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Usaa Life Investment Trust, et al. · N-30D · For 6/30/95

Filed On 8/31/95 · SEC Files 811-08670, 811-08672 · Accession Number 899243-95-583

  As Of               Filer                 Filing     On/For/As Docs:Pgs              Issuer               Agent

 8/31/95  Usaa Life Investment Trust        N-30D       6/30/95    1:51                                     899243
          Separate Account of Usaa Life Insurance Co

Annual or Semi-Annual Report Mailed to Shareholders · Rule 30d-1
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-30D       Semi-Annual Report                                    51    263K

Document Table of Contents

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			Alternative Formats (RTF, XML, et al.) Separate Account of Usaa Life Insurance Co Usaa Life Investment Trust
1	1st Page
9	Separate Account of Usaa Life Insurance Co
15	Usaa Life Investment Trust

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USAA LIFE INSURANCE COMPANY                                     
VARIABLE ANNUITY                                                
        ========================================================================
        ------------------------------------------------------------------------
SEMIANNUAL REPORT                                               

JUNE 30, 1995                                                   

                                                     [LOGO OF USAA APPEARS HERE]
                                                      USAA /(R)/

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TABLE of CONTENTS                                                               
================================================================================
--------------------------------------------------------------------------------

                                                                · Download Table
                                                                                    
PRESIDENT'S LETTER.................................................................5

SEPARATE ACCOUNT OF                                                                 
  USAA LIFE INSURANCE CO...................................................A-9--A-13

Statements of Assets and Liabilities............................................A-10
Statements of Operations........................................................A-11
Statements of Changes in Net Assets.............................................A-11
Notes to Financial Statements...................................................A-12

USAA LIFE INVESTMENT TRUST................................................B-15--B-49
Statements of Assets and Liabilities............................................B-17
USAA Life VA Money Market Fund                                                      
    An Overview.................................................................B-18
    Portfolio of Investments in Securities......................................B-19
USAA Life VA Income Fund                                                            
    An Overview.................................................................B-22
    Portfolio of Investments in Securities......................................B-23
USAA Life VA Growth and Income Fund                                                 
    An Overview.................................................................B-25
    Portfolio of Investments in Securities......................................B-27
USAA Life VA World Growth Fund                                                      
    An Overview.................................................................B-30
    Portfolio of Investments in Securities......................................B-32
USAA Life VA Diversified Assets Fund                                                
    An Overview.................................................................B-38
    Portfolio of Investments in Securities......................................B-40
Notes to Portfolios of Investments in Securities................................B-43
Statements of Operations........................................................B-44
Statements of Changes in Net Assets.............................................B-45
Notes to Financial Statements...................................................B-46

SCUDDER VARIABLE LIFE INVESTMENT FUND                                               
  CAPITAL GROWTH PORTFOLIO................................................C-51--C-67
Letter from the Fund's President................................................C-52
Capital Growth Portfolio Management Discussion..................................C-53
Capital Growth Portfolio Summary................................................C-54
Investment Portfolio, Financial Statements and Financial Highlights.............C-55
Notes to Financial Statements...................................................C-64

THE ALGER AMERICAN FUND                                                             
  ALGER AMERICAN GROWTH PORTFOLIO.........................................D-69--D-79
Portfolio Manager's Letter to Shareholders......................................D-70
Schedule of Investments.........................................................D-71
Financial Highlights............................................................D-73
Statement of Assets and Liabilities.............................................D-74
Statement of Operations.........................................................D-75
Statement of Cash Flows.........................................................D-76
Statements of Changes in Net Assets.............................................D-77
Notes to Financial Statements...................................................D-78

This report is for the information of USAA Life Variable Annuity contract owners
and others who have received a copy of the currently effective Variable Annuity 
prospectus. It may be used as sales literature only when preceded or accompanied
by a current prospectus which includes complete information. The USAA Life      
Variable Annuity is distributed by USAA Investment Management Company, a        
registered broker dealer.                                                       

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USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
PRESIDENT'S LETTER  
--------------------------------------------------------------------------------

[PHOTO APPEARS HERE]   from the desk of Ed Rosane                               
                       ---------------------------------------------------------

                  It is exciting to produce our first Variable Annuity
              Semiannual Report. This report provides in-depth
                    information to help you better understand your annuity
                    contract and its performance. In addition to pertinent
              financial information, fund narratives provide a
                  discussion of relevant market conditions, investment
             strategies and techniques pursued by the fund's
                     investment advisers; and charts and graphs are added to
                     provide further insight into some of the more important
              factors that drive a fund's performance. Because
                performance is important to you and your financial
                     future, I'd like to dedicate my first semiannual report
     message to a discussion of performance.

                                                      --------------------------
                                                      1995  SEMIANNUAL REPORT  5

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USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT  
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--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE 
--------------------------------------------------------------------------------

TOTAL RETURNS                                                                   

So far, 1995 has proven to be a good time to introduce a new retirement product.
The bull market has been most pleasant. We at USAA Life are pleased with the    
performance of each fund available through our Variable Annuity and the impact  
this has had on the value of your contract.                                     

The table below provides the accumulation unit value (AUV) total returns for    
each variable annuity fund account as of June 30, 1995--the close of our first  
financial reporting period. The AUV total return is important to you in         
monitoring the growth of your annuity.                                          

                                                                · Download Table

--------------------------------------------------------------------------------
                               AUV TOTAL RETURNS                                
--------------------------------------------------------------------------------
                     For the Period 2/6/95 through 6/30/95                      
                                                                                
VA Money Market                                                                 
Fund Account/1/                                                            1.83%
--------------------------------------------------------------------------------
VA Income Fund Account                                                     7.92%
--------------------------------------------------------------------------------
VA Growth and Income                                                            
Fund Account                                                              11.84%
--------------------------------------------------------------------------------
VA World Growth                                                                 
Fund Account/2/                                                           12.12%
--------------------------------------------------------------------------------
VA Diversified Assets                                                           
Fund Account                                                              10.17%
--------------------------------------------------------------------------------
Scudder VLIF                                                                    
Capital Growth Portfolio                                                  14.22%
--------------------------------------------------------------------------------
Alger American                                                                  
Fund Growth Portfolio                                                     20.89%
--------------------------------------------------------------------------------

The performance data quoted represents past performance. Past performance is not
a guarantee of future returns. The principal value contributed to the seven     
Variable Annuity fund accounts listed above will fluctuate. When variable       
annuity units are redeemed, they may be worth more or less than their original  
cost.                                                                           

1 An investment in the Variable Annuity Money Market Fund is neither insured nor
guaranteed by the U.S. Government. There can be no assurance that the Fund  
will be able to maintain a stable net asset value of $1 per share.          

2 Foreign investing is subject to certain risks which are discussed in the      
Variable Annuity prospectus.                                                

To calculate a variable annuity fund account's AUV total return, we first begin 
with each underlying fund's net asset value (NAV). The NAV total return         
calculated at the underlying fund's level includes the reinvestment of income   
dividends and the deduction of fund expenses which can vary from fund to fund.  
(More specific information regarding fund expenses can be found on page 9A of   
your August 1, 1995 prospectus.)                                                

NAV   -- Measure of how the underlying funds performed.       
- EXPENSES   -- Variable Annuity contract expenses, includes M&E and        
----------      administration.                                             
  AUV   -- Best measure for monitoring the value of your contract.

From the NAV, Variable Annuity contract costs are deducted to provide the AUV   
calculation. For the USAA Life Variable Annuity, these contract costs include:  
(1) the mortality and expense (M&E) risk charge, which is 1.05% of the average  
net asset value of each variable annuity fund account, and (2) the              
administration expense charge, which is 0.10% of the average net asset value of 
each variable annuity fund account.                                             

MAKING COMPARISONS                                                              

When performance figures are announced, it is human nature to make comparisons. 
However, comparisons made at a quick glance may cause you to reach the wrong    
conclusion. Because there is so much to contemplate when making comparisons, I'd
like to share a few guidelines you may want to consider.                        

EACH INDIVIDUAL HAS DIFFERENT NEEDS                                             

Your personal investment strategy, risk tolerance and retirement horizon are    
unique to your financial situation, your objectives and the investment options  
you select. These decisions should not be changed precipitously simply because a
given fund is currently providing superior returns. Taking the time to regularly
review these factors with a registered representative will ensure that your     
objectives are up-to-date and that your needs are still being met.              

A LONG-TERM RETIREMENT PLAN                                                     

It is important to view your variable annuity as a long-term retirement plan,   
rather than just another investment vehicle. Special tax-deferred status on the 
earnings of variable annuities is granted by the Internal Revenue Code to       
encourage individuals to save for retirement. Through the years, the compounding
of tax-deferred earnings may have a powerful impact on the value of your        
annuity.                                                                        

COMPARING PRODUCT FEATURES                                                      

Due to the unique design of variable annuities, contract features provide       
inherent value to the product which is difficult to measure. Therefore, when    
comparing variable annuity products to other investment vehicles, you may want  
to consider the following:                                                      

. Since a variable annuity is a contract between you and a life insurance   
company, the guaranteed death benefit gives you added protection. With USAA 
Life's Variable Annuity, you have the comfort of knowing that should you die
prematurely while your contract is in the accumulation phase, your          
beneficiary(ies) will receive the total value of your annuity contract or at
least the total contributions you made less any withdrawals, whichever is   
greater.                                                                    

--------------------------                                                      
6  SEMIANNUAL REPORT  1995                                                      

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USAA LIFE VARIABLE ANNUITY SEMIANNUAL REPORT  
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--------------------------------------------------------------------------------
PRESIDENT'S MESSAGE 
--------------------------------------------------------------------------------

. Unlike some investment vehicles, with most variable annuities there are no
tax consequences when assets are transferred among the contract's investment
options.                                                                    

. Because investment strategies do vary for each individual's personal      
situation, there may be instances when you may wish to allocate a portion of
your money to the USAA Life Variable Annuity fixed fund account. Such a     
transfer can be accomplished without surrender charges or tax consequences. 

. Sales loads or commissions may be charged on the products to which you may
compare your Variable Annuity. These costs can have a major impact on the   
total value that you are able to accumulate over time. As you are aware, our
Variable Annuity has no sales loads or commissions.                         

. One of the advantages of a variable annuity is the flexibility of choosing
an income stream upon retirement that can last the rest of your life. The   
payout options offered, as well as the fixed annuity payout rate, vary from 
  company to company. Even if you are years away from needing to select a payout
option, you may want to review this feature.                                

COMPARING PERFORMANCE                                                           

Once you actually begin comparing performance you may also want to consider the 
following:                                                                      

. Compare like periods of time. A lot can happen in a short period of time  
  which can dramatically affect the performance of a fund. And because different
companies and products have different fiscal years, comparing performance   
figures found in financial reports may not result in a comparison of like   
periods of time.                                                            

  . Consider a fund's investment objective. Generally funds with lower risk have
a lower rate of return. You wouldn't want to compare an income fund (low    
risk/return) to an aggressive growth fund (high risk/return) seeking capital
 appreciation. The performance of the Variable Annuity fund accounts was about
  what you would expect considering the investment objective of each. Those fund
accounts with less risk provided lower returns while those with greater risk
potential provided higher returns.                                          

. Compare variable annuity fund account AUV total returns. So often         
  individuals look only at NAV total returns. Comparing NAV total returns may be
appropriate for some investment products but not for variable annuities. AUV
total returns are more accurate measures of performance since they take into
account all of the fees and expenses that are deducted before you can truly 
determine the accumulated value of your contract.                           

. If you do compare the NAV total returns of another investment product to a
variable annuity fund account's AUV total return, keep in mind that products
which are not variable annuities may not provide the benefit of tax-deferred
earnings or the inherent value of a guaranteed death benefit.               

LOOKING FORWARD                                                                 

The future holds great promise as we continue to evaluate, update and add       
increasing value to our Variable Annuity. USAA Life is positioned for growth,   
and we feel our future is filled with considerable opportunities. The extent of 
our progress will be tempered only by factors beyond our control -- the market, 
interest rates and economic conditions.                                         

We believe in providing superior value to customers through an innovative       
product which offers options, flexibility and diversification at a fair price   
from a company where quality service, honest and open communication, and        
customer satisfaction are a way of life. We will continue to evaluate our       
Variable Annuity contract over time to ensure that strong cost-effective        
controls are maintained over day-to-day operations.                             

We feel this innovative package offers the right mix of investment options and  
features which individuals demand for their retirement plans. We invite you to  
call an Account Representative, toll free, at 1-800-531-2923 (456-9035 in San   
Antonio) to explore this report with us in greater detail.                      

Sincerely,                                                                      

/s/ Edwin L. Rosane                                                             

Edwin L. Rosane, CLU, FLMI                                                      
President                                                                       
USAA Life Insurance Company                                                     

                                                      --------------------------
                                                      1995  SEMIANNUAL REPORT  7

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                                                     SEPARATE ACCOUNT OF
                                                 USAA LIFE INSURANCE CO.
============================================================================    
----------------------------------------------------------------------------    
                                                       SEMIANNUAL REPORT

                                                           June 30, 1995

                                                     [LOGO OF USAA APPEARS HERE]
                                                      USAA /(R)/

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SEPARATE ACCOUNT OF USAA LIFE INSURANCE CO. 
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--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES  
--------------------------------------------------------------------------------
            VARIABLE ANNUITY FUND ACCOUNTS             June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                     USAA Life                   USAA Life     USAA Life     USAA Life      Scudder VLIF   Alger   
                                      VA Money     USAA Life     VA Growth     VA World     VA Diversified    Capital     American 
                                       Market      VA Income     and Income      Growth        Assets          Growth      Growth  
                                    Fund Account  Fund Account  Fund Account  Fund Account  Fund Account    Portfolio   Portfolio  
                                    ------------  ------------  ------------  ------------  ------------  ------------  ---------  
                                                                                                                                   
ASSETS                                                                                                                             
 Investments at value:                                                                                                             
  USAA Life Investment Trust -                                                                                                     
   USAA Life VA Money Market                                                                                                       
   Fund Account - 4,158,883                                                                                                        
   shares at net asset value                                                                                                       
   of $1.00 per share                                                                                                              
   (identified cost $1,999,613)      $1,999,613                                                                                    

  USAA Life Investment Trust -                                                                                                     
   USAA Life VA Income Fund                                                                                                        
   Account 2,027,610 shares at                                                                                                     
   net asset value of $11.22 per                                                                                                   
   share (identified cost $299,828)                 $309,785                                                                       

  USAA Life Investment Trust -                                                                                                     
   USAA Life VA Growth and Income                                                                                                  
   Fund Account - 2,024,756                                                                                                        
   shares at net asset value of                                                                                                    
   $11.65 per share (identified                                                                                                    
   cost $418,351)                                                 $432,419                                                         

  USAA Life Investment Trust -                                                                                                     
   USAA Life VA World Growth Fund                                                                                                  
   Account - 1,956,054 shares at                                                                                                   
   net asset value of $11.15 per                                                                                                   
   share (identified cost $521,274)                                             $561,714                                           

  USAA Life Investment Trust -                                                                                                     
   USAA Life VA Diversified Assets                                                                                                 
   Fund Account - 2,028,016 shares                                                                                                 
   at net asset value of $11.30 per                                                                                                
   share (identified cost $308,212)                                                           $316,578                             

  Scudder Variable Life Investment                                                                                                 
  Fund (VLIF) -                                                                                                                    
   Capital Growth Portfolio                                                                                                        
   13,504 shares at net asset                                                                                                      
   value of $13.72 per share                                                                                                       
   (identified cost $176,692)                                                                               $186,279               

  Alger American Fund -                                                                                                            
   American Growth Portfolio                                                                                                       
   41,639 shares at net asset                                                                                                      
   value of $28.60 per share                                                                                                       
   (identified cost $1,108,846)                                                                                          $1,215,709

  Receivable from USAA Life                                                                                                        
   Insurance Company                         56            -             -             -             -             2            165
                                     ----------   ----------    ----------    ----------    ----------    ----------     ----------
  TOTAL ASSETS                       $1,999,669     $309,785      $432,419      $561,714      $316,578      $186,281     $1,215,874
                                     ==========   ==========    ==========    ==========    ==========    ==========     ==========
LIABILITIES                                                                                                                        
  Payable to USAA Life                                                                                                             
   Insurance Company                          -           76            44            24            13             6             37
                                     ----------   ----------    ----------    ----------    ----------    ----------     ----------
   Net assets applicable to                                                                                                        
   accumulation units outstanding    $1,999,669     $309,709      $432,375      $561,690      $316,565      $186,275     $1,215,837
                                     ==========   ==========    ==========    ==========    ==========    ==========     ==========
ACCUMULATION UNITS OUTSTANDING        1,963,755       28,699        38,662        50,099        28,733        16,308        100,576
                                     ==========   ==========    ==========    ==========    ==========    ==========     ==========
ACCUMULATION UNIT VALUE AND                                                                                                        
  REDEMPTION PRICE PER UNIT           $1.018288   $10.791552    $11.183526    $11.211692    $11.017540    $11.422330     $12.088714
                                     ==========   ==========    ==========    ==========    ==========    ==========     ==========

See accompanying notes to financial statements on page A-12.                    

