................ 300,000 316,500
Price Development Company, 7.29%, due 3/11/08................... 450,000 474,786
Trinet Corp. Realty, 6.75%, due 3/01/13......................... 300,000 322,002
-------------
2,243,418
</Table>
22
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
STRATEGIC YIELD PORTFOLIO (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------------- --------------
INDUSTRIAL MACHINERY AND EQUIPMENT (3.77%)
AGCO Corp., 8.50%, due 3/15/06.................................. $ 900,000 $ 906,750
LUMBER AND WOOD PRODUCTS (1.55%)
Georgia-Pacific Corp., 9.875%, due 11/01/21..................... 225,000 227,250
Georgia-Pacific Corp., 9.125%, due 7/01/22...................... 150,000 146,250
-------------
373,500
METAL MINING (4.88%)
Great Central Mining Corp., 8.875%, due 4/01/08................. 900,000 454,500
Teck Cominco Ltd., 3.75%, due 7/15/06........................... 800,000 721,000
-------------
1,175,500
PAPER AND ALLIED PRODUCTS (8.74%)
Bowater Inc., 9.375%, due 12/15/21.............................. 900,000 984,591
Potlatch Corp., 12.5%, due 12/01/09............................. 900,000 1,121,031
-------------
2,105,622
TRANSPORTATION -- BY AIR (11.53%)
Continental Airlines, Inc., 7.461%, due 4/01/15................. 1,294,914 1,196,177
Northwest Airlines, 7.575%, due 3/01/19......................... 210,988 211,516
United Airlines, 7.783%, due 1/01/14............................ 1,692,636 1,368,919
-------------
2,776,612
WATER TRANSPORTATION (3.95%)
Windsor Petroleum Transportation, 144A, 7.84%, due 1/15/21...... 1,000,000 951,390
-------------
Total Corporate Bonds............................................. 20,095,017
SHORT-TERM INVESTMENTS (8.89%)
- -----------------------------------
COMMERCIAL PAPER (4.15%)
NONDEPOSITORY INSTITUTIONS
American General Finance Corp., 1.03%, due 7/03/03............ 450,000 450,000
General Electric Capital Corp., 1.21%, due 7/09/03............ 550,000 550,000
-------------
1,000,000
UNITED STATES GOVERNMENT AGENCIES (3.11%)
Federal National Mortgage Assoc., due 7/11/03................... 750,000 749,808
<Caption>
SHARES
HELD
-------------
MONEY MARKET MUTUAL FUND (1.63%)
Blackrock Provident Institutional Funds, T-Fund Portfolio....... 392,669 392,669
-------------
Total Short-Term Investments...................................... 2,142,477
-------------
Total Investments (97.63%)........................................ 23,515,388
</Table>
23
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
STRATEGIC YIELD PORTFOLIO (CONTINUED)
<Table>
<Caption>
VALUE
--------------
OTHER ASSETS LESS LIABILITIES (2.37%)
- -----------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... $ 571,567
-------------
Total Net Assets (100.00%)........................................ $ 24,086,955
=============
</Table>
SEE ACCOMPANYING NOTES.
24
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
COMMON STOCKS (67.69%)
- ---------------------------
BUSINESS SERVICES (1.33%)
Computer Associates International, Inc.......................... 7,100 $ 158,188
Compuware Corp.................................................. 17,000(1) 98,090
Microsoft Corp.................................................. 7,400 189,514
Symantec Corp................................................... 7,600(1) 333,336
-------------
779,128
CHEMICALS AND ALLIED PRODUCTS (6.79%)
Bristol-Myers Squibb Co......................................... 12,300 333,945
GlaxoSmithKline plc............................................. 4,700 190,538
IVAX Corp....................................................... 21,500(1) 383,775
Johnson & Johnson............................................... 7,200 372,240
KV Pharmaceutical Co.-Class A................................... 8,400(1) 233,520
Lyondell Chemical Co............................................ 21,300 288,189
Merck & Co., Inc................................................ 11,450 693,297
Mylan Laboratories, Inc......................................... 17,550 610,214
Olin Corp....................................................... 17,100 292,410
Pfizer, Inc..................................................... 17,310 591,136
-------------
3,989,264
COMMUNICATIONS (1.37%)
ADC Telecommunications.......................................... 39,900(1) 92,887
Centurytel, Inc................................................. 17,040 593,844
Comcast Corp.-Class A........................................... 3,930(1) 118,608
-------------
805,339
DEPOSITORY INSTITUTIONS (6.38%)
Associated Banc Corp............................................ 15,222 561,387
Astoria Financial Corp.......................................... 10,100 282,093
Community Bank Systems, Inc..................................... 10,685 406,030
FleetBoston Financial Corp...................................... 20,055 595,834
U. S. Bancorp................................................... 49,082 1,202,509
Wachovia Corp................................................... 8,328 332,787
Wilmington Trust Corp........................................... 12,500 366,875
-------------
3,747,515
</Table>
25
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
ELECTRIC, GAS AND SANITARY SERVICES (10.70%)
Alliant Energy Corp............................................. 22,115 $ 420,848
Atmos Energy Corp............................................... 44,552 1,104,890
Black Hills Corp................................................ 15,955 489,818
Laclede Group, Inc.............................................. 32,842 880,166
Nisource, Inc................................................... 32,000 608,000
Northwest Natural Gas Co........................................ 46,400 1,264,400
Puget Energy, Inc............................................... 32,360 772,433
Xcel Energy, Inc................................................ 49,290 741,322
-------------
6,281,877
ELECTRONIC AND OTHER ELECTRIC EQUIPMENT (2.17%)
Acuity Brands, Inc.............................................. 33,850 615,055
Adaptec, Inc.................................................... 24,850(1) 193,333
Electronic Data Systems Corp.................................... 15,000 321,750
Intel Corp...................................................... 5,800 120,547
Roxio, Inc...................................................... 4,090(1) 27,362
-------------
1,278,047
ENGINEERING & MANAGEMENT SERVICES (0.08%)
Monsanto Co..................................................... 2,243 48,539
FABRICATED METAL PRODUCTS (1.30%)
Cooper Industries, Ltd.......................................... 10,121 417,997
Stanley Works (The)............................................. 12,500 345,000
-------------
762,997
FOOD AND KINDRED PRODUCTS (4.78%)
ConAgra Foods, Inc.............................................. 49,530 1,168,908
Dean Foods Co................................................... 19,069(1) 600,674
Sara Lee Corp................................................... 24,100 453,321
Sensient Technologies Corp...................................... 25,465 585,440
-------------
2,808,343
FOOD STORES (1.67%)
7-Eleven, Inc................................................... 29,440(1) 310,592
Kroger Co....................................................... 14,350(1) 239,358
Safeway, Inc.................................................... 21,080(1) 431,297
-------------
981,247
GENERAL MERCHANDISE STORES (0.64%)
Federated Department Stores, Inc................................ 10,281 378,855
