Variable Products Funds Quarterly Update September 30, 2010
Table of Contents 2 3 4 5 6 7 8
American Century VP Capital Appreciation American Century VP Income & Growth Fund American Century VP Inflation Protection (Class II) American Century VP International American Century VP Mid Cap Value American Century VP Ultra® American Century VP Value Fund
9
Calamos® Growth and Income Portfolio
10 11 12 13
Dreyfus VIF Appreciation Portfolio Dreyfus VIF Opportunistic Small Cap Portfolio Dreyfus Stock Index Fund, Inc. The Dreyfus Socially Responsible Growth Fund, Inc.
14 15 16
Federated Capital Appreciation Fund II Federated High Income Bond Fund II Federated Prime Money Fund II
17 18 19 20 21 22 23 24 25 26 27
Fidelity VIP Contrafund Fidelity VIP Freedom Income Fidelity VIP Freedom 2010 Fidelity VIP Freedom 2015 Fidelity VIP Freedom 2020 Fidelity VIP Freedom 2025 Fidelity VIP Freedom 2030 Fidelity VIP Freedom 2035 Fidelity VIP Freedom 2040 Fidelity VIP Freedom 2045 Fidelity VIP Freedom 2050
28 29 30 31
Franklin Global Real Estate Fund (Class 2) Franklin Small-Mid Cap Growth Securities Fund (Class 2) Templeton Developing Markets Securities Fund (Class 2) Templeton Foreign Securities Fund (Class 2)
32 33 34
Invesco V.I. Capital Appreciation Fund Invesco V.I. Core Equity Fund Invesco V.I. Technology Fund
35 36 37
JPMorgan Insurance Trust Mid Cap Value Portfolio JPMorgan Insurance Small Cap Core Portfolio JPMorgan Insurance Trust U.S. Equity Portfolio
38 39 40 41 42 43
MFS® Growth Series MFS® Research Series MFS® Research Bond Series MFS® Strategic Income Series MFS® Total Return Series MFS® Utilities Series
44 45 46
Seligman Capital Portfolio (Class 2) Seligman Communications & Information Portfolio (Class 2) Seligman Smaller-Cap Value Portfolio (Class 2)
47
Ibbotson Classification Chart
Kansas City Life Century II Variable Product Series Kansas City Life Insurance Company would like to thank you for the trust you have placed in us, and we want you to know that we appreciate your business! We are committed to helping our customers build a financially sound future for themselves and their families. This quarterly booklet is part of our continuing effort to provide our customers with current information on their investment choices. Kansas City Life Variable Products offer 46 separate investment choices for your cash accumulations. You can invest in Kansas City Life’s Fixed Account and/or choose from the 45 investment choices offered through the Variable Account. All are professionally managed by some of today’s top investment advisers. We urge you to be realistic in your expectations when planning for your future with your financial advisor. With the exception of the “Ibbotson Classification” the information contained in this booklet has been provided by the investment manager of each fund. Ibbotson Associates, Inc. has reviewed the choices offered in the Kansas City Life Century II Variable Product Series, taking into account each investment’s performance over a period of years, its volatility or tendency to fluctuate in price. Because it does not engage in asset management, underwriting or brokerage services, Ibbotson is able to provide an objective review of funds based on investment style, philosophy and objectives. Please call your registered representative or Kansas City Life at 800-616-3670 if you have questions about this quarterly booklet or your Kansas City Life variable contract. You can also access information about your Kansas City Life variable contract at www.kclife.com.
This brochure is authorized for distribution only when preceded or accompanied by a prospectus which contains more complete information about Kansas City Life’s Variable Products, including charges, limitations and expenses. Read the prospectus carefully before investing money. Additional prospectuses can be obtained from your registered representative or by calling our toll-free number (800-616-3670). Kansas City Life’s Century II Variable Product Series is distributed by Sunset Financial Services Inc., Member FINRA and SIPC, a wholly owned subsidiary of Kansas City Life Insurance Company. 1
American Century VP Capital Appreciation TOP HOLDINGS Fastenal Company F5 Network Inc. SBA Communications Apple Inc. Whirlpool
TOP SECTORS
Domestic Stock.....90.5% Foreign Stock..........6.8% Cash/Other.............2.7%
Consumer Services Hardware Technology Healthcare Industrials Business Services
% of Portfolio 2.80 2.67 2.33 2.31 2.13
% of Portfolio 19.70 12.80 12.50 11.20 9.40
Ibbotson Classification: Small/Mid Cap Inception Date:
11/20/87
Investment Manager:
American Century Investment Management, Inc.
Bonds.....................2.6%
Portfolio Manager(s): Hollond / Walsh Description: Using a proprietary database containing information on approximately 16,000 companies, managers of American Century VP Capital Appreciation seek capital growth by searching for companies growing at accelerating rates.
Total Net Assets $7.68 million Total Number of Holdings 91 Benchmark Russell Mid Cap Growth Index 2
American Century VP Income & Growth Fund TOP HOLDINGS ExxonMobil IBM Johnson & Johnson Chevron J.P. Morgan Chase & Co.
TOP SECTORS
Domestic Stock.....98.0% Foreign Stock..........1.6% Cash/Other.............0.4%
Financials Healthcare Hardware Technology Consumer Goods Energy
% of Portfolio 3.52 2.60 2.57 2.24 2.15
% of Portfolio 15.80 13.30 12.90 12.10 10.50
Ibbotson Classification: Large Cap Core Inception Date:
10/30/97
Investment Manager:
American Century Investment Management, Inc.
Pang / Zhang / Borgwardt Portfolio Manager(s): Description: American Century VP Income & Growth attempts to produce a return exceeding its benchmark, the S&P 500. It invests mainly in large-company stocks, but may also purchase stocks of small and medium-sized companies. Computer models and a stock ranking system score stocks, providing guidance in investment decisions.
Total Net Assets Total Number of Holdings Benchmark 3
$2.28 million 229 S&P 500 Index
American Century VP Inflation Protection (Class II) TOP HOLDINGS 10 Yr Fix to Float Cpi w/boa US Treasury Note 1.625% US Treasury Bond 2% US Treasury Bond 2.375% US Treasury Note 2.375%
Credit Analysis
Bonds....................97.5% Cash/Other..............2.5%
AAA AA A BBB
% of Portfolio 3.84 3.60 3.41 3.15 2.90
% of Portfolio 86.00 7.17 3.05 3.74
Ibbotson Classification: Bonds Inception Date:
12/31/02
Investment American Century Investment Management, Inc. Manager: A Rated Bonds................3.2% B Rated Bonds................2.0%
Portfolio Manager(s): Howell / Gahagan / Platz Description: American Century Inflation Protection (Class II) seeks to invest in inflation-indexed securities that have historically been negatively correlated with all major stock indices and have had low correlation to major bond indices. When the pace of inflation rises, the fund will likely outperform traditional bond funds because the dividends are inflation adjusted. Higher inflation may mean higher dividends for the fund. Traditional bond funds own bonds whose coupons and principal don’t adjust for inflation.
