American Funds Insurance Series – ‘N-30D’ for 11/30/98

As of:  Tuesday, 2/9/99   ·   For:  11/30/98   ·   Accession #:  729528-99-4   ·   File #:  811-03857

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Annual or Semi-Annual Report Mailed to Shareholders   —   Rule 30d-1
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 1: N-30D       Class 1 Shares                                       116±   542K 

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AMERICAN VARIABLE INSURANCE SERIES                                              

1998 ANNUAL REPORT                                                              
FOR THE YEAR ENDED NOVEMBER 30                                                  

[photos:  packets of seeds]                                                     

CULTIVATING AN INVESTMENT GARDEN                                                

[photos:  part of a plant; packet of seeds; seeds]                              

FUND RESULTS AT A GLANCE                                                        

American Variable Insurance Series(r)                                           

American Variable Insurance Series is the underlying investment vehicle for the 
American Legacy II variable annuity and other insurance contracts.              

                                                                [Download Table]

                                                                            
                                   Total Returns                            

                                   periods ended November 30, 1998          

                                                      5-Year        10-Year 
                                                      Average       Average 

                                   1-Year             Annual        Annual  
                                                      Compound      Compound

                                   Total Return       Return        Return  

16     Global Growth Fund          +24.26%            +19.29%*      -       
       (since 4/30/97)                                                      

21     Global Small                -8.31*             -             -       
       Capitalization Fund                                                  
       (since 4/30/98)                                                      

26     Growth Fund                 +25.27             19.97         18.49   

31     International Fund          +16.94             +12.83         +10.85*
       (since 5/1/90)                                                       

37     Growth-Income Fund          +14.77             +18.60         +15.74 

43     Asset Allocation Fund       12.32              15.13         +12.38* 
       (since 8/1/89)                                                       

51     Bond Fund (since            5.12               +  6.94*      -       
       1/2/96)                                                              

58     High-Yield Bond Fund        +1.44              +7.95         +10.78  

65     U.S. Government/            +8.72              +5.98         +8.32   
       AAA-Rated                                                            
       Securities Fund                                                      

69     Cash Management             +5.17              +4.94         +5.32   
       Fund                                                                 

*Reflects results for the lifetime of the fund, which is                    

shorter than the complete period.                                           

                                   Total Returns                            

                                   periods ended December 31, 1998          

                                                      5-Year        10-Year 
                                                      Average       Average 

                                   1-Year             Annual        Annual  
                                                      Compound      Compound

                                   Total Return       Return        Return  

16     Global Growth Fund          0.2904             +22.36%*      -       
       (since 4/30/97)                                                      

21     Global Small                +2.61*             -             -       
       Capitalization Fund                                                  
       (since 4/30/98)                                                      

26     Growth Fund                 +35.55             +21.77        0.1916  

31     International Fund          +21.22             +12.28        +11.34* 
       (since 5/1/90)                                                       

37     Growth-Income Fund          +18.38             +19.15        +16.01  

43     Asset Allocation            +13.13             +15.32        +12.48* 
       Fund(since 8/1/89)                                                   

51     Bond Fund                   4.37               +6.77*        -       
       (since 1/2/96)                                                       

58     High-Yield Bond Fund        0.44               7.78          +10.71  

65     U.S. Government/            8.19               5.95          8.33    
       AAA-Rated                                                            
       Securities Fund                                                      

69     Cash Management             5.15               4.96          5.28    
       Fund                                                                 

*Reflects results for the lifetime of the fund, which is                    
shorter than the complete period.                                           


This table shows the investment results for the funds in American Variable      
Insurance Series. The variable annuities and life insurance contracts that use  
the series' funds contain certain fees and expenses not reflected here.         
Investment results through November 30, 1998, are through the close of our most 
recent fiscal year. Investment results as of December 31, 1998, are as of the   
end of the most recent calendar quarter.                                        

As of December 31, 1998, the Cash Management Fund's annualized seven-day yield  
was 5.51%. FIGURES SHOWN ARE PAST RESULTS. SHARE PRICES AND RETURNS WILL VARY,  
SO YOU MAY LOSE MONEY. INVESTING FOR SHORT PERIODS MAKES LOSSES MORE LIKELY.    
INVESTMENTS ARE NOT FDIC-INSURED, NOR ARE THEY DEPOSITS OF OR GUARANTEED BY A   
BANK OR ANY OTHER ENTITY. INVESTING OUTSIDE THE UNITED STATES IS SUBJECT TO     
ADDITIONAL RISKS, SUCH AS CURRENCY FLUCTUATIONS AND POLITICAL INSTABILITY,      
WHICH ARE DETAILED IN THE PROSPECTUS.                                           

ABOUT OUR COVER: With 10 investment options and a wide range of features and    
services, American Legacy helps contractholders sow the seeds of a strong       
financial future.                                                               

DEAR INVESTORS:                                                                 

This report covers the 1998 fiscal year - the 12 months ended November 30 - for 
American Variable Insurance Series, which serves as the underlying investment   
vehicle for the American Legacy variable annuities and other insurance          
products.                                                                       

Financial markets provided a study in contrasts during fiscal 1998. In our      
report to you six months ago, we remarked that, with investors mostly sanguine  
about the Asian crisis, stock prices in most major markets had soared to        
impressive heights. Almost immediately afterward, the tide turned dramatically. 
Investors grew skittish when it became increasingly apparent that Asia's        
difficulties had deeper roots than suspected and had begun to spread. As fresh  
currency turmoil beset first Russia and then Latin America, global stock        
markets plummeted. Standard & Poor's 500 Composite Index, an unmanaged proxy    
for the largest U.S. stocks, fell almost 20% from mid-July to the end of        
August, while international stocks and those of smaller companies retreated as  
well. Then, just as investors began to resign themselves to a gloomy winter,    
stock markets staged a turnaround, rising from the ashes of the summer downturn 
to regain most or all of their lost ground.                                     

Most major markets finished the fiscal year higher than where they began, but   
the fits and starts of the past year may have been a warning sign about what    
may lie ahead. Indeed, there are indications that the fallout of the global     
slowdown has begun to impact our record peacetime expansion. Although the U.S.  
economy continues to expand, it is doing so at a less vigorous pace than in     
recent years. Shrinking demand in Asia and the arrival of low-cost imports to   
the United States have begun to soften corporate earnings. While that is        
keeping inflation fears at bay and interest rates low, the net effect is a less 
buoyant U.S. economy. Meanwhile, it remains to be seen whether the historic     
impeachment proceedings in Washington will have repercussions on financial      
markets.                                                                        

One of the benefits of investing for the long term is that it allows us to make 
carefully reasoned judgments rather than react emotionally. As we evaluate      
events, we try to be mindful not only of their immediate consequences, but of   
the underlying patterns that may influence the fortunes of the companies and    
regions in which we invest on your behalf.                                      

[Begin Sidebar]                                                                 
GLOBAL GROWTH FUND                                                              
Where the Fund's Assets Are Invested                                            
(as of November 30, 1998)                                                       

                                                                [Download Table]

                                             
                                   Percent of

                                   Net Assets

THE AMERICAS                                 

United States                      33.5%     

Canada                             3.8       

Mexico                             3.0       

Argentina                          1.5       

Other Americas                     .4        

                                   42.2      

EUROPE                                       

United Kingdom                     11.1      

Germany                            4.8       

Sweden                             3.8       

France                             2.6       

Italy                              2.5       

Spain                              2.4       

Finland                            1.1       

Norway                             .6        

Denmark                            .5        

Greece                             .5        

Netherlands                        .5        

Portugal                           .5        

Other Europe                       .2        

                                   31.1      

ASIA/PACIFIC                                 

Japan                              7.4       

Australia                          3.5       

People's Republic of China         .5        

Other Asia                         .3        

                                   11.7      

OTHER COUNTRIES                    1.3       

Cash & Equivalents                 13.7      

Total                              100.0%    


[End Sidebar]                                                                   

Here are brief comments on each of the funds:                                   

THE GLOBAL GROWTH FUND posted a substantial 24.3% increase during its first     
full fiscal year. The fund, which can invest virtually anywhere in the world,   
was well-positioned to benefit in the United States and Europe, two regions     
where stock prices rose the most (see table on page 1). In the U.S., stock      
prices increased 25% for the 12 months, even accounting for the decline in late 
summer.* In Europe every market but Norway rose. Stock markets in the United    
Kingdom gained 19%, Germany 32%, France 41% and Finland a remarkable 77%.       
Elsewhere in the world, the news was less propitious. Stock prices declined in  
Japan (-4%), where efforts to stimulate an economic recovery have thus far been 
frustrated by a credit crunch in the banking system; other countries such as    
New Zealand (-25%), Mexico (-32%) and China (-39%) also fared poorly. With a    
relatively small exposure to the world's hardest hit markets, though, the       
fund's results were not hampered by the declines. At the close of the period,   
the fund held stocks of 111 companies based in 25 countries. Many are recent    
additions: The market downturn provided good buying opportunities for a number  
of companies we believe have excellent prospects but which had been somewhat    
overvalued in the stock market. Cash and equivalents account for about 14% of   
net assets, providing additional buying reserves and a cushion against          
declines.                                                                       

*Market returns are based on MSCI indexes, which track stock markets in         
individual countries, and are expressed in dollar terms with dividends          
reinvested.                                                                     

[Begin Sidebar]                                                                 
GLOBAL SMALL                                                                    
CAPITALIZATION FUND                                                             
Where the Fund's Assets Are Invested                                            
(as of November 30, 1998)                                                       

                                                                [Download Table]

                                      
                            Percent of

                            Net Assets

THE AMERICAS                          

United States               49.4%     

Canada                      4.3       

Argentina                   1.8       

Mexico                      1.6       

Chile                       .9        

                            58.0      

EUROPE                                

United Kingdom              3.6       

Germany                     2.1       

France                      1.0       

Turkey                      .9        

Denmark                     .7        

Ireland                     .7        

Sweden                      .7        

Switzerland                 .6        

Other Europe                .9        

                            11.2      

ASIA/PACIFIC                          

Australia                   2.2       

Japan                       2.1       

Singapore                   1.8       

Hong Kong                   .9        

Philippines                 .5        

                            7.5       

OTHER COUNTRIES             1.9       

Cash & Equivalents          21.4      

Total                       100.0%    


[End Sidebar]                                                                   

THE GLOBAL SMALL CAPITALIZATION FUND, the series' newest investment option,     
began life near what proved to be the year's market high for small-company      
stocks. The market rout took the sector 30% lower from its high before          
bottoming out in October, as measured by the Salomon Smith Barney World         
Smallcap Index, which tracks stocks in 22 countries with market capitalizations 
between $100 million and $1.2 billion. While prices have since begun to         
recover, at November 30 the fund was still off 8.3% from its inception on April 
30. It is always disappointing to see the value of an investment decline, but   
we believe there is a silver lining to this cloud. Prices of small-company      
stocks have fallen to levels that offer the best value, relative to larger      
companies, in a quarter century; this has enabled us to buy promising companies 
at what may be bargain-basement prices. As of November 30, the portfolio held   
stocks of 93 companies. Many of these are specialized technology firms, such as 
PMC-Sierra, which makes communications semiconductors for the networking        
industry, and Sanmina, which assembles circuit boards for electronics and       
telecommunications systems. Other holdings include The Cheesecake Factory, a    
U.S. restaurant chain, and Imax, a producer of film and equipment for special   
projection movies. Roughly half of net assets are invested in U.S.-based        
companies, with about 30% abroad (see table above). Given the uncertainty       
during the period, we maintained a fairly cautious stance, keeping 21% of net   
assets in cash and equivalents. As the past seven months have made abundantly   
clear, smaller company stocks are typically more volatile than their larger     
counterparts. The upside, however, is a greater potential for growth over       
longer, more meaningful periods.                                                

[Begin Sidebar]                                                                 
INTERNATIONAL FUND                                                              
Where the Fund's Assets Are Invested                                            
(as of November 30, 1998)                                                       

                                                                [Download Table]

                                             
                                   Percent   
                                   of        

                                   Net Assets

EUROPE                                       

United Kingdom                     14.3%     

France                             8.4       

Germany                            7.9       

Italy                              6.6       

Finland                            5.6       

Switzerland                        5.3       

Spain                              4.5       

Netherlands                        4.4       

Sweden                             4.1       

Portugal                           2.3       

Luxembourg                         1.6       

Norway                             1.3       

Other Europe                       .5        

                                   66.8      

ASIA/PACIFIC                                 

Japan                              9.0       

Australia                          4.4       

Philippines                        1.1       

Hong Kong                          .7        

People's Republic of China         .6        

OTHER ASIA/PACIFIC                 .9        

                                   16.7      

THE AMERICAS                                 

Canada                             3.7       

Mexico                             3.0       

Argentina                          .5        

Other Americas                     1.0       

                                   8.2       

OTHER COUNTRIES                    2.2       

Cash & Equivalents                 6.1       

Total                              100.0%    


[End Sidebar]                                                                   

THE GROWTH FUND was the series' biggest gainer, increasing 25.3% for the 12     
months ended November 30. The fund's primary objective is growth of capital,    
and we are pleased to note that the majority of holdings appreciated in price.  
That was especially true for media-related companies. Cable television          
providers, such as CSC Holdings (+102%) and Comcast (+74%), have emerged from a 
difficult period of reregulation, while entertainment conglomerates such as     
Viacom (+90%) and Time Warner (+82%) consolidated gains from recent mergers and 
acquisitions. At the other end of the spectrum, a number of technology          
companies are still struggling with reduced demand from Asia and an inventory   
"correction" working its way through the industry. Silicon Graphics (-7%), LSI  
Logic (-33%) and National Semiconductor (-57%) ended the year lower, extending  
earlier declines. Not all technology companies declined, however: Amid signs    
that demand may be picking up, stock prices rose for Texas Instruments (+55%)   
and Micron Technology (+66%). At fiscal year-end, 92% of the portfolio was held 
in the stocks of 143 companies, with the balance in cash and equivalents.       

THE INTERNATIONAL FUND rose 16.9% for fiscal 1998, mostly on the strength of    
its Europe-based investments (see table at left). Stock prices in Europe fed    
off a heady combination of strong corporate earnings, a wave of merger          
announcements and optimism about the upcoming monetary union. Despite the       
frenzied selling that hobbled markets in late summer, losses were more than     
offset by gains made during the rest of the year. Telecommunications-related    
issues once again posted extraordinary increases. Among the fund's larger       
holdings, these included the Scandinavian mobile phone giants Nokia (+144%) and 
Ericsson (+36%), as well as service providers TELECEL (+114%) of Portugal,      
Deutsche Telekom (+39%) and Spain's Telefonica (+63%). Olivetti, the fund's     
sixth-largest holding, appreciated an astonishing 368% in price due to          
escalating profits from its telecommunications business. On the other side of   
the ledger, a number of our Japanese and Latin American securities declined in  
price. We have trimmed our exposure to the latter to around 5% of net assets    
from about 10% a year ago. Among companies that were sold were Telecomunicacoes 
Brasileiras and ELETROBRAS, two long-time Brazilian holdings that have made     
considerable contributions to past results.                                     

THE GROWTH-INCOME FUND continued to do well, posting a 12-month increase of     
14.8%. The fund, which emphasizes established U.S. companies with the potential 
for rising dividends, was generally well-served by a robust economic            
environment. Consumer spending rose, boosting revenues for retailers; inflation 
hovered around 1.5%, keeping interest rates low; and a spate of well-publicized 
merger announcements helped inspire optimism among investors about the          
direction of stock prices. Among industries, pharmaceutical firms and a number  
of technology companies were especially successful. By year-end, the            
portfolio's exposure to the latter had more than doubled to become the largest  
sector of concentration. Oracle (+3%) became the fund's single largest holding  
when we significantly increased the fund's position in the stock near its low   
in October. Texas Instruments, our second-largest holding, was up 55% for the   
year. Drug concerns constitute the fund's second-largest industry; we would     
note among them Schering-Plough (+70%), Merck (+64%), Warner-Lambert (+62%) and 
Pfizer (+53%). Other areas that did well were telephone service providers and   
broadcasting companies. The fund was restrained by its fairly large positions   
in chemical, energy and paper stocks, industries that have seen profits         
contract as the difficulties in Asia deepened. Overall, about 30 industries and 
184 companies are represented in the portfolio. About 11% is held in cash and   
equivalents.                                                                    

THE ASSET ALLOCATION FUND had a 12.3% return for the year. The fund is managed  
as though it constitutes the complete portfolio of a prudent investor, with a   
balanced combination of carefully selected securities from all three major      
asset classes. At fiscal year-end, 61% of net assets were in equity securities, 
30% in bonds and 9% in cash and equivalents, reflecting the relative growth     
potential of each market. The equity portion comprises stocks of 80 companies   
in a wide range of industries. Among larger positions, gainers included Century 
Telephone Enterprises (+86%), Rentokil (+53%), IBM (+51%) and Carnival (+28%).  
A number of larger holdings declined in price, however, trimming overall        
returns somewhat. These included Citigroup (-1%), the entity created from the   
recent merger of Citicorp and Travelers; Praxair (-13%), a producer of          
industrial gases, and Atlantic Richfield (-18%), which was hurt by falling oil  
prices. The bond component is invested in a combination of U.S. Treasuries,     
federal agency obligations and corporate bonds. With most of the appreciation   
in the bond market occurring on the longer end of the yield curve, we extended  
the average effective maturity of the bonds in the portfolio to take advantage  
of rising prices. (The longer a bond's maturity, the more sensitive its price   
tends to be to interest-rate changes.) On November 30, the fund's average       
effective maturity was 8.4 years, up from 7.1 years 12 months ago.              