HEALTH SERVICES (2.51%)
Province Healthcare Co.......................................... 26,400(1) 292,248
Schering-Plough Corp............................................ 15,700 292,020
Select Medical Corp............................................. 12,500(1) 310,375
Taro Pharmaceutical Industries, Ltd............................. 6,030(1) 330,926
Universal Health Services, Inc.-Class B......................... 6,350(1) 251,587
-------------
1,477,156
</Table>
26
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
HOLDING AND OTHER INVESTMENT OFFICES (2.76%)
Highwoods Properties, Inc....................................... 21,500 $ 479,450
MBIA, Inc....................................................... 13,081 637,699
Reckson Associates Realty Corp.................................. 24,260 506,063
-------------
1,623,212
INDUSTRIAL MACHINERY & EQUIPMENT (1.35%)
EMC Corp........................................................ 13,800(1) 144,486
Hewlett-Packard Co.............................................. 6,900 146,970
Ingersoll-Rand Co. Ltd.-Class A................................. 10,622 502,633
-------------
794,089
INSTRUMENTS AND RELATED PRODUCTS (2.92%)
Becton Dickinson & Co........................................... 23,500 912,975
Pall Corp....................................................... 35,650 802,125
-------------
1,715,100
INSURANCE CARRIERS (1.32%)
Allstate Corp................................................... 17,100 609,615
Protective Life................................................. 6,200 165,850
-------------
775,465
METAL MINING (1.26%)
Barrick Gold Corp............................................... 41,200 737,480
MISCELLANEOUS MANUFACTURING INDUSTRY (0.27%)
Emerson Electric Co............................................. 3,100 158,410
OIL AND GAS EXTRACTION (4.21%)
Burlington Resources, Inc....................................... 7,500 405,525
Occidental Petroleum Co......................................... 21,500 721,325
Offshore Logistics.............................................. 35,850(1) 779,737
Rowan Companies, Inc............................................ 16,700(1) 374,080
Veritas DGC, Inc................................................ 16,400(1) 188,600
-------------
2,469,267
PAPER AND ALLIED PRODUCTS (3.11%)
Abitibi Consolidated, Inc....................................... 133,500 855,735
Glatfelter...................................................... 31,300 461,675
Sonoco Products Co.............................................. 21,200 509,224
-------------
1,826,634
PETROLEUM AND COAL PRODUCTS (3.52%)
BP Amoco........................................................ 8,100 340,362
ConocoPhillips.................................................. 21,012 1,151,458
Marathon Oil Corp............................................... 21,800 574,430
-------------
2,066,250
PRIMARY METAL INDUSTRIES (0.11%)
Wolverine Tube, Inc............................................. 11,400(1) 65,208
</Table>
27
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
PRINTING AND PUBLISHING (2.09%)
Belo Corp.-Series A............................................. 33,600 $ 751,296
R.R. Donnelley & Sons Co........................................ 18,100 473,134
-------------
1,224,430
TOBACCO PRODUCTS (1.66%)
Altria Group, Inc............................................... 21,400 972,416
TRANSPORTATION EQUIPMENT (3.15%)
Genuine Parts Co................................................ 8,900 284,889
Honeywell International, Inc.................................... 27,400 735,690
ITT Industries, Inc............................................. 5,095 333,519
SPX Corp........................................................ 11,228(1) 494,705
-------------
1,848,803
WHOLESALE-DURABLE GOODS (0.24%)
Apogent Technologies, Inc....................................... 7,000(1) 140,000
-------------
Total Common Stocks............................................... 39,755,071
PREFERRED STOCKS (4.76%)
- -----------------------------
DEPOSITORY INSTITUTIONS (1.12%)
Taylor Capital Group, Inc.-Series A, 9.00%,..................... 26,000 658,125
ELECTRIC, GAS AND SANITARY SERVICES (1.19%)
Virginia Electric & Power-Series A, 6.70%, due 6/30/09.......... 27,100 696,199
PETROLEUM AND COAL PRODUCTS (2.45%)
Nexen, Inc.-Series 1, 9.375%, due 3/31/48....................... 56,000 1,439,200
-------------
Total Preferred Stocks............................................ 2,793,524
<Caption>
PRINCIPAL
AMOUNT
-------------
CORPORATE BONDS (2.30%)
- ----------------------------
METAL MINING
Teck Cominco Ltd., 3.75%, due 7/15/06........................... $ 1,500,000 1,351,875
MORTGAGE-BACKED SECURITIES (6.35%)
- -----------------------------------------
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION
(GNMA) (6.35%)
Pool #2796, 7.00%, due 8/01/29.................................. 431,868 454,850
Pool #3040, 7.00%, due 2/01/31.................................. 319,371 336,114
Pool #3188, 6.50%, due 2/20/32.................................. 785,312 820,923
Pool #3239, 6.50%, due 5/01/32.................................. 1,196,146 1,250,387
Pool #3333, 5.50%, due 1/01/33.................................. 832,345 865,250
-------------
Total Mortgage-Backed Securities.................................. 3,727,524
</Table>
28
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MANAGED PORTFOLIO (CONTINUED)
<Table>
<Caption>
PRINCIPAL
AMOUNT VALUE
------------- --------------
SHORT-TERM INVESTMENTS (18.55%)
- ------------------------------------
COMMERCIAL PAPER (13.11%)
DEPOSITORY INSTITUTIONS (3.58%)
Wells Fargo Corp., 1.01%, due 7/21/03......................... $ 1,000,000 $ 1,000,000
Citigroup, 0.95%, due 7/14/03................................. 1,100,000 1,100,000
-------------
2,100,000
NONDEPOSITORY INSTITUTIONS (7.83%)
American General Finance Corp., 1.16%, due 7/01/03............ 1,100,000 1,100,000
American General Finance Corp., 1.18%, due 7/07/03............ 800,000 800,000
General Electric Capital Corp., 1.21%, due 7/09/03............ 1,000,000 1,000,000
General Electric Capital Corp., 1.14%, due 7/11/03............ 800,000 800,000
General Electric Capital Corp., 0.96%, due 7/17/03............ 900,000 900,000
-------------
4,600,000
PETROLEUM AND COAL PRODUCTS (1.70%)
ChevronTexaco Corp., 1.00%, due 7/03/03....................... 1,000,000 1,000,000
-------------
Total Commercial Paper.......................................... 7,700,000
UNITED STATES GOVERNMENT AGENCIES (3.81%)
Federal Farm Credit Bank, due 8/01/03........................... 750,000 749,380
Federal Home Loan Bank, due 7/25/03............................. 640,000 639,513
Federal Home Loan Mortgage Corp., due 7/15/03................... 850,000 849,699
-------------
Total United States Government Agencies......................... 2,238,592
<Caption>
SHARES
HELD
-------------
MONEY MARKET MUTUAL FUND (1.63%)
Blackrock Provident Institutional Funds, T-Fund Portfolio....... 955,946 955,946
-------------
Total Short-Term Investments...................................... 10,894,538
-------------
Total Investments (99.65%)........................................ 58,522,532
OTHER ASSETS LESS LIABILITIES (0.35%)
- -----------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... 204,118
-------------
Total Net Assets (100.00%)........................................ $ 58,726,650
=============
</Table>
(1) Non-income producing securities.