Total Net Assets $9.28 million Total Number of Holdings 175 Benchmark Custom Citigroup US Inflation-Linked 4
American Century VP International TOP HOLDINGS BHP Billiton Novartis AG Unilever BG Group Nestle
TOP SECTORS
Domestic Stock.......1.00% Foreign Stock........99.00%
Industrials Consumer Goods Financials Healthcare Services Energy
% of Portfolio 2.17 2.12 1.67 1.63 1.62
% of Portfolio 19.70 18.50 17.60 8.00 7.60
Ibbotson Classification: International Inception Date:
5/1/94
Investment American Century Investment Management, Inc. Cash/Other.............0.70% Manager: Portfolio Tedder / Gandhi Manager(s): Description: Using a bottom-up strategy, American Century VP International managers believe it’s easier to understand and analyze an individual company than an industry, country or region. Investing in an international portfolio of common stocks, their focus is on companies with fast-growing earnings and revenue. Investments in U.S. companies are authorized as circumstances warrant.
Total Net Assets Total Number of Holdings Benchmark 5
$15.42 million 127 MSCI EAFE Index
American Century VP Mid Cap Value TOP HOLDINGS
% of Portfolio
Republic Services Northern Trust Corp. Imperial Oil Lowe’s Aon Corp.
3.21 2.70 2.65 2.51 2.40
TOP SECTORS
Domestic Stock.....96.5% Foreign Stock..........2.7% Bonds.....................0.8%
Financials Industrial Goods Consumer Goods Utilities Consumer Services
% of Portfolio 23.90 16.20 15.20 12.70 8.50
Ibbotson Classification: Mid Cap Inception Date:
12/01/04
Investment Manager:
American Century Investment Management, Inc.
Portfolio Liss / Davidson / Toney Manager(s): Description: American Century VP Mid Cap Value Fund seeks long-term capital appreciation by investing in companies whose stock price may not reflect their true value. The managers attempt to purchase the stocks of undervalued companies and hold each stock until the price has increased to, or is higher than, a level the managers believe more accurately reflects the fair value of the company. The fund will invest at least 80% of its assets in securities of companies whose market capitalization at the time of purchase is within the capitalization range of the Russell 3000® Index, excluding the largest 100 such companies. The portfolio managers intend to manage the fund so that its weighted capitalization falls within the capitalization range of the members of the Russell Midcap® Index.
Total Net Assets $.35 million Total Number of Holdings 110 Benchmark Russell Midcap Value Index 6
American Century VP ultra速 TOP HOLDINGS
% of Portfolio
Apple Google Express Scripts Cisco Systems, Inc. Hewlett-Packard
5.78 4.01 3.17 2.74 5.59
TOP SECTORS
Domestic Stock.....91.7% Foreign Stock..........6.8% Bonds.....................1.5%
Hardware Technology Consumer Services Industrial Goods Healthcare Consumer Goods
% of Portfolio 18.40 14.90 13.80 13.20 9.50
Ibbotson Classification: Large Cap Growth Inception Date:
5/1/01
Investment Manager:
American Century Investment Management, Inc.
Portfolio Li / Lee Manager(s): Description: American Century Ultra seeks long-term capital growth, investing in common stocks that management believes have a better-than-average chance for appreciation. The fund attempts to remain fully invested at all times, giving it the potential to take full advantage of market rebounds. By following a disciplined investment process that seeks companies with sustainable accelerating earnings, VP Ultra may be well positioned for long-term performance.
Total Net Assets 2.21 million Total Number of Holdings 76 Benchmark Russell 1000 Growth Index 7
American Century VP Value Fund TOP HOLDINGS AT&T Chevron Corporation Johnson & Johnson JP Morgan Chase & Co. Pfizer
TOP SECTORS
Domestic Stock.....95.0% Foreign Stock..........5.0%
Financials Healthcare Consumer Goods Energy Consumer Services
% of Portfolio 3.75 3.34 3.15 3.09 2.73
% of Portfolio 24.40 14.10 12.50 11.90 8.80
Ibbotson Classification: Large Cap Value Inception Bonds.....................0.9% 5/1/96 Date: Investment Manager:
American Century Investment Management, Inc.
Portfolio Liss / Davidson / Toney Manager(s): Description: American Century VP Value is built from the ground up by buying stocks across statistically inexpensive sectors of the market to the extent they hold unrecognized value. This conservative-value style promotes equities of well-established businesses temporarily out of favor due to market decline, poor economic conditions or actual or anticipated unfavorable developments affecting the company or its industry.
Total Net Assets $16.83 million Total Number of Holdings 117 Benchmark Lipper Multicap Value Index 8
Calamos速 Growth and Income Portfolio TOP HOLDINGS
% of Portfolio
S&P 500 Index Dec10 1075 Put EMC MA 1.75% Netapp 1.75% Info Systems Tech United Technologies
TOP SECTORS Energy Software Technology Industrials Hardware Technology Healthcare Domestic Stock................39.7% Foreign Stock.....................9.0% Bonds................................7.0% Cash/Other......................44.3%
3.66 3.49 3.13 2.55 2.24
% of Portfolio 20.6 15.9 15.3 13.5 9.5
Credit Analysis A BBB BB
20.9 22.8 26.0
Ibbotson Classification: Specific Strategy Inception Date:
5/19/99
Investment Manager:
Calamos Advisors, LLC
Portfolio Calamos / Wysocki / Hillenbrand Manager(s): Description: Calamos combines convertible securities and stocks to offer investors a portion of the upside potential of the stock market with less volatility. Over the long term, the portfolio will dynamically allocate between investment grade and non-investment grade convertible securities, and stocks of all market capitalizations, seeking to maintain a consistent balance of risk and reward through the market cycle.
Total Net Assets $19.04 million Total Number of Holdings 52 Benchmark Value Line Convertible Index 9
Dreyfus VIF Appreciation Portfolio TOP HOLDINGS Coca-Cola Philip Morris Intl Nestle SA Exxon Mobil Procter Gamble
Domestic Stock.....87.8% Foreign Stock........11.7% Cash/Other.............0.6%
% of Portfolio 7.88 7.49 5.82 5.41 4.72
TOP INDUSTRIES
% of Portfolio
Consumer Goods Energy Hardware Technology Healthcare Consumer Services
35.10 17.80 11.60 11.50 11.40
Ibbotson Classification: Large Cap Core Inception Date:
4/5/93
Investment Manager:
The Dreyfus Corporation
Portfolio Manager(s): Sarofim Description: By investing in the common stocks of "blue chip" companies, including multinational companies, with a total market capitalization of more than $5 billion at the time of purchase, the fund seeks long-term growth while preserving capital.