THE BOND FUND rose 5.1% for the 12 months ended November 30. Most of the fund's 
gain occurred in the first half of the year, when low inflation, a flourishing  
economy and a flight to bonds by anxious stock investors benefited virtually    
every sector of the U.S. bond market. Later in the year, however, that benefit  
narrowed considerably. With U.S. Treasury securities the darlings of the bond   
market and the Asian crisis throwing business growth in doubt, corporate bonds  
suffered as investors grew concerned about issuers making good on their debt.   
Because bond market sectors tend to move cyclically, the portfolio is           
well-diversified among many types of bonds. Longer term, that helps cushion the 
fund against drops in a single sector as well as take advantage of upturns in   
each. The lion's share is held in corporate bonds, including a number of lower  
rated instruments that offer higher yields to compensate for the greater risk   
of default. U.S. Treasuries and federal agency bonds account for roughly        
one-quarter of the portfolio, while a small portion, about 4% of assets, is     
invested in bonds denominated in non-U.S. currencies. About 10% is held in cash 
and equivalents. We are also pleased to note that as of November 30, fund       
assets had increased more than 50% from a year earlier, to more than $230       
million.                                                                        

THE HIGH-YIELD BOND FUND registered a small 1.4% gain. After a long span of     
extraordinary returns, lower rated bonds suffered a setback in the latter half  
of the year. These instruments occupy a unique position in the fixed-income     
universe. They are sensitive not only to interest-rate swings, but also to the  
rise and fall of a company's fortunes. In that regard, they share many of the   
characteristics of stocks and were thus plagued by some of the same fundamental 
concerns that bedeviled equity prices in late summer: fears of recession,       
slowing revenues, tighter profit margins and the increased possibility of       
default. In that environment, demand for lower rated bonds all but evaporated.  
If the fund was not immune to the decline - the downturn was indiscriminate,    
taking down many fundamentally healthy issuers - it did bring a number of       
promising securities within an attractive price range. At the time of this      
writing, a recovery may be under way: The sector rallied in November on the     
heels of the Federal Reserve's interest-rate cuts, and liquidity, or the ease   
with which securities are traded, has improved sharply.                         

THE U.S. GOVERNMENT/AAA-RATED SECURITIES FUND made substantial progress,        
increasing 8.7% for the 12 months. U.S. Treasury securities moved higher as     
anxious investors clamored for the relative safety of dollar-denominated        
government bonds. Prices received an additional boost from a budget surplus     
that has slowed the pace of bond issuance by the federal government, leading to 
a shrinking supply of securities in the face of renewed demand. With scant      
evidence of inflation on the economic horizon, yields on 30-year Treasuries,    
which serve as the primary benchmark for U.S. interest rates, dropped from      
6.04% at the beginning of the period to 5.08% at its close. (Bond prices and    
yields move in opposite directions.) Meanwhile, mortgage-backed securities,     
which account for about 63% of the portfolio, did less well during the year.    
Low interest rates and a strong economy led to a spate of refinancings and      
record reissuance of new securities last year, creating a surplus in the        
marketplace. That dampened prices somewhat, but it also offered buying          
opportunities, and we have been adding selectively to our mortgage holdings.    

THE CASH MANAGEMENT FUND provided investors with a 5.2% gain. The Fed lowered   
short-term rates three times this fall in an effort to loosen credit markets    
and stave off recessionary pressures caused by weakness abroad. Managed for     
relative stability and a reasonable rate of return, the fund can be an          
important diversification tool as well as a base from which to make investments 
into other funds in the series. The fund maintains a high-quality orientation   
by concentrating its assets in top-grade commercial paper (short-term loans to  
major, well-known corporations), all of which carry the highest credit ratings  
from Moody's or Standard & Poor's, and federal agency discount notes            
(short-term loans to federal government agencies).                              

We look forward to reporting to you again in six months.                        

Cordially,                                                                      

/s/Thomas E. Terry              /s/James F. Rothenberg                          
Thomas E. Terry                 James F. Rothenberg                             
Chairman of the Board           President                                       
American Variable Insurance     American Variable Insurance                     
Series                          Series                                          

January 14, 1999                                                                

HOW A $10,000 INVESTMENT HAS GROWN                                              

These charts show the growth of a $10,000 investment over the past 10 years -   
or lifetime, if shorter than 10 years - of each of the investment portfolios in 
American Variable Insurance Series (with the exception of the Cash Management   
Fund, which is managed to provide preservation of principal). The tables below  
the charts show the average annual compound returns on an investment over       
various periods. The funds in American Variable Insurance Series have no sales  
charges. However, the variable annuities and life insurance contracts that use  
the series' funds contain certain fees and expenses not reflected here.         

GLOBAL GROWTH FUND                                                              

[begin mountain chart]                                                          
Investments primarily in stocks                                                 
Scale adjusted for                                                              
shorter time period                                                             

$13,334                                                                         
MSCI World Index/1/                                                             

$13,228                                                                         
Global Growth Fund                                                              

$10,237                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                             
End of Month         Global Growth        MSCI                 Consumer      
                     Fund                 World Index/1/       Price Index/2/

4/97                 10,000               10,000               10,000        

5/97                 10,420               10,619               9,994         

8/97                 10,580               10,887               10,037        

11/97                10,645               11,072               10,081        

2/98                 11,927               12,304               10,106        

5/98                 12,558               12,792               10,162        

8/98                 11,210               11,336               10,200        

11/98                13,228                                    13,334        


                                                                [Download Table]

                                                               
Ended                                 11/30/98         12/31/98

One Year                              +24.26%          +29.04% 

Lifetime (since 4/30/97)              +19.29           +22.36  


[end chart]                                                                     

GLOBAL SMALL CAPITALIZATION FUND                                                
[begin mountain chart]                                                          
Investments primarily in stocks                                                 
Scale adjusted for                                                              
shorter time period                                                             

$10,092                                                                         
Consumer Price Index/2/                                                         

$9,169                                                                          
Global Small Capitalization Fund                                                

$8,563                                                                          
Salomon Smith Barney World Smallcap Index                                       

                                                                [Download Table]

                                                                             
End of Month         Global Small         Consumer             Salomon       
                     Capitalization       Price Index/2/       Smith Barney  
                     Fund                                      World Smallcap
                                                               Index         

4/98                 10,000               10,000               10,000        

5/98                 9,479                10,018               9,716         

6/98                 9,545                10,031               9,536         

7/98                 9,154                10,043               8,997         

8/98                 7,809                10,055               7,532         

9/98                 7,941                10,068               7,760         

10/98                8,535                10,092               8,195         

11/98                9,169                                     8,563         


                                                                [Download Table]

                                            
Ended          11/30/98             12/31/98

Lifetime       -8.31%               +2.61%  

(total return since 4/30/98)                


[end chart]                                                                     

GROWTH FUND                                                                     
[begin mountain chart]                                                          
Investments primarily in stocks                                                 

$55,755                                                                         
S&P 500 Index                                                                   

$54,575                                                                         
Growth Fund                                                                     

$13,633                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                             
Year ended           Growth               S&P 500              Consumer      
Nov. 30              Fund                 Index                Price Index/2/

1988                 10,000               10,000               10,000        

1989                 13,887               13,083               10,466        

1990                 12,793               12,617               11,122        

1991                 15,979               15,193               11,455        

1992                 18,999               17,997               11,804        

1993                 21,960               19,810               12,120        

1994                 22,602               20,022               12,444        

1995                 30,592               27,422               12,768        

1996                 34,973               35,066               13,184        

1997                 43,565               45,082               13,425        

1998                 54,575               55,755                             


                                                                [Download Table]

                                                         
Ended                          11/30/98          12/31/98

One Year                       +25.27%           +35.55% 

Five Years                     +19.97            +21.77  

10 Years                       +18.49            +19.16  

Lifetime (since 2/8/84)        +17.08            +17.79  


[end chart]                                                                     

INTERNATIONAL FUND                                                              
[begin mountain chart]                                                          
Investments primarily in stocks                                                 

$24,206                                                                         
International Fund                                                              

$19,249                                                                         
MSCI EAFE Index/3/                                                              

$12,723                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                             
Year ended           International        MSCI EAFE            Consumer      
November 30          Fund                 Index/3/             Price Index/2/

1989                 10,000               10,000               10,000        

1990                 9,492                10,380               9,483         

1991                 10,314               10,691               10,310        

1992                 10,407               11,016               9,508         

1993                 13,238               11,311               11,852        

1994                 14,626               11,614               13,646        

1995                 16,202               11,916               14,724        

1996                 18,902               12,304               16,504        

1997                 20,701               12,529               16,483        

1998                 24,206                                    19,249        


                                                                [Download Table]

                                                         
Ended                              11/30/98      12/31/98

One Year                           +16.94%       +21.22% 

Five Years                         +12.83        +12.28  

Lifetime (since 5/1/90)            +10.85        +11.34  


[end chart]                                                                     

GROWTH-INCOME FUND                                                              
[begin mountain chart]                                                          
Investments primarily in stocks                                                 

$55,755                                                                         
S&P 500 Index                                                                   

$43,137                                                                         
Growth-Income Fund                                                              

$13,633                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                             
Year ended           Growth-              S&P 500              Consumer      
Nov. 30              Income               Index                Price Index/2/
                     Fund                                                    

1988                 10,000               10,000               10,000        

1989                 12,732               13,083               10,466        

1990                 12,061               12,617               11,122        

1991                 14,212               15,193               11,455        

1992                 16,471               17,997               11,804        

1993                 18,387               19,810               12,120        

1994                 18,977               20,022               12,444        

1995                 25,265               27,422               12,768        

1996                 30,576               35,066               13,184        

1997                 37,585               45,082               13,425        

1998                 43,137               55,755                             


                                                                [Download Table]

                                                      
Ended                          11/30/98       12/31/98

One Year                       +14.77%        +18.38% 

Five Years                     +18.60         +19.15  

10 Years                       +15.74         +16.01  

Lifetime (since 2/8/84)        +15.93         +16.17  


[end chart]                                                                     

BOND FUND                                                                       
[begin mountain chart]                                                          
Investments primarily in bonds                                                  
Scale adjusted for                                                              
shorter time period                                                             

$12,312                                                                         
Salomon Smith Barney BIG Index/4/                                               

$12,156                                                                         
Bond Fund                                                                       

$10,684                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                           
End of month         Bond Fund            Consumer             Salomon     
                                          Price Index/2/       Smith Barney
                                                               BIG Index/4/

1/96                 10,000               10,000               10,000      

2/96                 9,850                10,091               9,897       

5/96                 9,750                10,202               9,748       

8/96                 9,961                10,248               9,886       

11/96                10,574               10,332               10,454      

2/97                 10,751               10,397               10,413      

5/97                 10,880               10,430               10,554      

8/97                 11,308               10,476               10,875      

11/97                11,564               10,521               11,246      

2/98                 11,880               10,547               11,498      

5/98                 12,054               10,606               11,714      

8/98                 11,712               10,645               12,017      

11/98                12,156                                    12,312      


                                                                [Download Table]

                                                       
Ended                            11/30/98      12/31/98

One Year                         +5.12%        +4.37%  

Lifetime (since 1/2/96)          +6.94         +6.77   


[end chart]                                                                     

U.S. GOVERNMENT/AAA-RATED SECURITIES FUND                                       
[begin mountain chart]                                                          
Investments primarily in bonds                                                  

$23,998                                                                         
Salomon Smith Barney Treasury/Govt.-Sponsored Mortgage Index                    

$22,236                                                                         
U.S. Govt./AAA-Rated Securities Fund                                            

$13,633                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                             
Year ended           U.S. Govt./          Smith Barney         Consumer      
Nov. 30              AAA-Rated            Treasury/            Price Index/2/
                     Securities           Govt.-                             
                     Fund                 Sponsored                          
                                          Mortgage                           
                                          Index                              

1988                 10,000               10,000               10,000        

1989                 11,082               11,427               10,466        

1990                 11,869               12,348               11,122        

1991                 13,440               14,067               11,455        

1992                 14,762               15,308               11,804        

1993                 16,630               16,909               12,120        

1994                 15,868               16,425               12,444        

1995                 18,206               19,240               12,768        

1996                 19,206               20,379               13,184        

1997                 20,452               21,915               13,425        

1998                 22,236               23,998                             


                                                                [Download Table]

                                                        
Ended                            11/30/98       12/31/98

One Year                         +8.72%         +8.19%  

Five Years                       +5.98          +5.95   

10 Years                         +8.32          +8.33   

Lifetime (since 12/1/85)         +8.31          +8.28   


[end chart]                                                                     

ASSET ALLOCATION FUND                                                           
[begin mountain chart]                                                          
Investments in both stocks and bonds                                            

$43,239                                                                         
S&P 500 Index                                                                   

$29,720                                                                         
Asset Allocation Fund                                                           

$21,759                                                                         
Salomon Smith Barney BIG Index/4/                                               

$13,183                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                            
Year ended       Asset            S&P 500          Consumer         Salomon 
Nov. 30          Allocation       Index            Price            Smith   
                 Fund                              Index/2/         Barney  
                                                                    BIG     
                                                                    Index/4/

1,988            10,000           10,000           10,000           10,000  

1,989            10,180           10,147           10,121           10,233  

1,990            9,932            9,785            10,756           11,015  

1,991            11,683           11,783           11,077           12,602  

1,992            13,283           13,958           11,415           13,749  

1,993            14,690           15,364           11,720           15,261  

1,994            14,611           15,528           12,034           14,797  

1,995            18,915           21,267           12,347           17,432  

1,996            22,443           27,194           12,749           18,475  

1,997            26,460           34,962           12,982           19,874  

1,998            27,920           43,239                            21,759  


                                                                [Download Table]

                                                        
Ended                          11/30/98         12/31/98

One Year                       +12.32%          +13.13% 

Five Years                     +15.13           +15.32  

Lifetime (since 8/1/89)        +12.38           +12.48  


[end chart]                                                                     

HIGH-YIELD BOND FUND                                                            
[begin mountain chart]                                                          
Investments primarily in bonds                                                  

$32,045                                                                         
Salomon Smith Barney Long-Term High-Yield Index                                 

$27,848                                                                         
High-Yield Bond Fund                                                            

$24,287                                                                         
Salomon Smith Barney BIG Index/4/                                               

$13,633                                                                         
Consumer Price Index/2/                                                         

                                                                [Download Table]

                                                                              
Year ended       High-Yield       Consumer         Salomon          Salomon   
Nov. 30          Bond Fund        Price            Smith            Smith     
                                  Index/2/         Barney           Barney    
                                                   BIG              Long-Term 
                                                   Index/4/         High-Yield
                                                                    Index     

1,988            10,000           10,000           10,000           10,000    

1,989            11,085           10,466           11,422           9,979     

1,990            11,362           11,122           12,295           8,978     

1,991            14,341           11,455           14,066           12,904    

1,992            16,237           11,804           15,346           15,379    

1,993            18,999           12,120           17,034           18,540    

1,994            17,914           12,444           16,516           17,758    

1,995            21,462           12,768           19,457           22,729    

1,996            24,413           13,184           20,621           25,002    

1,997            27,452           13,425           22,183           29,107    

1,998            27,848                            24,287           32,045    


                                                                [Download Table]

                                                        
Ended                            11/30/98       12/31/98

One Year                         +1.44%         0.0044  

Five Years                       +7.95          +7.78   

10 Years                         +10.78         +10.71  

Lifetime (since 2/8/84)          +12.19         +12.13  


[end chart]                                                                     
The indexes are unmanaged and do not reflect sales charges, commissions or      
expenses.                                                                       

Past results are not predictive of future results.                              

/1/Morgan Stanley Capital International World Index                             

/2/Computed from data supplied by U.S. Department of Labor, Bureau of Labor     
Statistics.                                                                     

/3/Morgan Stanley Capital International EAFE(r) (Europe, Australasia, Far East) 
Index                                                                           

/4/Salomon Smith Barney Broad Investment-Grade (BIG) Bond Index                 

CULTIVATING AN INVESTMENT GARDEN                                                
SOWING THE SEEDS OF A DIVERSIFIED PORTFOLIO                                     

Whether you're landscaping a large estate or planting a flower box on a         
building rooftop, any experienced horticulturist will tell you that the secret  
to a well-laid garden is balance. Different plants blossom during different     
seasons. Gardeners must choose a combination of blooms to achieve a             
long-lasting array of colors and textures.                                      

Successful investors, like skilled gardeners, make balance a fundamental part   
of building their investment portfolios. The practice of asset allocation -     
that is, diversifying across different types of investments - can help reduce   
risk while exposing investors to a wide range of opportunities.                 

One of the advantages of your American Legacy variable annuity is that it       
offers under a single plan a variety of "seeds" to help you plant for the       
future. With 10 variable funds to choose from, investors can tailor a portfolio 
that exposes them to a variety of financial markets - U.S. stocks and bonds,    
international securities and money market instruments - which move at different 
rhythms and carry distinct risk/reward relationships. Contract owners may also  
select from two fixed accounts that guarantee a fixed rate of return.*          

Each fund is itself diversified because each owns dozens of securities. Most    
contract owners, however, find that investing in a number of funds with         
different objectives can be a sensible way to seek more consistent returns over 
time. They also find that, just as planting seeds requires patience, a          
long-term perspective is important when setting financial goals.                

Your American Legacy contract offers another type of diversification as well: a 
broad spectrum of features and benefits to help you customize your retirement   
plan. These include the advantage of tax deferral, a choice of payout options,  
several dollar cost averaging programs and the security of a guaranteed minimum 
death benefit.*                                                                 

*Guarantees are based on the claims-paying ability of The Lincoln National Life 
Insurance Company, which issues the American Legacy contracts. Dollar cost      
averaging cannot assure a profit or protect against loss.                       

On the following pages, you'll meet several real-life American Legacy contract  
owners who are cultivating their "investment gardens." While these examples may 
help you generate ideas about how best to balance your portfolio, everyone's    
needs are unique. Your financial planner can help you create a program that     
reflects your own risk tolerance, tax situation and investment time horizon.    

[Begin Sidebar]                                                                 
Spreading investments across different asset classes can help reduce risk while 
exposing investors                                                              
to a wide range of opportunities.                                               
[End Sidebar]                                                                   

[Begin Photo Caption]                                                           
Bob and Claudia Mendell, Alamo, California                                      
[End Photo Caption]                                                             

[photo:  packet of seeds]                                                       

[Begin Caption]                                                                 
The Mendells' Portfolio                                                         
[End Caption]                                                                   

[Begin pie chart]                                                               
Asset Allocation 33.3%                                                          
Global Growth    33.3%                                                          
International    33.3%                                                          
[End pie chart]                                                                 

HOW MIGHT YOUR GARDEN GROW?                                                     
SEEKING OPPORTUNITIES IN A VARIETY OF MARKETS                                   

As the nutritional director for a hospital in northern California, Claudia      
Mendell knows better than most the benefits of diversification. "One of the     
first lessons of Health 101," she says, "is that you can't get all your         
nutrients from one type of food. You need a balanced diet - many different      
foods - to maintain adequate physical growth."                                  

Claudia and her husband Bob view their investment strategy in much the same     
way. Both are still working - Bob is director of training for a wine and        
spirits company in the heart of vineyard country - but with life expectancies   
on the rise, they realize that they have to plan carefully for a retirement     
they hope will last a very long time. Their financial adviser helped them set   
up a growth-oriented portfolio within American Legacy that emphasizes stocks    
but is still diversified among market sectors.                                  