SEE ACCOMPANYING NOTES.
29
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
MONEY MARKET PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
ANNUALIZED
YIELD ON
PURCHASE PRINCIPAL
DATE AMOUNT VALUE
---------- ----------- --------------
SHORT-TERM INVESTMENTS (98.35%)
- ------------------------------------
COMMERCIAL PAPER (11.89%)
NONDEPOSITORY INSTITUTIONS (9.03%)
American General Finance Corp., 1.21%, due 7/25/03............ 1.213% $ 300,000 $ 300,000
General Electric Capital Corp., 0.95%, due 8/04/03............ 0.951 150,000 150,000
General Electric Capital Corp., 1.13%, due 8/12/03............ 1.132 150,000 150,000
-------------
600,000
PETROLEUM AND COAL PRODUCTS (2.86%)
ChevronTexaco, Corp., 1.18%, due 8/01/03...................... 1.182 190,000 190,000
-------------
Total Commercial Paper.......................................... 790,000
UNITED STATES GOVERNMENT AGENCIES (86.46%)
Federal Farm Credit Bank, due 7/11/03......................... 1.179 200,000 199,936
Federal Farm Credit Bank, due 7/22/03......................... 1.117 250,000 249,839
Federal Farm Credit Bank, due 8/06/03......................... 1.138 270,000 269,697
Federal Home Loan Bank, due 7/07/03........................... 1.106 250,000 249,955
Federal Home Loan Bank, due 7/09/03........................... 1.164 175,000 174,955
Federal Home Loan Bank, due 7/14/03........................... 1.076 300,000 299,885
Federal Home Loan Bank, due 7/16/03........................... 1.180 200,000 199,903
Federal Home Loan Bank, due 7/25/03........................... 1.158 370,000 369,718
Federal Home Loan Bank, due 7/28/03........................... 1.159 270,000 269,769
Federal Home Loan Bank, due 8/08/03........................... 0.964 150,000 149,850
Federal Home Loan Bank, due 8/20/03........................... 1.128 200,000 199,691
Federal Home Loan Mortgage Corp., due 7/03/03................. 1.169 200,000 199,987
Federal Home Loan Mortgage Corp., due 7/17/03................. 1.005 200,000 199,912
Federal Home Loan Mortgage Corp., due 7/24/03................. 1.184 125,000 124,907
Federal Home Loan Mortgage Corp., due 7/31/03................. 1.149 150,000 149,859
Federal Home Loan Mortgage Corp., due 8/21/03................. 0.904 250,000 249,685
Federal Home Loan Mortgage Corp., due 8/29/03................. 0.975 275,000 274,567
Federal Home Loan Mortgage Corp., due 9/02/03................. 1.057 190,000 189,654
Federal Home Loan Mortgage Corp., due 9/04/03................. 0.965 100,000 99,829
Federal National Mortgage Assoc., due 7/02/03................. 1.159 300,000 299,991
Federal National Mortgage Assoc., due 7/21/03................. 0.923 350,000 349,823
Federal National Mortgage Assoc., due 7/23/03................. 1.147 200,000 199,862
Federal National Mortgage Assoc., due 8/06/03................. 1.159 175,000 174,800
Federal National Mortgage Assoc., due 8/13/03................. 0.954 200,000 199,775
Federal National Mortgage Assoc., due 8/14/03................. 0.883 200,000 199,787
Federal National Mortgage Assoc., due 8/27/03................. 0.955 200,000 199,702
-------------
5,745,338
-------------
Total Short-Term Investments...................................... 6,535,338
OTHER ASSETS LESS LIABILITIES (1.65%)
- -----------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... 109,307
-------------
Total Net Assets (100.00%)........................................ $ 6,644,645
=============
</Table>
SEE ACCOMPANYING NOTES.
30
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO
JUNE 30, 2003
(UNAUDITED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
COMMON STOCKS (94.97%)
- ---------------------------
BUSINESS SERVICES (5.27%)
AOL Time Warner, Inc............................................ 50,502(1) $ 812,577
Microsoft Corp.................................................. 84,480 2,163,533
Oracle Corp..................................................... 58,314(1) 700,934
-------------
3,677,044
CHEMICALS AND ALLIED PRODUCTS (18.09%)
Abbott Laboratories............................................. 25,260 1,105,378
Amgen, Inc...................................................... 18,200(1) 1,209,208
Bristol-Myers Squibb Co......................................... 36,063 979,110
Dow Chemical Co................................................. 10,720 331,891
E.I. du Pont de Nemours & Co.................................... 16,081 669,613
Johnson & Johnson............................................... 43,580 2,253,086
Eli Lilly & Co.................................................. 18,022 1,242,977
Merck & Co., Inc................................................ 28,928 1,751,590
Pfizer, Inc..................................................... 36,882 1,259,520
Procter & Gamble Co............................................. 20,521 1,830,063
-------------
12,632,436
COMMUNICATIONS (5.94%)
AT&T Corp....................................................... 9,732 187,341
Comcast Corp.-Class A........................................... 22,486(1) 678,627
SBC Communications, Inc......................................... 35,565 908,686
Verizon Communications.......................................... 32,907 1,298,181
Viacom, Inc.-Class B............................................ 24,668(1) 1,077,005
-------------
4,149,840
DEPOSITORY INSTITUTIONS (10.90%)
Bank of America................................................. 23,298 1,841,241
Citigroup, Inc.................................................. 49,326 2,111,153
J. P. Morgan Chase & Co......................................... 47,270 1,615,689
Wachovia Corp................................................... 25,980 1,038,161
Wells Fargo Co.................................................. 19,900 1,002,960
-------------
7,609,204
EATING AND DRINKING PLACES (1.64%)
McDonald's Corp................................................. 51,752 1,141,649
ELECTRIC, GAS AND SANITARY SERVICES (3.09%)
Dominion Resources, Inc......................................... 11,600 745,532
Exelon Corp..................................................... 12,300 735,663
Southern Co..................................................... 21,650 674,614
-------------
2,155,809
</Table>
31
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
ELECTRONIC AND OTHER ELECTRIC EQUIPMENT (6.49%)
Applied Materials, Inc.......................................... 24,000(1) $ 380,640
General Electric Co............................................. 73,576 2,110,160
Intel Corp...................................................... 58,206 1,209,754
Motorola, Inc................................................... 37,949 357,859
Texas Instruments, Inc.......................................... 27,001 475,218
-------------
4,533,631
FOOD AND KINDRED PRODUCTS (3.58%)
Anheuser Busch Companies, Inc................................... 11,432 583,604
Coca-Cola Co. (The)............................................. 26,389 1,224,713
PepsiCo, Inc.................................................... 15,518 690,551
-------------
2,498,868
FORESTRY (0.50%)
Weyerhaeuser Co................................................. 6,400 345,600
GENERAL MERCHANDISE STORES (3.28%)