-----------------------------                                                   
A-10  SEMIANNUAL REPORT  1995                                                   

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SEPARATE ACCOUNT OF USAA LIFE INSURANCE CO. 
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STATEMENTS OF OPERATIONS  
--------------------------------------------------------------------------------
VARIABLE ANNUITY FUND ACCOUNTS          Period Ending June 30, 1995* (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                     USAA Life                   USAA Life     USAA Life     USAA Life     Scudder VLIF   Alger  
                                      VA Money     USAA Life     VA Growth     VA World     VA Diversified   Capital     American
                                       Market      VA Income     and Income      Growth        Assets        Growth      Growth  
                                    Fund Account  Fund Account  Fund Account  Fund Account  Fund Account    Portfolio   Portfolio
                                    ------------  ------------  ------------  ------------  ------------  ------------  ---------
                                                                                                                                 
INVESTMENT INCOME                                                                                                                
      Income dividends and capital                                                                                               
      gains distributions                $31,946             -             -             -             -         $133      $7,086
EXPENSES                                                                                                                         
      Mortality and expense risk           6,353           608           603         1,247           538          319       1,758
                                      ----------    ----------    ----------    ----------    ----------    ----------  ---------
NET INVESTMENT                                                                                                                   
INCOME (LOSS)                             25,594          (608)         (603)       (1,247)         (538)        (186)      5,328
                                      ----------    ----------    ----------    ----------    ----------    ----------  ---------
NET REALIZED AND UNREALIZED                                                                                                      
GAIN ON INVESTMENTS:                                                                                                             
      Net realized gain on                                                                                                       
      investment transactions                  -           511         1,418           772         1,418        2,884       2,073
      Change in net unrealized                                                                                                   
      appreciation on investments              -         9,957        14,068        40,440         8,366        9,587     106,863
                                      ----------    ----------    ----------    ----------    ----------    ----------  ---------
NET REALIZED AND UNREALIZED                                                                                                      
GAIN ON INVESTMENTS                            -        10,468        15,486        41,212         9,784       12,471     108,936
INCREASE IN NET ASSETS                                                                                                           
RESULTING FROM OPERATIONS                $25,594        $9,860       $14,883       $39,965        $9,246      $12,285    $114,265
                                      ==========    ==========    ==========    ==========    ==========    ==========  =========

*Separate Account commenced operation on February 6, 1995.                      

See accompanying notes to financial statements on page A-12.                    

--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 
--------------------------------------------------------------------------------
VARIABLE ANNUITY FUND ACCOUNTS          Period Ending June 30, 1995* (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                    USAA Life                   USAA Life     USAA Life     USAA Life      Scudder VLIF    Alger 
                                     VA Money     USAA Life     VA Growth     VA World      VA Diversified  Capital      American
                                      Market      VA Income     and Income      Growth        Assets        Growth       Growth  
                                   Fund Account  Fund Account  Fund Account  Fund Account  Fund Account    Portfolio    Portfolio
                                   ------------  ------------  ------------  ------------  ------------  ------------   ---------
                                                                                                                                 
FROM OPERATIONS:                                                                                                                 
  Net investment income (loss)          $25,594        ($ 608)       ($ 603)     ($ 1,247)       ($ 538)       ($ 186)     $5,328
  Net realized gain on                                                                                                           
  investment transactions                     -           511         1,418           772         1,418         2,884       2,073
  Change in net unrealized                                                                                                       
  appreciation                                -         9,957        14,068        40,440         8,366         9,587     106,863
                                     ----------    ----------    ----------    ----------    ----------    ----------  ----------
  Increase in net assets                                                                                                         
  resulting from operations             $25,594        $9,860       $14,883       $39,965        $9,246       $12,285    $114,265
                                     ----------    ----------    ----------    ----------    ----------    ----------  ----------
NET ACCUMULATION                                                                                                                 
UNIT TRANSACTIONS                     1,974,075       299,849       417,492       521,725       307,319       173,990   1,101,572
                                     ----------    ----------    ----------    ----------    ----------    ----------  ----------
TOTAL CHANGE IN NET ASSETS            1,999,669       309,709       432,375       561,690       316,565       186,275   1,215,837
                                     ----------    ----------    ----------    ----------    ----------    ----------  ----------
NET ASSETS AT BEGINNING OF PERIOD             -             -             -             -             -             -           -
                                     ----------    ----------    ----------    ----------    ----------    ----------  ----------
NET ASSETS AT END OF PERIOD          $1,999,669      $309,709      $432,375      $561,690      $316,565      $186,275  $1,215,837
                                     ==========    ==========    ==========    ==========    ==========    ==========  ==========

*Separate Account commenced operation on February 6, 1995.                      

See accompanying notes to financial statements on page A-12.                    

                                                   -----------------------------
                                                   A-11  SEMIANNUAL REPORT  1995

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SEPARATE ACCOUNT OF USAA LIFE INSURANCE CO. 
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 
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                                                       June 30, 1995 (Unaudited)
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1) ORGANIZATION                                                                 

The Separate Account of USAA Life Insurance Company (the Separate Account) is   
registered under the Investment Company Act of 1940, as amended, as a segregated
unit investment account of USAA Life Insurance Company (USAA Life), a wholly-   
owned subsidiary of the United Services Automobile Association (USAA).          

The Separate Account is divided into seven variable annuity fund accounts, each 
of which invests in a corresponding fund.                                       

The funds that are available within the Separate Account include: five funds of 
USAA Life Investment Trust (the Trust), namely the USAA Life Variable Annuity   
Money Market Fund Account (USAA Life VA Money Market Fund), USAA Life Variable  
Annuity Income Fund Account (USAA Life VA Income Fund), USAA Life Variable      
Annuity Growth and Income Fund Account (USAA Life VA Growth and Income Fund),   
USAA Life Variable Annuity World Growth Fund Account (USAA Life VA World Growth 
Fund), and USAA Life Variable Annuity Diversified Assets Fund Account (USAA Life
VA Diversified Assets Fund); the Capital Growth Portfolio of the Scudder        
Variable Life Investment Fund (Scudder Capital Growth Portfolio); and the       
American Growth Portfolio of The Alger American Fund (Alger American Growth     
Portfolio).                                                                     

The assets of the Separate Account are the property of USAA Life and are not    
chargeable with liabilities arising out of any other business of USAA Life.     

2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

SECURITY VALUATION                                                              

Investments in mutual fund securities are carried in the Statements of Assets   
and Liabilities at net asset value as reported by the Fund. Gains or losses on  
securities transactions are determined on the basis of the first-in first-out   
(FIFO) cost method. Security transactions are recorded on the trade date.       

DISTRIBUTIONS                                                                   

The net investment income (loss) and realized capital gains of the Separate     
Account are not distributed, but instead are retained and reinvested for the    
benefit of accumulation unit owners.                                            

FEDERAL INCOME TAX                                                              

Operations of the Separate Account are included in the federal income tax return
of USAA Life, which is taxed as a "life insurance company" under the Internal   
Revenue Code. Under current federal income tax law, no income taxes are payable 
with respect to operations of the Separate Account.                             

UNIT VALUE CALCULATION                                                          

For financial reporting purposes, amounts have been rounded to the nearest      
dollar, except for per unit amounts, which may result in minor rounding         
differences. Per unit amounts are calculated based on precise amounts.          

3) EXPENSES                                                                     

A mortality and expense risk charge is deducted by USAA Life from the Separate  
Account on a daily basis which is equal, on an annual basis, to 1.05% of the    
daily net asset value of each Variable Annuity Fund Account. The mortality risks
assumed by USAA Life arise from its contractual obligation to make annuity      
payments after the annuity date for the life of the annuitant in accordance with
annuity rates guaranteed in the contracts under distribution options that       
involve life contingencies. USAA Life will also assume a mortality risk by its  
contractual obligation to pay a death benefit upon the death of an Annuitant or 
Contract Owner prior to the Distribution Phase. The expense risk assumed by USAA
Life is that the costs of administering the contracts and the Separate Account  
may exceed the amount recovered from the contract maintenance and administration
expense charge. The mortality and expense risk charge is guaranteed by USAA Life
and cannot be increased.                                                        

The following expenses are charged to reimburse USAA Life for the expenses it   
incurs in the establishment and maintenance of the Contracts and each Variable  
Annuity Fund Account. USAA Life assesses each Variable Annuity Fund Account a   
daily charge at an annualized rate of 0.10% of the average daily net assets of  
each Variable Annuity Fund Account. Beginning on the first anniversary of the   
effective date, and each anniversary thereafter, a maintenance charge of $30 is 
deducted by USAA Life from the accumulated value of each contract. This charge  
will apply only while the contract is in the accumulation phase.                

Any premium tax levied by a state or government entity with respect to the      
Separate Account will be charged against the contract.                          

-----------------------------                                                   
A-12  SEMIANNUAL REPORT  1995                                                   

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SEPARATE ACCOUNT OF USAA LIFE INSURANCE CO. 
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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS   
--------------------------------------------------------------------------------
       (continued)                               June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

4) ACCUMULATION UNITS DATA*                                                     

                                                  VARIABLE ANNUITY FUND ACCOUNTS

                                                        · Enlarge/Download Table

                 USAA Life                   USAA Life     USAA Life     USAA Life       Scudder VLIF    Alger 
                  VA Money     USAA Life     VA Growth     VA World      VA Diversified   Capital      American
                   Market      VA Income     and Income      Growth        Assets         Growth       Growth  
                Fund Account  Fund Account  Fund Account  Fund Account  Fund Account     Portfolio    Portfolio
                ------------  ------------  ------------  ------------  ------------  ------------   --------- 
                                                                                                               

UNITS                                                                                                          
  Sales            4,967,538        29,396        39,887        51,228        30,213        29,264     103,920 
  Redemptions     (3,003,783)         (697)       (1,225)       (1,129)       (1,480)      (12,956)     (3,344)
                  ----------     ---------     ---------     ---------     ---------     ---------  ---------- 
    Net change     1,963,755        28,699        38,662        50,099        28,733        16,308     100,576 
                  ==========     =========     =========     =========     =========     =========  ========== 

AMOUNTS                                                                                                        
  Sales           $5,009,995      $306,580      $430,624      $533,783      $323,138      $309,391  $1,136,416 
  Redemptions     (3,035,920)       (6,731)      (13,132)      (12,058)      (15,819)     (135,401)    (34,844)
                  ----------     ---------     ---------     ---------     ---------     ---------  ---------- 
    Net change    $1,974,075      $299,849      $417,492      $521,725      $307,319      $173,990  $1,101,572 
                  ==========     =========     =========     =========     =========     =========  ========== 

5) ACCUMULATION UNIT VALUE DATA*                                                

                                                        · Enlarge/Download Table

                   USAA Life                   USAA Life     USAA Life     USAA Life      Scudder VLIF    Alger 
                    VA Money     USAA Life     VA Growth     VA World      VA Diversified  Capital      American
                     Market      VA Income     and Income      Growth        Assets        Growth       Growth  
                  Fund Account  Fund Account  Fund Account  Fund Account  Fund Account    Portfolio    Portfolio
                  ------------  ------------  ------------  ------------  ------------  ------------   ---------
                                                                                                                
February 6, 1995     $1.000000    $10.000000    $10.000000    $10.000000    $10.000000    $10.000000  $10.000000
  June 30, 1995      $1.018288    $10.791552    $11.183526    $11.211692    $11.017540    $11.422330  $12.088714

*Separate Account commenced operation on February 6, 1995.                      

                                                   -----------------------------
                                                   A-13  SEMIANNUAL REPORT  1995

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                                                         USAA LIFE
                                                  INVESTMENT TRUST
=========================================================================       
-------------------------------------------------------------------------       
                                                 SEMIANNUAL REPORT

                                                     June 30, 1995

                                       [LOGO OF USAA APPEARS HERE]
                                          USAA /(R)/

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The total return calculations found in this section are calculated at each      
fund's investment level and reflect the change in the net asset value (NAV), the
reinvestment of income dividends and the deductions of fund expenses which can  
vary from fund to fund. More specific information regarding the fund expenses   
can be found on page 9A of your August 1, 1995 prospectus.                      

These NAV total return performance figures quoted represent past performance for
the period beginning January 5, 1995 and ending June 30, 1995. Past performance 
is not a guarantee of future returns. The principal value contributed to the    
seven Variable Annuity Fund Accounts will fluctuate. When variable annuity units
are redeemed, they may be worth more or less than their original cost.          

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--------------------------------------------------------------------------------
STATEMENTS OF ASSETS AND LIABILITIES  
--------------------------------------------------------------------------------
                                                       June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                                            USAA Life                   USAA Life     USAA Life     USAA Life   
                                                             VA Money     USAA Life     VA Growth     VA World    VA Diversified
                                                              Market      VA Income     and Income      Growth        Assets    
                                                               Fund          Fund          Fund          Fund          Fund     
                                                           ------------  ------------  ------------  ------------  ------------ 
                                                                                                                                
ASSETS                                                                                                                          
   Investments in securities, at market value                                                                                   
      (identified cost of $4,152, $20,883, $20,570,                                                                             
      $20,322, and $20,938, respectively)                   $   4,152     $   22,571    $   23,327    $   21,801    $   22,932  
   Cash                                                            23             19             1             2             7  
   Cash denominated in foreign currencies                                                                                       
      (identified cost of $13)                                      -              -             -            14             -  
   Receivables:                                                                                                                 
      Capital shares sold                                          15              -             -            12             -  
      Dividends and interest                                       13            198            80            61           197  
      Securities sold                                               -              -           255           262         1,002  
      Foreign currency contracts held, at value                     -              -             -            10             -  
                                                            ---------     ----------    ----------    ----------    ----------  
            Total assets                                        4,203         22,788        23,663        22,162        24,138  
                                                            ---------     ----------    ----------    ----------    ----------  
LIABILITIES                                                                                                                     
   Securities purchased                                             -              -            37           273         1,180  
   Foreign currency contracts held, at value                        -              -             -            10             -  
   Capital shares redeemed                                         39              -             -             1             -  
   USAA Life Insurance Company                                      5             36            35            59            36  
                                                            ---------     ----------    ----------    ----------    ----------  
            Total liabilities                                      44             36            72           343         1,216  
                                                            ---------     ----------    ----------    ----------    ----------  
               Net assets applicable to capital                                                                                 
               shares outstanding                           $   4,159     $   22,752    $   23,591    $   21,819    $   22,922  
                                                            =========     ==========    ==========    ==========    ==========  
REPRESENTED BY:                                                                                                                 
   Paid-in capital                                          $   4,159     $   20,299    $   20,417    $   19,420    $   20,307  
   Accumulated net investment income                                -            762           320           209           532  
   Accumulated net realized gain on investments                     -              3            97           710            89  
   Net unrealized appreciation of investments                       -          1,688         2,757         1,479         1,994  
   Net unrealized appreciation on foreign                                                                                       
      currency translations                                         -              -             -             1             -  
                                                            ---------     ----------    ----------    ----------    ----------  
               Net assets applicable to capital                                                                                 
               shares outstanding                           $   4,159     $   22,752    $   23,591    $   21,819    $   22,922  
                                                            =========     ==========    ==========    ==========    ==========  
   Capital shares outstanding, unlimited number of shares                                                                       
      authorized, no par value                                  4,159          2,028         2,025         1,956         2,028  
                                                            =========     ==========    ==========    ==========    ==========  
   Net asset value, redemption price,                                                                                           
      and offering price per share                          $    1.00     $    11.22    $    11.65    $    11.15    $    11.30  
                                                            =========     ==========    ==========    ==========    ==========  

See accompanying "Notes to Financial Statements" on page B-46.                  