Although U.S. stocks have been unusually strong in recent years, that has not   
always been the case. In the past there have been times when bonds or           
international stocks have done better. The Mendells are well-positioned to take 
advantage of potential gains in all three of these markets, with investments in 
American Legacy's Asset Allocation Fund, Global Growth Fund and International   
Fund. "There's no crystal ball that can predict which market will do the best   
in any given year," says Bob. "By spreading our investments among several of    
them, there's a good chance that at least part of our portfolio should do       
well."                                                                          

Diversifying through American Legacy has the unique advantage of tax deferral.  
Although the Mendells will pay taxes on earnings they eventually withdraw, the  
ability to let all of their money work for them right away can make a big       
difference in their overall returns. What's more, when they recently decided to 
transfer assets from one fund to another, those exchanges were not only free,   
but tax-free.                                                                   

Of course, as Claudia would note, nutrition encompasses more than diet. It      
requires regular exercise, plenty of rest and stress reduction. Similarly,      
American Legacy is only one part of the Mendells' financial plan. When they     
retire, they intend to draw income from other retirement vehicles first and     
leave their Legacy assets untouched for as long as possible to maximize the     
tax-deferred growth potential of their diversified portfolio.                   

[Begin Photo Caption]                                                           
Phil and Annie Yarick, Santa Fe, New Mexico                                     
[End Photo Caption]                                                             

[Begin Caption]                                                                 
The Yaricks' Portfolio                                                          
[End Caption]                                                                   

[Begin pie chart]                                                               
International    40%                                                            
Growth           20%                                                            
Growth-Income    20%                                                            
Bond             10%                                                            
High-Yield Bond  10%                                                            
[End pie chart]                                                                 

[photo:  plant branch]                                                          

A PORTFOLIO FOR ALL SEASONS MANAGING RISK                                       
The city of Santa Fe, New Mexico, exudes a seamless mix of the Spanish, Mexican 
and Native American cultures that have settled here over the centuries. Amid    
this high desert community of artists and adobe architecture, Phil and Annie    
Yarick are making the most of a well-earned retirement. These transplants from  
New Jersey spend their days exploring the rugged terrain of the Pecos           
Wilderness, attending the opera and lavishing attention on their irascible      
English bulldog, Ryder.                                                         

Although Phil and Annie share many interests, when it comes to investing, the   
Yaricks find themselves at opposite ends of the risk spectrum. Annie is a       
self-described "bury-it-in-a-can-in-the-yard" type, while her husband likes to  
"shoot for the moon." Assembling a portfolio that would meet both their         
objectives was a challenge, but they have found a balance of funds that allows  
them to capture growth opportunities while at the same time helping to diminish 
the damage of severe market declines.                                           

Because equities have historically provided the best solution to outpacing      
inflation, their financial adviser suggested they concentrate the bulk of their 
American Legacy assets in a combination of stock funds - the Growth Fund, the   
Growth-Income Fund and the International Fund. That would not only give them a  
broad exposure to equity markets around the world, but might also increase the  
likelihood that losses in U.S. stocks, for example, could be offset by gains in 
non-U.S. markets. (Of course, the Yaricks had to consider the special risks     
associated with international investing.)                                       

The rest was divided between the Bond Fund and the High-Yield Bond Fund to help 
add the stability Annie sought. Bonds have tended to be less volatile than      
stocks, although their returns have been lower. They also respond somewhat      
differently to economic circumstances (including the recent Asian crisis).      

While asset allocation won't eliminate the risk that their account balance      
could go down, it can reduce the probability that severe fluctuations will      
impede the long-term progress of their overall portfolio. American Legacy gives 
Phil and Annie yet another hedge against market declines: a guaranteed minimum  
death benefit, which assures that their contract's beneficiaries will receive   
at least the amount of the original investment (less any money already          
withdrawn).                                                                     

[Begin Photo Caption]                                                           
Verne and Betty Colburn St. Albans, Vermont (with their granddaughter, Deanna)  
[End Photo Caption]                                                             

[Begin Caption]                                                                 
The Colburns' Portfolio                                                         
[End Caption]                                                                   

[Begin pie chart]                                                               
Asset Allocation   50%                                                          
Growth-Income      25%                                                          
Bond               15%                                                          
Global Growth      10%                                                          
[End pie chart]                                                                 

ENJOYING THE FRUITS                                                             
MEETING MULTIPLE OBJECTIVES WITH A SINGLE PLAN                                  

When Verne Colburn retired two years ago, more than 100 of his former students  
surprised him with a rousing musical tribute. It was a fitting capstone to a    
three-decade career of bringing music to the schoolchildren of St. Albans,      
Vermont, a small town near the U.S.-Canadian border.                            

It was also time to finally focus on financial goals, since Verne and his wife  
Betty, who had been a teacher as well, had a little catching up to do. "With    
seven children to raise," Betty explains, "there was very little left to put    
away." Although Social Security and their teachers' pensions would provide some 
of the income they needed, they knew it wouldn't be enough to maintain the kind 
of lifestyle they hoped to enjoy in retirement. After talking with their        
financial adviser, Verne rolled over his 403(b) plan - a 401(k)-type account    
for educational institutions - into an American Legacy Individual Retirement    
Account. Then, he set up a systematic withdrawal program that would not only    
provide enough income to help meet current expenses, but might leave enough to  
generate growth for future income.                                              

Because the Colburns needed to begin drawing income right away,* they wanted an 
investment that could deliver reasonably consistent returns. Their financial    
adviser helped them assemble a fairly conservative portfolio. He used the Asset 
Allocation Fund as their core holding, which immediately diversified their      
money among three primary asset classes: U.S. stocks, bonds and money market    
instruments. He then augmented the growth component with the Growth-Income      
Fund, which invests primarily in large U.S. companies, and the Global Growth    
Fund, which could take advantage of similar opportunities around the world.     
Finally, a portion was allocated to the Bond Fund for current income and        
additional stability.                                                           

*Contingent deferred sales charges apply in the first seven years after each    
payment, but contract owners may withdraw up to 10% of their account value each 
year without triggering those charges.                                          

Verne and Betty expect this plan to tide them over for many years to come, and  
perhaps one day leave something for a much more valuable legacy: their family.  

[photo:  packet of seeds]                                                       

                                                        [Enlarge/Download Table]
AMERICAN VARIABLE INSURANCE SERIES GLOBAL GROWTH FUND                                            
Investment Portfolio,  November 30, 1998                                                         
                                                                                                 

Where the Fund's Assets Are Invested                                                             
                                                                 Percent                         
                                                                 Net Asse                        
                                                                 --------                        
The Americas                                                       42.22%                        
Europe                                                             31.06%                        
Asia/Pacific                                                       11.70%                        
Other Countries                                                     1.27%                        
Cash & Equivalents                                                 13.75%                        
                                                                  100.00%                        

Largest Individual Stocks                                                                        

Zeneca Group                                                        3.36%                        
Telefonica                                                           2.45                        
Pfizer                                                               2.15                        
Telecom Italia                                                       2.15                        
Time Warner                                                          2.09                        
Cendant                                                              2.09                        
CKS Group                                                            1.92                        
Viacom                                                               1.88                        
Rentokil Initial                                                     1.81                        
Telefonaktiebolaget LM Ericsson                                      1.79                        

                                                                             Market    Percent   
                                                                 Number o     Value     of Net   
Stocks (common and preferred)                                     Shares      (000)     Assets   
----------------------------------------------------------------------------------------------   
TELECOMMUNICATIONS - 12.78%                                                                      
Telefonica SA (American Depositary Receipts) (Spain)              44,800     $6,244      2.45%   
Telecom Italia SpA, nonconvertible savings shares (Italy)        741,100      4,594              
Telecom Italia SpA                                               110,000        890        2.15  
Mannesmann AG (Germany)                                           39,650      4,289        1.68  
AirTouch Communications (USA) (1)                                 69,000      3,946        1.55  
Telecom Argentina STET-France Telecom SA, Class B                                                
 (American Depositary Receipts) (Argentina)                      128,500      3,919        1.54  
Deutsche Telekom AG (Germany)                                    107,500      3,016        1.18  
Orange PLC (United Kingdom) (1)                                  192,000      1,963         .77  
Cable & Wireless Communications PLC (United Kingdom) (1)         211,100      1,883         .74  
TELECEL - Comunicacoes Pessoais, SA (Portugal)                     6,700      1,310         .51  
Stet Hellas Telecommunications SA (American Depositary                                           
 Receipts) (Greece) (1)                                           35,300      1,227         .48  
China Telecom (Hong Kong) Ltd. (American Depositary                                              
 Receipts) (Peoples Republic of China) (1)                        31,000      1,227         .48  
AT&T Corp. (USA)                                                  18,750      1,168         .46  
France Telecom, SA (France)                                       13,000        903         .35  
Nippon Telegraph and Telephone Corp. (Japan)                         120        897         .35  
Telefonos de Mexico, SA de CV, Class L                                                           
 (American Depositary Receipts) (Mexico)                          12,000        559         .22  
Millicom International Cellular SA (Luxembourg) (1)               14,000        467         .18  
Compania de Telecomunicaciones de Chile SA                                                       
 (American Depositary Receipts) (Chile)                           15,948        370         .14  
BUSINESS & PUBLIC SERVICES - 13.00%                                                              
Cendant Corp. (USA) (1)                                          281,000      5,339        2.09  
CKS Group, Inc. (USA) (1)                                        146,400      4,905        1.92  
Rentokil Initial PLC (formerly Rentokil Group PLC)                                               
 (United Kingdom)                                                690,800      4,615        1.81  
America Online, Inc. (USA) (1)                                    45,000      3,940        1.54  
Reuters Group PLC (United Kingdom)                               383,140      3,699        1.45  
Brambles Industries Ltd. (Australia)                             123,800      3,025        1.19  
Vivendi SA (France)                                               11,800      2,667        1.05  
Waste Management, Inc. (formerly USA Waste                                                       
 Services, Inc.) (USA)                                            42,700      1,831         .72  
Suez Lyonnaise des Eaux (France)                                   7,000      1,382         .54  
Ratin, A/S Class B (Denmark)                                       6,300      1,178         .46  
Columbia/HCA Healthcare Corp. (USA)                               24,000        591         .23  
BROADCASTING & PUBLISHING - 10.56%                                                               
Time Warner Inc. (USA)                                            50,500      5,340        2.09  
Viacom Inc., Class B (USA) (1)                                    72,000      4,793        1.88  
Fox Entertainment Group, Inc., Class A (USA) (1)                 130,000      3,071        1.20  
Grupo Televisa, SA, ordinary participation certificates                                          
 (American Depositary  Receipts) (Mexico) (1)                    119,900      3,050        1.19  
TV Azteca, SA de CV (American Depositary                                                         
 Receipts) (Mexico)                                              400,000      3,000        1.17  
News Corp. Ltd. (Australia)                                      290,467      2,033         .80  
ProSieben Media AG (Germany) (1)                                  36,000      1,725         .68  
Fuji Television (Japan)                                              410      1,633         .64  
Ziff-Davis Inc.(USA) (1)                                          60,000        686         .27  
Sinclair Broadcast Group, Inc., Class A (USA) (1)                 53,800        663         .26  
Tele-Communications, Inc., Series A,  TCI Group (USA) (1)         13,800        583         .23  
SOFTBANK CORP. (Japan)                                             6,600        381         .15  
HEALTH & PERSONAL CARE - 8.69%                                                                   
Zeneca Group PLC (United Kingdom)                                203,960      8,459              
Zeneca Group PLC (American Depositary Receipts)                    3,000        126        3.36  
Pfizer Inc (USA)                                                  49,150      5,486        2.15  
Avon Products, Inc. (USA)                                         55,800      2,267         .89  
Glaxo Wellcome PLC (United Kingdom)                               52,900      1,672         .65  
Astra AB, Class A (Sweden)                                        90,000      1,648         .65  
Guidant Corp. (USA)                                               18,000      1,545         .61  
Luxottica Group SpA (American Depositary Receipts) (Italy)        75,000        778         .30  
Omnicare, Inc. (USA)                                               7,000        200         .08  
ELECTRONIC COMPONENTS - 5.43%                                                                    
Murata Manufacturing Co., Ltd. (Japan)                            82,000      3,212        1.26  
Microchip Technology Inc. (USA) (1)                               70,000      2,437         .96  
Intel Corp. (USA)                                                 20,000      2,152         .84  
Rohm Co., Ltd. (Japan)                                            23,000      1,944         .76  
Micron Technology, Inc. (USA) (1)                                 41,100      1,698         .67  
Texas Instruments Inc. (USA)                                      15,000      1,145         .45  
Quantum Corp. (USA) (1)                                           35,000        774         .30  
Altera Corp. (USA) (1)                                            10,000        491         .19  
DATA PROCESSING & REPRODUCTION - 4.74%                                                           
Oracle Corp. (USA) (1)                                           105,000      3,596        1.41  
Microsoft Corp. (USA) (1)                                         28,000      3,416        1.34  
PeopleSoft, Inc. (USA) (1)                                       127,000      2,611        1.02  
Computer Associates International, Inc. (USA)                     30,000      1,328         .52  
Dassault Systemes SA (France)                                     29,600      1,155         .45  
BANKING - 4.40%                                                                                  
Bank of Nova Scotia (Canada)                                     161,000      3,533        1.39  
BankAmerica Corp. (USA)                                           38,400      2,503         .98  
Washington Mutual, Inc. (USA)                                     60,000      2,325         .91  
ForeningsSparbanken AB, Class A (Sweden)                          52,000      1,457         .57  
Westpac Banking Corp.(Australia)                                 211,148      1,405         .55  
ELECTRICAL & ELECTRONICS - 3.17%                                                                 
Telefonaktiebolaget LM Ericsson, Class B (Sweden)                165,000      4,583        1.79  
Nokia Corp., Class A (American                                                                   
 Depositary Receipts) (Finland)                                   20,000      1,960         .77  
Northern Telecom Ltd. (Canada)                                    33,400      1,559         .61  
AUTOMOBILES - 2.81%                                                                              
Suzuki Motor Corp. (Japan)                                       281,000      3,220        1.26  
Bayerische Motoren Werke AG (Germany)                              2,200      1,699              
Bayerische Motoren Werke AG (1)                                      660        498         .86  
Nissan Motor Co., Ltd. (Japan)                                   570,000      1,760         .69  
CHEMICALS - 2.31%                                                                                
Monsanto Co. (USA)                                                61,400      2,782        1.09  
BOC Group PLC (United Kingdom)                                   145,000      2,105         .83  
Valspar Corp. (USA)                                               30,000        998         .39  
MERCHANDISING - 1.51%                                                                            
Consolidated Stores Corp. (USA) (1)                              113,700      2,445         .96  
Cifra, SA de CV (American Depositary Receipts)                                                   
 (Mexico) (1)                                                     60,000        742         .29  
Koninklijke Ahold NV (Netherlands)                                19,600        679         .26  
LEISURE & TOURISM - 1.46%                                                                        
Village Roadshow Ltd., Class A,                                                                  
 5.50% preferred shares (Australia)                              1,078,30     1,553         .61  
Mirage Resorts, Inc. (USA) (1)                                    65,000        967         .38  
Walt Disney Co. (USA)                                             15,000        483         .19  
King World Productions, Inc. (USA) (1)                            17,250        470         .18  
Carnival Corp., Class A (USA)                                      7,100        245         .10  
RECREATION & OTHER CONSUMER PRODUCTS - 1.30%                                                     
EMI Group PLC (United Kingdom)                                   557,000      3,316        1.30  
ELECTRONIC INSTRUMENTS - 1.17%                                                                   
Applied Materials, Inc. (USA) (1)                                 40,000      1,550         .61  
ADVANTEST CORP. (Japan)                                           21,600      1,443         .56  
MULTI-INDUSTRY - 1.13%                                                                           
Orkla AS, Class A (Norway)                                        72,000      1,201         .47  
Preussag AG (Germany) (1)                                          3,000      1,098         .43  
Gambro AB, Class A (formerly Incentive AB) (Sweden)               48,000        587         .23  
METALS:  NONFERROUS - 0.99%                                                                      
Aluminum Co. of America (USA)                                     28,000      2,076         .81  
Freeport-McMoRan Copper & Gold Inc.,                                                             
 Class B (USA)                                                    35,000        457         .18  
ENERGY SOURCES - 0.96%                                                                           
Fletcher Challenge Energy (New Zealand)                          398,974        840         .33  
Woodside Petroleum Ltd. (Australia)                              142,000        720         .28  
TOTAL, Class B (American Depositary                                                              
 Receipts) (France)                                                9,600        587         .23  
Shell Transport and Trading Co., PLC (New York                                                   
 Registered) (United  Kingdom)                                     8,500        309         .12  
AEROSPACE & MILITARY TECHNOLOGY - 0.87%                                                          
Bombardier Inc., Class B (Canada)                                170,000      2,215         .87  
MISCELLANEOUS MATERIALS & COMMODITIES - 0.86%                                                    
Sealed Air Corp. (USA) (1)                                        50,000      2,206         .86  
APPLIANCES & HOUSEHOLD DURABLES - 0.85%                                                          
Sony Corp. (Japan)                                                29,600      2,167         .85  
INSURANCE - 0.63%                                                                                
Fairfax Financial Holdings Ltd. (Canada) (1)                       5,000      1,603         .63  
FINANCIAL SERVICES - 0.61%                                                                       
Shohkoh Fund & Co., Ltd. (Japan)                                   3,000        990         .39  
Credicorp Ltd. (Peru)                                             50,600        556         .22  
ENERGY EQUIPMENT - 0.60%                                                                         
Schlumberger Ltd. (Netherlands Antilles)                          34,200      1,528         .60  
BEVERAGES & TOBACCO - 0.58%                                                                      
Seagram Co. Ltd. (Canada)                                         25,000        858         .33  
Grupo Industrial Emprex-B (Mexico)                               150,000        352         .14  
Coca-Cola Amatil Ltd. (Australia)                                 51,820        174         .07  
Coca-Cola Beverages PLC (United Kingdom) (1)                      50,728        105         .04  
GOLD MINES - 0.57%                                                                               
Anglogold Ltd. (South Africa)                                     30,000      1,466         .57  
REAL ESTATE - 0.54%                                                                              
Mandamus AB (Sweden) (1) (2)                                     262,600      1,388         .54  
INDUSTRIAL COMPONENTS - 0.49%                                                                    
NGK Spark Plug Co., Ltd. (Japan)                                 135,000      1,248         .49  
FOOD & HOUSEHOLD PRODUCTS - 0.37%                                                                
Raisio Group PLC (Finland)                                        73,000        946         .37  
MACHINERY & ENGINEERING - 0.12%                                                                  
Kvaerner AS, Class A (Norway)                                     20,600        311         .12  
TEXTILES & APPAREL - 0.06%                                                                       
Nine West Group Inc. (USA) (1)                                    12,900        161         .06  
MISCELLANEOUS - 0.24%                                                                            
Other stocks in initial period of acquisition                                   637         .24  
                                                                         ----------------------  
TOTAL STOCKS  (cost: $194,792,000)                                          220,208       83.80  
                                                                         ----------------------  