Wal-Mart Stores, Inc............................................ 42,623 2,287,576
INDUSTRIAL MACHINERY AND EQUIPMENT (9.28%)
3M Co........................................................... 8,904 1,148,438
Caterpillar, Inc................................................ 14,307 796,328
Cisco Systems, Inc.............................................. 62,268(1) 1,039,253
Dell Computer Corp.............................................. 31,210(1) 997,472
EMC Corp........................................................ 38,068(1) 398,572
Hewlett-Packard Co.............................................. 41,279 879,243
International Business Machines Corp............................ 14,821 1,222,732
-------------
6,482,038
INSTRUMENTS AND RELATED PRODUCTS (0.60%)
Eastman Kodak Co................................................ 15,278 417,853
INSURANCE CARRIERS (3.00%)
American International Group, Inc............................... 37,964 2,094,854
LUMBER AND WOOD PRODUCTS (1.23%)
Home Depot, Inc................................................. 25,913 858,239
MOTION PICTURES (1.04%)
Disney (Walt) Co................................................ 36,832 727,432
NONDEPOSITORY INSTITUTIONS (1.39%)
Federal National Mortgage Assoc................................. 14,400 971,136
PAPER AND ALLIED PRODUCTS (0.89%)
International Paper Co.......................................... 17,317 618,736
PETROLEUM AND COAL PRODUCTS (5.62%)
ChevronTexaco Corp.............................................. 19,700 1,422,340
Exxon Mobil Corp................................................ 69,771 2,505,477
-------------
3,927,817
</Table>
32
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
SCHEDULE OF INVESTMENTS
BLUE CHIP PORTFOLIO (CONTINUED)
<Table>
<Caption>
SHARES
HELD VALUE
------------- --------------
PRIMARY METAL INDUSTRIES (1.13%)
Alcoa, Inc...................................................... 30,898 $ 787,899
SECURITY AND COMMODITY BROKERS (3.16%)
American Express Co............................................. 52,797 2,207,443
TOBACCO PRODUCTS (2.54%)
Altria Group, Inc............................................... 38,965 1,770,570
TRANSPORTATION EQUIPMENT (6.31%)
Boeing Co. (The)................................................ 32,082 1,101,054
General Motors Corp............................................. 16,700 601,200
Honeywell International, Inc.................................... 38,024 1,020,944
United Technologies Corp........................................ 23,701 1,678,741
-------------
4,401,939
-------------
Total Common Stocks............................................... 66,297,613
<Caption>
PRINCIPAL
AMOUNT
-------------
SHORT-TERM INVESTMENTS (5.05%)
- -----------------------------------
COMMERCIAL PAPER (1.43%)
NONDEPOSITORY INSTITUTIONS
American General Finance Corp., 1.02%, due 7/25/03............ $ 1,000,000 1,000,000
UNITED STATES GOVERNMENT AGENCIES (1.79%)
Federal Home Loan Bank, due 7/07/03............................. 1,250,000 1,249,760
<Caption>
SHARES
HELD
-------------
MONEY MARKET MUTUAL FUND (1.83%)
Blackrock Provident Institutional Funds, T-Fund Portfolio....... 1,277,699 1,277,699
-------------
Total Short-Term Investments...................................... 3,527,459
-------------
Total Investments (100.02%)....................................... 69,825,072
OTHER ASSETS LESS LIABILITIES (-0.02%)
- ------------------------------------------
Cash, receivables, prepaid expense and other assets, less
liabilities.................................................... (13,715)
-------------
Total Net Assets (100.00%)........................................ $ 69,811,357
=============
</Table>
(1) Non-income producing securities.
SEE ACCOMPANYING NOTES.
33
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2003
(UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
EquiTrust Variable Insurance Series Fund (the "Fund") is registered under
the Investment Company Act of 1940, as amended, as a no-load, open-end
diversified management investment company and operates in the mutual fund
industry. The Fund currently consists of six portfolios (known as the Value
Growth, High Grade Bond, Strategic Yield, Managed, Money Market and Blue Chip
Portfolios). Shares of the Fund are sold only to certain life insurance
companies' separate accounts to fund the benefits under variable insurance
contracts issued by such life insurance companies, including Farm Bureau Life
Insurance Company and EquiTrust Life Insurance Company (see NOTE 3).
SECURITY VALUATION
All portfolios, other than the Money Market Portfolio, value their
investment securities that are traded on any national exchange at the last sale
price on the day of valuation or, lacking any sales, at the mean between the
closing bid and asked prices. If the mean is not available, exchange-traded
securities are valued using the prior day's closing prices. Investments traded
in the over-the-counter market are valued at the mean between the bid and asked
prices or yield equivalent as obtained from one or more dealers that make
markets in the securities. Investments for which market quotations are not
readily available, or in situations when liquidation of the holdings at quoted
market prices is questionable, are valued at fair value as determined in good
faith by the Fund's Board of Trustees. Short-term investments are valued at
market value, except that obligations maturing in 90 days or less are valued
using the amortized cost method of valuation described below with respect to the
Money Market Portfolio, which approximates market.
The Money Market Portfolio values investments at amortized cost, which
approximates market value. Under the amortized cost method, a security is valued
at its cost on the date of purchase and thereafter is adjusted to reflect a
constant amortization to maturity of the difference between the principal amount
due at maturity and the cost of the investment to the portfolio.
INCOME AND INVESTMENT TRANSACTIONS
The Fund records investment transactions generally one day after the trade
date. The identified cost basis has been used in determining the net realized
gain or loss from investment transactions and unrealized appreciation or
depreciation on investments. Dividend income is recorded on the ex-dividend date
and interest is recognized on an accrual basis. Discounts and premiums on
investments purchased are amortized over the life of the respective investments.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
With respect to the Money Market Portfolio, all net investment income and
any realized gains and losses from investment transactions are declared as
dividends daily to shareholders of record as of that day. Dividends and
distributions of the other portfolios are recorded on the ex-dividend date.
Dividends and distributions from net investment income and net realized gain
from investments are determined in accordance with federal tax regulations,
which may differ from accounting principles generally accepted in the United
States. These differences are primarily due to differing treatments for certain
defaulted
34
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
securities, and basis adjustments resulting from corporate reorganizations.