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-17

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USAA LIFE INVESTMENT TRUST  
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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND  
--------------------------------------------------------------------------------
              AN OVERVIEW                              June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

OBJECTIVE:                                                                      

To obtain the highest level of current income consistent with preservation of   
capital and maintenance of liquidity.                                           

INVESTMENT PROGRAM:                                                             

This Fund invests in a diversified portfolio of high-quality U.S. dollar-       
denominated debt instruments that present minimal credit risk with remaining    
maturities of 397 days or less.                                                 

                                                                · Download Table

                           As of June 30, 1995 
                                               
NET ASSETS:                       $4.2 million 

NET ASSETS VALUE                               
(NAV) PER SHARE:                         $1.00 

SIMPLE 7-DAY YIELD:                       5.80%
TOTAL RETURN:                                  

Since Inception                                
January 5, 1995:                          2.82%

GENERAL DISCUSSION                                                              
by Portfolio Manager J. Eric Thorderson                                         

FUND BACKGROUND                                                                 

The Securities and Exchange Commission (SEC) places strict parameters on the    
quality and maturity of taxable money market funds. Nearly all money market     
funds have high-quality portfolios because the SEC mandates that at least 95% of
the assets of the fund be invested in securities of the highest grade. One way  
that the VA Money Market Fund differs from other money market funds is that it  
invests 100% of the portfolio in the highest category of credit quality.        

In addition, like all money market funds, the VA Money Market Fund limits the   
average maturity of its portfolio to 90 days and the maturity of any one        
security to 397 days. This reduces the likelihood of any short-term fluctuations
in the stated net asset value of $1 per share*.                                 

PORTFOLIO POSITION                                                              

Due to the Variable Annuity's design and the necessity of the free-look period, 
the VA Money Market Fund invests in securities with relatively short maturity   
dates. Currently, the Fund's average maturity is managed in a range of 7 to 16  
days.                                                                           

The portfolio contains four types of securities: Demand Notes, Certificates of  
Deposit (CDs), Commercial Paper and U.S. Agency Discount Notes. Discount Notes  
are extremely liquid and provide the flexibility this Fund needs while the      
higher percentage of Demand Notes held by the Fund adds stability. Currently,   
Demand Notes have higher yields than the other three types of securities.       

The Fund's position is constantly reviewed in relation to the current market,   
and potential securities are evaluated for appropriateness and eligibility based
on established standards. We also consider the liquidity needs of the Fund and  
purchase those securities that "make sense" on a credit quality, yield, and     
maturity basis.                                                                 

OUTLOOK                                                                         

It appears the economy has slowed down enough that the Fed funds rate (the rate 
member banks of the Federal Reserve charge each other) will begin to decline.   

We continue to search for opportunities that are developing in the marketplace  
and take advantage of those that will add value (for example, demand notes that 
are enhanced by banks). We attempt to do this by monitoring market conditions   
and economic indicators.                                                        

PORTFOLIO MIX                                                                   
as of June 30, 1995                                                             
--------------------------------------------------------------------------------

[PIE CHART APPEARS HERE]  

                                                                · Download Table
                                       
Demand Notes                      46.4%
CDs                                4.4%
U.S. Agency Discount              22.6%
Commercial Paper                  26.4%

*An investment in this Fund is neither insured nor guaranteed by the U.S.       
Government and there is no assurance that the Fund can maintain a stable net  
asset value of $1 per share.                                                  

-----------------------------                                                   
B-18  SEMIANNUAL REPORT  1995                                                   

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USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND  
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS IN SECURITIES                 June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                          VARIABLE RATE DEMAND NOTES (42.8%)                               

Principal                                                                                                  
  Amount                                                                       Coupon                Value 
  (000)    Security                                                             Rate     Maturity    (000) 
  ------   ----------                                                         --------  ----------  -------
                                                                                                           
           AUTO PARTS                                                                                      
  $ 100    Alabama IDA RB (Rehau Project), (CRE)                                6.25%    10/01/19     $100 
    140    Bardstown, KY, Taxable Notes, Series 1994, (CRE)                     6.15      6/01/24      140 
                                                                                                    ------ 
                                                                                                       240 
                                                                                                    ------ 
           BUILDING MATERIALS GROUP                                                                        
    100    Sarasota County, FL, IDA RB, Series 1994, (CRE)                      6.15      9/01/14      100 
                                                                                                    ------ 
           BUILDINGS                                                                                       
    100    MMR Funding I, DEB, Series A, (CRE)                                  6.07      9/01/10      100 
                                                                                                    ------ 
           FINANCE - RECEIVABLES                                                                           
    150    Capital One Funding Corp., Notes, Series 1993A, (CRE)                6.07      6/02/08      150 
    100    Capital One Funding Corp., Notes, Series 1994D, (CRE)                6.07     10/01/24      100 
     92    Midwest Funding Corp., Notes, Series 1992A, (CRE)                    6.07      5/01/07       92 
                                                                                                    ------ 
                                                                                                       342 
                                                                                                    ------ 
           HEALTHCARE - DIVERSIFIED                                                                        
    100    GMS Associates Partnership Project Health Care RB, (CRE)             6.15      5/15/24      100 
                                                                                                    ------ 
           HEALTHCARE - MISCELLANEOUS                                                                      
    100    Mason City Clinic, P.C., IA, Demand Bonds, Series 1992, (CRE)        6.15      9/01/22      100 
                                                                                                    ------ 
           HOSPITALS                                                                                       
    100    Armstrong County Hospital Auth., PA, RB, Series 1993B, (CRE)         6.15      9/01/17      100 
                                                                                                    ------ 
           HOTEL/MOTEL                                                                                     
    100    Howard County, MD, Taxable RB, Series 1994, (CRE)                    6.15     10/01/09      100 
    100    Ramada Hotel Downtown, San Diego, CA, DEB, (CRE)                     6.60      2/01/96      100 
                                                                                                    ------ 
                                                                                                       200 
                                                                                                    ------ 
           HOUSING - MULTI/FAMILY                                                                          
    100    Palm Desert Redevelopment Agency, CA, RB, (CRE)                      6.38      8/01/22      100 
                                                                                                    ------ 
           MACHINERY - DIVERSIFIED                                                                         
    100    DSL Funding Corp., Notes, (CRE)                                      6.23     12/01/09      100 
                                                                                                    ------ 
           NURSING CARE                                                                                    
    150    Massachusetts Nursing Homes RB, Series 1993, (CRE)                   6.15     11/15/13      150 
                                                                                                    ------ 
           SPECIAL ASSESSMENT/TAX/FEE                                                                      
    150    Community Redevelopment Agency,                                                                 
              City of Visalia, CA, DEB, (CRE)                                   6.26      9/01/20      150 
                                                                                                    ------ 
           Total variable rate demand notes (cost: $1,782)                                           1,782 
                                                                                                    ------ 


                                                   PUT BONDS (3.6%)                                        
                                                                                                           
           HEALTHCARE - DIVERSIFIED                                                                        
    150    Wenatchee Valley Clinic, P. S., TaxableBonds,                                                   
              Series 1995, (CRE) (cost: $150)                                   6.25      1/15/15      150 
                                                                                                    ------ 

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-19

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND  
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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                             FIXED RATE INSTRUMENTS (53.4%)                               
 Principal                                                                                                
   Amount                                                                     Coupon                Value 
   (000)    Security                                                           Rate     Maturity    (000) 
----------  ---------                                                        --------  ----------  -------
                                                                                                          
            BANKS                                                                                         
    $185    First Deposit National Bank, CD                                    6.25%     8/03/95    $  185
                                                                                                   -------
            CHEMICALS                                                                                     
     100    Du Pont (E.I.) De Nemours and Co., CP                              5.95      7/07/95       100
                                                                                                   -------
            ELECTRIC POWER                                                                                
     100    Midwest Power Systems Inc., CP                                     5.98      7/21/95        99
     100    Northern States Power Minnesota, CP                                5.95      7/05/95       100
                                                                                                   -------
                                                                                                       199
                                                                                                   -------
            FINANCE - BUSINESS/COMMERCIAL                                                                 
     100    Sanwa Business Credit Corp., CP                                    6.05      7/14/95        99
     100    Sears Roebuck Acceptance Corp., CP                                 5.95      7/13/95       100
                                                                                                   -------
                                                                                                       199
                                                                                                   -------
            FINANCE - CONSUMER                                                                            
     100    Aristar Inc., CP                                                   6.02      7/06/95       100
     100    Aristar Inc., CP                                                   6.03      8/04/95        99
     100    Ford Motor Credit Co., CP                                          6.55      7/05/95       100
     100    Heller Financial Inc., CP                                          5.89      8/01/95       100
                                                                                                   -------
                                                                                                       399
                                                                                                   -------
            RETAIL STORES - DEPARTMENT STORES                                                             
     100    J. C. Penney Funding Corp., CP                                     5.94      7/07/95       100
                                                                                                   -------
            RETAIL STORES - GENERAL MERCHANDISING                                                         
     100    Wal-Mart Stores Inc., CP                                           5.92      7/19/95       100
                                                                                                   -------
            U.S. GOVERNMENT                                                                               
     175    Federal Home Loan Mortgage Discount Notes                          5.88      7/20/95       175
     150    FNMA Discount Notes                                                5.88      7/06/95       150
     200    FNMA Discount Notes                                                5.77      7/10/95       200
     165    FNMA Discount Notes                                                5.78      7/17/95       164
     250    FNMA Discount Notes                                                5.91      7/25/95       249
                                                                                                   -------
                                                                                                       938
                                                                                                   -------
            Total fixed rate instruments (cost: $2,220)                                              2,220
                                                                                                   -------
            Total investments (cost: $4,152)                                                        $4,152
                                                                                                   =======

-----------------------------                                                   
B-20  SEMIANNUAL REPORT  1995                                                   

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY MONEY MARKET FUND  
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

PORTFOLIO SUMMARY BY INDUSTRY 

                                                                · Download Table
                                                                                
U.S. Government                                                            22.5%
--------------------------------------------------------------------------------
Finance - Consumer                                                          9.6 
--------------------------------------------------------------------------------
Finance - Receivables                                                       8.2 
--------------------------------------------------------------------------------
Healthcare - Diversified                                                    6.0 
--------------------------------------------------------------------------------
Auto Parts                                                                  5.8 
--------------------------------------------------------------------------------
Hotel/Motel                                                                 4.8 
--------------------------------------------------------------------------------
Electric Power                                                              4.8 
--------------------------------------------------------------------------------
Finance - Business/Commercial                                               4.8 
--------------------------------------------------------------------------------
Banks                                                                       4.5 
--------------------------------------------------------------------------------
Nursing Care                                                                3.6 
--------------------------------------------------------------------------------
Special Assessment/Tax/Fee                                                  3.6 
--------------------------------------------------------------------------------
Building Materials Group                                                    2.4 
--------------------------------------------------------------------------------
Buildings                                                                   2.4 
--------------------------------------------------------------------------------
Chemicals                                                                   2.4 
--------------------------------------------------------------------------------
Healthcare - Miscellaneous                                                  2.4 
--------------------------------------------------------------------------------
Hospitals                                                                   2.4 
--------------------------------------------------------------------------------
Housing - Multi/Family                                                      2.4 
--------------------------------------------------------------------------------
Machinery - Diversified                                                     2.4 
--------------------------------------------------------------------------------
Retail Stores - Department Stores                                           2.4 
--------------------------------------------------------------------------------
Retail Stores - General Merchandising                                       2.4 
                                                                          ------
--------------------------------------------------------------------------------
                                                                           99.8%
                                                                          ======

See accompanying "Notes to Portfolio of Investments in Securities" on page B-43.

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-21

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY INCOME FUND  
--------------------------------------------------------------------------------
AN OVERVIEW                          June 30, 1995 (Unaudited)  
--------------------------------------------------------------------------------

OBJECTIVE:                                                                      

To obtain maximum current income without undue risk to principal.               

INVESTMENT PROGRAM:                                                             

This Fund invests in a diversified portfolio of U.S. dollar-denominated debt and
income-producing equity securities selected for their high yields relative to   
the risk involved.                                                              

                                                                · Download Table

                                                                  June 30, 1995 
                                                                                
NET ASSETS:                                                       $22.8 million 

NET ASSET VALUE                                                                 

(NAV) PER SHARE:                                                         $11.22 

TOTAL RETURN:                                                                   
Since Inception                                                                 
January 5, 1995                                                           12.20%

GENERAL DISCUSSION                                                              
by Portfolio Manager J.W. Saunders, Jr.                                         

January 1995 was a good time to start the VA Income Fund. We have been in a     
strong bull market for bonds in this first reporting period and the net asset   
value per share of the Fund has increased 12.20% in value.                      

Our investment strategy involves using a combination of high-yield common       
stocks, government agency mortgage pass-through securities, and corporate or    
government bonds. In fact, mortgage pass-through securities are the foundation  
of the Fund's portfolio. These securities are issued by U.S. government         
agencies - FNMA (Fannie Mae) and GNMA (Ginnie Mae) - and although not rated, are
considered to be comparable to Moody's and Standard & Poor's highest categories 
(Aaa and AAA, respectively) for rating bond quality.                            

Mortgage pass-through securities are pools of mortgages which receive monthly   
principal and interest payments. While yields on these securities are generally 
comparable to yields on long-term bonds, they are priced like 10-year bonds to  
reflect the 8-to 10-year average maturity which results from monthly principal  
paydowns and refinancing of mortgages in the pools. The result is high current  
yield with less price volatility, which fits well with the Fund's investment    
objective.                                                                      

A portion of the Fund is invested in high-yield common stocks which have        
dividend yields almost as high as bonds and, over time, offer the potential for 
increasing dividends. These common stocks react quickly to changes in interest  
rates and generally experience the highest price volatility in the portfolio.   
The Fund also holds long-term U.S. Treasury bonds which capture the benefits of 
increasing prices as long-term interest rates decline.                          

Currently, the VA Income Fund portfolio mix (as percentages of net assets) is   
14.5% in high-yield common stocks, 0.6% preferred stock, 71.1% in agency        
mortgage pass-through securities, and 12.5% in U.S. Treasury bonds, with the    
remaining 0.5% in cash and cash equivalents.                                    