                                                                 Principa                        
                                                                  Amount                         
Short-Term Securities                                              (000)                         
------------------------------------------------------------------------------------   -------   
CORPORATE SHORT-TERM NOTES - 9.64%                                                               
Kellogg Co. 4.97-5.30% 12/4-12/17/1998                             3,100      3,094        1.21  
Siemens Capital Corp. 5.02% due 1/22/1999                          2,800      2,779        1.09  
Electricite de France 5.05% due 2/16/1999                          2,600      2,572        1.01  
General Electric Capital Corp. 5.06% due 12/1/1998                 2,500      2,500         .98  
Bayer AG 5.17% due 12/8/1998 (3)                                   2,000      1,998         .78  
AMERICAN HONDA FINANCE 5.20% due 1/28/1999                         2,000      1,983         .78  
KFW International Finance Inc. 5.15% due 12/11/1998                1,700      1,697         .66  
HOUSEHOLD FINANCE CORP. 5.03% due 12/2/1998                        1,600      1,600         .63  
Coca-Cola Co. 4.85% due 12/22/1998                                 1,600      1,595         .62  
BMW US CAPITAL CORP. 5.10% due 12/15/1998                          1,400      1,397         .55  
Johnson & Johnson 5.00% due 12/14/1998 (3)                         1,400      1,397         .55  
Diageo Capital PLC 5.15% due 12/18/1998 (3)                        1,400      1,396         .55  
Pfizer Inc 5.09% due 12/2/1998 (3)                                   600        600         .23  
FEDERAL AGENCY DISCOUNT NOTES - 3.57%                                                            
Federal Home Loan Banks 5.00% due 1/29/1999                        4,300      4,264        1.67  
Fannie Mae 4.92-5.12% due 1/8-3/18/1999                            3,000      2,965        1.16  
Freddie Mac 4.95% due 1/25/1999                                    1,900      1,885         .74  
                                                                         ---------------------   
TOTAL SHORT-TERM SECURITIES (cost: $33,722,000)                              33,722       13.21  
                                                                         ---------------------   
TOTAL INVESTMENT SECURITIES (cost: $228,514,000)                            253,930       97.01  

Excess of cash and receivables over payables                                  1,372         .54  
                                                                         ------------------------
NET ASSETS                                                                 $255,302     97.55%   
                                                                           ========   ========   

(1) Non-income-producing securities.                                                             
(2) Valued under procedures established by the Board of Trustees.                                
(3) Purchased in a private placement transaction; resale to the public                           
  may require registration or sale only to qualified institutional buyers.                       

See Notes to Financial Statements                                                                

Stocks appearing in the portfolio                                                                
since May 31, 1998                                                                               

Anglogold                                                                                        
Applied Materials                                                                                
Astra                                                                                            
AT&T                                                                                             
BankAmerica                                                                                      
Coca-Cola Beverages                                                                              
Computer Associates International                                                                
Deutsche Telekom                                                                                 
Fox Entertainment Group                                                                          
Fuji Television                                                                                  
Grupo Televisa                                                                                   
Guidant                                                                                          
Koninklijke Ahold                                                                                
Luxottica Group                                                                                  
Mirage Resorts                                                                                   
News Corp.                                                                                       
NGK Spark Plug                                                                                   
Nippon Telegraph and Telephone                                                                   
Nissan Motor                                                                                     
PeopleSoft                                                                                       
Preussag                                                                                         
Quantum                                                                                          
Sealed Air                                                                                       
Shell Transport and Trading                                                                      
Shohkoh Fund                                                                                     
Stet Hellas Telecommunications                                                                   
Tele-Communications                                                                              
Telefonaktiebolaget LM Ericsson                                                                  

Stocks eliminated from the portfolio                                                             
since May 31, 1998                                                                               

Advanced Micro Devices                                                                           
Chrysler                                                                                         
General Motors                                                                                   
Home Depot                                                                                       
Host Marriott                                                                                    
Inco                                                                                             
Kyocera                                                                                          
Oil Co. LUKoil                                                                                   
Oryx Energy                                                                                      
Rambus                                                                                           
Raytheon                                                                                         
Rio Tinto                                                                                        
Thomson-CSF                                                                                      
Viking Office Products                                                                           


                                                        [Enlarge/Download Table]
AMERICAN VARIABLE INSURANCE SERIES GLOBAL SMALL CAPITALIZATION FUND                                 
Investment Portfolio,  NOVEMBER 30, 1998                                                            
                                                                                                    

Where the Fund's Assets Are Invested                                                                
                                                                      Percent of                    
                                                                      Net Assets                    
                                                                        --------                    
The Americas                                                               58.02%                   
Europe                                                                     11.22%                   
Asia/Pacific                                                                7.54%                   
Other Countries                                                             1.85%                   
Cash & Equivalent                                                          21.37%                   
                                                                          100.00%                   

Largest Individual Stocks                                                                           

PMC-Sierra                                                                  2.61%                   
Sanmina                                                                      2.41                   
ABR Information Services                                                     2.24                   
HNC Software                                                                 1.87                   
Sapient                                                                      1.56                   
Laurentian Bank of Canada                                                    1.53                   
Jones Intercable                                                             1.50                   
Black Box                                                                    1.43                   
USWeb                                                                        1.39                   
Flextronics International                                                    1.38                   

                                                                                   Market   Percent 
                                                                       Number of    Value    of Net 
STOCKS (common and preferred)                                             Shares    (000)    Assets 
---------------------------------------------------------------------   -------- --------  -------- 
BUSINESS & PUBLIC SERVICES - 14.56%                                                                 
ABR Information Services, Inc. (USA)(1)                                   95,000  $      1    2.24% 
Sapient Corp. (USA)(1)                                                    24,400    1,128       1.56
Black Box Corp. (USA)(1)                                                  29,500    1,036       1.43
USWeb Corp. (USA)(1)                                                      44,000    1,001       1.39
Flextronics International Ltd. (Singapore)(1)                             15,000      998       1.38
Midas, Inc. (USA)                                                         28,700      895       1.24
Protection One, Inc. (USA)(1)                                             62,400      601        .83
Kroll-O'Gara Co. (USA)(1)                                                 18,700      580        .80
Medicis Pharmaceutical Corp., Class A (USA)(1)                             9,200      580        .80
NCO Group, Inc. (USA)(1)                                                  15,100      557        .77
Strayer Education, Inc. (USA)                                             13,500      502        .70
Rhon-Klinikum AG (Germany)                                                 5,000      486        .67
Corporate Services Group PLC (United Kingdom)                            178,750      433        .60
International Container Terminal Services, Inc. (Philippines)(1)       4,500,000      401        .56
Budget Group, Inc., Class A (USA)(1)                                      28,500      356        .49
Renaissance Worldwide Inc. (USA)(1)                                       46,700      333        .46
ARIS Corp. (USA)(1)                                                       20,000      327        .45
Brunel International NV (Netherlands)                                     13,048      252        .35
Fujitsu Support and Service Inc. (Japan)(2)                                1,000       56        .08
ELECTRONIC COMPONENTS - 10.56%                                                                      
PMC-Sierra, Inc. (USA)(1)                                                 35,000    1,886       2.61
Sanmina Corp. (USA)(1)                                                    35,000    1,743       2.41
Level One Communications, Inc. (USA)(1)                                   30,000      928       1.29
Venture Manufacturing (Singapore) Ltd (Singapore)                        150,000      574           
Venture Manufacturing Ltd (Singapore)(2)                                  90,000      344       1.28
Micrel, Inc. (USA)(1)                                                     20,000      811       1.12
NatSteel Electronics Ltd (Singapore)(2)                                  175,000      378        .52
Megachips Corp. (Japan)(1,2)                                              10,000      358        .50
Cymer, Inc. (USA)(1)                                                      14,100      212        .29
Towa Corp. (Japan)                                                         8,500      202        .28
Cicorel Holding AG (Switzerland)(1)                                          700      133        .18
QPL International Holdings Ltd. (Hong Kong -                                                        
 Incorporated in Bermuda)                                                664,000       57        .08
MERCHANDISING - 8.00%                                                                               
Disco SA (ADR) (Argentina)(1)                                             44,250      916       1.27
Rent-Way, Inc. (USA)(1)                                                   30,000      814       1.13
DFS Furniture Co. PLC (United Kingdom)                                   250,000      701        .97
EUROBIKE AG (Germany)                                                     40,000      691        .95
White Cap Industries, Inc. (USA)(1)                                       50,000      663        .92
Migros Turk TAS (Turkey)                                                 650,000      642        .89
Komori Corp. (Japan)                                                      40,000      569        .79
GrandVision SA (France)                                                   20,000      448        .62
Dickson Concepts (International) Ltd. (Hong Kong-                                                   
 Incorporated in Bermuda)                                                310,000      334        .46
DATA PROCESSING & REPRODUCTION - 7.61%                                                              
HNC Software Inc. (USA)(1)                                                40,900    1,350       1.87
Aspect Development, Inc. (USA)(1)                                         25,000      836       1.16
Platinum Software Corp. (USA)(1)                                          69,300      736       1.02
Macromedia, Inc. (USA)(1)                                                 25,900      724       1.00
National Computer Systems, Inc.                                           20,000      657        .91
Remedy Corp. (USA)(1)                                                     50,000      522        .72
Vantive Corp. (USA)(1)                                                    60,000      510        .71
Edify Corp. (USA)(1)                                                      19,300      159        .22
BROADCASTING & PUBLISHING - 6.93%                                                                   
Jones Intercable, Inc., Class A (USA)(1)                                  35,000    1,087       1.51
Century Communications Corp., Class A (USA)(1)                            40,000      977       1.35
Westwood One, Inc. (USA)(1)                                               32,100      851       1.18
United Television, Inc. (USA)                                              6,000      660        .91
APN News and Media, Ltd. (Australia)                                     400,000      541        .75
Central European Media Enterprises Ltd., Class A (1)                                                
 (USA - Incorporated in Bermuda)                                          80,000      520        .72
Sondagsavisen A/S (Denmark)                                                7,500      372        .51
LEISURE & TOURISM - 4.34%                                                                           
Morton's Restaurant Group, Inc. (USA)(1)                                  35,000      696        .96
Navigant International, Inc. (USA)(1)                                    100,000      637        .88
Lions Gate Entertainment Corp. (Canada)(1)                               200,000      620        .86
Imax Corp. (Canada)(1)                                                    20,000      545        .76
Cheesecake Factory Inc. (USA)(1)                                          14,300      372        .52
Hoyts Cinemas Ltd., units (Australia)                                    282,300      262        .36
BANKING - 2.52%                                                                                     
Laurentian Bank of Canada (Canada)                                        63,700    1,107       1.53
Citizens Banking Corp. (USA)                                              22,100      714        .99
FOOD & HOUSEHOLD PRODUCTS - 2.28%                                                                   
Santa Isabel SA (ADR) (Chile)                                             75,000      642        .89
Grupo Industrial Maseca, SA de CV, Class B (ADR)  (Mexico)                31,300      421        .58
Geest PLC (United Kingdom)                                                45,000      301        .42
Metro-Richelieu Inc., Class A (Canada)                                    24,000      282        .39
RECREATION & OTHER CONSUMER PRODUCTS - 2.21%                                                        
Radica Games Ltd. (1)                                                     52,000      812       1.12
Movado Group, Inc. (USA)                                                  30,000      608        .84
Metromedia International Group, Inc. (USA)(1)                             40,000      178        .25
HEALTH & PERSONAL CARE - 1.76%                                                                      
Aviron (USA)(1)                                                           29,200      628        .87
Pharmacyclics, Inc. (USA)(1)                                              20,000      347        .48
Grupo Casa Autrey, SA de CV (ADR) (Mexico)                                45,000      298        .41
ELECTRONIC INSTRUMENTS - 1.52%                                                                      
Etec Systems, Inc. (USA)(1)                                               16,600      546        .76
Disco Corp. (Japan)                                                       10,000      283        .39
ASM Pacific Technology Ltd. (Hong Kong)                                  700,000      267        .37
BEVERAGES & TOBACCO - 1.28%                                                                         
Robert Mondavi Corp., Class A (USA) (1)                                   13,600      498        .69
Quilmes Industrial SA, preferred shares                                                             
 (ADR) (Luxembourg)                                                       45,000      425        .59
BUILDING MATERIALS & COMPONENTS - 1.08%                                                             
Futuris Corp. Ltd. (Australia)                                           675,000      778       1.08
INSURANCE - 1.02%                                                                                   
LandAmerica Financial Group, Inc. (USA)                                   12,000      736       1.02
MISCELLANEOUS MATERIALS & COMMODITIES - 0.97%                                                       
SPARTECH Corp. (USA)                                                      35,000      698        .97
FINANCIAL SERVICES - 0.84%                                                                          
American Capital Strategies, Ltd. (USA)                                   40,000      610        .84
INDUSTRIAL COMPONENTS - 0.70%                                                                       
Hayes Lemmerz International, Inc. (USA)(1)                                16,000      504        .70
CHEMICALS - 0.60%                                                                                   
Gurit-Heberlein AG (Switzerland)                                             130      321        .44
Kalon Group PLC (United Kingdom)                                          78,000      117        .16
TELECOMMUNICATIONS - 0.55%                                                                          
Western Telecom (France)(1)                                               25,000      277        .38
CESKE RADIOKOMUNIKACE AS (GDR) (Czech Republic)(1,2)                       4,200      123        .17
REAL ESTATE - 0.45%                                                                                 
TBI PLC (United Kingdom)                                                 204,100      328        .45
MACHINERY & ENGINEERING - 0.40%                                                                     
KCI Konecranes International Corp. (Finland)                               6,800      290        .40
ENERGY SOURCES - 0.38%                                                                              
Premier Oil PLC (United Kingdom)                                         430,000      152        .21
Ramco Energy PLC (United Kingdom)                                         26,400      122        .17
TRANSPORTATION:  SHIPPING - 0.38%                                                                   
ICB Shipping AB, Class B (Sweden)                                         35,400      274        .38
EQUITY COMMON TRUSTS - 0.32%                                                                        
Atle AB, Class A (Sweden)                                                 16,800      233        .32
AEROSPACE & MILITARY TECHNOLOGY - 0.16%                                                             
Alvis PLC (United Kingdom)                                                38,400      115        .16
MISCELLANEOUS - 4.97%                                                                               
Other stocks in initial period of acquisition                                         3592      4.97
                                                                                 --------  -------- 
TOTAL STOCKS (cost: $60,509,000)                                                     56802    76.39 
                                                                                 --------  -------- 

                                                                       Principal   Market   Percent 
                                                                          Amount    Value    of Net 
SHORT-TERM SECURITIES                                                      (000)    (000)    Assets 
---------------------------------------------------------------------   -------- --------  -------- 
CORPORATE SHORT-TERM NOTES - 19.15%                                                                 
BP Capital PLC 5.30% due 12/1/98                                       $            1,500       2.08
Canadian Wheat Board 5.02% due 2/19/99                                     1,300    1,285       1.78
BMW U.S. Capital Corp. 5.10% due 12/10/98                                  1,000      999       1.38
E.I. du Pont de Nemours and Co. 5.17% due 12/7/98                          1,000      999       1.38
Reed Elsevier Inc. 5.11% due 12/4/98 (2)                                   1,000      999       1.38
Unilever PLC 5.00% due 12/4/98 (2)                                         1,000      999       1.38
Siemens Corp. 5.02% due 1/22/99                                            1,000      993       1.37
Vermont American Corp. 5.11% due 12/18/98 (2)                                900      898       1.24
Kellogg Co. 5.30% due 12/4/98                                                825      824       1.14
Pfizer Inc. 5.09% due 12/2/98 (2)                                            800      800       1.11
France Telecom 5.15% due 12/14/98                                            800      798       1.11
KFW International Finance Inc. 5.15% due 12/9/98                             700      699        .97
Household Finance Corp. 5.00% due 12/22/98                                   550      548        .76
Diageo Capital PLC 5.15% due 12/18/98 (2)                                    500      499        .69
American Honda Finance Corp. 5.40% 1/13/99                                   500      497        .69
Mobil Australia Finance Co. 5.08% due 2/8/99 (2)                             500      495        .69
FEDERAL AGENCY DISCOUNT NOTES - 4.26%                                                               
Federal Home Loan Bank 5.00%-5.04% due 12/4/98-1/29/99                     2,500    2,483       3.44
Freddie Mac 4.95% due 1/25/99                                                600      595        .82
                                                                                 --------  -------- 
TOTAL SHORT-TERM SECURITIES (cost: $16,911,000)                                    16,910     23.41 
                                                                                 --------  -------- 
TOTAL INVESTMENT SECURITIES (cost: $77,420,000)                                    73,712     99.80 

Excess of payables over cash and receivables                                        1,470       2.04
                                                                                 --------  -------- 
NET ASSETS                                                                        $72,242    97.76% 
                                                                                 ========  ======== 

(1) Non-income-producing securities.                                                                
(2) Purchased in a private placement transaction; resale                                            
 to the public may require registration or sale only to                                             
  qualified institutional buyers.                                                                   

ADR = American Depositary Receipts                                                                  
GDR = Global Depositary Receipts                                                                    

See Notes to Financial Statements                                                                   

                                                                [Download Table]
Stocks appearing in the portfolio  Stocks eliminated from the portfolio
since November 30, 1998            since November 30, 1998             
                                                                       