Total Net Assets Total Number of Holdings Benchmark 10
$9.09 million 47 S&P 500 Index
Dreyfus VIF Opportunistic Small Cap Portfolio TOP HOLDINGS
% of Portfolio
Emergent BioSolutions CB Richard Ellis Group Inc. King Pharmaceuticals Actuant Corporation Interpublic Group
TOP INDUSTRIES
Domestic Stock.....98.9% Cash/Other.............1.1%
Consumer Goods Industrial Goods Financial Services Software Technology Healthcare
2.84 2.46 2.45 2.23 2.22
% of Portfolio 12.5 12.3 11.5 11.5 11.4
Ibbotson Classification: Small/Mid Cap Inception Date:
8/31/90
Investment Manager:
The Dreyfus Corporation
Portfolio Manager(s): Daglio Description: Setting maximum capital appreciation as their goal, the managers of this portfolio invest in small companies with a total market value of less than $2 billion at the time of purchase. The portfolio may hold common and preferred stocks and convertible securities, including those issued in initial public offerings.
Total Net Assets Total Number of Holdings Benchmark 11
$9.6 million 93 Russell 2000 Index
Dreyfus Stock Index Fund, Inc. TOP HOLDINGS ExxonMobil Apple Microsoft Procter & Gamble AT&T
TOP INDUSTRIES
Domestic Stock.....100.0%
Financial Services Consumer Goods Healthcare Industrials Energy
% of Portfolio 3.19 2.33 1.89 1.81 1.68
% of Portfolio 16.2 11.7 11.5 11.2 10.9
Ibbotson Classification: Large Cap Core Inception Date:
9/29/89
Investment The Dreyfus Corporation & Mellon Equity Associates Manager: Cash/Other.............1.0% Portfolio Manager(s): Durante / Brown / Wango Description: The fund is designed to match, as closely as possible, the performance of its benchmark, the S&P 500 Composite Stock Price Index. All 500 stocks included in the index are generally held in proportion to their weighting in the index.
Total Net Assets Total Number of Holdings Benchmark 12
$33.19 million 500 S&P 500 Index
The Dreyfus Socially Responsible Growth Fund, Inc.
Domestic Stock.....92.2% Foreign Stock..........7.8%
TOP HOLDINGS
% of Portfolio
IBM Microsoft Procter & Gamble United Technologies Apple Inc.
3.92 3.82 2.98 2.63 2.53
TOP INDUSTRIES
% of Portfolio
Hardware Technology Financials Healthcare Consumer Services Industrials
14.6 13.8 13.2 12.0 9.9
Ibbotson Classification: Large Cap Growth Inception Date:
10/7/93
Investment The Dreyfus Corporation Cash/Other.............0.4% Manager: Portfolio Reed Manager(s): Description: The fund’s management looks to invest in companies that, in their opinion, meet traditional investment standards and conduct their business in a manner that contributes to the enhancement of the quality of life in America. The primary goal of the portfolio is to provide capital growth.
Total Net Assets Total Number of Holdings Benchmark 13
$1.33 million 89 S&P 500 Index
Federated Capital Appreciation Fund II TOP HOLDINGS McDonald’s Corp IBM Chevron Exxon Mobil Apple
TOP SECTORS
Domestic Stock........87.9% Foreign Stock.............4.2% Cash/Other................7.9%
Industrials Healthcare Financials Consumer Goods Hardware Technology
% of Portfolio 0.47 3.43 2.96 2.86 2.73
% of Portfolio 14.3 14.1 13.2 11.9 11.0
Ibbotson Classification: Large Cap Value Inception Date:
2/10/94
Investment Manager:
Federated Investment Management Co.
Portfolio Miller / Kartsonas Manager(s): Description: As its name implies, this fund invests in America’s leading companies. Worldwide, people use the products and services of these wellrecognized companies. These blue-chip stocks are purchased according to a time-tested, value-based investment approach that has been in place at Federated for more than 20 years. This process aims to deliver to investors' long-term growth of capital.
Total Net Assets $6.84 million Total Number of Holdings 60 Benchmark S&P 500 / Barra Value Index 14
Federated High Income Bond Fund II TOP HOLDINGS HCA Inc 9.625% Cit Group 7% Intelsat Inter Hldg Co. Ford Motor Credit 8% Biomet 11.625%
Top Sectors Media Industrials
Bonds....................98.2% Cash/Other..............1.8%
credit analysis BB B Below B
% of Portfolio 1.98 1.37 1.16 1.08 1.06
% of Portfolio 99.8 0.2
% of Portfolio 20.4 51.0 24.7
Ibbotson Classification: High Yield Bonds Inception Date:
3/1/94
Investment Manager:
Federated Investment Management Co.
Portfolio Durbiano Manager(s): Description: This fund pursues the high-income potential of lower-rated corporate bonds. Companies may issue high-yield bonds to finance business expansion, restructure operations, fund new equipment purchases and launch/develop new products. This fund’s investment approach focuses on bottom-up, fundamental analysis to identify strong, quality operating companies that have the potential to improve their debt servicing ability over time. To temper risk, portfolio managers place high priority on creditworthiness and broad diversification. Federated Investors has been managing high yield assets since 1972.
Total Net Assets $6.21 million Total Number of Holdings 321 Benchmark Lehman Brothers Yield Index 15
Federated Prime Money Fund II TOP HOLDINGS
% of Portfolio
Conneticut State Health Opelika AL Development Authority Louisiana Public Facilities Lee County FL Development Authority NY NY City Hsg
1.42 0.89 0.81 0.62 0.41
SECTOR WEIGHTINGS
% of Portfolio
Commercial Paper & Notes Variable Rate Instruments Bank Instruments Overnight Securities
57.0 21.2 19.1 2.7
Cash/Other.............100.0%
Ibbotson Classification: Cash Inception Date:
11/21/94
Investment Manager:
Federated Investment Management Co.
Portfolio Wilhelm / Cunningham Manager(s): Description: The Prime Money Fund II is a money market mutual fund that seeks to provide stability of principal and daily liquidity. The fund invests in highquality, short-term money market instruments. It’s an ideal “short-term parking lot” for money waiting to be invested or for funds being reallocated from another asset class. Federated manages more than $125 billion in money market assets.
Total Net Assets $10.17 million Total Number of Holdings Benchmark Lipper VA Money Market Funds Average 16
Fidelity Contrafund Portfolio TOP HOLDINGS Apple Inc. Microsoft J.P. Morgan Chase & Co. Coca-Cola General Electric
TOP SECTORS
Domestic Stock..........84.7% Foreign Stock.............13.2% Cash/Other..................2.1%
Financials Hardware Technology Consumer Goods Industrials Healthcare
% of Portfolio 2.94 1.96 1.79 1.73 1.65
% of Portfolio 15.2 14.7 12.1 11.2 11.1
Ibbotson Classification: Specific Strategy Inception Date:
05/17/67
Investment Manager:
Fidelity Management & Research
Portfolio Stansky / Kaye / Friedman Manager(s): Description: Invests primarily in the common stock of companies whose value Fidelity Management & Research Company (FMR) believes is not fully recognized by the public. The types of companies in which the fund may invest include companies experiencing positive fundamental change such as a new management team or product launch; a significant cost-cutting initiative, a merger or acquisition, or a reduction in industry capacity that should lead to improved pricing; companies whose earnings potential has increased or is expected to increase more than generally perceived; companies that have enjoyed recent market popularity but which appear to have fallen temporarily out of favor for reasons that are considered nonrecurring or short-term; or companies that are undervalued in relation to securities of other companies in the same industry. Invests in ‘growth’ stocks, ‘value’ stocks, or both. Invests in foreign and domestic issuers.