Permanent book and tax basis differences are reclassified within the capital
accounts based on their federal tax-basis treatment; temporary differences do
not require reclassification. During the period ended June 30, 2003, there were
no permanent adjustments reflected in the statement of assets and liabilities.
Dividends and distributions which exceed net investment income and net
realized capital gains for financial reporting purposes, but not for tax
purposes, are reported as dividends in excess of net investment income or
distributions in excess of net realized capital gains. To the extent
distributions exceed current and accumulated earnings and profits for federal
income tax purposes, they are reported as a non-taxable return of capital
distributions.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States 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.
2. FEDERAL INCOME TAXES
No provision for federal income taxes is considered necessary because the
Fund is qualified as a "regulated investment company" under the Internal Revenue
Code and intends to distribute each year substantially all of its net investment
income and realized capital gains to shareholders.
As of June 30, 2003, the following Portfolios had approximate net capital
loss carryforwards set forth below:
<Table>
<Caption>
PORTFOLIO
-----------------------------------------------
VALUE STRATEGIC BLUE
NET CAPITAL LOSS CARRYFORWARDS EXPIRE IN: GROWTH YIELD MANAGED CHIP
- ----------------------------------------- ----------- ---------- ---------- ----------
2006............................... $ 7,077,000 $ -- $ -- $ --
2008............................... 2,848,000 -- $2,626,000
2010............................... -- 1,784,000 -- 1,786,000
2011............................... 195,000 -- -- 4,691,000
----------- ---------- ---------- ----------
$10,120,000 $1,784,000 $2,626,000 $6,477,000
=========== ========== ========== ==========
</Table>
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES
The Fund has entered into agreements with EquiTrust Investment Management
Services, Inc. ("EquiTrust Investment") relating to the management of the
portfolios and the investment of their assets. Pursuant to these agreements,
fees paid to EquiTrust Investment are as follows: (1) annual investment advisory
and management fees, which are based on each portfolio's average daily net
assets as follows: Value Growth Portfolio -- 0.45%; High Grade Bond
Portfolio -- 0.30%; Strategic Yield Portfolio -- 0.45%; Managed Portfolio --
0.45%; Money Market Portfolio -- 0.25%; and Blue Chip Portfolio -- 0.20%, and
(2) accounting fees, which are based on each portfolio's daily net assets at an
annual rate of 0.05%, with a maximum per portfolio annual expense of $30,000.
35
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
3. MANAGEMENT CONTRACT AND TRANSACTIONS WITH AFFILIATES (CONTINUED)
The Fund has entered into an agreement with EquiTrust Investment whereby
EquiTrust Investment also serves as the principal underwriter and distributor of
the Fund's shares and as the Fund's shareholder service, transfer and dividend
disbursing agent. There are no additional fees associated with these services.
EquiTrust Investment has agreed to reimburse the portfolios annually for
total expenses (excluding brokerage, interest, taxes and extraordinary expenses)
in excess of 1.50% of each portfolio's average daily net assets. The amount
reimbursed, however, shall not exceed the amount of the investment advisory and
management fee paid by the portfolio for such period. During the period ended
June 30, 2003, EquiTrust Investment further agreed to reimburse any portfolio,
to the extent that annual operating expenses, including the investment advisory
fee, exceed 0.65%. As of June 30, 2003, the Strategic Yield Portfolio had $866
due from EquiTrust Investment for the reimbursement of expenses.
Certain officers and trustees of the Fund are also officers of EquiTrust
Investment, its affiliate, Farm Bureau Life Insurance Company and other
affiliated entities. As of June 30, 2003, the total number of the shares of each
portfolio owned by Farm Bureau Life Insurance Company, EquiTrust Life Insurance
Company (an affiliate) and related separate accounts are as follows:
<Table>
<Caption>
PORTFOLIO SHARES
- --------- ---------
Value Growth...................................... 4,488,803
High Grade Bond................................... 2,541,546
Strategic Yield................................... 2,644,039
Managed........................................... 4,450,422
Money Market...................................... 6,466,433
Blue Chip......................................... 2,345,026
</Table>
4. EXPENSE OFFSET ARRANGEMENTS
The Fund and other mutual funds managed by EquiTrust Investment have an
agreement with the custodian bank to indirectly pay a portion of the custodian's
fees through credits earned by the funds' cash on deposit with the bank. This
deposit agreement is an alternative to overnight investments. Custodial fees
have been adjusted to reflect amounts that would have been paid without this
agreement, with a corresponding adjustment reflected as fees paid indirectly in
the statement of operations.
36
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CAPITAL SHARE TRANSACTIONS
The Fund has an unlimited number of shares of beneficial interest authorized
with no par value. Net assets as of June 30, 2003, consisted of the following
for financial reporting purposes:
<Table>
<Caption>
PORTFOLIO
----------------------------------------------------------------------------
VALUE HIGH GRADE STRATEGIC MONEY BLUE
GROWTH BOND YIELD MANAGED MARKET CHIP
------------ ----------- ----------- ----------- ---------- -----------
Paid-in capital.......... $ 56,244,007 $25,776,201 $25,813,573 $56,581,247 $6,644,645 $73,309,702
Accumulated undistributed
net investment income... 248,028 -- -- 664,897 -- 538,345
Accumulated undistributed
net realized gain (loss)
from investment
transactions............ (10,180,445) 3,506 (1,783,549) (2,750,326) -- (6,477,074)
Net unrealized
appreciation
(depreciation) of
investments............. (1,266,393) 1,240,032 56,931 4,230,832 -- 2,440,384
------------ ----------- ----------- ----------- ---------- -----------
Net Assets............... $ 45,045,197 $27,019,739 $24,086,955 $58,726,650 $6,644,645 $69,811,357
============ =========== =========== =========== ========== ===========
</Table>
As of June 30, 2003, the components of accumulated earnings (deficit) and
capital gains (losses) on a tax basis were identical to those reported in the
statements of assets and liabilities, except as follows:
<Table>
<Caption>
PORTFOLIO
--------------------------------------
VALUE STRATEGIC
GROWTH YIELD MANAGED
------------ ----------- -----------
Undistributed ordinary income...... $ 248,028 $ 14,430 $ 664,897
------------ ----------- -----------
Accumulated earnings............... 248,028 14,430 664,897
Accumulated capital and other
losses............................ (10,120,011) (1,783,549) (2,626,358)
Net unrealized appreciation
(depreciation) of investments..... (1,326,827) 58,931 4,106,865
------------ ----------- -----------
Total accumulated earnings
(deficit)......................... $(11,198,810) $(1,710,188) $ 2,145,404
============ =========== ===========
</Table>
During 2002, certain investees of the Value Growth and Managed Portfolios
reincorporated in Bermuda. Upon reincorporation, unrealized capital gains on
these investments were recognized for tax purposes, creating taxable capital
gains for their shareholders. As of June 30, 2003, unrealized depreciation and
accumulated capital gains book and tax differences related to reincorporation
were $60,434 for the Value Growth Portfolio and $123,967 for the Managed
Portfolio. Additionally, the Strategic Yield Portfolio held defaulted securities
which had accrued interest ($14,430) for tax purposes and not for financial
reporting purposes.