American Capital Strategies        Dr Solomon's Group                  
Aspect Development                 Four Media                          
Century Communications             Hartmarx                            
CESKE RADOKOMUNIDACE               Medallion                           
EUROBIKE                           Petco Animal Supplies               
Fujitsu Support and Service        Rambus                              
Futuris                                                                
Imax                                                                   
Megachips                                                              
Morton's Restaurant Group                                              
Movado Group                                                           
National Computer Systems                                              
NatSteel Electronics                                                   
Navigant International                                                 
PMC- Sierra                                                            
Radica Games                                                           
Rent- Way                                                              
Rhon-Klinikum                                                          
Sanmina                                                                
Santa Isabel                                                           
Sapient                                                                
Venture Manufacturing                                                  
Western Telecom                                                        
White Cap Industries                                                   

                                                        [Enlarge/Download Table]
GROWTH FUND                                                                                 
Investment Portfolio  November 30, 1998                                                     
------------------------------------------------------------                                
                                                                                            

STOCKS                                                           91.99%                     

CASH &                                                                                      
EQUIVALENTS                                                       8.01%                     
------------------------------------------------------------                                

                                                                Percent                     
                                                                 Of Net                     
Largest Individual Stocks                                        Assets                     
------------------------------------------------------------    -------                     

Time Warner                                                       5.08%                     
Viacom                                                              4.89                    
Tele-Communications, Liberty Media Group                            3.05                    
Cendant                                                             2.89                    
Texas Instruments                                                   2.72                    
Disney                                                              2.06                    
Comcast                                                             1.79                    
Altera                                                              1.79                    
King World Productions                                              1.72                    
USA Networks                                                        1.67                    

                                                                            Market  Percent 
                                                              Number of      Value   of Net 
Stocks (common and preferred)                                    Shares      (000)   Assets 
--------------------------------------------                    -------    -------  ------- 
Broadcasting & Publishing - 24.74%                                                          
Time Warner Inc.                                               2,702,575   $285,797   5.08% 
Viacom Inc., Class B  (1)                                      3,700,000    246,281     4.89
Viacom Inc., Class A  (1)                                        439,200     28,850         
Tele-Communications, Inc., Series A, Liberty Media Group  (1   4,255,205    171,538     3.05
Comcast Corp., Class A, special                                2,075,000    100,897     1.79
USA Networks, Inc. (1)                                         2,970,000     93,741     1.67
News Corp. Ltd., preferred  (ADR) (Australia)                  2,102,500     52,957     1.58
News Corp. Ltd. (ADR)                                          1,270,000     35,560         
Fox Entertainment Group, Inc., Class A  (1)                    2,750,000     64,969     1.16
CSC Holdings, Inc. (Formerly Cablevision Systems Corp.), Cla   1,500,000     62,062     1.10
Cox Communications, Inc., Class A  (1)                         1,105,600     58,251     1.04
Jones Intercable, Inc., Class A  (1)                           1,525,000     47,370      .84
Tele-Communications, Inc., Series A,  TCI Group  (1)           1,089,078     46,014      .82
BHC Communications, Inc., Class A  (1)                           286,189     31,910      .57
Tele-Communications, Inc., Series A, TCI Ventures Group (1)    1,545,698     30,624      .55
United International Holdings, Inc., Class A  (1)              1,180,000     19,912      .35
Jacor Communications, Inc.  (1)                                  100,000      5,819      .10
Adelphia Communications Corp., Class A  (1)                      135,000      4,717      .08
Chancellor Media Corp., Class A   (1)                            100,000      3,769      .07
Electronic Components - 15.22%                                                              
Texas Instruments Inc.                                         2,000,000    152,750     2.72
Altera Corp.  (1)                                              2,050,000    100,578     1.79
Intel Corp.                                                      860,800     92,644     1.65
Microchip Technology Inc.  (1)                                 2,105,000     73,280     1.30
Micron Technology, Inc.  (1)                                   1,696,300     70,078     1.25
SCI Systems, Inc. (1)                                          1,213,326     58,998     1.05
Linear Technology Corp.                                          800,000     56,050     1.00
Quantum Corp.  (1)                                             2,275,000     50,334      .89
ADC Telecommunications, Inc.  (1)                              1,305,900     39,014      .69
Adaptec, Inc.  (1)                                             2,336,000     37,960      .68
Xilinx, Inc.  (1)                                                700,000     35,525      .63
Analog Devices, Inc.  (1)                                      1,366,666     27,931      .50
LSI Logic Corp.  (1)                                           1,000,000     15,500      .28
Newbridge Networks Corp. (Canada) (1)                            460,000     13,455      .24
National Semiconductor Corp.  (1)                                665,000      9,559      .17
Motorola, Inc.                                                   103,400      6,411      .11
Seagate Technology  (1)                                          200,000      5,900      .10
Rogers Corp.  (1)                                                190,800      5,176      .09
Park Electrochemical Corp.                                       250,000      4,797      .08
Business & Public Services - 9.38%                                                          
Cendant Corp.  (1)                                             8,564,800    162,731     2.89
Columbia/HCA Healthcare Corp.                                  2,047,500     50,420      .90
Waste Management, Inc. (formerly USA Waste Services, Inc.)     1,070,597     45,902      .82
Federal Express Corp.  (1)                                       700,000     45,413      .81
America Online, Inc.  (1)                                        436,000     38,177      .68
Cambridge Technology Partners (Massachusetts), Inc.  (1)       1,400,000     29,225      .52
Concord EFS, Inc.  (1)                                           850,900     27,069      .48
Universal Health Services, Inc., Class B  (1)                    500,000     26,813      .48
Allied Waste Industries, Inc.  (1)                             1,257,100     25,613      .46
Flextronics International Ltd. (USA - Incorporated in Singap     300,000     19,950      .35
First Data Corp.                                                 500,000     13,344      .24
Avery Dennison Corp.                                             220,000     10,546      .19
Ceridian Corp.  (1)                                              150,000      9,759      .17
Paychex, Inc.                                                    125,000      6,219      .11
Electronic Data Systems Corp.                                    150,000      5,850      .10
TeleTech Holdings, Inc.  (1)                                     640,000      5,840      .10
APAC TeleServices, Inc.  (1)                                     700,000      4,550      .08
Data Processing & Reproduction - 8.42%                                                      
Solectron Corp.  (1)                                           1,271,000     84,124     1.50
Oracle Corp.  (1)                                              2,425,000     83,056     1.48
PeopleSoft, Inc.  (1)                                          3,100,000     63,744     1.13
Ascend Communications, Inc.  (1)                                 750,000     42,141      .75
Microsoft Corp.  (1)                                             300,000     36,600      .65
Autodesk, Inc.                                                   859,100     31,250      .56
Silicon Graphics, Inc. (1)                                     2,170,000     26,582      .47
Intuit Inc.  (1)                                                 393,300     22,762      .41
Lexmark International Group, Inc., Class A  (1)                  200,000     15,275      .27
Computer Associates International, Inc.                          320,800     14,195      .25
Vantive Corp.  (1)                                             1,269,156     10,788      .19
Compaq Computer Corp.                                            300,000      9,750      .17
Gateway 2000, Inc.  (1)                                          150,000      8,419      .15
Structural Dynamics Research Corp.  (1)                          475,000      8,283      .15
3Com Corp.  (1)                                                  205,000      7,931      .14
Mentor Graphics Corp.  (1)                                       800,000      6,900      .12
Data General Corp.  (1)                                          100,000      1,813      .03
Leisure & Tourism - 5.58%                                                                   
Walt Disney Co.                                                3,600,000    115,875     2.06
King World Productions, Inc.  (1)                              3,550,000     96,737     1.72
Carnival Corp.                                                 1,284,800     44,326      .79
Mirage Resorts, Inc.  (1)                                      2,700,000     40,162      .71
MGM Grand, Inc.  (1)                                             650,000     16,697      .30
Insurance - 2.99%                                                                           
American International Group, Inc.                               800,000     75,200     1.34
EXEL Ltd., Class A (Incorporated in Bermuda)                     635,000     47,704      .85
Transatlantic Holdings, Inc.                                     405,000     30,780      .55
MGIC Investment Corp.                                            320,000     14,060      .25
Health & Personal Care - 2.51%                                                              
Sepracor Inc.  (1)                                               300,000     24,900      .44
Guidant Corp.                                                    250,000     21,453      .38
Warner-Lambert Co.                                               244,400     18,452      .33
Gilead Sciences, Inc.  (1)                                       500,000     15,563      .28
Pfizer Inc                                                       100,000     11,163      .20
BioChem Pharma Inc. (Canada) (1)                                 400,000      9,750      .17
SEQUUS Pharmaceuticals, Inc.  (1)                                440,416      8,698      .16
Johnson & Johnson                                                 97,600      7,930      .14
Forest Laboratories, Inc.  (1)                                   160,000      7,460      .13
Novoste Corp.  (1)                                               400,000      6,500      .12
Omnicare, Inc.                                                   150,000      4,294      .08
Guilford Pharmaceuticals, Inc.  (1)                              200,000      2,825      .05
Pharmacia & Upjohn, Inc.                                          36,250      1,887      .03
Chemicals - 2.37%                                                                           
Monsanto Co.                                                   1,721,200     77,992     1.39
Valspar Corp.                                                    750,000     24,938      .44
Air Products and Chemicals, Inc.                                 450,000     17,156      .31
Praxair, Inc.                                                    200,000      7,638      .13
Engelhard Corp.                                                  284,400      5,492      .10
Banking - 2.23%                                                                             
Washington Mutual, Inc.                                        1,225,000     47,469      .84
BankBoston Corp.                                                 581,680     24,212      .43
Charter One Financial, Inc.                                      791,824     23,507      .42
Wells Fargo & Co.                                                500,000     18,000      .32
M&T Bank Corp.                                                    25,000     12,463      .22
Telecommunications - 2.23%                                                                  
AirTouch Communications  (1)                                   1,550,000     88,641     1.58
MCI WorldCom, Inc. (formerly MCI Communications Corp.)  (1)      460,243     27,154      .48
Paging Network, Inc.  (1)                                      1,500,000      9,281      .17
Electronic Instruments - 2.13%                                                              
Applied Materials, Inc.  (1)                                   2,041,700     79,116     1.41
Perkin-Elmer Corp.                                               363,900     33,934      .60
Security Dynamics Technologies, Inc. (1)                         250,000      3,812      .07
ANTEC Corp.  (1)                                                 150,000      2,775      .05
Transportation:Airlines - 1.97%                                                             
AMR Corp.  (1)                                                   790,000     52,091      .93
Southwest Airlines Co.                                         2,350,675     50,539      .90
Delta Air Lines, Inc.                                            150,000      8,053      .14
Merchandising - 1.95%                                                                       
Consolidated Stores Corp.  (1)                                 2,152,425     46,277      .82
Limited Inc.                                                     617,700     17,875      .32
Lowe's Companies, Inc.                                           400,000     16,900      .30
Cardinal Health, Inc., Class A                                   222,300     15,255      .27
Circuit City Stores, Inc. - Circuit City Group                   200,000      7,237      .13
Venator Group, Inc. (formerly Woolworth Corp.)  (1)              774,300      6,098      .11
Electrical & Electronics - 1.56%                                                            
Telefonaktiebolaget LM Ericsson, Class B (ADR) (Sweden)        1,590,000     43,924      .78
Northern Telecom Ltd. (Canada)                                   390,000     18,208      .32
General Instrument Corp.  (1)                                    600,000     16,875      .30
Nokia Corp., Class A (ADR) (Finland)                              90,000      8,820      .16
Financial Services - 1.37%                                                                  
Fannie Mae                                                       500,000     36,375      .65
Household International, Inc.                                    700,000     27,388      .49
Capital One Financial Corp.                                      120,000     13,200      .23
Energy Sources - 0.89%                                                                      
Murphy Oil Corp.                                                 350,000     13,956      .25
Pogo Producing Co.                                             1,124,300     13,070      .23
Enterprise Oil PLC (United Kingdom)                            1,700,000      9,335      .17
Talisman Energy Inc. (Canada) (1)                                400,000      6,961      .12
TOTAL, Class B (ADR) (France)                                    110,000      6,724      .12
Textiles & Apparel - 0.83%                                                                  
NIKE, Inc., Class B                                            1,000,000     40,000      .71
Nine West Group Inc.  (1)                                        544,500      6,806      .12
Beverages & Tabacco - 0.69%                                                                 
Philip Morris Companies Inc.                                     555,000     31,045      .55
PepsiCo, Inc.                                                    200,000      7,738      .14
Miscellaneous Materials & Commodities - 0.67%                                               
Sealed Air Corp.  (1)                                            850,000     37,506      .67
Recreation & Other Consumer Products - 0.48%                                                
Hasbro, Inc.                                                     770,700     27,023      .48
Food & Household Products - 0.26%                                                           
Keebler Foods Co.  (1)                                           250,000      8,422      .15
Dole Food Co., Inc.                                              200,000      6,325      .11
Energy Equipment - 0.25%                                                                    
Schlumberger Ltd. (Netherlands Antilles)                         250,000     11,172      .20
Baker Hughes Inc.                                                162,500      2,976      .05
Aerospace & Military Technology - 0.24%                                                     
Gulfstream Aerospace Corp.  (1)                                  267,000     13,717      .24
Transportation: Rail & Road - 0.06%                                                         
Wisconsin Central Transportation Corp.  (1)                      200,000      3,625      .06
Machinery & Engineering - 0.06%                                                             
Thermo Electron Corp.  (1)                                       200,000      3,375      .06
Miscellaneous - 2.91%                                                                       
Other stocks in intial period of acquisition                                163,859     2.91
                                                                           -------  ------- 
TOTAL STOCKS (cost: $3,548,234,000)                                       5,172,758    91.99
                                                                           -------  ------- 

                                                              Principal                     
                                                                Amount                      
Short-Term Securities                                             (000)                     

CORPORATE SHORT - TERM NOTES - 8.14%                                                        
A.I. Credit Corp. 5.00%-5.14% due 12/9/1998-1/6/1999             $64,900     64,648     1.15
Lucent Technologies Inc. 5.05%-5.17%                                                        
 due 12/4-12/10/1998                                              52,605     52,559      .94
E.I. du Pont de Nemours and Co. 5.23%-5.28%                                                 
 due 1/13-1/20/1999                                               50,000     49,662      .88
Johnson & Johnson 5.08% due 1/21/1999                             50,000     49,635      .88
Ford Motor Credit Co. 5.04% due 1/8/1999                          40,000     39,777      .71
PACCAR Financial Corp. 4.99%-5.12%                                                          
 due 12/3/1998-2/22/1999                                          29,500     29,320      .52
General Electric Capital Corp. 5.00% due 2/1/1999                 27,500     27,246      .48
PepsiCo. Inc. 5.03%-5.05% due 1/7-1/12/1999                       26,000     25,858      .46
H.J. Heinz Co. 5.05%-5.18% due 1/7-1/25/1999                      25,875     25,708      .46
National Rural Utilities Cooperative Finance Corp. 5.00%                                    
 due 1/11/1999                                                    22,600     22,460      .40
General Motors Acceptance Corp. 5.11%-5.19%                                                 
 due 12/7/1998-1/4/1999                                           19,400     19,359      .34
BellSouth Telecommunications, Inc. 4.95%-5.00%                                              
 due 1/27-2/4/1999                                                16,340     16,200      .29
Associates Corp. of North America 5.06% due 1/11/1999             15,000     14,906      .27
Household Finance Corp. 5.05% due 1/14/1999                       15,000     14,901      .26
Associates First Capital Corp. 5.34% due 12/2/1998                 5,500      5,498      .10
FEDERAL AGENCY DISCOUNT NOTES - 0.37%                                                       
Fannie Mae 4.92% due 3/18/1999                                    13,000     12,807      .23
Freddie Mac 5.07%-5.21% due 12/3/1998-2/11/1999                    8,151      8,078      .14
                                                                           -------  ------- 
TOTAL SHORT-TERM SECURITIES (cost: $478,657,000)                            478,622     8.51
                                                                           -------  ------- 
TOTAL INVESTMENT SECURITIES (cost:  $4,026,891,000)                       5,651,380   100.50
Excess of payables over cash and receivables                                 28,272      .50
                                                                           -------  ------- 
NET ASSETS                                                               $5,623,108 100.00% 
                                                                           =======  ======= 
(1) Non-income-producing securities.                                                        

ADR = American Depositary Receipts                                                          
See notes to Financial Statements                                                           

Stocks appearing in the portfolio                                                           
 since May 31, 1998                                                                         
American International                                                                      
Applied Materials                                                                           
Compaq Computer                                                                             
Computer Associates International                                                           
Fox Entertainment                                                                           
Gateway 2000                                                                                
General Instrument                                                                          
Gilead Sciences                                                                             
Keebler Foods                                                                               
MGIC Investment                                                                             
Northern Telecom                                                                            
Paging Network                                                                              
PeopleSoft                                                                                  
Praxair                                                                                     
Sealed Air                                                                                  
TeleTech Holdings                                                                           
WorldCom                                                                                    

Stocks eliminated from the portfolio                                                        
 since May 31, 1998                                                                         
Aetna                                                                                       
Avon Products                                                                               
Barnes & Noble                                                                              
Bay Networks                                                                                
Boise Cascade Office Products                                                               
Coram Healthcare                                                                            
Digital Equipment                                                                           
Dura Pharmaceuticals                                                                        
Ecolab                                                                                      
Harrah's Entertainment                                                                      
Host Marriott                                                                               
KLA-Tencor                                                                                  
LCI International                                                                           
Midway Games                                                                                
Mycogen                                                                                     
Netscape Communications                                                                     
NextLevel Systems                                                                           
Oryx Energy                                                                                 
Payless ShoeSource                                                                          
Rambus                                                                                      
Security Capital                                                                            
Sequent Computer Systems                                                                    
Shared Medical Systems                                                                      
Spiegel                                                                                     
Stone & Webster                                                                             
Transocean Offshore                                                                         
Union Texas Petroleum Holdings                                                              
Western Atlas                                                                               
Western Digital                                                                             

                                                        [Enlarge/Download Table]
AMERICAN VARIABLE INSURANCE SERIES INTERNATIONAL FUND                                                  
Investment Portfolio,  November 30, 1998                                                               
                                                                                                       

Where the Fund's Assets Are Invested                                                                   
                                                                    Percent of                         
                                                                    Net Assets                         
                                                                    -----------                        
EUROPE                                                                   66.76%                        
ASIA/PACIFIC                                                             16.75%                        
THE AMERICAS                                                              8.17%                        
OTHER COUNTRIES                                                           2.19%                        
CASH AND EQUIVALENTS                                                      6.13%                        
TOTAL                                                                    100.0%                        