OUTLOOK                                                                         

The rapid decline in long-term interest rates this year has surprised market    
forecasters. This decline is a result of a perception that the economy is       
slowing and that the Federal Reserve will not foster further increases in short-
term interest rates. Although a change in this perception could cause a         
temporary bond market reversal, we believe that the trend toward lower long-term
interest rates can continue.                                                    

TOP 10 SECURITIES                                                               
as of June 30, 1995                                                             

                                                                · Download Table

--------------------------------------------------------------------------------
                                                      Coupon            % of    
                                                       Rate          Net Assets 
                                                                                
 1) U.S. Treasury                                                               
    Bond                                              7.875%            12%     
--------------------------------------------------------------------------------
 2) GNMA                                                6.5%             8%     
--------------------------------------------------------------------------------
 3) GNMA                                                8.5%             7%     
--------------------------------------------------------------------------------
 4) FNMA                                                8.5%             7%     
--------------------------------------------------------------------------------
 5) FNMA                                                8.0%             7%     
--------------------------------------------------------------------------------
 6) GNMA                                                8.0%             7%     
--------------------------------------------------------------------------------
 7) FNMA                                                7.0%             6%     
--------------------------------------------------------------------------------
 8) GNMA                                                7.5%             6%     
--------------------------------------------------------------------------------
 9) FNMA                                                7.5%             6%     
--------------------------------------------------------------------------------
10) FNMA                                                6.5%             6%     
--------------------------------------------------------------------------------

-----------------------------                                                   
B-22  SEMIANNUAL REPORT  1995                                                   

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USAA LIFE VARIABLE ANNUITY INCOME FUND  
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PORTFOLIO OF INVESTMENTS IN SECURITIES                 June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

COMMON STOCKS (14.5%) 

                                                        · Enlarge/Download Table

                                                                               Market 
   Number                                                                      Value  
 of Shares  Security                                                           (000)  
 ---------  ---------                                                         --------
                                                                                      
   14,000   Allegheny Power System, Inc.                                      $  329  
    9,000   American Electric Power Co., Inc.                                    316  
   13,000   CINergy Corp.                                                        341  
   11,000   CIPSCO, Inc.                                                         329  
    4,500   Entergy Corp.                                                        109  
   11,000   General Public Utilities Corp.                                       327  
    3,300   Health Care Property Investors, Inc.                                 106  
    8,500   Houston Industries, Inc.                                             358  
   13,500   Northeast Utilities                                                  304  
    4,000   NYNEX Corp.                                                          161  
    6,000   PNC Bank Corp.                                                       158  
   11,500   Public Service Enterprise Group, Inc.                                319  
    5,000   Sun Co., Inc.                                                        137  
                                                                              ------  
            Total common stocks (cost: $3,081)                                 3,294  
                                                                              ------  

                           PREFERRED STOCKS (0.6%)                                    
    6,000   United Dominion Realty Trust, Inc. "A",                                   
               9.25%, Preferred Series A (cost: $150)                            152  
                                                                              ------  

                   U.S. GOVERNMENT & AGENCY ISSUES (83.6%)                            

Principal                                                                             
  Amount                                                                              
  (000)                                                                               
----------                                                                            
                                                                                      
            FEDERAL NATIONAL MORTGAGE ASSOCIATION (34.7%)                             
  $ 1,511   6.50%, 4/01/24                                                     1,454  
    1,485   7.00%, 6/01/24                                                     1,462  
    1,454   7.50%, 1/01/25                                                     1,460  
    1,461   8.00%, 1/01/25                                                     1,490  
    1,465   8.50%, 12/01/24                                                    1,512  
      498   9.00%, 1/01/25                                                       520  
                                                                              ------  
                                                                               7,898  
                                                                              ------  
            GOVERNMENT NATIONAL MORTGAGE ASSOCIATION (36.4%)                          
    1,959   6.50%, 1/15/24 - 4/15/24                                           1,883  
    1,436   7.00%, 8/15/23                                                     1,414  
    1,452   7.50%, 8/15/23                                                     1,461  
    1,441   8.00%, 5/15/24                                                     1,476  
    1,465   8.50%, 12/15/24                                                    1,522  
      488   9.00%, 1/15/25                                                       513  
                                                                              ------  
                                                                               8,269  
                                                                              ------  
            U.S. TREASURY BOND (12.5%)                                                
      100   7.625%, 2/15/25                                                      113  
    2,400   7.875%, 2/15/21                                                    2,734  
                                                                              ------  
                                                                               2,847  
                                                                              ------  
            Total U.S. Government & agency issues (cost: $17,541)             19,014  
                                                                              ------  

                              SHORT-TERM (0.5%)                                       

                                                     Coupon                           
                                                      Rate        Maturity            
                                                     ------       --------            
                                                                                      
            COMMERCIAL PAPER                                                          
     $111   Ford Motor Credit Co. (cost: $111)        5.93%       7/03/95        111  
                                                                             -------  
            Total investments (cost: $20,883)                               $ 22,571  
                                                                             =======  

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-23

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USAA LIFE VARIABLE ANNUITY INCOME FUND  
--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

PORTFOLIO SUMMARY BY INDUSTRY 

                                                                · Download Table
                                                                                
U.S. Government                                                            83.6%
--------------------------------------------------------------------------------
Electric Power                                                             12.0 
--------------------------------------------------------------------------------
Real Estate Investment Trusts                                               1.1 
--------------------------------------------------------------------------------
Telephone                                                                   0.7 
--------------------------------------------------------------------------------
Bank Holding Companies - Major Regional                                     0.7 
--------------------------------------------------------------------------------
Oil - Domestic                                                              0.6 
--------------------------------------------------------------------------------
Automobiles                                                                 0.5 
                                                                          ------
--------------------------------------------------------------------------------
                                                                           99.2%
                                                                          ======

See accompanying "Notes to Portfolio of Investments in Securities" on page B-43.

-----------------------------                                                   
B-24  SEMIANNUAL REPORT  1995                                                   

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND 
--------------------------------------------------------------------------------
AN OVERVIEW                        June 30, 1995 (Unaudited)  
--------------------------------------------------------------------------------

GENERAL DISCUSSION                                                              
by Portfolio Manager R. David Ullom                                             

INVESTMENT PHILOSOPHY                                                           

Since this is our first report to Variable Annuity contractowners, it is        
appropriate to explain this Fund's investment philosophy - value orientation.   
This philosophy emphasizes the valuation of securities based on earnings, cash  
flow, dividends, asset values and our judgment of a company's management. We do 
not base investment selections on economic forecasts or market outlooks. We     
place importance on being a patient investor and viewing the entire investment  
process over an extended period of time. It is important to adhere to our       
strategy which may not seem in line with market activity from time to time.     

FUND PERFORMANCE                                                                

The above-average performance of the VA Growth and Income Fund since its        
inception on January 5 resulted from investment in several areas which all      
reflect our value-oriented investment philosophy. In particular, investments in 
the areas of capital goods (Aerospace/Defense) and consumer staples             
(Healthcare, Foods and Tobacco) had the most significant influence on the Fund's
performance since all of these areas boasted above-average appreciation. More   
specifically, the Fund's investment weighting in Aerospace (Boeing, Rockwell and
B.F. Goodrich) and Healthcare (Baxter International, Merck and American Home    
Products) provided solid returns. Also aiding the performance were our          
investments in various technology-oriented companies such as National           
Semiconductor, Computer Associates and Novell.                                  

Detracting from the Fund's performance in the first half of the fiscal year were
our investments in various companies providing intermediate goods and services  
(chemicals, machinery, energy, and paper & forest products). Also impeding      
performance were investments in consumer cyclicals, primarily automobile and    
retail stores.                                                                  

                                                                · Download Table

PORTFOLIO INVESTMENT DIVERSIFICATION                                            
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                                 % of Net Assets
                                                                                
Intermediate Goods & Services                                              27.0%
Credit Sensitive                                                           24.9%
Consumer Staples                                                           18.3%
Capital Goods                                                              15.1%
Consumer Cyclicals                                                         12.7%
Cash Equivalent                                                             0.9%

                                                                · Download Table

TOP 10 HOLDINGS                                                                 
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                                 % of Net Assets
                                                                                
Boeing Co.                                                                  3.2%
Xerox Corp.                                                                 2.5%
Baxter International                                                        2.5%
Dow Chemical Co.                                                            2.1%
Occidental Petroleum Corp.                                                  2.1%
Ford Motor Co.                                                              2.1%
Ball Corp.                                                                  2.1%
BankAmerica Corp.                                                           2.0%
American Home Products Corp.                                                2.0%
Universal Corp.                                                             2.0%

OBJECTIVE:                                                                      

Seeks capital growth and current income.                                        

INVESTMENT PROGRAM:                                                             

Not less than 65% of its assets are invested in a diversified portfolio of      
dividend-paying common stocks, convertible securities, nonconvertible preferred 
stock and nonconvertible debt securities of companies that offer the prospect   
for growth of earnings.                                                         

                                                                · Download Table

                                                                  June 30, 1995 
                                                                                
NET ASSETS:                                                       $23.6 million 

NET ASSET VALUE                                                                 
(NAV) PER SHARE:                                                         $11.65 

TOTAL RETURN:                                                                   
Since Inception                                                                 
January 5, 1995                                                           16.50%

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-25

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND 
--------------------------------------------------------------------------------
AN OVERVIEW (Continued)               June 30, 1995 (Unaudited) 
--------------------------------------------------------------------------------

OUTLOOK                                                                         

As discussed, our investment philosophy is value-oriented and is not predicated 
on a forecast for the U.S. economy or stock markets. Therefore, we will continue
to invest in securities that meet our value criteria. More specifically, we will
continue to invest in select cyclical industries such as chemicals, paper &     
forest products, and railroads.                                                 

                                                                · Download Table

TOP SECTORS                                                                     
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                                 % of Net Assets
                                                                                
Energy*                                                                     7.9%
--------------------------------------------------------------------------------
Telephones                                                                  7.7%
--------------------------------------------------------------------------------
Aerospace/Defense                                                           6.0%
--------------------------------------------------------------------------------
Chemicals*                                                                  6.0%
--------------------------------------------------------------------------------
Tobacco                                                                     5.1%
--------------------------------------------------------------------------------
Insurance*                                                                  4.8%
--------------------------------------------------------------------------------
Computer Software & Service                                                 4.6%
--------------------------------------------------------------------------------
Paper & Forest Products                                                     4.6%
--------------------------------------------------------------------------------
Medical Products & Supplies                                                 4.0%
--------------------------------------------------------------------------------
Automobiles                                                                 3.1%
--------------------------------------------------------------------------------
Natural Gas Distribution--                                                      
Pipelines                                                                   2.9%
--------------------------------------------------------------------------------

* Sectors broken down by industries:                                            

Energy: Oil - Domestic (3.4%), Oil - Exploration & Production (1.5%),           
Oil - International (1.4%), Oil Well Equipment & Service (1.6%) 

Chemicals: Chemicals (4.7%), Chemicals - Specialty (1.3%)                       

Insurance: Insurance- Property/Casualty (2.9%), Insurance - Multi/Line (1.9%)   

-----------------------------                                                   
B-26  SEMIANNUAL REPORT  1995                                                   

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PORTFOLIO OF INVESTMENTS IN SECURITIES          June 30, 1995 (Unaudited) 
--------------------------------------------------------------------------------

                                                                · Download Table

                            COMMON STOCKS (96.1%)                
                                                          Market 
  Number                                                  Value  
of Shares  Security                                       (000)  
---------  ---------                                     --------
                                                                 
           AEROSPACE/DEFENSE (6.0%)                              
   4,000   B.F. Goodrich Co.                             $  215  
  12,000   Boeing Co.                                       752  
  10,000   Rockwell International Corp.                     458  
                                                         ------  
                                                          1,425  
                                                         ------  
           ALUMINUM (1.6%)                                       
   7,400   Aluminum Co. of America                          371  
                                                         ------  
           AUTOMOBILES (3.1%)                                    
   5,000   Chrysler Corp.                                   239  
  16,500   Ford Motor Co.                                   491  
                                                         ------  
                                                            730  
                                                         ------  
           BANK HOLDING COMPANIES - MONEY CENTER (1.6%)          
   6,000   Bankers Trust New York Corp.                     372  
                                                         ------  
           BANK HOLDING COMPANIES - OTHER MAJOR (2.0%)           
   9,000   BankAmerica Corp.                                474  
                                                         ------  
           BROKERAGE FIRMS (1.4%)                                
   7,000   Dean Witter, Discover & Co.                      329  
                                                         ------  
           CHEMICALS (4.7%)                                      
   7,000   Dow Chemical Co.                                 503  
   6,000   Olin Corp.                                       309  
   9,000   Union Carbide Corp.                              301  
                                                         ------  
                                                          1,113  
                                                         ------  
           CHEMICALS - SPECIALTY (1.3%)                          
  10,500   Morton International, Inc.                       307  
                                                         ------  
           COMPUTER SOFTWARE & SERVICE (4.6%)                    
   5,500   Computer Associates International, Inc.          373  
   5,000   First Financial Management Corp.                 427  
  15,000   Novell, Inc.*                                    299  
                                                         ------  
                                                          1,099  
                                                         ------  
           CONTAINERS - METALS & GLASS (2.1%)                    
  14,000   Ball Corp.                                       488  
                                                         ------  
           DRUGS (1.3%)                                          
   6,500   Merck & Co., Inc.                                319  
                                                         ------  
           ELECTRIC POWER (1.9%)                                 
   6,000   CINergy Corp.                                    157  
   7,000   Houston Industries, Inc.                         295  
                                                         ------  
                                                            452  
                                                         ------  
           ENGINEERING & CONSTRUCTION (0.3%)                     
  11,000   Morrison Knudsen Corp.                            74  
                                                         ------  
           ENTERTAINMENT (1.4%)                                  
   8,000   Time Warner, Inc.                                329  
                                                         ------  
           FOODS (2.8%)                                          
   6,000   CPC International, Inc.                          371  
  10,500   Dean Foods Co.                                   294  
                                                         ------  
                                                            665  
                                                         ------  

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-27

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USAA LIFE VARIABLE ANNUITY GROWTH AND INCOME FUND 
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PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                                · Download Table

                                                           Market 
  Number                                                    Value 
of Shares  Security                                         (000) 
---------  ---------                                      --------
                                                                  