37
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
5. CAPITAL SHARE TRANSACTIONS (CONTINUED)
Transactions in shares of beneficial interest for each portfolio were as
follows:
<Table>
<Caption>
SHARES ISSUED IN
REINVESTMENT OF
DIVIDENDS AND NET INCREASE
SHARES SOLD DISTRIBUTIONS SHARES REDEEMED (DECREASE)
----------------------- ------------------- ----------------------- -----------------------
PORTFOLIO SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT SHARES AMOUNT
- --------- ---------- ----------- ------- ---------- ---------- ----------- ---------- -----------
Period ended June 30, 2003:
Value Growth........... 124,025 $ 1,141,430 70,077 $ 632,800 185,452 $ 1,682,252 8,650 $ 91,978
High Grade Bond........ 316,200 3,273,347 68,052 706,358 220,512 2,284,593 163,740 1,695,112
Strategic Yield........ 140,782 1,240,059 99,592 881,691 136,960 1,206,183 103,414 915,567
Managed................ 135,115 1,659,213 124,058 1,494,900 209,893 2,543,342 49,280 610,771
Money Market........... 8,288,881 8,288,881 16,587 16,587 9,810,364 9,810,364 (1,504,896) (1,504,896)
Blue Chip.............. 83,729 2,314,601 39,362 1,066,311 113,529 3,049,777 9,562 331,135
Year ended December 31, 2002:
Value Growth........... 313,599 $ 3,060,299 79,813 $ 815,691 293,302 $ 2,780,200 100,110 $ 1,095,790
High Grade Bond........ 629,420 6,433,056 109,184 1,119,460 209,026 2,140,588 529,578 5,411,928
Strategic Yield........ 387,871 3,430,716 173,173 1,525,246 270,103 2,363,471 290,941 2,592,491
Managed................ 446,596 5,652,393 143,639 1,801,236 317,632 3,905,338 272,603 3,548,291
Money Market........... 23,190,009 23,190,009 74,993 74,993 24,435,623 24,435,623 (1,170,621) (1,170,621)
Blue Chip.............. 193,377 5,860,594 34,889 1,156,568 205,739 6,055,865 22,527 961,297
</Table>
6. INVESTMENT TRANSACTIONS
For the period ended June 30, 2003, the cost of investment securities
purchased and proceeds from investment securities sold (not including short-term
investments and U.S. Government securities) by portfolio, were as follows:
<Table>
<Caption>
PORTFOLIO PURCHASES SALES
- --------- ----------- -----------
Value Growth............................ $ 3,729,571 $ 1,992,356
High Grade Bond......................... -- 39,802
Strategic Yield......................... 4,506,760 5,494,381
Managed................................. 3,949,103 2,438,934
Blue Chip............................... 10,955,297 11,346,827
</Table>
The basis for federal income tax purposes and financial reporting purposes
for investments in the Money Market Portfolio is the same and is equal to the
underlying investments' carrying value.
Any of the portfolios may purchase newly issued securities on a
"when-issued" basis and may purchase or sell securities on a "delayed delivery"
basis. When-issued or delayed delivery transactions involve a commitment by a
portfolio to purchase or sell particular securities with payment and delivery to
take place at a future date. As of June 30, 2003, the High Grade Bond Portfolio
had a purchase commitment on a mortgage-backed security issued by the Government
National Mortgage Association (security pool # 4567) with a face amount of
$2,000,000, cost of $2,009,688, and a market value of $2,080,625. The
transaction is subject to market fluctuations and the current value is
determined in the same manner as for other portfolio securities. The transaction
settled on July 22, 2003.
38
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. INVESTMENT TRANSACTIONS (CONTINUED)
The basis of the Fund's investments in securities and the net unrealized
appreciation (depreciation) of investments for U.S. federal income tax purposes
as of June 30, 2003, by portfolio, were composed of the following:
<Table>
<Caption>
TAX COST OF GROSS UNREALIZED NET UNREALIZED
INVESTMENTS -------------------------- APPRECIATION (DEPRECIATION)
PORTFOLIO IN SECURITIES APPRECIATION DEPRECIATION OF INVESTMENTS
- --------- ------------- ------------ ------------ ---------------------------
Value Growth.................. $46,335,164 $ 4,993,648 $ (6,320,475) $(1,326,827)
High Grade Bond............... 27,540,423 1,351,837 (111,805) 1,240,032
Strategic Yield............... 23,458,457 1,187,104 (1,130,173) 56,931
Managed....................... 54,415,668 7,255,124 (3,148,259) 4,106,865
Blue Chip..................... 66,384,688 12,920,606 (10,480,222) 2,440,384
</Table>
The basis for U.S. federal income tax purposes and financial reporting
purposes for investments in the Money Market Portfolio is the same and is equal
to the underlying investments' carrying value.
7. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Dividends from net investment income for the following portfolios are
declared daily and were payable on the last business day of the month as
follows:
<Table>
<Caption>
PORTFOLIO
------------------------------
HIGH
GRADE STRATEGIC MONEY
PAYABLE DATE BOND YIELD MARKET
- ------------ ---------- --------- -------
January 31, 2003................... $0.0356 $0.0553 $0.0006
February 28, 2003.................. 0.0357 0.0616 0.0005
March 31, 2003..................... 0.0451 0.0623 0.0005
April 30, 2003..................... 0.0342 0.0487 0.0005
May 30, 2003....................... 0.0323 0.0490 0.0005
June 30, 2003...................... 0.0471 0.0633 0.0005
------- ------- -------
Total dividends per share.......... $0.2300 $0.3402 $0.0031
======= ======= =======
</Table>
39
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
7. DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS (CONTINUED)
In addition, dividends and distributions to shareholders from net investment
income and net realized gain on investment transactions were paid during the
period ended June 30, 2003 for the following portfolios:
ORDINARY INCOME DIVIDENDS:
<Table>
<Caption>
DIVIDEND
PERCENT
DECLARATION RECORD PAYABLE PER
PORTFOLIO DATE DATE DATE SHARE
- --------- ----------- ---------- ---------- --------
Value Growth.................. 1/22/03 1/22/03 1/23/03 $0.1411
Managed....................... 1/22/03 1/22/03 1/23/03 0.3387
Blue Chip..................... 1/22/03 1/22/03 1/23/03 0.4549
</Table>
For federal income tax purposes, the portfolio designates capital gain
dividends as follows:
CAPITAL GAINS DISTRIBUTIONS:
<Table>
<Caption>
DECLARATION RECORD PAYABLE AMOUNT
PORTFOLIO DATE DATE DATE PER SHARE
- --------- ----------- ---------- ---------- ---------
High Grade.................... 1/22/03 1/22/03 1/23/03 $0.0521
</Table>
The federal income tax character of dividends and distributions to
shareholders during 2003 and 2002 was the same for financial reporting purposes.