Largest Individual Stocks                                                                              

Telefonica                                                                4.48%                        
Nokia                                                                      3.43                        
Telefonaktiebolaget LM Ericsson                                            2.72                        
TELECEL - Comunicacoes Pessoais                                            2.32                        
Deutsche Telekom                                                           2.24                        
Olivetti                                                                   2.17                        
Koninklijke Philips Electronics                                            2.02                        
Novartis                                                                   2.02                        
Bayerische Motoren Werke                                                   1.76                        
Rentokil Initial                                                           1.76                        

                                                                                   Market    Percent   
                                                                     Number of      Value     of Net   
Stocks (common and preferred)                                           Shares      (000)     Assets   
-----------------------------------------------------------------------------------------------------  
TELECOMMUNICATIONS - 21.76%                                                                            
Telefonica, SA (Spain)                                                2,077,636     97,652             
Telefonica, SA (ADR)                                                    172,363     24,023     4.48%   
TELECEL - Comunicacoes Pessoais, SA (Portugal)                          322,835     63,134       2.32  
Deutsche Telekom AG (Germany)                                         2,167,400     60,812       2.24  
Orange PLC (United Kingdom) (1)                                       4,440,000     45,394       1.67  
Telefonos de Mexico, SA de CV, Class L (ADR) (Mexico)                   882,000     41,068       1.51  
Telecom Italia SpA, nonconvertible savings (Italy)                    5,754,265     35,673             
Telecom Italia SpA                                                      345,000      2,793       1.41  
Mannesmann AG (Germany)                                                 350,000     37,857       1.39  
Koninklijke PTT Nederland NV (Netherlands)                              634,000     27,348       1.01  
France Telecom, SA (France)                                             365,000     25,341        .93  
Telecom Italia Mobile SpA (Italy)                                     2,000,000     13,144             
Telecom Italia Mobile SpA savings                                     1,312,800      5,554        .69  
Cable & Wireless Communications PLC (United Kingdom) (1)              1,900,000     16,950        .62  
Telefonica de Argentina SA, Class B (ADR) (Argentina)                   417,000     13,500        .50  
Philippine Long Distance Telephone Co. (Philippines)                    205,000      5,380             
Philippine Long Distance Telephone Co. (ADR)                            154,000      4,033        .48  
Philippine Long Distance Telephone Co., convertible preferred (GDR)      80,000      3,780             
China Telecom (Hong Kong) Ltd. (ADR) (People's Republic of China) (1    314,600     12,446        .46  
Cia. de Telecomunicaciones de Chile SA (ADR) (Chile)                    425,300      9,862        .36  
DDI Corp. (Japan)                                                         2,600      8,451        .31  
Hong Kong Telecommunications Ltd. (Hong Kong)                         4,000,000      7,647        .28  
Bayan Telecommunications Holdings Corp.,                                150,000      7,500             
convertible preferred (Philippines) (1,2,3)                                                            
Bayan Telecommunications Holdings Corp. (1,2,3)                          57,209        146        .28  
NTT Mobile Communications Network, Inc. (Japan) (1)                         163      6,225        .23  
Panafon Hellenic Telecommunications Co., SA (Greece) (1,3)              300,400      5,385        .20  
SK Telecom Co., Ltd. (South Korea)                                        5,017      3,506        .13  
Telstra Corp. Ltd. (Australia) (1)                                      700,000      3,105        .11  
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp. (Indone  1,600,000      2,314             
Perusahaan Perseroan (Persero) PT Indonesian Satellite Corp. (ADR)       40,000        560        .11  
Videsh Sanchar Nigam Ltd. (GDR) (India)                                 108,600      1,110        .04  
BROADCASTING & PUBLISHING - 8.86%                                                                      
Mediaset SpA (Italy) (1)                                              4,000,000     28,358             
Mediaset SpA                                                          1,967,000     13,945       1.56  
CANAL+ (France)                                                         124,418     28,582       1.05  
Societe Europeenne des Satellites, Class A (FDR) (Luxembourg) (1)       143,000     22,176        .82  
FLEXTECH PLC (United Kingdom) (1)                                     2,250,000     21,575        .79  
News Corp. Ltd. (ADR) (Australia)                                       362,000     10,136             
News Corp. Ltd., preferred (United Kingdom)                             793,719      4,973        .72  
News Corp. Ltd., preferred (ADR)                                        181,000      4,559             
ProSieben Media AG (Germany)                                            400,000     19,169        .71  
Metropole Television (France)                                           106,000     17,439        .64  
Fuji Television (Japan)                                                   3,733     14,864        .55  
Television Francaise 1 SA (France)                                       80,000     13,991        .51  
Grupo Televisa, SA (ADR) (Mexico) (1)                                   321,100      8,168        .30  
Nippon Television Network Corp. (Japan)                                  21,000      6,672        .25  
Television Broadcasts Ltd. (Hong Kong)                                2,259,300      5,836        .21  
Modern Times Group MTG AB, Class B (ADR) (Sweden) (1)                    61,000      3,923             
Modern Times Group MTG AB, Class A (1)                                  101,600      1,286        .19  
Seven Network Ltd. (Australia)                                        1,531,083      5,084        .19  
TV Azteca, SA de CV (ADR) (Mexico)                                      463,900      3,479        .13  
Hachette Filipacchi Medias (France)                                      14,909      3,132        .12  
Primedia Ltd. units (South Africa)                                      391,631      1,094             
Primedia Ltd. units, Class N                                            167,842        389        .05  
SOFTBANK CORP. (Japan)                                                   24,900      1,437        .05  
Publishing & Broadcasting Ltd. (Australia)                              150,000        651        .02  
ELECTRICAL & ELECTRONICS - 7.95%                                                                       
Nokia Corp., Class A (Finland)                                          652,000     63,853             
Nokia Corp., Class K                                                    300,000     29,380       3.43  
Telefonaktiebolaget LM Ericsson, Class B (Sweden)                     2,269,200     63,022             
Telefonaktiebolaget LM Ericsson, Class B (ADR)                          400,000     11,050       2.72  
Siemens AG (Germany)                                                    350,000     24,344        .90  
Northern Telecom Ltd. (Canada)                                          460,000     21,476        .79  
Premier Farnell PLC (United Kingdom)                                  1,000,000      2,968        .11  
BUSINESS & PUBLIC SERVICES - 6.90%                                                                     
Rentokil Initial PLC (formerly Rentokil Group PLC) (United Kingdom)   7,144,100     47,728       1.76  
Vivendi, SA (France)                                                    166,934     37,733       1.39  
Suez Lyonnaise des Eaux (France)                                        145,000     28,621       1.05  
Brambles Industries Ltd. (Australia)                                    925,682     22,621        .83  
TNT Post Groep (Netherlands)                                            634,000     15,944        .59  
Aegis Group PLC (United Kingdom)                                      7,350,000     10,878        .40  
Thames Water PLC (United Kingdom)                                       435,416      8,602        .32  
Reuters Holdings PLC (United Kingdom)                                   776,533      7,497        .27  
United Utilities PLC (United Kingdom)                                   320,424      4,671        .17  
Zhejiang Expressway Co. Ltd., Class H (People's Republic of China)   17,262,000      3,233        .12  
Sasani Ltd. (South Africa)                                            1,229,528         50        .00  
FOOD & HOUSEHOLD PRODUCTS - 4.92%                                                                      
Nestle SA (Switzerland)                                                  20,936     43,470       1.60  
Raisio Group PLC (Finland)                                            2,319,300     30,045       1.10  
Cadbury Schweppes PLC (United Kingdom)                                1,500,000     22,675        .83  
Reckitt & Colman PLC (United Kingdom)                                 1,076,375     15,122        .56  
Groupe Danone (France)                                                   50,987     14,877        .55  
Kerry Group PLC, Class A (United Kingdom)                               560,000      7,572        .28  
MERCHANDISING - 4.03%                                                                                  
Dixons Group PLC (United Kingdom)                                     3,850,000     46,520       1.71  
Carrefour SA (France)                                                    39,000     27,591       1.02  
Koninklijke Ahold NV (Netherlands)                                      437,436     15,164        .56  
Cifra, SA de CV, Class C (Mexico) (1)                                 6,000,000      7,336             
Cifra, SA de CV, Class V (1)                                          3,397,506      4,195        .42  
Kingfisher PLC (United Kingdom)                                         553,798      5,278        .19  
Coles Myer Ltd. (Australia)                                             660,436      3,413        .13  
HEALTH & PERSONAL CARE - 3.67%                                                                         
Novartis AG (Switzerland)                                                29,324     55,007       2.02  
AB Astra, Class A (Sweden)                                            1,333,333     24,414        .90  
Zeneca Group PLC (United Kingdom)                                       418,200     17,344        .64  
SmithKline Beecham PLC (ADR) (United Kingdom)                            50,000      3,047        .11  
BANKING - 3.58%                                                                                        
Safra Republic Holdings SA (Luxembourg)                                 468,000     22,464        .83  
Bank of Nova Scotia (Canada)                                            975,000     21,393        .79  
Westpac Banking Corp. (Australia)                                     2,349,948     15,635        .57  
Royal Bank of Scotland Group PLC (United Kingdom)                       650,000      9,797        .36  
ForeningsSparbanken AB, Class A (Sweden)                                310,000      8,686        .32  
Bank of Scotland (United Kingdom)                                       707,000      7,858        .29  
Sakura Bank, Ltd. (Japan)                                             1,720,000      4,389        .16  
Commonwealth Bank of Australia (Australia)                              304,105      4,182        .15  
Fuji Bank, Ltd. (Japan)                                                 470,000      1,860        .07  
Standard Chartered Bank (United Kingdom)                                100,000      1,062        .04  
DATA PROCESSING & REPRODUCTION - 3.30%                                                                 
Olivetti SpA (Italy) (1)                                             20,602,400     54,072             
Olivetti SpA, warrants, expire 2002 (1)                               2,490,400      5,058       2.17  
Dassault Systemes SA (France)                                           466,000     18,183        .67  
Fujitsu Ltd. (Japan)                                                  1,070,000     12,364        .46  
APPLIANCES & HOUSEHOLD DURABLES - 3.07%                                                                
Koninklijke Philips Electronics NV (formerly                            870,000     55,040       2.02  
Philips Electronics NV) (Netherlands)                                                                  
Sony Corp. (Japan)                                                      340,000     24,894        .92  
Samsung Electronics Co., Ltd. (South Korea)                              65,000      3,477        .13  
ELECTRONIC COMPONENTS - 2.82%                                                                          
Rohm Co., Ltd. (Japan)                                                  340,000     28,734       1.06  
Hoya Corp. (Japan)                                                      475,000     19,956        .73  
Murata Manufacturing Co., Ltd. (Japan)                                  455,000     17,821        .66  
Hirose Electric Co., Ltd. (Japan)                                       111,000      7,441        .27  
LG Semicon Co., Ltd. (South Korea) (1)                                  239,820      2,697        .10  
AUTOMOBILES - 2.72%                                                                                    
Bayerische Motoren Werke AG (Germany)                                    48,000     37,064             
Bayerische Motoren Werke AG (1)                                          14,400     10,865       1.76  
Suzuki Motor Corp. (Japan)                                            1,700,000     19,478        .72  
Mazda Motor Corp. (Japan) (1)                                         1,535,000      5,925        .22  
Honda Motor Co., Ltd. (Japan)                                            14,000        503        .02  
BEVERAGES & TOBACCO - 2.24%                                                                            
South African Breweries Ltd. (South Africa)                           1,416,686     23,977        .88  
Coca-Cola Beverages PLC (United Kingdom) (1)                          6,505,950     13,518             
Coca-Cola Amatil Ltd. (Australia)                                     2,408,093      8,068        .80  
Panamerican Beverages, Inc., Class A (Multinational-Incorporated in     486,000     11,208        .41  
San Miguel Corp., Class B (Philippines)                               2,357,000      4,144        .15  
MULTI-INDUSTRY - 2.15%                                                                                 
Orkla AS, Class A (Norway)                                            1,835,700     30,636       1.13  
Lend Lease Corp. Ltd. (Australia)                                       452,616     11,016        .41  
Siebe PLC (United Kingdom)                                            3,060,000     10,988        .40  
Benpres Holdings Corp. (GDR) (Philippines) (1)                        2,156,000      5,821        .21  
FINANCIAL SERVICES - 1.64%                                                                             
Shohkoh Fund & Co., Ltd. (Japan)                                        109,000     35,961       1.32  
Credicorp Ltd. (Peru)                                                   792,000      8,712        .32  
ENERGY SOURCES - 1.41%                                                                                 
Broken Hill Proprietary Co. Ltd. (Australia)                          2,078,038     16,469        .61  
Imperial Oil Ltd. (Canada)                                              330,000      5,981        .22  
Elf Aquitaine (France)                                                   40,000      4,985        .18  
TOTAL, Class B (ADR) (France)                                            75,000      4,584        .17  
"Shell" Transport and Trading Co., PLC (New York Registered) (United     90,000      3,268        .12  
Woodside Petroleum Ltd. (Australia)                                     600,000      3,045        .11  
AEROSPACE & MILITARY TECHNOLOGY - 1.34%                                                                
Bombardier Inc., Class B (Canada)                                     2,787,800     36,320       1.34  
BUILDING MATERIALS & COMPONENTS - 1.27%                                                                
Holderbank Financiere Glaris Ltd. (Switzerland)                          15,000     17,355        .64  
Cemex, SA de CV (Mexico)                                              4,769,224     11,567             
Cemex, SA de CV, Class A                                              2,321,450      5,584        .63  
RECREATION & OTHER CONSUMER PRODUCTS - 1.24%                                                           
EMI Group PLC (United Kingdom)                                        3,800,000     22,621        .83  
Nintendo Co., Ltd. (Japan)                                               50,000      4,636        .17  
Sony Music Entertainment (Japan) Inc. (Japan)                            90,000      3,964        .15  
Square Co., Ltd. (Japan)                                                125,000      2,580        .09  
CHEMICALS - 0.89%                                                                                      
Bayer AG (Germany)                                                      590,000     24,205        .89  
METALS:  NONFERROUS - 0.79%                                                                            
Alcan Aluminium Ltd. (Canada)                                           310,000      8,254        .30  
WMC Ltd. (Australia)                                                  1,928,134      6,063        .22  
Pechiney, Class A (France)                                               90,000      2,996        .11  
Inco Ltd. (Canada)                                                      180,000      2,081        .08  
Teck Corp., Class B (Canada)                                            300,000      2,028        .08  
FOREST PRODUCTS & PAPER - 0.77%                                                                        
UPM-Kymmene Corp. (Finland)                                             795,000     20,813        .77  
INSURANCE - 0.76%                                                                                      
Royal & Sun Alliance Insurance Group PLC (United Kingdom)             1,786,407     14,906        .55  
ING Groep NV (Netherlands)                                              100,000      5,725        .21  
GOLD MINES & PAPER - 0.49%                                                                             
Anglogold Ltd. (South Africa)                                           275,000     13,436        .49  
UTILITIES:  ELECTRIC & GAS - 0.42%                                                                     
Cia. Paranaense de Energia-COPEL, Class B, preferred nominative (Bra480,373,000      4,619             
Cia. Paranaense de Energia-COPEL, ordinary nominative               328,207,800      2,104        .25  
Scottish Power PLC (United Kingdom)                                     350,000      3,723        .14  
Cia. Energetica de Minas Gerais - CEMIG (Brazil)                     43,678,798        673        .02  
Centrais Geradoras do Sul do Brasil SA - GERASUL,                        53,800        350        .01  
Class B, preferred nominative (ADR) (Brazil) (1)                                                       
MACHINERY & ENGINEERING - 0.34%                                                                        
Valmet Corp. (Finland)                                                  600,000      8,145        .30  
Kvaerner AS, Class A (Norway)                                            80,000      1,207        .04  
CONSTRUCTION & HOUSING - 0.30%                                                                         
YTL Corp. Bhd. (Malaysia) (3)                                        10,000,000      8,032        .30  
ELECTRONIC INSTRUMENTS - 0.29%                                                                         
ADVANTEST CORP. (Japan)                                                 118,400      7,909        .29  
INDUSTRIAL COMPONENTS - 0.23%                                                                          
Bridgestone Corp. (Japan)                                               175,000      4,096        .15  
Minebea Co., Ltd. (Japan)                                               200,000      2,150        .08  
REAL ESTATE - 0.22%                                                                                    
Cheung Kong (Holdings) Ltd. (Hong Kong)                                 500,000      3,600        .13  
Mitsui Fudosan Co., Ltd. (Japan)                                        159,000      1,220        .05  
Kerry Properties Ltd. (Hong Kong - Incorporated In Bermuda)           1,411,000      1,139        .04  
LEISURE & TOURISM - 0.20%                                                                              
Mandarin Oriental International Ltd. (Singapore)                      6,911,218      5,460        .20  
TRANSPORTATION: SHIPPING - 0.18%                                                                       
Stolt-Nielsen SA, Class B (ADR) (Multinational)                         327,000      3,924        .14  
Nippon Yusen KK (Japan)                                                 353,000      1,076        .04  
ENERGY EQUIPMENT - 0.16%                                                                               
Petroleum Geo-Services ASA (ADR) (Norway) (1)                           311,600      4,382        .16  
MISCELLANEOUS MATERIALS & COMMODITIES - 0.15%                                                          
English China Clays PLC (United Kingdom)                              1,583,750      4,100        .15  
MISCELLANEOUS -- 2.32%                                                                                 
Other stocks in initial period of acquisition                                       63,143       2.32  
                                                                               ----------------------  
TOTAL STOCKS (cost: $1,924,615,000)                                              2,538,817      93.38  
                                                                               ----------------------  

                                                                     Principal                         
                                                                        Amount                         
Convertible Debentures                                                   (000)                         
----------------------------------------------------------------------------------------------------   
BROADCASTING & PUBLISHING - 0.29%                                                                      
United News & Media PLC 6.125% 2003                                   GBP4,500       7,708        .29  
ELECTRONIC COMPONENTS - 0.11%                                                                          
Acer Peripherals Inc. 1.25% 2006 (2)                                    $2,680       2,948        .11  
ENERGY SOURCES - 0.03%                                                                                 
Zhenhai Refining & Chemical Co. Ltd. 3.00% 2003 (2)                         950        817        .03  
MISCELLANEOUS -- 0.06%                                                                                 
Other equities in initial period of acquisition                                      1,682        .06  
                                                                               ----------------------  
TOTAL CONVERTIBLE DEBENTURES (cost: $12,793,000)                                    13,155        .49  
                                                                               ----------------------  
TOTAL EQUITY-TYPE SECURITIES (cost: $1,937,408,000)                              2,551,972      93.87  
                                                                               ----------------------  

                                                                     Principal     Market    Percent   
                                                                        Amount      Value     of Net   
Short-Term Securities                                                    (000)      (000)     Assets   
-----------------------------------------------------------------------------------------------------  
CORPORATE SHORT-TERM NOTES - 6.34%                                                                     
British Gas Capital Inc. 5.25% due 1/4/1999                              24,100     23,977        .88  
General Electric Capital Corp. 5.45% due 12/1/1998                       17,700     17,697        .65  
Shell Finance (UK) PLC 5.12% due 2/2/1999                                16,700     16,548        .61  
Siemens Capital Corp. 5.18% due 1/20/1999                                15,100     14,992        .55  
Export Development Corp. 5.02% due 1/28/1999                             15,000     14,874        .55  
Electricite de France 5.12% due 2/16/1999                                14,900     14,736        .54  
Rio Tinto America, Inc. 5.15% due 1/8/1999 (2)                           14,000     13,922        .51  
Unilever NV 5.00% due 12/4/1998 (2)                                      13,000     12,993        .48  
Diageo Capital PLC 5.07% due 12/11/1998 (2)                              12,000     11,982        .44  
Nestle Capital Corp. 5.00% due 1/27/1999                                 11,300     11,207        .41  
International Lease Finance Corp. 5.19% due 1/14/1999                    10,000      9,935        .37  
General Motors Acceptance Corp. 5.17% due 1/4/1999                        9,700      9,651        .35  
NON-U.S. CURRENCY - 0.09%                                                                              
New Taiwanese Dollar                                                 NT$77,697       2,399        .09  
                                                                               ----------------------  
TOTAL SHORT-TERM SECURITIES (cost: $174,774,000)                                   174,913       6.43  
                                                                               ----------------------  
TOTAL INVESTMENT SECURITIES (cost: $2,112,182,000)                               2,726,885     100.30  

Excess of payables over cash and receivables                                         8,172        .30  
                                                                               ------------------------
NET ASSETS                                                                     $2,718,713    100.00%   
                                                                                 ========   ========   

(1) Non-income-producing securities.                                                                   

(2) Purchased in a private placement transaction; resale to the public may                             
    require registration or sale only to qualified institutional buyers.                               