Total Net Assets Total Number of Holdings Benchmark 17
$5.05 million 352 S&P 500
Fidelity Freedom Income Portfolio TOP HOLDINGS Fidelity VIP Money Market IC Fidelity VIP Investment Grade Fidelity VIP High Income IC Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC
CREDIT ANALYSIS
Domestic Stock.............14.0% Foreign Stock..................5.2% Bonds...........................38.0% Cash/Other...................42.8%
AAA AA A BBB BB B
% of Portfolio 39.96 35.04 5.00 3.76 2.90
% of Portfolio 54.56 3.10 7.02 12.04 7.01 6.29
Ibbotson Classification: Asset Allocation Inception Date:
10/17/96
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors already in retirement. Allocating assets among underlying Fidelity funds according to a stable asset allocation strategy of approximately 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds.
Total Net Assets $1.17 million Benchmark Lehman Brothers U.S. Aggregate Index 18
Fidelity Freedom 2010 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Investment Grade Fidelity VIP Overseas IC Fidelity VIP Money Market IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income IC
CREDIT ANALYSIS
Domestic Stock.........33.1% Foreign Stock............14.5% Bonds.......................35.0% Cash/Other...............17.4%
AAA AA A BBB BB B
34.91 11.12 10.42 6.84 6.83
% of Portfolio 54.54 3.21 7.02 12.04 7.03 6.30
Ibbotson Classification: Asset Allocation Inception Date:
10/17/96
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2010. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2010). Ultimately, the fund will merge with Freedom Income Fund.
$.60 million Total Net Assets Lehman Brothers U.S. Aggregate Index Benchmark 19
Fidelity Freedom 2015 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Investment Grade Fidelity VIP Overseas IC Fidelity VIP Money Market IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income IC
TOP SECTORS
Domestic Stock.........34.1% Foreign Stock............14.9% Bonds.......................34.7% Cash/Other...............16.3%
Financial Services Industrial Goods Consumer Goods Healthcare Hardware Technology
34.48 11.46 9.29 7.04 7.27
% of Portfolio 20.0 14.1 12.2 10.0 9.4
Ibbotson Classification: Asset Allocation Inception Date:
11/06/03
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2015. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2015). Ultimately, the fund will merge with Freedom Income Fund
Total Net Assets Benchmark 20
$1.47 million S&P 500
Fidelity Freedom 2020 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Investment Grade Fidelity VIP Overseas IC Fidelity VIP Equity Income IC Fidelity VIP Growth & Income IC Fidelity VIP Growth IC
TOP SECTORS
Domestic Stock........40.9% Foreign Stock...........17.9% Bonds......................30.8% Cash/Other..............10.4%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
28.68 13.76 8.45 8.43 8.42
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Ibbotson Classification: Asset Allocation Inception Date:
10/17/96
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2020. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2020). Ultimately, the fund will merge with Freedom Income Fund.
Total Net Assets Benchmark 21
$8.54 million S&P 500
Fidelity Freedom 2025 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Investment Grade Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income IC Fidelity VIP Growth IC
TOP SECTORS
Domestic Stock.........46.5% Foreign Stock............20.3% Bonds.......................26.1%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
22.66 15.65 9.61 9.59 9.58
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Cash/Other.................7.1%
Ibbotson Classification: Asset Allocation Inception Date:
11/06/03
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2025. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2025). Ultimately, the fund will merge with Freedom Income Fund.
Total Net Assets Benchmark 22
$.35 million S&P 500
Fidelity Freedom 2030 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Investment Grade Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income Fidelity VIP Growth IC
TOP SECTORS
Domestic Stock.........50.0% Foreign Stock............21.9% Bonds.......................21.8% Cash/Other.................6.3%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
17.50 16.82 10.33 10.31 10.29
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Ibbotson Classification: Asset Allocation Inception Date:
10/17/96
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2030. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2030). Ultimately, the fund will merge with Freedom Income Fund.
Total Net Assets Benchmark 23
$1.15 million S&P 500
Fidelity Freedom 2035 Portfolio TOP HOLDINGS
% of Portfolio
Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income Fidelity VIP Growth IC Fidelity VIP Investment Grade IC
TOP SECTORS Domestic Stock.........55.0% Foreign Stock............24.0% Bonds.......................15.5% Cash/Other.................5.5%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
18.49 11.35 11.33 11.31 10.05
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Ibbotson Classification: Asset Allocation Inception Date:
6/1/2006
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2035. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2035). Ultimately, the fund will merge with Freedom Income Fund.
Benchmark 24
S&P 500
Fidelity Freedom 2040 Portfolio TOP HOLDINGS Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income Fidelity VIP Growth IC Fidelity VIP Value IC
TOP SECTORS Domestic Stock.........55.7% Foreign Stock............24.4% Bonds.......................14.7% Cash/Other.................5.2%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
% of Portfolio 18.74 11.51 11.49 11.47 9.89
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Ibbotson Classification: Asset Allocation Inception Date:
6/1/2006
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2040. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2040). Ultimately, the fund will merge with Freedom Income Fund.
Benchmark 25
S&P 500
Fidelity Freedom 2045 Portfolio TOP HOLDINGS Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income Fidelity VIP Growth IC Fidelity VIP Value IC
TOP SECTORS Domestic Stock.........56.6% Foreign Stock............24.8% Bonds.......................13.6% Cash/Other.................5.0%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
% of Portfolio 19.06 11.70 11.68 11.66 10.06
% of Portfolio 20.0 14.1 12.2 10.0 9.5
Ibbotson Classification: Asset Allocation Inception Date:
6/1/2006
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2045. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2045). Ultimately, the fund will merge with Freedom Income Fund.