           HEALTHCARE - DIVERSIFIED (2.0%)                        
    6,000  American Home Products Corp.                    $  464 
                                                           ------ 
           HOMEBUILDING (1.8%)                                    
   15,000  Centex Corp.                                       424 
                                                           ------ 
           HOUSEHOLD PRODUCTS (1.7%)                              
    5,500  Procter & Gamble Co.                               395 
                                                           ------ 
           INSURANCE - MULTI/LINE COMPANIES (1.9%)                
    7,000  Aetna Life & Casualty Co.                          440 
                                                           ------ 
           INSURANCE - PROPERTY/CASUALTY (2.9%)                   
    3,300  American International Group, Inc.                 376 
   11,800  PartnerRe Holdings Ltd.                            308 
                                                           ------ 
                                                              684 
                                                           ------ 
           MACHINERY - DIVERSIFIED (1.6%)                         
   20,000  BW/IP, Inc.                                        370 
                                                           ------ 
           MANUFACTURING - DIVERSIFIED INDUSTRIES (1.4%)          
   11,000  Hillenbrand Industries, Inc.                       342 
                                                           ------ 
           MEDICAL PRODUCTS & SUPPLIES (4.0%)                     
   16,000  Baxter International, Inc.                         582 
   12,000  C.R. Bard, Inc.                                    360 
                                                           ------ 
                                                              942 
                                                           ------ 
           NATURAL GAS DISTRIBUTION - PIPELINES (2.9%)            
   12,000  NICOR, Inc.                                        323 
   12,000  Sonat, Inc.                                        366 
                                                           ------ 
                                                              689 
                                                           ------ 
           OFFICE EQUIPMENT & SUPPLIES (2.5%)                     
    5,000  Xerox Corp.                                        586 
                                                           ------ 
           OIL - DOMESTIC (3.4%)                                  
   21,500  Occidental Petroleum Corp.                         492 
   11,000  Unocal Corp.                                       304 
                                                           ------ 
                                                              796 
                                                           ------ 
           OIL - EXPLORATION & PRODUCTION (1.5%)                  
   13,000  Apache Corp.                                       356 
                                                           ------ 
           OIL - INTERNATIONAL (1.4%)                             
    5,000  Texaco, Inc.                                       328 
                                                           ------ 
           OIL WELL EQUIPMENT & SERVICE (1.6%)                    
    6,000  Schlumberger Ltd.                                  373 
                                                           ------ 
           PAPER & FOREST PRODUCTS (4.6%)                         
   27,000  Fort Howard Corp.*                                 381 
   24,000  Jefferson Smurfit Corp.*                           315 
    8,500  Weyerhaeuser Co.                                   401 
                                                           ------ 
                                                            1,097 
                                                           ------ 
           POLLUTION CONTROL (1.7%)                               
   14,000  WMX Technologies, Inc.                             397 
                                                           ------ 
           RAILROADS (1.6%)                                       
    5,500  Norfolk Southern Corp.                             371 
                                                           ------ 

-----------------------------                                                   
B-28  SEMIANNUAL REPORT  1995                                                   

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--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                                · Download Table

                                                                             Market 
  Number                                                                     Value  
of Shares     Security                                                        (000) 
---------     ---------                                                     --------
                                                                                    
              REAL ESTATE INVESTMENT TRUSTS (2.7%)                                  
   10,600     Developers Diversified Realty Corp.                           $   305 
   20,000     Storage Equities, Inc.                                            327 
                                                                            ------- 
                                                                                632 
                                                                            ------- 
              RETAIL STORES - DEPARTMENT STORES (1.7%)                              
   10,000     May Department Stores Co.                                         416 
                                                                            ------- 
              RETAIL STORES - GENERAL MERCHANDISING (1.6%)                          
    6,500     Sears, Roebuck & Co.                                              389 
                                                                            ------- 
              RETAIL STORES - SPECIALTY (2.7%)                                      
   11,000     OfficeMax, Inc.*                                                  307 
   21,000     Phillips-Van Heusen Corp.                                         325 
                                                                            ------- 
                                                                                632 
                                                                            ------- 
              TELEPHONES (7.7%)                                                     
    7,000     American Telephone & Telegraph Co.                                372 
   17,000     COMSAT Corp.                                                      334 
   10,000     GTE Corp.                                                         341 
    9,000     NYNEX Corp.                                                       362 
   12,000     Sprint Corp.                                                      403 
                                                                            ------- 
                                                                              1,812 
                                                                            ------- 
              TOBACCO (5.1%)                                                        
    5,000     Philip Morris Companies, Inc.                                     372 
   13,000     RJR Nabisco Holdings Corp.                                        362 
   22,000     Universal Corp.                                                   462 
                                                                            ------- 
                                                                              1,196 
                                                                            ------- 
              Total common stocks (cost: $20,044)                            22,678 
                                                                            ------- 

                              PREFERRED STOCKS (1.9%)                               
    4,500     National Semiconductor Corp. depositary shares, $3.25                 
                 convertible (cost: $321)                                       444 
                                                                            ------- 

                                 SHORT-TERM (0.9%)                                  

  Principal                                                                         
   Amount                                             Coupon                        
    (000)                                              Rate      Maturity           
 -----------                                          -------    --------           
                                                                                    
              U.S. GOVERNMENT ISSUES                                                
  $   205     FNMA Discount Notes                                                   
              (cost: $205)                             5.90%      7/07/95       205 

              Total investments (cost: $20,570)                            $ 23,327 
                                                                            ======= 

*Non-income producing                                                           

See accompanying "Notes to Portfolio of Investments in Securities" on page B-43.

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-29

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--------------------------------------------------------------------------------
USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND  
--------------------------------------------------------------------------------
AN OVERVIEW                         June 30, 1995 (Unaudited) 
--------------------------------------------------------------------------------

OBJECTIVE:                                                                      

Seeks long-term capital appreciation.                                           

INVESTMENT PROGRAM:                                                             

Not less than 65% of the Fund's assets are invested in a diversified portfolio  
of common stocks and other equity securities of both foreign and domestic       
issuers representing at least three countries, one of which may include the     
United States. The remainder of the Fund's assets may be invested in marketable 
debt securities having remaining maturities of less than one year which are     
issued or guaranteed as to both principal and interest by the U.S. government or
by its agencies.                                                                

                                                                · Download Table

                                                                  June 30, 1995 
                                                                                
NET ASSETS:                                                       $21.8 million 

NET ASSET VALUE                                                                 
(NAV) PER SHARE:                                                         $11.15 

TOTAL RETURN:                                                                   
Since Inception                                                                 
January 5, 1995                                                           11.50%

GENERAL DISCUSSION                                                              

by Portfolio Managers David Peebles (Foreign Stocks) and R. David Ullom         
(Domestic Stocks)                                                               

EUROPE                                                                          

Over the last six months, Europe provided attractive stock market returns aided 
by stronger European currencies. Investments were selected on the merits of a   
company's prospects rather than by country. This approach helped to reduce      
exposure to the possibility of poor profit growth within certain countries and  
industries.                                                                     

JAPAN                                                                           

Japan was underweighted for a number of reasons: a lack of economic recovery,   
Japan's bad debt within its banking system, a lack of competitiveness within    
certain Japanese industries and trade disputes arising from closed markets. When
signs of the long-awaited recovery are evident, this market will be viewed more 
positively.                                                                     

EMERGING MARKETS                                                                

Concerns over the Mexican peso devaluation affected all emerging markets, both  
inside and outside Latin America. While these markets have shown some recovery  
in the last few months, the mature markets still provided better returns.       
However, we will continue to maintain an overweighted position in emerging      
markets as we feel these economies will continue to grow at a rapid rate.       

UNITED STATES                                                                   

We anticipate that the U.S. economy will continue to experience reasonable      
economic growth and therefore will emphasize investments in areas such as       
intermediate goods and services (commodity chemicals and metals), consumer      
cyclicals (retailing and autos) and the capital goods area (aerospace/defense   
and electronics).                                                               

COUNTRY WEIGHTINGS AS A PERCENTAGE OF NET ASSETS                                
as of June 30, 1995                                                             
--------------------------------------------------------------------------------

[PIE CHART APPEARS HERE]  

                                                                · Download Table
                                        
USA                                 43.0
Japan                                9.3
U.K.                                 6.1
France                               3.9
Netherlands                          3.9
Germany                              3.2
Hong Kong                            2.8
Sweden                               2.7
Mexico                               2.0
Australia                            2.0
Other*                              21.0

*Investment in all other countries was less than 2% of the portfolio's net      
assets.                                                                       

-----------------------------                                                   
B-30  SEMIANNUAL REPORT  1995                                                   

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USAA LIFE VARIABLE ANNUITY WORLD GROWTH FUND  
--------------------------------------------------------------------------------
AN OVERVIEW (Continued)                      June 30, 1995 (Unaudited)  
--------------------------------------------------------------------------------

OUTLOOK                                                                         

We think economic growth will continue to be modest in many markets; however,   
low inflation and low interest rates coupled with continued gains in corporate  
profits could provide attractive returns.                                       

                                                                · Download Table
TOP 10 EQUITY HOLDINGS                                                          
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                                 % of Net Assets
                                                                                
Tarkett AG (Germany)                                                        1.8%
--------------------------------------------------------------------------------
Cadbury Schweppes                                                               
plc (United Kingdom)                                                        1.5%
--------------------------------------------------------------------------------
Verenigd Bezit                                                                  
VNU (Netherlands)                                                           1.5%
--------------------------------------------------------------------------------
Veba AG (Germany)                                                           1.4%
--------------------------------------------------------------------------------
Northern Ireland Electricity                                                    
plc (United Kingdom)                                                        1.3%
--------------------------------------------------------------------------------
Tomkins plc (United Kingdom)                                                1.3%
--------------------------------------------------------------------------------
Autoliv AB (Sweden)                                                         1.3%
--------------------------------------------------------------------------------
Essilor International (France)                                              1.3%
--------------------------------------------------------------------------------
Microsoft Corp. (United States)                                             1.2%
--------------------------------------------------------------------------------
STET Savings SHS (Italy)                                                    1.2%
--------------------------------------------------------------------------------

                                                                · Download Table

TOP 10 INDUSTRIES                                                               
OF EQUITY HOLDINGS                                                              
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                                 % of Net Assets
                                                                                
Telephones                                                                  6.0%
--------------------------------------------------------------------------------
Automobiles                                                                 3.6%
--------------------------------------------------------------------------------
Conglomerate                                                                3.5%
--------------------------------------------------------------------------------
Electronics (semi-conductors)                                               3.4%
--------------------------------------------------------------------------------
Retail- Specialty                                                           3.3%
--------------------------------------------------------------------------------
Computer Software & Service                                                 3.0%
--------------------------------------------------------------------------------
Drugs                                                                       2.9%
--------------------------------------------------------------------------------
Building Materials                                                          2.8%
--------------------------------------------------------------------------------
Electric Power                                                              2.8%
--------------------------------------------------------------------------------
Paper & Forest Products                                                     2.7%
--------------------------------------------------------------------------------

Foreign investing is subject to certain risks which are discussed in the USAA   
Life Variable Annuity prospectus.                                               

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-31

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PORTFOLIO OF INVESTMENTS IN SECURITIES                June 30, 1995  (Unaudited)
--------------------------------------------------------------------------------

FOREIGN SECURITIES (56.9%)  

FOREIGN COMMON STOCKS (55.9%) 

                                                                · Download Table

                                                                  Market   
   Number                                                          Value   
of Shares  Security                                                (000)   
---------  --------                                               ------   
                                                                           
           ARGENTINA (0.8%)                                                
   12,400  Compania Interamericana de Automobiles S.A.*             $ 60   
    6,000  YPF Sociedad Anonima S.A. ADS "D"                         113   
                                                                  ------   
                                                                     173   
                                                                  ------   
           AUSTRALIA (0.9%)                                                
   90,000  CSL Ltd.                                                  192   
    5,100  Rothmans Holdings Ltd.                                     17   
                                                                  ------   
                                                                     209   
                                                                  ------   
           AUSTRIA (0.7%)                                                  
    1,200  VA Technologie AG                                         150   
                                                                  ------   
           BRAZIL (0.8%)                                                   
   15,100  Usinas Siderurgicas de Minas Gerais S.A.-USIMINAS ADS     170(a)
                                                                  ------   
           CANADA (1.0%)                                                   
    7,000  Alliance Forest Products, Inc.*                           128   
    3,200  Canadian Occidental Petroleum Ltd.                         99   
                                                                  ------   
                                                                     227   
                                                                  ------   
           CHILE (1.1%)                                                    
      100  Compania de Telefonos de Chile S.A.                         8   
    7,900  Madeco S.A. ADS                                           227   
                                                                  ------   
                                                                     235   
                                                                  ------   
           DENMARK (1.8%)                                                  
    2,200  Novo Nordisk A/S "B"                                      235   
    5,800  Tele Danmark A/S ADS                                      162   
                                                                  ------   
                                                                     397   
                                                                  ------   
           FINLAND (1.1%)                                                  
    4,000  Nokia Corp. ADS                                           239   
                                                                  ------   
           FRANCE (3.9%)                                                   
    6,000  Coflexip ADS                                              152   
    5,000  Elf Aquitaine ADS                                         186   
    3,300  Eramet Group*                                             236   
    1,500  Essilor International                                     273   
                                                                  ------   
                                                                     847   
                                                                  ------   
           GERMANY (3.2%)                                                  
   15,000  Tarkett AG                                                389   
      800  Veba AG                                                   315   
                                                                  ------   
                                                                     704   
                                                                  ------   
           HONG KONG (2.8%)                                                
   84,400  Hong Kong Telecommunications Ltd.                         167   
   50,000  Hutchison Whampoa Ltd.                                    242   
  120,000  Varitronix International Ltd.                             210   
                                                                  ------   
                                                                     619   
                                                                  ------   
           INDIA (1.0%)                                                    
   11,000  Larsen & Toubro Ltd. GDR*                                 215   
                                                                  ------   

-----------------------------                                                   
B-32  SEMIANNUAL REPORT  1995                                                   

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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                                · Download Table

                                                                    Market
   Number                                                            Value
of Shares  Security                                                  (000)
---------  --------                                                 ------
                                                                          
           INDONESIA (0.9%)                                               
  110,000  PT Astra International, Inc.                             $  195
                                                                    ------
           ITALY (1.2%)                                                   
  116,800  STET                                                        259
                                                                    ------
           JAPAN (9.3%)                                                   
   10,000  77 Bank Ltd.                                                112
    9,000  Canon, Inc.                                                 147
   13,000  Higo Bank                                                   127
    4,000  Hoya Corp.                                                  118
    3,000  Ito-Yokado Co., Ltd.                                        158
    3,000  Kissei Pharmaceutical Co., Ltd.                              95
    7,000  Laox Co., Ltd.                                              136
    2,000  Mabuchi Motor Co.                                           138
   26,000  Minebea Co., Ltd.                                           167
   19,000  Mitsubishi Heavy Industries, Ltd.                           129
    6,000  Nomura Securities Co., Ltd.                                 105
    5,000  Sanwa Bank Ltd.                                              94
    3,000  Shimamura Co., Ltd.                                         106
    4,000  Tostem Corp.                                                123
    7,000  Toyo Communication                                          157
    4,000  Toyo Seikan Kaisha, Ltd.                                    117
                                                                    ------
                                                                     2,029
                                                                    ------
           MALAYSIA (1.6%)                                                
   35,000  Aokam Perdana BHD                                            87
   25,000  Malaysian Assurance Alliance BHD                             90
   19,000  Tanjong plc                                                  65
   40,000  Technology Resources Industries BHD*                        115
                                                                    ------
                                                                       357
                                                                    ------
           MEXICO (2.0%)                                                  
    6,000  Bufete Industrial, S.A. de C.V. ADS                          97
    7,500  Desc, Soceidad de Fomento Industrial, S.A. de C.V. ADS*      97
    8,000  Grupo Simec, S.A. de C.V. ADS*                               79
    8,000  Grupo Televisa, S.A. de C.V. ADS                            163
                                                                    ------
                                                                       436
                                                                    ------
           NETHERLANDS (3.9%)                                             
    2,000  EVC International N.V.*                                      93
    1,250  Heineken N.V.                                               189
    4,400  Royal PTT Nederland N.V.                                    158
    3,000  Vendex International N.V.*                                   80
    2,700  Verenigd Bezit VNU                                          323
                                                                    ------
                                                                       843
                                                                    ------
           PHILIPPINES (1.3%)                                             
  500,000  Filinvest Land, Inc.*                                       145
  212,500  Petron Corp. GDS                                            139
                                                                    ------
                                                                       284
                                                                    ------
           PORTUGAL (0.8%)                                                
    8,500  Portucel Industrial, S. A.                                   61
      928  Portugal Telecom*                                            18
    5,300  Portugal Telecom, S.A. ADS*                                 100
                                                                    ------
                                                                       179
                                                                    ------

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-33

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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
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                                                                · Download Table

                                                           Market
   Number                                                   Value
of Shares  Security                                         (000)
---------  --------                                        ------
                                                                 