(3) Valued under procedures established by the Board of Trustees.                                      

ADR = American Depositary Receipts                                                                     
FDR = Fiduciary Depositary Receipts                                                                    
GDR = Global Depositary Receipts                                                                       
See Notes to Financial Statements                                                                      

Stocks appearing in the portfolio                                                                      
since May 31, 1998                                                                                     

ADVANTEST                                                                                              
Anglogold                                                                                              
Bayer                                                                                                  
Broken Hill Proprietary                                                                                
Centrais Geradoras do Sul do Brasil - GERASUL                                                          
DDI                                                                                                    
Fuji Television                                                                                        
NTT Mobile Communications Network                                                                      
Panafon Hellenic Telecommunications                                                                    
Siemens                                                                                                
Societe Europeenne des Satellites                                                                      
Telstra                                                                                                
TNT POST                                                                                               

Stocks eliminated from the portfolio                                                                   
since May 31, 1998                                                                                     

Amway Japan                                                                                            
Australia and New Zealand Banking                                                                      
Ayala Land                                                                                             
Bank of Montreal                                                                                       
BOC Group                                                                                              
Centrais Eletricas Brasileiras SA - ELETROBRAS                                                         
CESP - Cia. Energetica de Sao Paulo                                                                    
China Southern Airlines                                                                                
Christiania Bank                                                                                       
Cia. Cervejaria Brahma                                                                                 
Cie. Generale des Etablissements Michelin                                                              
Deutsche Bank                                                                                          
Grupo Financiero Banamex Accival                                                                       
Havas                                                                                                  
Hellenic Bottling                                                                                      
Hongkong Electric Holdings                                                                             
Hutchison Whampoa                                                                                      
Hyundai Electronics Industries                                                                         
Imasco                                                                                                 
Incentive                                                                                              
Kawasaki Heavy Industries                                                                              
Kyocera                                                                                                
LG Electronics-LG Semiconductors                                                                       
Mandamus                                                                                               
Oil Co. LUKoil                                                                                         
Pathe                                                                                                  
RAO Gazprom                                                                                            
SGL Carbon                                                                                             
Societe Centrale des Assurances Generales de France                                                    
Springer (Axel) Verlag                                                                                 
Swire Pacific                                                                                          
Telecomunicacoes Brasileiras                                                                           
Tesco                                                                                                  
Toronto-Dominion Bank                                                                                  
Unidanmark                                                                                             


                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                                       
GROWTH-INCOME FUND                                                                                       
Investment Portfolio - November 30, 1998                                                                 
                                                                                                         
Equity Securities                                                          88.76%                        
Cash & Equivalents                                                         11.24%                        

                                                                          Percent                        
                                                                           of Net                        
Largest Individual Stocks                                                  Assets                        
Oracle                                                                      1.71%                        
Texas Instruments                                                             1.58                       
Monsanto                                                                      1.45                       
Viacom                                                                        1.31                       
First Union                                                                   1.28                       
Wells Fargo                                                                   1.24                       
Time Warner                                                                   1.15                       
York International                                                            1.10                       
Warner-Lambert                                                                1.04                       
3Com                                                                          1.01                       

                                                                                       Market    Percent 
                                                                       Number of        Value     of Net 
Stocks (common and preferred)                                              Shares       (000)     Assets 

Data Processing & Reproduction - 7.13%                                                                   
Oracle Corp. (1)                                                        3,622,700    $124,077      1.71% 
3Com Corp. (1)                                                          1,900,000      73,506        1.01
Xerox Corp.                                                               609,400      65,510         .90
Microsoft Corp. (1)                                                       500,000      61,000         .84
Computer Associates International, Inc.                                 1,000,000      44,250         .61
Hewlett-Packard Co.                                                       500,000      31,375         .43
Silicon Graphics, Inc. (1)                                              2,424,300      29,698         .41
Adobe Systems Inc.                                                        600,000      26,850         .37
International Business Machines Corp.                                     135,400      22,341         .31
Cisco Systems, Inc.   (1)                                                 200,000      15,075         .21
Compaq Computer Corp.                                                     400,000      13,000         .18
Gateway 2000, Inc.   (1)                                                  200,000      11,225         .15
Health & Personal Care - 6.99%                                                                           
Warner-Lambert Co.                                                      1,000,000      75,500        1.04
Schering-Plough Corp.                                                     600,000      63,825         .88
Glaxo Wellcome PLC (ADR) (United Kingdom)                                 950,000      60,325         .83
Guidant Corp.                                                             600,000      51,487         .71
Astra AB, Class A (ADR) (Sweden)                                        2,600,000      48,100         .66
Pfizer Inc                                                                400,000      44,650         .61
Kimberly-Clark Corp.                                                      740,000      38,942         .54
Merck & Co., Inc.                                                         250,000      38,719         .53
Bristol-Myers Squibb Co.                                                  275,000      33,705         .46
Avon Products, Inc.                                                       800,000      32,500         .45
Johnson & Johnson                                                         250,000      20,313         .28
Banking - 6.37%                                                                                          
First Union Corp.                                                       1,530,000      92,947        1.28
Wells Fargo & Co.                                                       2,497,000      89,892        1.24
BankAmerica Corp.                                                         856,537      55,835         .77
Washington Mutual Savings Bank                                          1,200,000      46,500         .64
Marshall & Ilsley Corp.                                                   599,800      30,552         .42
Bank of New York Co., Inc.                                                800,000      27,400         .37
Chase Manhattan Corp.                                                     400,000      25,375         .35
KeyCorp                                                                   800,000      24,550         .33
SunTrust Banks, Inc.                                                      280,000      19,547         .27
J.P. Morgan & Co. Inc.                                                    150,000      16,031         .22
Huntington Bancshares Inc.                                                459,679      13,618         .19
BANK ONE CORP.                                                            183,012       9,391         .13
Bank of Tokyo - Mitsubishi, Ltd. (ADR) (Japan)                            600,000       6,337         .09
Sakura Bank, Ltd. (ADR) (Japan)                                           200,000       5,000         .07
Broadcasting & Publishing - 6.26%                                                                        
Viacom Inc., Class B (1)                                                1,425,000      94,851        1.31
Time Warner Inc.                                                          792,000      83,754        1.15
Tele-Communications, Inc., Series A, Liberty Media Group (1)            1,285,937      51,839         .71
Harte-Hanks Communications, Inc.                                        1,845,600      43,602         .60
News Corp. Ltd. (ADR) (Australia)                                       1,100,000      30,800            
News Corp. Ltd., preferred (ADR)                                          400,000      10,075         .56
Houston Industries Inc. 7.00% ACES convertible preferred 2000             350,000      32,200         .44
Media General, Inc., Class A                                              636,100      30,175         .42
Gannett Co., Inc.                                                         385,400      24,882         .34
E.W. Scripps Co., Class A                                                 372,800      19,176         .26
Comcast Corp., Class A, special stock                                     350,000      17,019         .24
Fox Entertainment Group, Inc., Class A   (1)                              700,000      16,537         .23
Chemicals - 5.60%                                                                                        
Monsanto Co.                                                            2,325,000     105,352        1.45
Morton International, Inc.                                              2,200,000      64,763         .89
International Flavors & Fragrances Inc.                                 1,100,000      46,063         .63
Praxair, Inc.                                                           1,094,100      41,781         .58
Millennium Chemicals Inc.                                               1,641,600      39,193         .54
E.I. du Pont de Nemours and Co.                                           600,000      35,250         .49
Mallinckrodt Inc.                                                         770,000      24,881         .34
Dow Chemical Co.                                                          180,000      17,528         .24
PPG Industries, Inc.                                                      250,000      15,297         .21
Witco Corp.                                                               500,000       9,531         .13
Air Products and Chemicals, Inc.                                          200,000       7,625         .10
Energy Sources - 5.59%                                                                                   
Ultramar Diamond Shamrock Corp.                                         2,780,400      71,595         .99
Valero Energy Corp. (2)                                                 2,809,000      58,989         .81
Atlantic Richfield Co.                                                    750,000      49,875         .69
Conoco Inc., Class A   (1)                                              1,374,000      32,547         .45
Noble Affiliates, Inc.                                                  1,160,000      29,362         .40
Pennzoil Co.                                                              780,900      28,991         .40
Amoco Corp.                                                               450,000      26,522         .36
Texaco Inc.                                                               350,000      20,147         .28
Murphy Oil Corp.                                                          463,200      18,470         .25
Kerr-McGee Corp.                                                          450,000      17,775         .24
Oryx Energy Co. (1)                                                     1,250,000      17,266         .24
Pioneer Natural Resources Co.                                             930,700      12,332         .17
Ashland Inc.                                                              250,000      12,156         .17
Phillips Petroleum Co.                                                    250,000      10,500         .14
Merchandising - 4.38%                                                                                    
American Stores Co.                                                     1,750,000      58,734         .81
J.C. Penney Co., Inc.                                                   1,050,000      57,750         .79
Circuit City Stores, Inc. - Circuit City Group                          1,425,000      51,567         .71
Albertson's, Inc.                                                         818,700      46,717         .64
Federated Department Stores, Inc. (1)                                     700,000      29,181         .40
Limited Inc.                                                              900,000      26,044         .36
AutoZone, Inc. (1)                                                        750,000      22,594         .31
Lowe's Companies, Inc.                                                    300,000      12,675         .17
Circuit City Stores, Inc. - CarMax Group (1)                            1,300,000       6,987         .10
Venator Group, Inc. (formerly Woolworth Corp.)   (1)                      798,600       6,289         .09
Business & Public Services - 4.28%                                                                       
Cendant Corp.   (1)                                                     2,800,000      53,200         .73
Electronic Data Systems Corp.                                           1,349,500      52,631         .73
Browning-Ferris Industries, Inc.                                        1,656,100                     .67
IKON Office Solutions, Inc.                                             4,050,000      39,488         .54
Hertz Corp., Class A                                                      991,800      36,449         .50
Waste Management, Inc.                                                    725,000      31,084         .43
Alexander & Baldwin, Inc.                                               1,020,000      23,460         .32
Pitney Bowes Inc.                                                         350,000      19,600         .27
Avery Dennison Corp.                                                      127,500       6,112         .09
Telecommunications- 4.09%                                                                                
Ameritech Corp.                                                         1,161,800      62,882         .87
AT&T Corp.                                                              1,000,000      62,312         .86
GTE Corp.                                                                 739,900      45,874         .63
AirTouch Communications (1)                                               755,000      43,176         .59
Telefonica, SA (ADR) (Spain)                                              218,181      30,409         .42
MCI Communications Corp. (1)                                              435,365      25,686         .35
U S WEST Communications, Inc.                                             275,000      17,119         .24
SBC Communications Inc.                                                   200,000       9,588         .13
Forest Products & Paper - 3.89%                                                                          
Bowater Inc.                                                            1,495,000      59,052         .81
Weyerhaeuser Co.                                                          950,000      47,619         .66
Fort James Corp.                                                        1,169,499      45,757         .63
Union Camp Corp.                                                          600,000      38,812         .53
Georgia-Pacific Corp., Georgia-Pacific Group                              448,300      25,441            
Georgia-Pacific Corp., Timber Group                                       300,000       6,900         .45
Sonoco Products Co.                                                       800,000      23,950         .33
International Paper Co.                                                   450,000      19,547         .27
Chesapeake Energy Corp.                                                   192,600       6,681         .09
Westvaco Corp.                                                            187,500       5,273         .07
Louisiana-Pacific Corp.                                                   200,000       3,400         .05
Electronic Components - 3.54%                                                                            
Texas Instruments Inc.                                                  1,500,000     114,562        1.58
Intel Corp.                                                               500,000      53,813         .74
AMP Inc.                                                                  632,381      30,591         .42
Corning Inc.                                                              679,500      27,265         .38
Micron Technology, Inc. (1)                                               300,000      12,394         .17
SCI Systems, Inc. (1)                                                     200,000       9,725         .13
Quantum Corp. (1)                                                         400,000       8,850         .12
Beverages & Tobacco - 3.35%                                                                              
Philip Morris Companies Inc.                                            1,305,000      72,998        1.00
RJR Nabisco Holdings Corp.                                              1,800,000      51,863         .71
Seagram Co. Ltd. (Canada)                                               1,300,000      44,606         .62
PepsiCo, Inc.                                                             820,000      31,724         .44
Anheuser-Busch Companies, Inc.                                            350,000      21,219         .29
UST Inc.                                                                  600,000      20,850         .29
Insurance - 2.41%                                                                                        
St. Paul Companies, Inc.                                                  937,254      33,038         .46
Aetna Inc.                                                                375,000      28,992         .40
General Re Corp.                                                          110,000      25,685         .35
Allstate Corp.                                                            600,000      24,450         .34
American General Corp.                                                    320,000      22,540         .31
MGIC Investment Corp.                                                     500,000      21,969         .30
Royal & Sun Alliance Insurance Group PLC (United Kingdom)               2,200,000      18,357         .25
Utilities: Electric & Gas - 2.29%                                                                        
Ameren Corp.                                                            1,145,400      47,176         .65
DPL Inc.                                                                1,600,000      32,000         .44
GPU, Inc.                                                                 725,000      31,764         .43
TECO Energy, Inc.                                                       1,050,000      28,219         .39
Williams Companies, Inc.                                                  622,000      17,921         .25
Duke Energy Corp.                                                         150,000       9,384         .13
Electrical & Electronics - 2.20%                                                                         
York International Corp.                                                1,902,900      79,922        1.10
Northern Telecom Ltd. (Canada)                                            978,840      45,700         .63
Nokia Corp., Class A (ADR) (Finland)                                      180,000      17,640         .24
Siemens AG (Germany)                                                      240,000      16,693         .23
Financial Services - 2.09%                                                                               
Household International, Inc.                                           1,813,320      70,946         .98
Capital One Financial Corp.                                               300,000      33,000         .45
FINOVA Group Inc.                                                         360,000      19,013         .26
Transamerica Corp.                                                        170,000      18,063         .25
Associates First Capital Corp., Class A                                   138,732      10,804         .15
Machinery & Engineering - 2.03%                                                                          
Deere & Co.                                                             1,016,600      35,517         .49
Ingersoll-Rand Co.                                                        525,000      24,577         .34
Parker Hannifin Corp.                                                     675,000      23,456         .32
New Holland NV (Netherlands)                                            1,570,900      21,502         .30
Caterpillar Inc.                                                          400,000      19,775         .27
Pall Corp.                                                                700,000      16,275         .22
Greenfield Capital Trust 6.00% convertible preferred                      118,000       6,136         .09
Aerospace & Military Technology - 1.90%                                                                  
United Technologies Corp.                                                 350,000      37,516         .51
Raytheon Co., Class B                                                     350,000      19,381            
Raytheon Co., Class A                                                     224,030      12,252         .44
Boeing Co.                                                                750,000      30,469         .42
Sundstrand Corp.                                                          500,000      27,000         .37
Gulfstream Aerospace Corp. (1)                                            225,000      11,559         .16
Industrial Components - 1.49%                                                                            
Eaton Corp.                                                               520,000      35,523         .49
Federal-Mogul Corp.                                                       456,600      25,912         .36
TRW Inc.                                                                  400,000      22,025         .30
Tower Automotive, Inc. (1)                                                400,000       9,100         .13
Dana Corp.                                                                231,800       9,040         .12
Genuine Parts Co.                                                         200,000       6,588         .09
Multi-Industry - 1.32%                                                                                   
FMC Corp. (1)                                                             550,000      31,969         .44
Textron Inc.                                                              340,000      26,414         .36
Loews Corp.                                                               200,000      20,000         .28
AlliedSignal Inc.                                                         400,000      17,600         .24
Energy Equipment - 1.18%                                                                                 
Schlumberger Ltd. (Netherlands Antilles)                                1,170,000      52,284         .72
Baker Hughes Inc.                                                       1,810,120      33,148         .46
Electronic Instruments - 1.17%                                                                           
Perkin-Elmer Corp.                                                        500,000      46,625         .64
Applied Materials, Inc. (1)                                             1,000,000      38,750         .53
Food & Household Products - 1.07%                                                                        
General Mills, Inc.                                                       500,000      37,750         .52
Bestfoods                                                                 400,000      23,250         .32
Colgate-Palmolive Co.                                                     200,000      17,125         .23
Textiles & Apparel - 0.88%                                                                               
NIKE, Inc., Class B                                                     1,040,000      41,600         .57
VF Corp.                                                                  460,000      22,569         .31
Miscellaneous Materials & Commodities - 0.72%                                                            
Crown Cork & Seal Co., Inc.                                             1,100,000      37,125         .51
Potash Corp. of Saskatchewan Inc. (Canada)                                250,000      15,422         .21
Real Estate - 0.62%                                                                                      
Boston Properties, Inc.                                                   750,000      23,672         .33
Equity Residential Properties Trust                                       500,000      21,156         .29
Leisure & Tourism - 0.60%                                                                                
Walt Disney Co.                                                         1,364,796      43,929         .60
Metals: Nonferrous - 0.35%                                                                               
Aluminum Co. of America                                                   340,000      25,203         .35
Metals:  Steel - 0.34%                                                                                   
Allegheny Teledyne Inc.                                                 1,200,000      24,675         .34
Transportation: Rail & Road - 0.23%                                                                      
Norfolk Southern Corp.                                                    540,000      16,403         .23
Miscellaneous - 4.25%                                                                                    
Other stocks in initial period of acquisition                                         309,202        4.25
                                                                                    ---------  --------- 
TOTAL STOCKS (cost:$4,972,455,000)                                                  6,439,754       88.61
                                                                                    ---------  --------- 
                                                                        Principal                        
                                                                           Amount Market ValuePercent of 
Convertible Debentures                                                      (000)       (000) Net Assets 