Benchmark 26
S&P 500
Fidelity Freedom 2050 Portfolio TOP HOLDINGS Fidelity VIP Overseas IC Fidelity VIP Equity-Income IC Fidelity VIP Growth & Income Fidelity VIP Growth IC Fidelity VIP Value IC
TOP SECTORS Domestic Stock.........59.2% Foreign Stock............26.4% Bonds.........................9.9% Cash/Other.................4.5%
Financial Services Industrial Goods Consumer Goods Healthcare Consumer Services
% of Portfolio 20.43 12.22 12.20 12.18 10.51
% of Portfolio 20.0 14.1 12.2 9.9 9.5
Ibbotson Classification: Asset Allocation Inception Date:
6/1/2006
Investment Manager:
Fidelity Management & Research
Portfolio Sharpe / Shelon Manager(s): Description: Investing in a combination of underlying Fidelity equity, fixed-income, and short-term funds using a moderate asset allocation strategy designed for investors expecting to retire around the year 2050. Allocating assets among underlying Fidelity funds according to an asset allocation strategy that becomes increasingly conservative until it reaches 20% in domestic equity funds, 35% in investment-grade fixed-income funds, 5% in high yield fixed-income funds, and 40% in short-term funds (approximately 10 to 15 years after the year 2050). Ultimately, the fund will merge with Freedom Income Fund.
Benchmark 27
S&P 500
Franklin Global Real Estate Fund (Class 2) TOP HOLDINGS Simon Property Group Westfield Group Unibail-Rodamco Boston Properties Equity Residential
TOP INDUSTRIES Financial Services Consumer Services
% of Portfolio 5.49 4.33 4.26 3.73 3.56
% of Portfolio 99.20 0.80
Domestic Stock.......55.8% Foreign Stock..........41.9% Cash/Other...............2.3%
Ibbotson Classification: Real Estate Inception Date:
1/24/89
Investment Manager:
Franklin Advsiers, Inc.
Portfolio Foster / Levy Manager(s): Description: The portfolio managers are research-driven, fundamental investors, pursuing a disciplined strategy. Seeking capital appreciation, with a secondary objective of current income, the Fund invests predominantly in investments of companies operating in the real estate sector. Note:
On May 1, 2007, the Franklin Real Estate Fund Class 2 will be renamed to the Franklin Global Real Estate Securities Fund Class 2.
Total Net Assets $6.16 million Total Number of Holdings 94 Benchmark S&P 500 / Wilshire Real Estate Securities Index 28
Franklin Small-Mid Cap Growth Securities Fund (Class 2) TOP HOLDINGS Concho Resources SBM Communications Corp. Community Health Systems Citrix Systems, Inc. Precision Castparts Corp.
Domestic Stock........95.5% Foreign Stock.............3.6% Cash/Other................0.9%
% of Portfolio 2.37 1.77 1.70 1.64 1.61
TOP INDUSTRIES
% of Portfolio
Hardware Technology Consumer Goods Business Services Healthcare Industrials
14.7 12.7 12.6 12.1 11.8
Ibbotson Classification: Small/Mid Cap Inception Date:
11/1/95
Investment Manager:
Franklin Advsiers, Inc.
Portfolio McCarthy / Jemieson / Cross Manager(s): Description: The portfolio managers are research-driven, fundamental investors, pursuing a growth strategy. The manager seeks to identify companies with clear drivers of future earnings growth that the manager believes present a good trade-off between potential growth opportunity, business and financial risk and valuation. This fund invests predominantly in investments of small capitalization (small cap) and mid capitalization (mid cap) companies. Small cap companies are those with market capitalization values not exceeding $1.5 billion or the highest market capitalization value in the Russell 2000速 Index, whichever is greater, at the time of purchase; mid-cap companies are companies with market capitalization values not exceeding $8.5 billion, at the time of purchase.
Total Net Assets $1.36 million Total Number of Holdings 127 Benchmark Russell 2500 Midcap Growth Index 29
Templeton Developing Markets Securities Fund (Class 2) TOP HOLDINGS Institutional Fiduciary Vale S.A. Petroleo Brasileiro Itau Unibanco Holding Sesa Goa Ltd.
TOP INDUSTRIES Industrial Goods Energy Financial Services Software Technology Consumer Services
% of Portfolio 6.97 5.54 4.44 4.24 3.79
% of Portfolio 30.2 22.2 19.2 6.3 5.9
Foreign Stock............77.3% Cash/Other...............22.7%
Ibbotson Classification: Emerging Markets Inception Date:
3/4/96
Investment Manager:
Templeton Asset Management, Ltd.
Lim / Mobius / Wu Portfolio Bonds.......................1.5% Manager(s): Description: The portfolio managers are value investors, searching for stocks they believe are selling at the greatest discount to their five-year potential. This fund invests predominantly in emerging market investments, which generally include equity securities that trade in emerging markets or are issued by companies that derive significant revenue from goods, services or sales produced, or that have their principal activities or significant assets in emerging market countries.
Total Net Assets $8.71 million Total Number of Holdings 64 Benchmark MCSI Emerging Markets Index 30
Templeton Foreign Securities Fund (Class 2) TOP HOLDINGS
% of Portfolio
Vadafone Group PLC Samsung Electronics Taiwan Semiconductor Singapore Telecommunications Siemens AG
TOP INDUSTRIES
Domestic Stock.......1.4% Foreign Stock........93.4% Cash/Other.............5.2%
Telecommunication Financial Services Energy Consumer Services Industrials
3.17 2.49 2.12 2.07 2.06
% of Portfolio 19.6 14.4 9.4 9.2 9.2
Ibbotson Classification: International Inception Date:
5/1/92
Investment Manager:
Templeton Investment Council, LLC
Portfolio Nori / Motyl / Sadler Manager(s): Description: The portfolio managers are bargain hunters, acting upon the principle of buying low and selling high, using a long-term approach and ignoring emotion and short-term “noise.� They search worldwide for stocks they believe are selling at the greatest discount to their five-year potential. The fund invests predominantly in investments of issuers located outside the US, including those in emerging markets. The fund invests predominantly in large to medium capitalization companies.
Total Net Assets Total Number of Holdings Benchmark 31
$9.81 million 82 MCSI EAFE Index
Invesco V.I. Capital Appreciation Fund TOP HOLDINGS
% of Portfolio
Apple, Inc. Check Point Software Google Inc. United Health Invesco Treasurer’s
5.53 3.07 2.96 2.38 2.16
TOP SECTORS
Domestic Stock.....87.3% Foreign Stock..........8.4% Cash/Other.............4.3%
Consumer Services Hardware Technology Healthcare Services Industrials Consumer Goods
% of Portfolio 17.60 17.30 13.10 10.20 7.60
Ibbotson Classification: Specific Strategy Inception Date:
12/29/99
Investment Manager:
Invesco Advisors, Inc.
Portfolio Lloyd / Amerman Manager(s):
Description: Subscribing to the belief that consumer spending patterns, especially those of baby-boomers, drive stock market performance, the fund invests in securities of companies that are likely to benefit from changing demographic, economic and lifestyle trends. However, unforeseen events such as rising inflation, declining productivity, irregular spending and savings patterns, and other social, political and economic uncertainty can affect corporate earnings and the stock market.