8. PROXY VOTING RESULTS
A special meeting of the fund's shareholders was held on May 21, 2003. The
results of votes taken among shareholders on proposals before them are reported
below. Each vote reported represents one share held on the record date for the
meeting.
PROPOSAL 1
To elect Board of Trustees:
<Table>
<Caption>
NUMBER OF VOTES
--------------------------------
FOR WITHHELD TOTAL
---------- -------- ----------
Craig A. Lang...................... 22,324,342 699,248 23,023,590
William J. Oddy.................... 22,087,280 936,310 23,023,590
Erwin H. Johnson................... 22,196,521 827,068 23,023,590
Kenneth Kay........................ 22,194,410 829,180 23,023,590
Paul E. Larson..................... 22,030,367 993,222 23,023,590
Steven W. Plate.................... 22,050,418 973,172 23,023,590
Erlin J. Weness.................... 22,027,588 996,002 23,023,590
</Table>
40
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. PROXY VOTING RESULTS (CONTINUED)
PROPOSAL 2
Approval of the amended and restated investment advisory and management services
agreement:
<Table>
<Caption>
NUMBER OF VOTES
-----------------------------------------
FOR AGAINST ABSTAIN TOTAL
--------- ------- --------- ----------
Value Growth Portfolio........ 4,030,573 93,007 224,091 4,347,671
High Grade Bond Portfolio..... 2,105,499 159,343 193,138 2,457,980
Strategic Yield Portfolio..... 2,179,848 73,303 238,911 2,492,062
Managed Portfolio............. 3,884,603 110,993 316,567 4,312,163
Money Market Portfolio........ 5,575,128 326,764 1,225,927 7,127,819
Blue Chip Portfolio........... 2,042,266 103,556 140,073 2,285,895
----------
Total..................... 23,023,590
==========
</Table>
PROPOSAL 3
<Table>
<Caption>
NUMBER OF VOTES
------------------------------------------
FOR AGAINST ABSTAIN TOTAL
---------- ------- --------- ----------
Ratification of the selection
of Ernst & Young LLP as
independent auditors......... 21,213,656 490,460 1,319,474 23,023,590
</Table>
41
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
FINANCIAL HIGHLIGHTS
PERIOD ENDED JUNE 30, 2003 (UNAUDITED) AND
YEARS ENDED DECEMBER 31, 2002, 2001, 2000 AND 1999
<Table>
<Caption>
VALUE GROWTH
PORTFOLIO
-------------------------------------------
2003 2002 2001 2000 1999
------- ------- ------- ------- -------
Net asset value,
beginning of period..... $ 9.14 $ 10.39 $ 9.92 $ 8.69 $ 9.50
Income From Investment
Operations
Net investment
income.............. 0.05 0.14 0.18 0.22 0.18
Net gains (losses) on
securities (both
realized and
unrealized)......... 0.98 (1.20) 0.50 1.20 (0.77)
------- ------- ------- ------- -------
Total from investment
operations............ 1.03 (1.06) 0.68 1.42 (0.59)
------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment
income)............. (0.14) (0.19) (0.21) (0.19) (0.22)
Distributions (from
capital gains)...... -- -- -- -- --
Distributions in
excess of net
realized gains...... -- -- -- -- --
------- ------- ------- ------- -------
Total distributions.... (0.14) (0.19) (0.21) (0.19) (0.22)
------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 10.03 $ 9.14 $ 10.39 $ 9.92 $ 8.69
======= ======= ======= ======= =======
Total Return:
Total investment return
based on net asset
value (1)............. 11.45% (10.43)% 6.98% 16.71% (6.34)%
Ratios/Supplemental Data:
Net assets, end of
period (000's
omitted).............. $45,045 $40,953 $45,522 $40,173 $40,848
Ratio of total expenses
to average net
assets................ 0.64%(2) 0.59% 0.57% 0.57% 0.57%
Ratio of net expenses
to average net
assets................ 0.64%(2) 0.59% 0.57% 0.56% 0.57%
Ratio of net investment
income to average net
assets................ 1.21%(2) 1.46% 1.89% 2.34% 1.91%
Portfolio turnover
rate.................. 6%(3) 15% 40% 78% 152%
</Table>
- ------------------------------
Note: Per share amounts have been calculated on the basis of monthly per share
amounts (using average monthly outstanding shares) accumulated for the period.
(1) Total investment return is calculated assuming an initial investment made
at the net asset value at the beginning of the period, reinvestment of all
dividends and distributions at net asset value during the period, and
redemption on the last day of the period, and is not annualized for periods
less than one year.
(2) Computed on an annualized basis.
(3) Not annualized.
SEE ACCOMPANYING NOTES.