           SINGAPORE (1.6%)                                      
   16,000  City Developments Ltd.                          $   98
   27,000  DBS Land Ltd.                                       85
   19,500  Keppel Corp. Ltd.                                  159
                                                           ------
                                                              342
                                                           ------
           SOUTH AFRICA (1.1%)                                   
    8,400  Murray and Roberts Holdings Ltd.                    49
   14,800  Nedcor Ltd. GDR *                                  179
    3,700  Nedcor Ltd. Warrants *                               6
                                                           ------
                                                              234
                                                           ------
           SPAIN (1.1%)                                          
    6,200  Telefonica de Espana, S.A. ADR                     240
                                                           ------
           SWEDEN (2.7%)                                         
   13,000  Arjo AB                                            114
    5,300  Autoliv AB                                         284
   10,000  Volvo AB                                           190
                                                           ------
                                                              588
                                                           ------
           SWITZERLAND (0.9%)                                    
      200  Ciba Geigy AG                                      147
       65  Sulzer AG P.C.                                      44
                                                           ------
                                                              191
                                                           ------
           THAILAND (1.9%)                                       
   25,600  Finance One Public Co.                             189
   30,000  Krung Thai Bank Ltd.                               122
   15,000  TPI Polene Public Co., Ltd.                        101
                                                           ------
                                                              412
                                                           ------
           UNITED KINGDOM (6.1%)                                 
    6,000  British Sky Broadcasting plc ADR *                 157
   45,000  Cadbury Schweppes plc                              328
   50,500  Northern Ireland Electricity plc                   291
   20,000  Refuge Group plc                                   108
   81,500  Tomkins plc                                        291
   80,000  WPP Group plc                                      155
                                                           ------
                                                            1,330
                                                           ------
           OTHER HOLDINGS (0.4%)                                 
  153,000  Central European Growth Fund plc                    94
   30,000  Central European Growth Fund plc Warrants *          3
                                                           ------
                                                               97
                                                           ------

           Total foreign common stocks (cost: $11,796)     12,201
                                                           ------

                          FOREIGN PREFERRED STOCKS (1.0%)        

           AUSTRALIA (1.0%)                                      
  100,000  Village Roadshow Ltd. (cost: $203)                 217
                                                           ------
           Total foreign securities (cost: $11,999)        12,418
                                                           ------

-----------------------------                                                   
B-34  SEMIANNUAL REPORT  1995                                                   

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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
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DOMESTIC STOCKS (35.3%) 

                                                                · Download Table

                                                         Market
  Number                                                  Value
of Shares  Security                                       (000)
---------  --------                                      ------
                                                               
           AEROSPACE/DEFENSE (2.6%)                            
    1,500  B.F. Goodrich Co.                             $   80
    4,000  Boeing Co.                                       251
    5,000  Rockwell International Corp.                     229
                                                         ------
                                                            560
                                                         ------
           ALUMINUM (0.6%)                                     
    2,400  Aluminum Co. of America                          120
                                                         ------
           AUTOMOBILES (1.6%)                                  
    3,500  Chrysler Corp.                                   168
    6,000  Ford Motor Co.                                   178
                                                         ------
                                                            346
                                                         ------
           BANK HOLDING COMPANIES - MONEY CENTER (1.1%)        
    1,900  Bankers Trust New York Corp.                     118
    2,200  Citicorp                                         127
                                                         ------
                                                            245
                                                         ------
           BIOTECHNOLOGY (0.7%)                                
    2,000  Amgen, Inc. *                                    161
                                                         ------
           BROKERAGE FIRMS (0.4%)                              
    2,000  Dean Witter, Discover & Co.                       94
                                                         ------
           CHEMICALS (0.9%)                                    
    2,700  Dow Chemical Co.                                 194
                                                         ------
           CHEMICALS - SPECIALTY (0.5%)                        
    4,000  Morton International, Inc.                       117
                                                         ------
           COMPUTER SOFTWARE & SERVICE (3.0%)                  
    1,800  First Financial Management Corp.                 154
    3,000  Microsoft Corp. *                                271
    5,500  Novell, Inc. *                                   110
    3,250  Oracle Systems Corp. *                           125
                                                         ------
                                                            660
                                                         ------
           CONTAINERS - METALS & GLASS (0.6%)                  
    4,000  Ball Corp.                                       140
                                                         ------
           DRUGS (0.5%)                                        
    2,100  Merck & Co., Inc.                                103
                                                         ------
           ELECTRONICS - SEMI-CONDUCTORS (2.4%)                
    3,000  Intel Corp.                                      190
    3,000  Motorola, Inc.                                   201
    5,000  National Semiconductor Corp. *                   139
                                                         ------
                                                            530
                                                         ------
           ENTERTAINMENT (1.0%)                                
    5,500  Time Warner, Inc.                                226
                                                         ------
           FOODS (0.6%)                                        
    4,300  Dean Foods Co.                                   120
                                                         ------
           HEALTHCARE - DIVERSIFIED (1.0%)                     
    3,200  Bristol-Myers Squibb Co.                         218
                                                         ------
           HEALTHCARE - HMO (0.8%)                             
    4,000  United HealthCare Corp.                          166
                                                         ------

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-35

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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
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                                                                · Download Table
                                                         Market
   Number                                                 Value
of Shares  Security                                       (000)
---------  --------                                      ------
                                                               
           HEALTHCARE - MISCELLANEOUS (0.7%)                   
    2,500  Cerner Corp. *                                  $153
                                                         ------
           HOUSEHOLD PRODUCTS (0.5%)                           
    1,500  Procter & Gamble Co.                             108
                                                         ------
           INSURANCE - PROPERTY/CASUALTY (1.0%)                
    2,000  American International Group, Inc.               228
                                                         ------
           MACHINERY - DIVERSIFIED (1.7%)                      
    6,000  BW/IP, Inc.                                      111
    2,900  Deere & Co.                                      248
                                                         ------
                                                            359
                                                         ------
           MEDICAL PRODUCTS & SUPPLIES (1.3%)                  
    4,100  C.R. Bard, Inc.                                  123
    3,000  St. Jude Medical, Inc.                           150
                                                         ------
                                                            273
                                                         ------
           OFFICE EQUIPMENT & SUPPLIES (0.7%)                  
    1,300  Xerox Corp.                                      153
                                                         ------
           OIL - DOMESTIC (0.4%)                               
    3,000  Unocal Corp.                                      83
                                                         ------
           OIL - EXPLORATION & PRODUCTION (0.5%)               
    4,100  Apache Corp.                                     112
                                                         ------
           OIL & GAS DRILLING (0.7%)                           
    5,500  Sonat Offshore Drilling, Inc.                    158
                                                         ------
           OIL WELL EQUIPMENT & SERVICE (0.6%)                 
    3,400  Halliburton Co.                                  122
                                                         ------
           PAPER & FOREST PRODUCTS (1.4%)                      
    8,600  Fort Howard Corp. *                              121
    4,000  Weyerhaeuser Co.                                 189
                                                         ------
                                                            310
                                                         ------
           POLLUTION CONTROL (0.6%)                            
    4,800  WMX Technologies, Inc.                           136
                                                         ------
           REAL ESTATE INVESTMENT TRUSTS (0.7%)                
    5,000  Developers Diversified Realty Corp.              144
                                                         ------
           RESTAURANTS (0.4%)                                  
    5,000  Brinker International, Inc. *                     86
                                                         ------
           RETAIL STORES - GENERAL MERCHANDISING (1.1%)        
    7,500  Dollar General Corp.                             237
                                                         ------
           RETAIL STORES - SPECIALTY (1.5%)                    
    7,600  Borders, Inc. *                                  109
    4,000  OfficeMax, Inc. *                                111
    7,000  Phillips-Van Heusen Corp.                        109
                                                         ------
                                                            329
                                                         ------
           TELEPHONES (1.1%)                                   
    5,600  COMSAT Corp.                                     110
    4,000  Sprint Corp.                                     135
                                                         ------
                                                            245
                                                         ------

-----------------------------                                                   
B-36  SEMIANNUAL REPORT  1995                                                   

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PORTFOLIO OF INVESTMENTS IN SECURITIES (Continued)     June 30, 1995 (Unaudited)
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                                                                · Download Table
                                                                              Market
  Number                                                                       Value
of Shares          Security                                                    (000)
---------          --------                                                   ------
                                                                                    
                   TOBACCO (1.6%)                                                   
    3,000          Philip Morris Companies, Inc.                              $  223
    4,200          RJR Nabisco Holdings Corp.                                    117
                                                                              ------
                                                                                 340
                                                                              ------
                   TRANSPORTATION - MISCELLANEOUS (0.5%)                            
    5,000          American President Companies, Ltd.                            119
                                                                              ------
                   Total domestic stocks (cost: $6,635)                        7,695
                                                                              ------

    U.S. GOVERNMENT & AGENCY ISSUES (7.7%)                                          

Principal                                                                           
  Amount                                                  Coupon                    
  (000)                                                    Rate   Maturity          
---------                                                 ------  --------          
                                                                                    
                   U.S. GOVERNMENT AGENCY ISSUES (7.7%)                             
$   1,690          FNMA Discount Notes (Cost $1,688)       5.90%   7/07/95     1,688

                   Total investments (cost: $20,322)                        $ 21,801
                                                                            ========

*Non-income producing.                                                          

See accompanying "Notes to Portfolio of Investments in Securities" on page B-43.

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-37

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USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND  
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AN OVERVIEW                               June 30, 1995 (Unaudited) 
--------------------------------------------------------------------------------

OBJECTIVE                                                                       

Seeks long-term capital growth, consistent with preservation of capital and     
balanced by current income.                                                     

INVESTMENT PROGRAM:                                                             

Approximately 60% of the Fund's assets are invested in equity securities        
selected for total return potential and approximately 40% are invested in debt  
securities of varying maturities. On June 30, 1995, the portfolio mix was 59.4% 
common stocks and 40.6% fixed-income securities.                                

                                                                · Download Table

                                                                  June 30, 1995 
                                                                                
NET ASSETS:                                                       $22.9 million 

NET ASSET VALUE                                                                 
(NAV) PER SHARE:                                                         $11.30 

TOTAL RETURN:                                                                   

Since Inception                                                                 
January 5, 1995                                                           13.00%

GENERAL DISCUSSION                                                              

by Portfolio Managers Harry Miller (Common Stock) and Paul Lundmark (Debt       
Securities)                                                                     

THE MARKET                                                                      

COMMON STOCK. We are pleased at how well common stocks have performed. The rise 
has been broad -- not centering on just one or two industry sectors. Corporate  
earnings have steadily increased; however, few companies have increased the     
payout of their dividends. Instead, they are reinvesting dividends and          
restructuring in order to lower costs. We expect these trends to continue.      

DEBT SECURITIES. From the inception of the Fund to June 30, 1995, interest rates
on debt securities from six months to 30 years to maturity have fallen          
dramatically. The increases in overnight rates instituted by the Federal Reserve
in 1994 caused the economy to slow significantly. In response, in early July    
1995, the Federal Reserve eased overnight rates by a quarter of a percent. We   
believe that with the slowing economy, inflation will be contained and          
therefore, debt securities could provide excellent returns.                     

PORTFOLIO STRATEGIES                                                            

COMMON STOCK. The equity portfolio segment is diversified in high-quality common
stocks which we consider to be undervalued with regard to assets and earnings.  
These "basic value" stocks have one or more of the following characteristics    
when purchased: P/E ratio lower than the S&P 500 P/E ratio, dividend yield      
higher than the S&P 500 yield, share price below book value, or assets with     
perceived market value higher than book value.                                  

Since the equity component of the Fund consists primarily of "value-oriented"   
stocks, this is not considered an aggressive fund.                              

                                                                · Download Table

--------------------------------------------------------------------------------
BASIC VALUE STOCKS                                                              
TOP 10 HOLDINGS                                                                 

as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                           % of Total Net Assets
                                                                                
Boeing Co.                                                                  2.7%

Ford Motor Co.                                                              2.5%

Monsanto Co.                                                                2.4%

Sears, Roebuck & Co.                                                        2.1%

James River Corp.                                                           2.1%

Occidental Petroleum Corp.                                                  2.0%

Rockwell International Corp.                                                2.0%

Philip Morris Companies, Inc.                                               2.0%

Aetna Life & Casualty Co.                                                   1.9%

Atlantic Richfield Co.                                                      1.9%
--------------------------------------------------------------------------------

                                                                · Download Table

--------------------------------------------------------------------------------
TOP 5 BONDS                                                                     
as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                     Coupon           % of Total
                                                      Rate            Net Assets
                                                                                
U.S. Treasury                                                                   

Bonds                                                 6.25%              8.7%   

Westinghouse                                                                    
Electric Notes                                       8.875%              4.7%   

Nationwide                                                                      
Healthcare                                                                      
Properties                                            8.61%              4.6%   

Time Warner                                                                     
Inc., Notes                                           7.95%              4.5%   
K-Mart Corp.                                         8.125%              4.5%   
--------------------------------------------------------------------------------

-----------------------------                                                   
B-38  SEMIANNUAL REPORT  1995                                                   

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AN OVERVIEW (Continued)               June 30, 1995  (Unaudited)  
--------------------------------------------------------------------------------

Compared to like sectors in the S&P 500, the Fund was overweighted in Drugs,    
Healthcare, and Aerospace/Defense. More importantly, each of these sectors      
outperformed the market. Outstanding individual stocks included: Aetna, American
Home Products, Deere, Upjohn, Philip Morris, Sears, Bristol-Myers Squibb,       
Boeing, EG & G, Monsanto, Rockwell and Xerox. One disappointment was Morrison   
Knudsen which has been sold.                                                    

DEBT SECURITIES. The Fund has continued to lengthen the maturity of the debt    
segment. As of June 30, 1995, the weighted average maturity for this segment    
stood at 12.2 years. This has been done in order to take advantage of falling   
interest rates. At first, the Fund was heavily weighted in cash instruments but 
has subsequently reduced this cash position and funnelled the proceeds into     
intermediate and long-term, fixed-rate securities.                              

OUTLOOK                                                                         

COMMON STOCK. On the equities side, the market has produced satisfactory results
so far this year. Much of this can be attributed to lower interest rates and    
higher corporate earnings under a scenario of low inflation. We do not see these
factors changing much in the near future.                                       

DEBT SECURITIES. It is important to note that it is impossible to predict the   
course interest rates will take. However, the general feeling is that the       
Federal Reserve Board has slowed the economy sufficiently to contain inflation. 
With a continued slowdown in the economy, the result should be a further        
decrease in interest rates. The Fund's debt segment is positioned to provide    
high current income and potential high returns in this environment.             