Total Net Assets Total Number of Holdings Benchmark 32
$.86 million 106 Russell 3000
Invesco V.I. Core Equity Fund TOP HOLDINGS
% of Portfolio
Invesco Treas Tr Invesco Short Term Liquid Assets Progressive American Express Symantec Corporation
TOP SECTORS
Domestic Stock.....76.0% Foreign Stock..........7.7% Cash/Other...........16.3%
Healthcare Financials Industrials Consumer Services Hardware Technology
8.16 8.16 3.13 2.76 2.61
% of Portfolio 18.80 15.20 14.00 11.70 10.60
Ibbotson Classification: Large Cap Growth Inception Date:
5/5/93
Investment Manager:
Invesco Advisors, Inc.
Portfolio Manager(s): Sloan / Nelson / Dann II Description: In searching for investment value, there is a trap — buying a stock simply because it’s selling at a low price only to watch it drop even lower. AIM managers strive to avoid this trap by seeking those “gems” that truly have what it takes to produce real growth: positive earnings momentum. Not a traditional value approach, this strategy identifies stocks that the managers consider to be undervalued relative to industry or historic norms. The difference is that they look for stocks with a gap between the intrinsic value and the current price plus the earnings momentum needed to close the gap.
Total Net Assets Total Number of Holdings Benchmark 33
$2.15 million 65 S&P 500
Invesco V.I. Technology Fund TOP HOLDINGS Apple Inc. Google Cognizant-Packard Co Hewlett-Packard Microsoft Corporation
TOP SECTORS
Domestic Stock.....81.6% Foreign Stock........12.7%
Hardware Technology Software Technology Telecommunication Business Services
% of Portfolio 7.35 4.13 4.09 3.96 3.46
% of Portfolio 53.90 27.60 9.70 4.00
Cash/Other.............5.7%
Ibbotson Classification: Specialty Sector Inception Date:
10/18/93
Investment Manager:
Invesco Advisors, Inc.
Portfolio Manager(s): Tennant / Nelson Description: Investors believing that technology is a key sector driving the U.S. and world economies, look no farther. This portfolio seeks to capitalize on the earnings momentum of small and mid-cap technology stocks. Although the portfolio may include up to 25 percent of its assets in foreign securities, fund managers have historically invested in domestic stocks.
Total Net Assets Total Number of Holdings Benchmark 34
$.74 million 58 S&P 500 Index
JPMorgan Mid Cap Value Portfolio TOP HOLDINGS
% of Portfolio
JPMorgan Prime Money Market Old Republic International Williams Companies Republic Services Lincare Holdings
TOP SECTORS
Domestic Stock.....87.3% Foreign Stock..........2.9% Cash/Other.............9.8%
Financial Services Consumer Services Industrials Utilities Consumer Goods
15.61 2.09 2.06 2.05 1.85
% of Portfolio 28.4 15.1 14.2 13.9 8.7
Ibbotson Classification: Mid Cap Inception Date:
9/28/01
Investment Manager:
JPMorgan Investment Management, Inc.
Portfolio Manager(s):
Fu / Simon / Playford, Jr.
Description: The JPMorgan Mid Cap Value Portfolio seeks to provide long-term growth from mid-capitalization stocks. The Portfolio invests in mediumsized companies with market capitalizations between $1 billion and $20 billion. The Portfolio also diversifies across a broad range of industrial sectors to minimize volatility.
Total Net Assets $7.63 million Total Number of Holdings 97 Benchmark Russell Mid Cap Value Index 35
JPMorgan Small Cap Core Portfolio TOP HOLDINGS
% of Portfolio
JPMorgan Prime Money Market Skyworks Solutions Cash America Int’l Rock-Tenn Regal-Beloit
Domestic Stock......96.5% Foreign Stock...........1.0% Cash/Other..............2.5%
2.26 1.05 1.04 1.02 0.92
TOP SECTORS
% of Portfolio
Financial Services Healthcare Consumer Goods Industrials Business Services
21.5 13.7 11.9 10.2 9.9
Ibbotson Classification: Small Cap Inception Date:
1/3/95
Investment Manager:
JPMorgan Investment Management, Inc.
Portfolio Blum / Ruhl Manager(s): Description: JP Morgan offers more than 35 years of experience managing small-cap stocks. Investment decisions are focused on individual companies with sustainable competitive advantage and long-term return potential across all economic sectors rather than market-timing and sector themes.
Total Net Assets Total Number of Holdings Benchmark 36
$6.89 million 509 Russell 2000 Index
JPMorgan U.S. Equity Portfolio TOP HOLDINGS
Domestic Stock......99.3% Cash/Other..............0.7%
% of Portfolio
Apple, Inc. Microsoft Merck & Co Procter & Gamble Cisco Systems
3.02 2.48 2.40 2.32 2.31
TOP SECTORS
% of Portfolio
Financials Hardware Technology Energy Industrials Healthcare
15.0 13.6 11.3 10.9 10.5
Ibbotson Classification: Large Cap Core Foreign Stock...........0.6%
Inception Date:
1/3/95
Investment Manager:
JPMorgan Investment Management, Inc.
Portfolio Manager(s): Bao / Skibeli / Luddy Description: The JPMorgan U.S. Large Cap Core Equity Portfolio relies on the muchsought-after research capabilities of JPMorgan’s career U.S. equity research analysts. The key to JPMorgan’s investment success lies in creating and capturing an information advantage. With this belief, Morgan has an intensive commitment to in-house research, employing teams of securities analysts and economists throughout the world’s major finance capitals. The Portfolio focuses on buying the most attractive undervalued stocks in a sector, rather than basing decisions on the sector as a whole.
Total Net Assets Total Number of Holdings Benchmark 37
$1.99 million 156 S&P 500 Index
MFS速 Growth Series TOP HOLDINGS Apple Google Cisco Systems Danaher American Tower Corporation
TOP SECTORS
Domestic Stock.....91.2% Foreign Stock..........5.8% Cash/Other.............3.0%
Hardware Technology Industrials Software Technology Consumer Services Healthcare
% of Portfolio 4.32 3.67 2.75 2.48 2.02
% of Portfolio 15.3 12.8 10.6 10.4 9.7
Ibbotson Classification: Small/Mid Cap Inception Date:
7/24/95
Investment Manager:
MFS Investment Management速
Portfolio Manager(s): Fischman Description: An aggressive growth portfolio seeking companies of all sizes poised to experience accelerated growth. The management team targets emerging growth companies that are believed to be either early in their lifecycle with the potential to become major enterprises, or that are major enterprises, with an expected acceleration in earnings growth. The fund's objective is to seek long-term growth of capital.
Total Net Assets $14.74 million Total Number of Holdings 134 Benchmark Russell 3000 Growth Index 38
MFS速 Research Series TOP HOLDINGS Apple Exxon Mobile Chevron Cisco Danaher Corporation
TOP SECTORS
Domestic Stock......94.3% Foreign Stock...........3.6% Cash/Other..............2.1%
Financial Services Hardware Technology Industrials Energy Healthcare
% of Portfolio 3.60 2.35 2.35 2.31 2.30
% of Portfolio 15.6 12.7 11.7 11.7 11.4
Ibbotson Classification: Large Cap Growth Inception Date:
7/26/95
Investment Manager:
MFS Investment Management速
Portfolio Manager(s): Mead / MacDougall Description: The series is designed to be diversified by sector with the flexibility to invest across industries, styles, and market capitalizations. The fund's objective is to seek long-term growth of capital and future income.