42
<Page>
<Table>
<Caption>
HIGH GRADE BOND STRATEGIC YIELD
PORTFOLIO PORTFOLIO
------------------------------------------- -------------------------------------------
2003 2002 2001 2000 1999 2003 2002 2001 2000 1999
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
beginning of period..... $ 10.39 $ 10.08 $ 9.82 $ 9.49 $ 10.19 $ 8.75 $ 8.90 $ 8.82 $ 9.30 $ 10.17
Income From Investment
Operations
Net investment
income.............. 0.23 0.50 0.62 0.67 0.62 0.34 0.62 0.73 0.75 0.74
Net gains (losses) on
securities (both
realized and
unrealized)......... 0.18 0.32 0.26 0.34 (0.67) 0.29 (0.15) 0.08 (0.48) (0.81)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total from investment
operations............ 0.41 0.82 0.88 1.01 (0.05) 0.63 0.47 0.81 0.27 (0.07)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment
income)............. (0.23) (0.50) (0.62) (0.67) (0.62) (0.34) (0.62) (0.73) (0.75) (0.74)
Distributions (from
capital gains)...... (0.05) (0.01) -- (0.01) (0.03) -- -- -- -- --
Distributions in
excess of net
realized gains...... -- -- -- -- -- -- -- -- -- (0.06)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Total distributions.... (0.28) (0.51) (0.62) (0.68) (0.65) (0.34) (0.62) (0.73) (0.75) (0.80)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 10.52 $ 10.39 $ 10.08 $ 9.82 $ 9.49 $ 9.04 $ 8.75 $ 8.90 $ 8.82 $ 9.30
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
Total Return:
Total investment return
based on net asset
value (1)............. 4.04% 8.37% 9.10% 11.14% (0.46)% 7.35% 5.43% 9.22% 3.05% (0.75)%
Ratios/Supplemental Data:
Net assets, end of
period (000's
omitted).............. $27,020 $24,984 $18,908 $13,934 $13,638 $24,087 $22,395 $20,182 $16,410 $17,752
Ratio of total expenses
to average net
assets................ 0.50%(2) 0.46% 0.45% 0.45% 0.48% 0.66%(2) 0.61% 0.59% 0.59% 0.60%
Ratio of net expenses
to average net
assets................ 0.50%(2) 0.46% 0.45% 0.45% 0.47% 0.65%(2) 0.61% 0.59% 0.58% 0.59%
Ratio of net investment
income to average net
assets................ 4.47%(2) 4.92% 6.10% 7.03% 6.34% 7.77%(2) 7.04% 7.93% 8.30% 7.62%
Portfolio turnover
rate.................. 11%(3) 22% 17% 7% 24% 22%(3) 34% 33% 3% 27%
</Table>
43
<Page>
EQUITRUST VARIABLE INSURANCE SERIES FUND
FINANCIAL HIGHLIGHTS (CONTINUED)
<Table>
<Caption>
MANAGED
PORTFOLIO
-------------------------------------------
2003 2002 2001 2000 1999
------- ------- ------- ------- -------
Net asset value,
beginning of period..... $ 12.34 $ 13.00 $ 12.58 $ 10.54 $ 11.45
Income From Investment
Operations
Net investment
income.............. 0.15 0.34 0.44 0.59 0.64
Net gains (losses) on
securities (both
realized and
unrealized)......... 1.02 (0.57) 0.55 2.11 (1.02)
------- ------- ------- ------- -------
Total from investment
operations............ 1.17 (0.23) 0.99 2.70 (0.38)
------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment
income)............. (0.34) (0.43) (0.57) (0.66) (0.53)
Distributions (from
capital gains)...... -- -- -- -- --
Distributions in
excess of net
realized gains...... -- -- -- -- --
------- ------- ------- ------- -------
Total distributions.... (0.34) (0.43) (0.57) (0.66) (0.53)
------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 13.17 $ 12.34 $ 13.00 $ 12.58 $ 10.54
======= ======= ======= ======= =======
Total Return:
Total investment return
based on net asset
value (1)............. 9.73% (1.80)% 8.12% 27.39% (3.45)%
Ratios/Supplemental Data:
Net assets, end of
period (000's
omitted).............. $58,727 $54,428 $53,795 $48,012 $47,829
Ratio of total expenses
to average net assets
...................... 0.63%(2) 0.58% 0.56% 0.56% 0.56%
Ratio of net expenses
to average net assets
...................... 0.63%(2) 0.58% 0.56% 0.55% 0.56%
Ratio of net investment
income to average net
assets................ 2.44%(2) 2.73% 3.47% 4.96% 5.28%
Portfolio turnover
rate.................. 6%(3) 18% 40% 85% 43%
</Table>
44
<Page>
<Table>
<Caption>
MONEY MARKET BLUE CHIP
PORTFOLIO PORTFOLIO
-------------------------------------- -------------------------------------------
2003 2002 2001 2000 1999 2003 2002 2001 2000 1999
------ ------ ------ ------ ------ ------- ------- ------- ------- -------
Net asset value,
beginning of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 27.22 $ 34.14 $ 39.29 $ 43.98 $ 36.87
Income From Investment
Operations
Net investment
income.............. -- 0.01 0.03 0.06 0.04 0.23 0.46 0.50 0.56 0.54
Net gains (losses) on
securities (both
realized and
unrealized)......... -- -- -- -- -- 2.72 (6.88) (4.83) (4.26) 7.06
------ ------ ------ ------ ------ ------- ------- ------- ------- -------
Total from investment
operations............ -- 0.01 0.03 0.06 0.04 2.95 (6.42) (4.33) (3.70) 7.60
------ ------ ------ ------ ------ ------- ------- ------- ------- -------
Less Distributions
Dividends (from net
investment
income)............. -- (0.01) (0.03) (0.06) (0.04) (0.46) (0.50) (0.56) (0.53) (0.49)
Distributions (from
capital gains)...... -- -- -- -- -- -- -- (0.26) (0.46) --
Distributions in
excess of net
realized gains...... -- -- -- -- -- -- -- -- -- --
------ ------ ------ ------ ------ ------- ------- ------- ------- -------
Total distributions.... -- (0.01) (0.03) (0.06) (0.04) (0.46) (0.50) (0.82) (0.99) (0.49)
------ ------ ------ ------ ------ ------- ------- ------- ------- -------
Net asset value, end of
period.................. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 29.71 $ 27.22 $ 34.14 $ 39.29 $ 43.98
====== ====== ====== ====== ====== ======= ======= ======= ======= =======
Total Return:
Total investment return
based on net asset
value (1)............. 0.31% 1.16% 3.51% 5.85% 4.53% 10.98% (19.07)% (11.28)% (8.52)% 20.85%
Ratios/Supplemental Data:
Net assets, end of
period (000's
omitted).............. $6,645 $8,150 $9,320 $7,233 $6,609 $69,811 $63,699 $79,124 $87,118 $86,849
Ratio of total expenses
to average net assets
...................... 0.59%(2) 0.52% 0.50% 0.50% 0.55% 0.37%(2) 0.31% 0.28% 0.27% 0.30%
Ratio of net expenses
to average net assets
...................... 0.58%(2) 0.52% 0.48% 0.48% 0.54% 0.37%(2) 0.31% 0.28% 0.27% 0.30%
Ratio of net investment
income to average net
assets................ 0.62%(2) 1.16% 3.41% 5.74% 4.49% 1.68%(2) 1.50% 1.42% 1.39% 1.43%
Portfolio turnover
rate.................. --%(3) --% --% --% --% 18%(3) --% --% 13% 5%
</Table>
45
<Page>
ITEM 2. CODE OF ETHICS.
Not applicable.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
Not applicable.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT.
Not applicable.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
Not applicable.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES
(a) The registrant's principal executive and principal financial
officers, or persons performing similar functions, have concluded
that the registrant's disclosure controls and procedures (as
defined in Rule 30a-3(c) under the Investment Company Act of 1940,
as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective,
as of a date within 90 days of the filing date of the report that
includes the disclosure required by this paragraph, based on their
evaluation of these controls and procedures required by Rule
30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules
13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There has been no change to the registrant's internal control over
financial reporting that occurred during the registrant's most
recent fiscal half-year that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 10. EXHIBITS.
(a)(1) Not applicable.
(a)(2) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of
2002 are attached hereto.
(b) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of
2002 are attached hereto.