                                                                · Download Table

--------------------------------------------------------------------------------
TOP 10 PORTFOLIO INDUSTRIES                                                     

as of June 30, 1995                                                             
--------------------------------------------------------------------------------
                                                        % of Total Net Assets   
                                                                                
Real Estate Investment Trusts                                            8.9%   

U.S. Government                                                          8.7%   

Retail Stores -                                                                 
General Merchandising                                                    7.9%   

Aerospace/Defense                                                        6.6%   

Oil - Domestic                                                           5.4%   

Tobacco                                                                  4.9%   

Oil - International                                                      4.8%   

Electrical Equipment                                                     4.7%   

Entertainment                                                            4.5%   

Banks                                                                    4.4%   

Chemicals                                                                4.2%   
--------------------------------------------------------------------------------

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-39

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PORTFOLIO OF INVESTMENTS IN SECURITIES                June 30, 1995  (Unaudited)
--------------------------------------------------------------------------------

                                                                · Download Table

                            BASIC VALUE STOCKS (59.4%)            
                                                            Market
 Number                                                     Value 
of Shares  Security                                         (000) 
---------  --------                                         ------
                                                                  
           AEROSPACE/DEFENSE (6.6%)                               
   10,000  Boeing Co.                                       $  626
   25,000  EG & G, Inc.                                        419
   10,000  Rockwell International Corp.                        457
                                                            ------
                                                             1,502
                                                            ------
           AUTO PARTS (1.4%)                                      
   14,000  Arvin Industries, Inc.                              313
                                                            ------
           AUTOMOBILES (2.5%)                                     
   19,000  Ford Motor Co.                                      565
                                                            ------
           BANK HOLDING COMPANIES - MONEY CENTER (1.4%)           
    5,000  Bankers Trust New York Corp.                        310
                                                            ------
           CHEMICALS (4.2%)                                       
    6,000  Dow Chemical Co.                                    431
    6,000  Monsanto Co.                                        541
                                                            ------
                                                               972
                                                            ------
           DISTRIBUTION & PIPELINES (1.6%)                        
   14,000  NICOR, Inc.                                         376
                                                            ------
           DRUGS (1.6%)                                           
   10,000  Upjohn Co.                                          379
                                                            ------
           ELECTRIC POWER (3.2%)                                  
    9,000  Houston Industries, Inc.                            379
   10,000  Texas Utilities Co.                                 344
                                                            ------
                                                               723
                                                            ------
           HEALTHCARE - DIVERSIFIED (3.5%)                        
    5,000  American Home Products Corp.                        387
    6,000  Bristol-Myers Squibb Co.                            409
                                                            ------
                                                               796
                                                            ------
           INSURANCE - MULTI/LINE COMPANIES (1.9%)                
    7,000  Aetna Life & Casualty Co.                           440
                                                            ------
           INSURANCE - PROPERTY/CASUALTY (1.5%)                   
    8,000  Hartford Steam Boiler Inspection & Insurance Co.    355
                                                            ------
           MACHINERY - DIVERSIFIED (1.7%)                         
    4,600  Deere & Co.                                         394
                                                            ------
           MANUFACTURING - DIVERSIFIED INDUSTRIES (1.5%)          
    6,000  Minnesota Mining & Manufacturing Co.                343
                                                            ------
           OFFICE EQUIPMENT & SUPPLIES (1.5%)                     
    3,000  Xerox Corp.                                         352
                                                            ------
           OIL - DOMESTIC (5.4%)                                  
    7,000  Amerada Hess Corp.                                  342
    4,000  Atlantic Richfield Co.                              439
   20,000  Occidental Petroleum Corp.                          458
                                                            ------
                                                             1,239
                                                            ------

-----------------------------                                                   
B-40  SEMIANNUAL REPORT  1995                                                   

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PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                                · Download Table

                                                         Market
 Number                                                  Value 
of Shares  Security                                      (000) 
---------  --------                                      ------
                                                               
           OIL - INTERNATIONAL (4.8%)                          
    7,000  Chevron Corp.                                 $  326
    4,000  Mobil Corp.                                      384
    6,000  Texaco, Inc.                                     394
                                                         ------
                                                          1,104
                                                         ------
           PAPER & FOREST PRODUCTS (2.0%)                      
   17,000  James River Corp.                                470
                                                         ------
           RETAIL STORES - GENERAL MERCHANDISING (3.4%)        
   20,000  Kmart Corp.                                      292
    8,000  Sears, Roebuck & Co.                             479
                                                         ------
                                                            771
                                                         ------
           TELEPHONES (3.2%)                                   
   10,000  GTE Corp.                                        341
   10,000  NYNEX Corp.                                      403
                                                         ------
                                                            744
                                                         ------
           TOBACCO (4.9%)                                      
    9,000  American Brands, Inc.                            358
    6,000  Philip Morris Companies, Inc.                    446
   15,000  Universal Corp.                                  315
                                                         ------
                                                          1,119
                                                         ------
           TRANSPORTATION - MISCELLANEOUS (1.6%)               
   15,000  American President Companies, Ltd.               356
                                                         ------
           Total basic value stocks (cost: $11,926)      13,623
                                                         ------
                                                        · Enlarge/Download Table

                         CORPORATE AND MUNICIPAL OBLIGATIONS (31.1%)                           

Principal                                                                                Market
 Amount                                                              Coupon              Value 
  (000)    Security                                                   Rate   Maturity    (000) 
---------  --------                                                  ------  --------    ------
                                                                                               
           BANKS (4.4%)                                                                        
 $  1,000  Manufacturers + Traders Trust Company, Subordinated Notes  7.00%   7/01/05  $  1,000
                                                                                       --------
           ELECTRICAL EQUIPMENT (4.7%)                                                         
    1,000  Westinghouse Electric Corp., Global Notes                  8.88    6/01/01     1,074
                                                                                       --------
           ENTERTAINMENT (4.5%)                                                                
    1,000  Time Warner, Inc., Notes                                   7.95    2/01/00     1,030
                                                                                       --------
           HEALTHCARE - MISCELLANEOUS (4.1%)                                                   
    1,000  Caremark International, Inc., Notes                        6.88    8/15/03       949
                                                                                       --------
           REAL ESTATE INVESTMENT TRUSTS (8.9%)                                                
    1,000  Merry Land + Investment Co., Notes                         7.25    6/15/05       988
    1,000  Nationwide Health Properties, Inc., MTN                    8.61    3/01/02     1,063
                                                                                       --------
                                                                                          2,051
                                                                                       --------
           RETAIL STORES - GENERAL MERCHANDISING (4.5%)                                        
    1,000  K Mart Corporation, Notes                                  8.13   12/01/06     1,029
                                                                                       --------
           Total corporate and municipal obligations (cost: $6,957)                       7,133
                                                                                       --------

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-41

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USAA LIFE VARIABLE ANNUITY DIVERSIFIED ASSETS FUND  
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PORTFOLIO OF INVESTMENTS IN SECURITIES (continued)     June 30, 1995 (Unaudited)
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                         U.S. Government & Agency Issues (8.7%)                            

Principal                                                                           Market 
  Amount                                                         Coupon             Value  
  (000)    Security                                               Rate   Maturity   (000)  
---------  --------                                              ------  --------   ------ 
                                                                                           
           U.S. GOVERNMENT (8.7%)                                                          
    2,110  U.S. Treasury Bonds (cost: $1,875)                     6.25%   8/15/23     1,996
                                                                                   --------

                                SHORT-TERM (0.8%)                                          

           COMMERCIAL PAPER (0.8%)                                                         
      180  Columbus Southern Power Co. (cost: $180)                6.15   7/06/95       180
                                                                                   --------
           Total investments (cost: $20,938)                                       $ 22,932
                                                                                   ========

See accompanying "Notes to Portfolio of Investments in Securities" on page B-43.

-----------------------------                                                   
B-42  SEMIANNUAL REPORT  1995                                                   

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NOTES TO PORTFOLIOS OF INVESTMENTS IN SECURITIES  
--------------------------------------------------------------------------------
                                                      June 30, 1995  (Unaudited)
--------------------------------------------------------------------------------

GENERAL NOTES                                                                   

Market values of securities are determined by procedures and practices discussed
in note 1 to the Trust's financial statements.                                  

The cost of securities for federal income tax purposes is approximately the same
as that reported in the financial statements.                                   

The percentages shown represent the percentage of the investments to net assets.

PORTFOLIO DESCRIPTION ABBREVIATIONS                                             

CP  Commercial Paper                                          

CRE  Credit Enhanced                                            

DEB  Debentures                                                 

FNMA  Federal National                                            
Mortgage Association                                  

IDA  Industrial Development                                     
Authority/Agency                                      

MTN  Medium-Term Note                                           

RB  Revenue Bond                                              

SPECIFIC NOTES                                                                  

(a) Securities which are exempt from registration by Rule 144A under the        
Securities Act of 1933 and when purchased were determined to be liquid. Any     
resale of these securities will occur in an exempt transaction in the United    
States to a qualified institutional buyer.                                      

CATEGORIES                                                                      
& DEFINITIONS                                                                   

The securities in USAA Life VA Money Market Fund are divided into three         
categories - variable rate demand notes, put bonds, and fixed rate instruments. 
We hope this presentation enhances your understanding of the securities held in 
the fund.                                                                       

VARIABLE RATE DEMAND NOTES (VRDN) - provide the right, on any business day, to  
demand, or put, the security for redemption at face value on either that day or 
in seven days. The interest rate is adjusted at the stipulated daily, weekly, or
monthly interval to a rate that reflects current market conditions. In money    
market funds, the VRDN's effective maturity is the longer of the next put date  
or the interest reset date rather than the final maturity. Most VRDNs possess a 
credit enhancement.                                                             

PUT BONDS - provide the right to tender, or put, the bond for redemption at face
value at specific tender dates prior to final maturity. The put feature shortens
the effective maturity to the next tender date. Between tender dates, the price 
of a put bond generally varies inversely to the movement of interest rates.     

FIXED RATE INSTRUMENTS - consist of municipal bonds, notes, and commercial      
paper. The coupon rate is constant to maturity. Prior to maturity, the price of 
a fixed rate instrument generally varies inversely to the movement of interest  
rates. At maturity, the security pays face value.                               

CREDIT ENHANCEMENT - adds the financial strength of the provider to support the 
underlying obligor's debt service obligations and/or the put option. The        
enhancement may be provided by either a high-quality bank, insurance company or 
other corporation, or a collateral trust. Typically, the rating agencies        
evaluate the security based upon the credit standing of the credit enhancement. 

                                                   -----------------------------
                                                   1995  SEMIANNUAL REPORT  B-43

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--------------------------------------------------------------------------------
STATEMENTS OF OPERATIONS  
--------------------------------------------------------------------------------
(In Thousands)                Period Ending June 30, 1995*  (Unaudited) 
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                                      USAA Life                     USAA Life        USAA Life       USAA Life   
                                                      VA Money       USAA Life      VA Growth        VA World     VA Diversified 
                                                       Market        VA Income      and Income        Growth          Assets     
                                                        Fund           Fund            Fund            Fund            Fund      
                                                  --------------  --------------  --------------  --------------  -------------- 
                                                                                                                                 
NET INVESTMENT INCOME:                                                                                                           
   Income (net of foreign taxes withheld of $0,                                                                                  
         $0, $0, $19, and $0, respectively):                                                                                     
      Dividends                                   $            -  $          107  $          295  $          186  $          246 
      Interest                                                97             691              60              82             322 
                                                  --------------  --------------  --------------  --------------  -------------- 
         Total income                                         97             798             355             268             568 
                                                  --------------  --------------  --------------  --------------  -------------- 
   Expenses:                                                                                                                     
      Management fees                                          3              21              20              19              21 
      Administrative fees                                     19              19              19              19              19 
      Custodian's fees                                        18              22              25              38              21 
      Trustees' fees                                           1               1               1               1               1 
      Audit fees                                               3               3               3               3               3 
      Legal fees                                               5               5               5               5               5 
      Miscellaneous                                            2               1               2               1               1 
                                                  --------------  --------------  --------------  --------------  -------------- 
         Total expenses before reimbursement                  51              72              75              86              71 

      Expenses reimbursed                                    (45)            (36)            (40)            (27)            (35)
                                                  --------------  --------------  --------------  --------------  -------------- 

         Total expenses after reimbursement                    6              36              35              59              36 
                                                  --------------  --------------  --------------  --------------  -------------- 

            Net investment income                             91             762             320             209             532 
                                                  --------------  --------------  --------------  --------------  -------------- 

NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS                                                                                  
AND FOREIGN CURRENCY:                                                                                                            
   Net realized gain on investments                            -               3              97             710              89 
   Change in net unrealized appreciation on:                                                                                     
      Investments                                              -           1,688           2,757           1,479           1,994 
      Translation of assets and liabilities in                                                                                   
        foreign currencies                                     -               -               -               1               - 
                                                  --------------  --------------  --------------  --------------  -------------- 

            Net realized and unrealized gain                   -           1,691           2,854           2,190           2,083 
                                                  --------------  --------------  --------------  --------------  -------------- 

Increase in net assets resulting from operations  $           91  $        2,453  $        3,174  $        2,399  $        2,615 
                                                  ==============  ==============  ==============  ==============  ============== 

*Funds commenced operations on January 5, 1995.                                 

See accompanying "Notes to Financial Statements" on page B-46.                  

---------------------------                                                     
B-44 SEMIANNUAL REPORT 1995                                                     

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--------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS 
--------------------------------------------------------------------------------
(In Thousands)       Period Ending June 30, 1995* (Unaudited) 
--------------------------------------------------------------------------------

                                                        · Enlarge/Download Table

                                                              USAA Life                USAA Life  USAA Life    USAA Life   
                                                               VA Money    USAA Life   VA Growth   VA World  VA Diversified
                                                                Market     VA Income  and Income    Growth        Assets   
                                                                 Fund        Fund       Fund        Fund          Fund     
                                                              ---------  -----------  ----------  ---------  --------------

                                                                                                                           
From operations:                                                                                                           
   Net investment income                                      $    91    $      762   $    320    $    209   $         532 
   Net realized gain on investments                                 -             3         97         710              89 
   Change in net unrealized appreciation on:                                                                               
      Investments                                                   -         1,688      2,757       1,479           1,994 
      Foreign currency translations                                 -             -          -           1               - 
                                                              ---------  -----------  ----------  ---------  --------------
      Increase in net assets resulting from operations             91         2,453      3,174       2,399           2,615 
                                                              ---------  -----------  ----------  ---------  --------------

Distributions to shareholders from:                                                                                        
   Net investment income                                          (91)            -          -           -               - 
                                                              ---------  -----------  ----------  ---------  --------------

From capital share transactions:                                                                                           
   Shares sold                                                  7,110        20,306     20,431      19,434          20,323 
   Shares issued for dividends reinvested                          91             -          -           -               - 
   Shares redeemed                                             (3,042)           (7)       (14)        (14)            (16)
                                                              ---------  -----------  ----------  ---------  --------------

      Increase in net assets from capital share transactions    4,159        20,299     20,417      19,420          20,307 

                                                              ---------  -----------  ----------  ---------  --------------

Net Increase in net assets                                      4,159        22,752     23,591      21,819          22,922 

Net assets:                                                                                                                
   Beginning of period                                              -             -          -           -               - 
                                                              ---------  -----------  ----------  ---------  --------------

   End of period                                              $ 4,159    $   22,752   $ 23,591    $ 21,819   $      22,922 
                                                              =========  ===========  ==========  =========  ==============

Undistributed net investment income included in net assets:                                                                
      Beginning of period                                     $     -    $        -   $      -    $      -   $           - 
                                                              =========  ===========  ==========  =========  ==============

      End of period                                           $     -    $      762   $    320    $    209   $         532 
                                                              =========  ===========  ==========  =========  ==============

Change in shares outstanding:                                                                                              
   Shares sold                                                  7,110         2,028      2,026       1,957           2,030 
   Shares issued for dividends reinvested                          91             -          -           -               - 
   Shares redeemed                                             (3,042)            -         (1)         (1)             (2)
                                                              ---------  -----------  ----------  ---------  --------------

      Increase in shares outstanding                            4,159         2,028      2,025       1,956           2,028 
                                                              =========  ===========  ==========  =========  ==============


*Funds commenced operations on January 5, 1995.                                 

See accompanying "Notes to Financial Statements" on page B-46.                  