Total Net Assets Total Number of Holdings Benchmark 39
$11.48 million 126 S&P 500 Stock Index
MFS速 Research Bond Series TOP HOLDINGS US Treasury Note 1.375% US Treasury Note 1.875% FNMA 5.5% US Treasury Bonds 4.5% US Treasury Note 4.5%
Credit Analysis
Bonds.....................89.6% Cash/Other.............10.4%
AAA AA A BBB BB
% of Portfolio 5.46 2.32 2.01 1.95 1.72
% of Portfolio 59.4 4.2 8.2 21.9 7.7
Ibbotson Classification: Bonds Inception Date:
10/24/95
Investment Manager:
MFS Investment Management速
Portfolio Manager(s): Persons / Roberge / Wakelin Description: MFS' team of fixed-income analysts seeks to drive performance through security selection and sector rotation across various sectors including corporate bonds, government, and mortgage-backed securities. The portfolio seeks to maintain an average credit quality of "A" or better; it may, however, invest in non-investment-grade securities.
Total Net Assets $19.53 million Total Number of Holdings 462 Benchmark Lehman Brothers U.S. Aggregate Index 40
MFS® Strategic Income Series TOP HOLDINGS Japan Gov’t 1.7% Japan Gov’t 1.3% Germany 3.75% FNMA 5.5% Italy 5.25%
Credit Analysis
Bonds......................91.4% Cash/Other................8.6%
AAA AA A BBB BB B
% of Portfolio 1.56 1.05 1.02 0.95 0.88
% of Portfolio 11.32 11.74 13.92 22.17 11.65 15.25
Ibbotson Classification: Bonds Inception Date:
6/14/94
Investment Manager:
MFS Investment Management®
Portfolio Manager(s): Ryan / Addeo / Weisman / Persons Description: Management seeks to drive performance through sector rotation across a wide range of fixed-income sectors, including high-grade and highyield corporate bonds, international, emerging markets, U.S. Treasury, mortgage-backed, agency-backed, and asset-backed securities. The fund’s primary objective is to seek high current income by investing in fixedincome securities. Its secondary objective is to provide significant capital appreciation.
Total Net Assets $8.37 million Total Number of Holdings 479 Benchmark Lehmans Brothers U.S. Aggregate Index 41
MFS® Total Return Series TOP HOLDINGS
% of Portfolio
J.P. Morgan Chase & Co. AT&T Lockheed Martin Philip Morris Int’l Exxon Mobil
Domestic Stock.......54.8% Foreign Stock............4.3% Bonds.....................38.4% Cash/Other...............2.5%
1.91 1.77 1.74 1.66 1.55
TOP SECTORS
% of Portfolio
Financial Services Industrials Consumer Goods Energy Healthcare
22.5 14.5 13.3 12.6 10.2
Ibbotson Classification: Specific Strategy Inception Date:
1/3/95
Investment Manager:
MFS Investment Management®
Portfolio Manager(s): Marston / Douglas / Roberge Description: MFS’ team-managed balanced portfolio maintains an investment mix of stocks and bonds, which historically has been allocated at approximately 60% stocks and 40% bonds. The portfolio follows a conservative approach investing in value stocks and a well-diversified mix of generally higher-quality bonds. The fund’s primary objective is to provide aboveaverage income (compared to a portfolio invested entirely in equity securities) consistent with the prudent employment of capital. Its secondary objective is to provide a reasonable opportunity for growth of capital and income.
Total Net Assets Total Number of Holdings Benchmark 42
$11.77 million 658 S&P 500 Stock Index
MFS速 Utilities Series TOP HOLDINGS Virgin Media CMS Energy Williams Companies American Electric Power EQT Corp.
TOP SECTORS
Domestic Stock....62.4% Foreign Stock.......33.0% Cash/Other............4.6%
Utilities Telecommunications Energy Media
% of Portfolio 4.06 3.91 3.23 2.70 2.68
% of Portfolio 52.90 20.40 16.40 10.30
Ibbotson Classification: Specialty Sector Inception Date:
1/3/95
Investment Manager:
MFS Investment Management速
Portfolio Persons / Shaughnessy Manager(s): Description: Seeks to provide a combination of capital growth and current income. The series focuses on utilities stocks believed to have strong growth prospects. These stocks generally come from the gas and electric utilities, telecommunications, and cable TV industries. A portion of the portfolio is typically invested in bonds and convertible securities.
Total Net Assets $25.12 million Total Number of Holdings 78 Benchmark S&P 500 Utilities Index 43
Seligman Capital Portfolio (Class 2) TOP HOLDINGS Riversource Short Term Cognizant Technology Solution Dollar General Corp. SAVVIS Alliance Data Systems
Domestic Stock......86.3% Foreign Stock...........5.1% Cash/Other..............8.6%
% of Portfolio 8.65 3.47 2.27 2.02 1.91
TOP INDUSTRIES
% of Portfolio
Healthcare Industrials Business Services Software Technology Consumer Services
14.0 12.6 12.2 11.9 10.5
Ibbotson Classification: Small/Mid Cap Inception Date:
6/21/88
Investment Manager:
J. & W. Seligman & Co. Incorporated
Portfolio Manager(s): Voss / Lin / Collette Description: Seligman’s Growth Team looks to identify medium-size companies it believes display one or more of the following characteristics: proven track record, strong management, multiple product lines, potential for improvement in overall operations and/or positive supply and demand outlook for its industry. Seligman hopes to identify mid-cap leaders that may grow to become the largest and most significant companies in a specific sector.
Total Net Assets $5.64 million Total Number of Holdings 98 Benchmark Russell Mid Growth Index 44
Seligman Communications & Information Portfolio (Class 2) TOP HOLDINGS Riversource Short Term Synopsys Apple BMC Software Check Point Software
Domestic Stock.....82.2% Foreign Stock........10.0% Cash/Other.............7.8%
% of Portfolio 7.84 6.19 6.03 5.02 4.87
TOP INDUSTRIES
% of Portfolio
Software Technology Hardware Technology Telecommunication Healthcare
47.0 34.8 6.5 5.7
Ibbotson Classification: Specialty Sector Inception Date:
10/11/94
Investment Manager:
J. & W. Seligman & Co. Incorporated
Portfolio Manager(s): Wick / Parower / Diwan Description: This portfolio seeks capital appreciation by investing primarily in companies operating in the communications, information, and related industries. Seligman’s Technology Group consists of 17 investment professionals with nearly 160 years of investment/industry experience under the leadership of industry veteran Paul H. Wick since 1990. The Technology Group uses a bottom-up stock selection approach to find those companies that it believes offer the greatest prospects for future growth. These companies either display or are expected to display: robust growth prospects; high profit margins or return on capital; attractive valuation relative to expected earnings or cash flow; quality management; unique competitive advantages.
Total Net Assets $3.97 million Total Number of Holdings 52 Benchmark Lipper Science & Technology Funds 45
Seligman Smaller-Cap Value Portfolio (Class 2)
Domestic Stock........96.7% Cash/Other................3.3%
TOP HOLDINGS
% of Portfolio
Lincoln National Fred’s Delta Air Lines Cubic Corporation F5 Networks Inc.
4.26 4.17 4.07 3.78 3.60
TOP Industries
% of Portfolio
Financial Services Hardware Technology Consumer Services Industrials Business Services
18.0 16.7 14.8 14.7 11.0
Ibbotson Classification: Small Cap Inception Date:
5/1/98
Investment Manager:
J. & W. Seligman & Co. Incorporated
Foreign Stock.............2.8%
Portfolio Manager(s): Eigen / Rosen Description: The Portfolio uses the following strategies to seek its objective of longterm capital appreciation. The Portfolio generally invests at least 80% of its net assets in the common stocks of “value” companies with small market capitalization (up to $2 billion) at the time of purchase. The Portfolio uses a bottom-up stock selection approach. The Portfolio generally holds a small number of securities because the investment manager believes doing so allows it to adhere to its disciplined value investment approach. The investment manager maintains close contact with the management of each company in which the portfolio invests and continually monitors portfolio holdings, remaining sensitive to overvaluation and deteriorating fundamentals.
Total Net Assets $2.69 million Total Number of Holdings 40 Benchmark Russell 2000 Balanced Index 46
Ibbotson Classification Chart Kansas City Life’s variable universal life products offer a wide range of investment choices managed by some of today’s top experts in money management. You and your clients may select up to 15 of the available investment choices. Emerging Templeton Developing Markets Securities Fund (Class 2) Mark ets
Non-Style Specific
Invesco V.I. Technology Fund*** Calamos® Growth & Income Franklin Small-Mid Cap Growth Securities Fund (Class 2) MFS® Total Return Series MFS® Utilities Series Seligman Communications & Information Portfolio (Class 2)
International
American Century VP International Fund Templeton Foreign Securities Fund (Class 2)
Global Real Estate (REITS)
Franklin Global Real Estate Securities Fund (Class 2)
Small Cap
JPMorgan Insurance Trust Small Cap Core Portfolio Seligman Smaller-Cap Value Portfolio (Class 2) Dreyfus Opportunistic Small Cap Portfolio**
Mid Cap
Growth
Large Cap Core Value
Seligman Capital Portfolio (Class 2) JPMorgan Insurance Trust Mid Cap Value Portfolio American Century VP Capital Appreciation Fund American Century VP Mid Cap Value Fund American Century VP Ultra® Fund Dreyfus Socially Responsible Growth Fund MFS® Growth Series Invesco V.I. Capital Appreciation Fund*** Federated Capital Appreciation Fund II* Invesco V.I. Core Equity Fund*** Fidelity VIP Contrafund Portfolio Dreyfus VIF Appreciation Portfolio Dreyfus Stock Index Fund JPMorgan Insurance Trust U.S. Equity Portfolio MFS® Research Series American Century VP Value Fund American Century VP Income & Growth Fund
High Yield Bonds
Federated High Income Bond Fund II
Aggregate Bonds
MFS® Research Bond Series
MFS® Strategic Income Series1
(continued on next page) 47
TIPs
American Century VP Inflation Protection Fund (Class II)
Cash
Federated Prime Money Fund II
Kansas City Life The Kansas City Life Fixed Account has not been analyzed by Ibbotson Associates, nor is it included in the variable product asset allocation models. Please see the variable product prospectus for details. Fixed Account
Target Date Funds
Fidelity VIP Freedom Income Portfolio Fidelity VIP 2015 Portfolio Fidelity VIP 2025 Portfolio Fidelity VIP 2035 Portfolio Fidelity VIP 2045 Portfolio
Fidelity VIP 2010 Portfolio Fidelity VIP 2020 Portfolio Fidelity VIP 2030 Portfolio Fidelity VIP 2040 Portfolio Fidelity VIP 2050 Portfolio
*The Federated American Leaders Fund changed name to Federated Clover Value in May 2009. In February 2010 the fund will merge into the Federated Capital Appreciation Fund, which is classified in the Large Cap Core classification. **The Dreyfus Developing Leaders fund changed name to the Dreyfus Opportunistic Small Cap fund in February 2010. ***The AIM funds changed names to Invesco due to the merger. Used with permission. Š 2010 Ibbotson Associates, Inc. All rights reserved.
48
Kansas City Life Century II Variable Product Series This report is neither an offer to sell nor a solicitation to buy securities. The information is current as of the date printed on the front cover and is not a guarantee of subsequent investment composition, which is subject to change at the discretion of the portfolio manager. The investment objectives and policies of Kansas City Life Variable Product Funds may be similar to the objectives and policies of other portfolios that are managed by the same investment adviser, investment sub-adviser or manager. Investment results of the Kansas City Life Variable Product Funds may be higher or lower than the results of similar portfolios. There can be no guarantee or assurance that the investment results will be comparable to that of any other portfolio, even if it has the same investment adviser, subadviser or manager. Investment return and principal value of an investment will fluctuate so that when units are redeemed, they may be worth more or less than their original cost. For more information on the Kansas City Life Variable Product Funds and the risks associated with investing in those funds, please see the funds prospectus. International investments may include added risks such as currency fluctuations and economic and political instability. These risks are heightened in emerging markets due to their smaller size and lesser liquidity. High-yield investments may carry risks linked with the quality of the debt instruments in the portfolios. High-yield, lower-rated securities generally entail greater market, credit and liquidity risks than investment grade securities. Equity securities of technology companies may be subject to greater price volatility than other industry securities. The products of companies in which such portfolios invest may be subject to severe competition and obsolescence. Investments in small capitalization stocks generally involve greater risks than large capitalization stocks. Smaller companies typically have a higher risk of failure and historically have experienced a greater degree of volatility. There are specific risks associated with investing in real estate companies. Property values can fall due to environmental, economic or other reasons, and changes in interest rates can negatively impact the performance of real estate companies. Sector portfolios are narrowly focused, so they typically exhibit higher volatility. An investment in the money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Century II Variable Products are not sponsored, managed, sold or promoted by Ibbotson Associates, Inc. or its affiliates.
Financial stability, based on a history of fiscal integrity, highlights Kansas City Life’s record of progress. For more than 115 years, Kansas City Life Insurance Company has seen the insurance and financial services world transform dramatically. Now we are prepared to see our policyholders through the challenges of the future.
49
3520 Broadway Kansas City, MO 64111 800.616.3670 www.kclife.com
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