                                                    ----------------------------
                                                     1995 SEMIANNUAL REPORT B-45

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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 
--------------------------------------------------------------------------------
(In Thousands)           June 30, 1995 (Unaudited)  
--------------------------------------------------------------------------------

1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                                   

USAA LIFE INVESTMENT TRUST (the Trust), registered under the Investment Company 
Act of 1940, is a diversified, open-end management investment company organized 
as a Delaware business trust consisting of five separate Funds. Shares of the   
Trust currently are offered only to the Separate Account of USAA Life Insurance 
Company (the Separate Account) to serve as the funding medium for certain       
variable annuity contracts offered by USAA Life Insurance Company (USAA Life).  

A. SECURITY VALUATION                                                           

The value of each security is determined (as of the close of trading on the New 
York Stock Exchange on each business day the Exchange is open) as set forth     
below:                                                                          

[1] Portfolio securities, except as otherwise noted, traded primarily on a      
domestic securities exchange are valued at the last sales price on that 
exchange. Portfolio securities traded primarily on foreign securities   
  exchanges are generally valued at the closing values of such securities on
   the exchange where primarily traded. If no sale is reported, the latest bid
price is generally used depending upon local custom or regulation.      

[2] Over-the-counter securities are priced at the last sales price or, if not   
available, at the average of the bid and asked prices.                  

[3] Securities purchased with maturities of 60 days or less and, pursuant to    
  Rule 2a-7 of the Securities and Exchange Commission, all securities in the
USAA Life VA Money Market Fund are stated at amortized cost which       
approximates market value.                                              

[4] Other debt and government securities are valued each business day by a      
   pricing service (the Service) approved by the Funds' Board of Trustees. The
  Service uses the mean between quoted bid and asked prices or the last sale
    price to price securities when, in the Service's judgement, these prices are
  readily available and are representative of the securities' market values.
For many securities, such prices are not readily available. The Service 
generally prices these securities based on methods which include        
consideration of yields or prices of securities of comparable quality,  
coupon, maturity and type, indications as to values from dealers in     
securities, and general market conditions.                              

[5] Securities which cannot be valued by the methods set forth above, and all   
other assets, are valued in good faith at fair value, using methods     
determined by the Manager under the general supervision of the Board of 
Trustees.                                                               

B. FEDERAL TAXES                                                                

The Funds' policy is to comply with the requirements of the Internal Revenue    
Code applicable to regulated investment companies and to distribute             
substantially all of their income to their shareholders. Therefore, no federal  
income or excise tax provision is required.                                     

C.  INVESTMENTS IN SECURITIES                                                   

As is common in the industry, security transactions are accounted for on the    
date the securities are purchased or sold (trade date). Gain or loss from sales 
of investment securities is computed on the identified cost basis. Dividend     
income, less foreign taxes, if any, are recorded on the ex-dividend date. If the
ex-dividend date has passed, certain dividends from foreign securities are      
recorded upon notification. Interest income is recorded on the accrual basis.   
Discounts and premiums on short-term securities are amortized over the life of  
the respective securities. Amortization of market discounts on long-term        
securities is recognized as interest income upon disposition of security to the 
extent there is a gain on disposition.                                          

D. FOREIGN CURRENCY TRANSLATIONS AND FOREIGN CURRENCY CONTRACTS                 

The assets of the USAA Life VA World Growth Fund may be invested in the         
securities of foreign issuers. Since the accounting records of the Fund are     
maintained in U.S. dollars, foreign currency amounts are translated into U.S.   
dollars on the following basis:                                                 

[1] Market value of securities, other assets, and liabilities at the mean       
   between the bid and asked translation rates of such currencies against U.S.
dollars.                                                                

[2] Purchases and sales of securities, income, and expenses at the rate of      
exchange obtained from an independent pricing service on the respective 
dates of such transactions.                                             

Net realized and unrealized foreign currency gains/losses occurring during the  
holding period of investments are a component of realized gain/loss on          
investments and unrealized appreciation/depreciation on investments,            
respectively.                                                                   

Net realized foreign currency gains/losses arise from sales of foreign currency,
currency gains/losses realized between the trade and settlement dates on        
security transactions, and the difference between amounts of dividends,         
interest, and foreign withholding taxes recorded on the Fund's books and the    
U.S. dollar equivalent of the amounts received. Net realized foreign currency   
gains/losses have been reclassified from accu-                                  

---------------------------                                                     
B-46 SEMIANNUAL REPORT 1995                                                     

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USAA LIFE INVESTMENT TRUST  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 
--------------------------------------------------------------------------------
In Thousands (continued)              June 30, 1995  (Unaudited)  
--------------------------------------------------------------------------------

mulated net realized gain/loss to accumulated undistributed net investment      
income on the statement of assets and liabilities as such amounts are treated as
ordinary income for tax purposes. Net unrealized foreign currency exchange      
gains/losses arise from changes in the value of assets and liabilities other    
than investments in securities resulting from changes in the exchange rate.     

2) DISTRIBUTIONS                                                                

Distributions of realized gains from security transactions not offset by capital
losses are made in the succeeding fiscal year to the Separate Account.          

USAA LIFE VA MONEY MARKET FUND:                                                 

Net investment income is accrued daily as dividends and distributed to the      
Separate Account monthly. All net investment income available for distribution  
had been distributed at June 30, 1995.                                          

USAA LIFE VA INCOME,                                                            

USAA LIFE VA GROWTH AND INCOME,                                                 

USAA LIFE VA WORLD GROWTH, AND                                                  

USAA LIFE VA DIVERSIFIED ASSETS FUND:                                           

Distributions of net investment income are made to the Separate Account annually
in the succeeding year.                                                         

3) INVESTMENT TRANSACTIONS                                                      

Purchases and sales/maturities of securities, excluding short-term securities,  
for the six-month period ended June 30, 1995, were as follows:                  

                                                                · Download Table

           USAA Life VA          USAA Life VA              
           Income Fund           Growth and Income Fund    
           ---------------       ------------------------- 
                                                           
Purchases  $    20,963           $    21,355               
Sales             $208           $     1,050               

           USAA Life VA          USAA Life VA              
           World Growth Fund     Diversified Assets Fund   
           --------------------  --------------------------
                                                           
Purchases  $    24,949           $    25,465               
Sales      $     7,026           $     4,795               

Purchases and sales/maturities of securities for the six-month period ended     
June 30, 1995, for the USAA Life VA Money Market Fund were $15,180 and $11,070, 
respectively.                                                                   

Gross unrealized appreciation and depreciation of investments as of June 30,    
1995, were as follows:                                                          

                                                                · Download Table

                 USAA Life VA          USAA Life VA              
                 Income Fund           Growth and Income Fund    
                 ---------------       ------------------------- 
                                                                 
UNREALIZED:                                                      
   Appreciation  $    1,704            $     2,940               
   Depreciation  $       16            $       183               

                 USAA Life VA          USAA Life VA              
                 World Growth Fund     Diversified Assets Fund   
                 --------------------  --------------------------
                                                                 
UNREALIZED:                                                      
   Appreciation  $    1,968            $     2,041               
   Depreciation  $      489            $        47               

4) FOREIGN CURRENCY CONTRACTS                                                   

A forward currency contract (currency contract) is a commitment to purchase or  
sell a foreign currency at a specified date, at a negotiated price. The USAA    
Life VA World Growth Fund currently enters into currency contracts only in      
connection with the purchase or sale of a security denominated in a foreign     
currency. These contracts allow the fund to "lock in" the U.S. dollar price of  
the security. Currency contracts are valued on a daily basis using foreign      
currency exchange rates obtained from an independent pricing service. Risks of  
entering into currency contracts include the potential inability of the         
counterparty to meet the terms of the contract and the fund foregoing the       
opportunity for potential profit.                                               

At June 30, 1995, the terms of open foreign currency contracts in the USAA Life 
VA World Growth Fund were as follows:                                           

                                                                · Download Table

                          U.S.Dollar                         U.S.Dollar
                            Value                              Value   
Exchange  Currency to be    as of         Currency to be       as of   
  Date      Delivered      6/30/95           Received          6/30/95 
  ----      ---------      -------           --------          ------- 
                                                                       
07-03-95  3  U.S. Dollar  $    3       8  Malaysian Ringgit   $    3   
07-07-95  7  U.S. Dollar       7      17  Malaysian Ringgit        7   
                          --------                            -------- 
                          $   10                              $   10   
                          ========                            ======== 

                                                     ---------------------------
                                                     1995 SEMIANNUAL REPORT B-47

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USAA LIFE INVESTMENT TRUST  
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 
--------------------------------------------------------------------------------
In Thousands (continued)          June 30, 1995 (Unaudited) 
--------------------------------------------------------------------------------

5) TRANSACTIONS WITH AFFILIATES                                                 

A.  MANAGEMENT FEES                                                             

The investment policy of the Funds and the management of the Funds' portfolios  
are carried out by USAA Investment Management Company (USAA IMCO). The Funds'   
management fees are computed at .20% on an annual basis of the monthly average  
net assets of each Fund of the Trust for each calendar month. USAA Life, out of 
its general account, has agreed to reimburse USAA IMCO for the expenses it      
incurs in rendering services to the Trust, but only to the extent these expenses
exceed the amount of the above advisory fees.                                   

B.  ADMINISTRATIVE FEES                                                         

As outlined in the Underwriting and Administrative Services Agreement by and    
between USAA Life, USAA Life Investment Trust and USAA IMCO, USAA Life provides 
certain management, administrative, legal, clerical, accounting and record-     
keeping services necessary or appropriate to conduct the Trust's business and   
operations.                                                                     

C.  EXPENSES REIMBURSED                                                         

USAA Life, out of its general account, has agreed to pay directly or reimburse  
the Trust for Trust expenses to the extent that such expenses exceed .65% of the
monthly average net assets of the USAA Life VA World Growth Fund and .35% of the
monthly average net assets of each other Fund.                                  

D.  UNDERWRITING AND DISTRIBUTION AGREEMENT                                     

The Trust has an agreement with USAA IMCO for exclusive underwriting and        
distribution of the Funds' shares on a continuing best efforts basis. This      
agreement provides that USAA IMCO will receive no fee or other remuneration for 
such services.                                                                  

E. BROKERAGE SERVICES                                                           

USAA Brokerage Services, a discount brokerage service of USAA IMCO, may execute 
portfolio transactions for the Funds. The amount of brokerage commissions paid  
to USAA Brokerage Services during the six-month period ended June 30, 1995, was 
$5, $4, $1, and $4 for the USAA Life VA Income, USAA Life VA Growth and Income, 
USAA Life VA World Growth, and USAA Life VA Diversified Assets Funds,           
respectively.                                                                   

F. SHARE OWNERSHIP                                                              

At June 30, 1995, USAA Life, for the Separate Account, owned 2,159 shares       
(51.9%) of the USAA Life VA Money Market Fund, 2,000 shares (98.6%) of the USAA 
Life VA Income Fund, 1,988 shares (98.2%) of the USAA Life VA Growth and Income 
Fund, 1,906 shares (97.4%) of the USAA Life VA World Growth Fund, and 2,000     
shares (98.6%) of the USAA Life VA Diversified Assets Fund.                     

-----------------------------                                                   
B-48  SEMIANNUAL REPORT  1995                                                   

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--------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS 
--------------------------------------------------------------------------------
       (continued)                            June 30, 1995* (Unaudited)
--------------------------------------------------------------------------------

6) FINANCIAL HIGHLIGHTS                                                         

Per share operating performance for a share outstanding throughout the period is
as follows:                                                                     

                                                        · Enlarge/Download Table

                                                     USAA Life                       USAA Life      USAA Life        USAA Life     
                                                     VA Money       USAA Life        VA Growth      VA World      VA Diversified   
                                                      Market        VA Income       and Income       Growth           Assets       
                                                       Fund           Fund             Fund           Fund             Fund        
                                                     ---------      ---------       ----------      ---------     --------------   
                                                                                                                                   
Net asset value at beginning of period               $  1.00        $  10.00        $  10.00        $  10.00        $  10.00       
Net investment income                                   0.03 (a)        0.38 (a)        0.18 (a)        0.12 (a)        0.26 (a)   
Net realized and unrealized gain                           -            0.84            1.47            1.03            1.04       
Distributions from net investment income               (0.03)              -               -               -               -       
                                                     -------        --------        --------        --------        --------       
Net asset value at end of period                     $  1.00        $  11.22        $  11.65        $  11.15        $  11.30       
                                                     =======        ========        ========        ========        ========       
Total return                                            2.82% (b)      12.20% (b)      16.50% (b)      11.50% (b)      13.00% (b)  
Net assets at end of period ($000)                   $ 4,159        $ 22,752        $ 23,591        $ 21,819        $ 22,922       
Ratio of expenses to average net assets                 0.35% (c,d)     0.35% (c,d)     0.35% (c,d)     0.65% (c,d)     0.35% (c,d)
Ratio of net investment income to average net assets    5.77% (c,d)     7.33% (c,d)     3.21% (c,d)     2.27% (c,d)     5.12% (c,d)
Portfolio turnover                                         -            1.12%           5.90%          46.03%           29.15%     

(a) Calculated using weighted average shares.                                   
(b) Total returns do not reflect expenses that apply at the separate account    
 level. These expenses would reduce the total return for the period shown.
(c) Annualized. The ratio is not necessarily indicative of 12 months of         
operations.                                                             
(d) The information contained in this table is based on actual expenses for     
   the period, after giving effect to reimbursements of expenses by USAA Life.
Absent such reimbursements, the Funds' ratios would have been:          

                                                        · Enlarge/Download Table

                                                      USAA Life                 USAA Life    USAA Life     USAA Life  
                                                       VA Money    USAA Life    VA Growth    VA World   VA Diversified
                                                        Market     VA Income   and Income     Growth        Assets    
                                                         Fund        Fund         Fund        Fund           Fund     
                                                     -----------  -----------  -----------  ----------  --------------
                                                                                                                      
Ratio of expenses to average net assets                3.20% (c)    0.70% (c)   0.75% (c)    0.94% (c)    0.69% (c)   
Ratio of net investment income to average net assets   2.92% (c)    6.98% (c)   2.81% (c)    1.98% (c)    4.78% (c)   

*Funds commenced operations on January 5, 1995.                                 

                                                   1995  SEMIANNUAL REPORT  B-49

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--------------------------------------------------------------------------------
USAA LIFE INSURANCE COMPANY 
--------------------------------------------------------------------------------

To discuss your investment strategy,  
the Variable Annuity's features or performance, 
call an Account Representative toll free  
Monday - Friday 7:15 a.m. to 8:00 p.m.  

1-800-531-2923
(456-9035 in San Antonio) 

----------------------------------- 

If you wish to discuss your particular contract,  
transfer money from one fund account to another or select a payout option,  
call a Service Representative, toll free, 
Monday - Friday 8 a.m. to 5 p.m.  

1-800-531-4265

----------------------------------- 

For variable annuity unit values, 
call our recorded QUOTELINE,  
24-hours a day, 7 days a week 

1-800-531-8233
(498-6860 in San Antonio) 

================================================================================

[LOGO OF USAA APPEARS HERE] 

USAA Life Insurance Company 
9800 Fredericksburg Road  
San Antonio, Texas 78288  

(C)Copyright, 1995, USAA. All rights reserved.

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Dates Referenced Herein and Documents Incorporated By Reference

		Referenced-On Page
This N-30D Filing	Date	First	Last	Other Filings

	1/5/95	16	49
	2/6/95	11	13
For The Period Ended	6/30/95	1	49	NSAR-A
	8/1/95	6	16
Filed On / Filed As Of	8/31/95

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Usaa Life Investment Trust, et al. · N-30D · For 6/30/95

Filed On 8/31/95 · SEC Files 811-08670, 811-08672 · Accession Number 899243-95-583

Annual or Semi-Annual Report Mailed to Shareholders · Rule 30d-1Filing Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated By Reference

Annual or Semi-Annual Report Mailed to Shareholders · Rule 30d-1
Filing Table of Contents