Business & Public Services - 0.15%                                                                       
Cendant Corp. (formerly CUC International Inc.) 3.00% 2002(3)             $12,000      10,965         .15
                                                                                    ---------  --------- 
TOTAL CONVERTIBLE DEBENTURES (cost: $11,982,000)                                       10,965         .15
                                                                                    ---------  --------- 
TOTAL EQUITY SECURITIES (cost: $4,984,437,000)                                      6,450,719       88.76
                                                                                    ---------  --------- 

Short-Term Securities                                                                                    

Corporate Short-Term Notes - 8.91%                                                                       
International Lease Finance Corp. 5.10%-5.18% due 12/8/98-2/12/99          75,900      75,367        1.04
A.I. Credit Corp. 5.10%-5.12% due 12/4-12/9/98                             54,600      54,548         .75
H.J. Heinz Co. 5.05%-5.20% due 1/7-1/25/99                                 43,100      42,791         .59
Procter & Gamble Co. 4.95%-5.00% due 12/11/98-1/22/99                      38,100      37,932         .52
PepsiCo, Inc. 5.03%-5.05% due 1/7-1/12/99                                  38,100      37,885         .52
Coca-Cola Co. 5.00%-5.08% due 1/12/99                                      34,000      33,795         .47
Eastman Kodak Co. 5.11%-5.12% due 12/3-12/4/98                             31,000      30,985         .43
General Motors Acceptance Corp. 5.11%-5.16% due 12/7/1998-1/14/1999        30,400      30,246         .42
Ford Motor Credit Co. 5.18% due 12/1/98                                    30,000      29,996         .41
Associates First Capital Corp. 5.32%-5.34% due 12/2/98-1/6/99              28,500      28,414         .39
CIT Group Holdings, Inc. 5.09% due 12/14/98                                27,500      27,445         .38
American Express Credit Corp. 5.05% due 12/15/98-1/26/99                   27,000      26,855         .37
PACCAR Financial Corp. 4.99%-5.12% 12/7/98-1/26/99                         26,000      25,867         .36
St. Paul Companies, Inc. 5.07%-5.16% due 12/3-12/10/98 (3)                 25,000      24,984         .34
Ameritech Capital Funding Corp. 5.00%-5.04% due 1/12-1/20/99 (3)           25,100      24,928         .34
Lucent Technologies Inc. 5.17% due 12/8/98                                 22,700      22,674         .31
Sara Lee Corp. 5.00% due 12/23/98                                          20,000      19,936         .27
Associates Corp. of North America 5.06%-5.26% due 1/5-1/11/99              20,000      19,881         .27
National Rural Utilities Cooperative                                                                     
 Finance Corp. 5.00%-5.33% due 1/7-1/11/99                                 19,500      19,387         .27
General Electric Capital Corp. 5.00% due 2/1/99                            18,500      18,329         .25
Kellogg Co. 5.10% due 12/10/98                                             12,000      11,983         .16
Gannett Co., Inc. 5.05% due 1/11/99 (3)                                     3,600       3,579         .05

Federal Agency Discount Notes - 2.28%                                                                    
Freddie Mac 4.66%-5.30% due 12/3/98-2/24/99                               111,650     110,805        1.52
Federal Home Loan Banks 5.02%-5.10% due 12/4/98-1/13/99                    55,300      55,069         .76
                                                                                    ---------  --------- 
TOTAL SHORT-TERM SECURITIES (cost: $813,716,000)                                      813,681       11.19
                                                                                    ---------  --------- 
TOTAL INVESTMENT SECURITIES (cost: $5,798,153,000)                                  7,264,400       99.95
Excess of cash and receivables over payables                                            3,317         .05
                                                                                    ---------  --------- 
NET ASSETS                                                                         $7,267,717    100.00% 
                                                                                  =======================

(1)Non-income-producing securities.                                                                      

(2)The Fund owns 5.03% of the outstanding voting securities of Valero Energy,                            
 which represent investments in affiliates as defined in the Investment                                  
 Company Act of 1940.                                                                                    

(3)Purchased in a private placement transaction; resale to the public                                    
 may require registration or sale only to qualified institutional buyers.                                

ADR = American Depositary Receipts                                                                       

See Notes to Financial Statements                                                                        

Stocks appearing in the portfolio                                                                        
since May 31, 1998                                                                                       

Applied Materials                                                                                        
Boston Properties                                                                                        
Cendant                                                                                                  
Cisco Systems                                                                                            
Compaq Computer                                                                                          
Conoco                                                                                                   
Equity Residential Properties Trust                                                                      
Fox Entertainment                                                                                        
Gateway 2000                                                                                             
Genuine Parts                                                                                            
GTE                                                                                                      
Gulfstream Aerospace                                                                                     
International Flavors & Fragrances                                                                       
Loews                                                                                                    
MGIC Investment                                                                                          
Micron Technology                                                                                        
Morton International                                                                                     
Northern Telecom                                                                                         
Pall                                                                                                     
Perkin-Elmer                                                                                             
Quantum                                                                                                  
RJR Nabisco Holdings                                                                                     
SCI Systems                                                                                              
Transamerica                                                                                             
TRW                                                                                                      
Washington Mutual Savings Bank                                                                           

Stocks eliminated from the portfolio                                                                     
since May 31, 1998                                                                                       

Abbott Laboratories                                                                                      
Alumax                                                                                                   
Beneficial                                                                                               
Cardinal Health                                                                                          
Chrysler                                                                                                 
Citicorp                                                                                                 
Columbia/HCA Healthcare                                                                                  
Crompton & Knowles                                                                                       
DePuy                                                                                                    
Elf Aquitaine                                                                                            
Ford Motor                                                                                               
General Motors                                                                                           
Goodyear Tire & Rubber                                                                                   
Harley Davidson                                                                                          
McCormick                                                                                                
Norsk Hydro                                                                                              
Norwest                                                                                                  
Rayonier                                                                                                 
Regions Financial                                                                                        
Scottish Power                                                                                           
Telefonaktiebolaget LM Ericsson                                                                          
Unilever                                                                                                 
Union Pacific                                                                                            
UNOVA                                                                                                    
Wal-Mart Stores                                                                                          
Western Atlas                                                                                            


                                                        [Enlarge/Download Table]
Asset Allocation Fund                                            Percent                             
Investment Portfolio November 30, 1998                            of Net                             
                                                                  Assets                             
                                                                                                     
----------------------------------------------------          ----------                             
Equity Securities                                                   61.16%                           
Corporate Bonds                                                     15.33                            
U.S. Government Bonds                                               14.02                            
Non-U.S. Government Bonds                                            0.20                            
Cash & Equivalents                                                   9.29                            

LARGEST INDIVIDUAL EQUITY SECURITIES                                                                 
BankAmerica                                                          2.18%                           
Rentokil Initial                                                     1.92                            
Century Telephone Enterprises                                        1.83                            
Household International                                              1.76                            
Zeneca Group                                                         1.66                            
Carnival                                                             1.65                            
International Business Machines                                      1.43                            
Warner-Lambert                                                       1.35                            
Citigroup                                                            1.35                            
Pfizer                                                               1.34                            

                                                                                Market       Percent 
                                                               Number of         Value        of Net 
Stocks (common and preferred)                                     Shares         (000)        Assets 
----------------------------------------------------          ----------    ----------    ---------- 
Chemicals- 5.12%                                                                                     
Praxair, Inc.                                                     550,000       $21,003        1.26% 
Monsanto Co.                                                      365,600        16,566           .99
Air Products and Chemicals, Inc.                                  420,000        16,012           .96
Morton International, Inc.                                        500,000        14,719           .88
Millennium Chemicals Inc.                                         600,000        14,325           .86
PPG Industries, Inc.                                              200,000        12,237           .73
E.I. du Pont de Nemours and Co.                                   200,000        11,750           .70
Energy Sources- 6.26%                                                                                
Atlantic Richfield Co.                                            320,000        21,280          1.27
Royal Dutch Petroleum Co. (New York Registered                                                       
 Shares) (Netherlands)                                            360,000        16,920          1.01
Chevron Corp.                                                     150,000        12,544           .75
Ultramar Diamond Shamrock Corp.                                   350,000         9,013           .54
Amoco Corp.                                                       150,000         8,841           .53
Phillips Petroleum Co.                                            200,000         8,400           .50
Kerr-McGee Corp.                                                  200,000         7,900           .47
Murphy Oil Corp.                                                  175,300         6,990           .42
Oryx Energy Co. (1)                                               500,000         6,906           .42
Pioneer Natural Resources Co.                                     442,100         5,858           .35
Banking- 6.18%                                                                                       
BankAmerica Corp.                                                 558,620        36,415          2.18
Citigroup Inc. (formerly Citicorp)                                450,000        22,584          1.35
Washington Mutual Savings Bank                                    400,000        15,500           .93
First Union Corp.                                                 202,500        12,302           .74
KeyCorp                                                           250,000         7,672           .46
Tokai Preferred Capital Co. LLC 9.98% noncumulative                                                  
 preferred, Series A (2)                                            5,000         4,400           .26
BNP U.S. Funding Co. LLC 7.738% noncumulative preferred,            2,500         2,414           .14
Series A (2)                                                                                         
IBJ Preferred Capital Co. LLC 8.79% noncumulative preferred,                                         
 Series A (2)                                                       1,500         1,305           .08
Fuji JGB investment LLC 9.87% noncumulative preferred,              1,000           711           .04
Series A (Japan) (2)                                                                                 
Health & Personal Care- 6.04%                                                                        
Zeneca Group PLC (American Depositary Receipts)                                                      
 (United Kingdom)                                                 660,000        27,761          1.66
Warner-Lambert Co.                                                300,000        22,650          1.35
Pfizer Inc                                                        200,000        22,325          1.34
SmithKline Beecham PLC (American Depositary                                                          
 Receipts) (United Kingdom)                                       300,000        18,281          1.09
Gillette Co.                                                      216,960         9,967           .60
Business & Public Services- 3.44%                                                                    
Rentokil Initial PLC (American Depositary Receipts)                                                  
 (United Kingdom)                                                 500,000        32,062          1.92
Reuters Group PLC (American Depositary Receipts)                                                     
 (United Kingdom)                                                 216,740        12,463           .75
Avery Dennison Corp.                                              250,000        11,984           .72
Alexander & Baldwin, Inc.                                          37,500           862           .05
Insurance- 3.22%                                                                                     
St. Paul Companies, Inc.                                          575,000        20,269          1.21
American General Corp.                                            176,700        12,446           .75
CIGNA Corp.                                                       150,000        11,672           .70
General Re Corp.                                                   40,000         9,340           .56
Telecommunications- 3.09%                                                                            
Century Telephone Enterprises, Inc.                               536,250        30,566          1.83
Telefonica SA (American Depositary                                                                   
 Receipts) (Spain)                                                125,000        17,422          1.04
NEXTEL Communications, Inc. 13.00% exchangeable                                                      
 preferred, Series D (1) (3)                                        1,461         1,505           .10
NEXTEL Communications, Inc., Class A (1)                            4,647           100              
Omnipoint Corp. 7.00% convertible preferred (2)                    40,000           830           .05
COLT Telecom Group PLC, warrants, expire 2006 (1) (2)               3,750           750           .04
Iridium LLC, warrants, expire 2005 (1) (2)                          1,500           218           .01
Conecel Holdings Ltd., Class B, warrants,                                                            
 expire 2000 (Ecuador) (2) (1)                                     77,700           117           .01
Esat Telecom Group PLC, warrants, expire 2007                                                        
 (Ireland) (1) (2)                                                  3,500           108           .01
Loral Space & Communication Ltd.,warrants, expire 2007              1,250            15           .00
(formerly Orion Network Systems, Inc.)  (1)                                                          
McCaw International, Ltd., warrants, expire 2007 (1) (2)            2,000             6           .00
Aerospace & Military Technology- 2.73%                                                               
United Technologies Corp.                                         190,100        20,376          1.22
Raytheon Co., Class A                                             161,037         8,807          1.02
Raytheon Co., Class B                                             150,000         8,306              
Boeing Co.                                                        200,000         8,125           .49
Merchandising- 2.39%                                                                                 
J.C. Penney Co., Inc.                                             290,000        15,950           .96
Limited Inc.                                                      550,000        15,916           .95
Walgreen Co.                                                      150,000         8,053           .48
Electrical & Electronics- 2.35%                                                                      
Nokia Corp., Class A (American Depositary                                                            
 Receipts) (Finland)                                              200,000        19,600          1.17
York International Corp.                                          400,000        16,800          1.01
Hubbell Inc., Class B                                              72,300         2,915           .17
Forest Products & Paper- 2.34%                                                                       
Weyerhaeuser Co.                                                  300,000        15,037           .90
Sonoco Products Co.                                               400,000        11,975           .71
Union Camp Corp.                                                  100,000         6,469           .39
Georgia-Pacific Corp.                                             100,000         5,675           .34
Beverages & Tobacco- 2.04%                                                                           
PepsiCo, Inc.                                                     520,000        20,118          1.21
UST Corp.                                                         400,000        13,900           .83
Financial Services- 1.76%                                                                            
Household International, Inc.                                          39        29,344          1.76
Leisure & Tourism- 1.65%                                                                             
Carnival Corp., Class A                                           800,000        27,600          1.65
Discovery Zone, Inc. (1) (4)                                        2,940            15           .00
Discovery Zone, Inc., warrants, expire 2007 (1) (4)                   326             0              
Data Processing & Reproduction- 1.43%                                                                
International Business Machines Corp.                             145,000        23,925          1.43
Automobiles- 1.26%                                                                                   
General Motors Corp.                                                   75        21,000          1.26
Food & Household Products- 0.90%                                                                     
General Mills, Inc.                                               200,000        15,100           .90
Electronic Components- 0.88%                                                                         
AMP Inc.                                                          305,287        14,768           .88
Industrial Components- 0.86%                                                                         
Dana Corp.                                                        200,000         7,800           .47
Genuine Parts Co.                                                 200,000         6,587           .39
Multi-Industry- 0.66%                                                                                
Textron Inc.                                                      120,000         9,322           .56
Swire Pacific Capital Ltd. 8.84% cumulative                                                          
 guaranteed perpetual capital securities (Hong Kong) (2)          100,000         1,650           .10
Machinery & Engineering- 0.62%                                                                       
Deere & Co.                                                       300,000        10,481           .63
Metals: Steel- 0.37%                                                                                 
Allegheny Teledyne Inc.                                           300,000         6,169           .37
Broadcasting & Publishing- 0.14%                                                                     
Adelphia Communications Corp. 13.00% exchangeable                                                    
 preferred, Series B (1)                                           20,000         2,360           .14
Real Estate- 0.07%                                                                                   
CarrAmerica Realty Corp. 8.57% redeemable preferred,                                                 
 Series B                                                          50,000         1,116           .07
Recreation-Other Consumer Products- 0.00%                                                            
V2 Music Holdings, warrants, expire 2008                            1,250             0           .00
(United Kingdom) (2) (1)                                                                             
Miscellaneous- 3.41%                                                                                 
Other stocks in initial period of  acquisition                                   56,890          3.41

                                                                             ----------   ---------- 
TOTAL STOCKS (cost: $735,121,000)                                             1,010,435         59.22
                                                                            -----------  ----------- 

                                                                Principal                            
                                                                   Amount                            
Convertible Debentures                                              (000)                            
----------------------------------------------------          ----------     ----------              
Industrials & Services- 0.68%                                                             ---------- 
Bell Atlantic Financial Services, Inc., senior                     $4,000         4,115           .46
 exchangeable notes, 4.25% 2005 (2)                                                                  
Bell Atlantic Financial Services, Inc. 5.75% 2003 (2)               3,500         3,592              
Sunglass Hut International, Inc. 5.25% 2003                         3,375         2,160           .13
Advanced Micro Devices, Inc. 6.00% convertible                      1,500         1,462           .09
 subordinated notes 2005                                                                             
                                                                             ----------   ---------- 
TOTAL CONVERTIBLE DEBENTURES (cost: $11,331,000)                                 11,329           .68
                                                                             ----------   ---------- 
TOTAL EQUITY SECURITIES (cost: $746,452,000)                                  1,021,764         59.90
                                                                             ----------   ---------- 

Bonds & Notes                                                                                        
-----------------------------------------------                                                      
Diversified Media, Cable Television &                                                                
Telecommunications- 3.05%                                                                            
Time Warner Inc.:                                                                                    
 9.125% 2013                                                        4,000         4,989           .40
 7.25% 2017                                                         1,500         1,633              
Cable & Wireless Communications PLC:                                                                 
 6.625% 2005                                                        3,300         3,326           .32
 6.75% 2008                                                         2,000         2,009              
Comcast Cable Communications, Inc. 8.875% 2017                      2,500         3,138           .19
Qwest Communications International Inc. 0%/9.47% 2007 (5)           4,000         3,100           .19
CBS Radio Inc. 11.375% 2009                                         2,632         3,066           .18
Fox/Liberty Networks, LLC 0%/9.75% 2007 (5)                         4,000         2,860           .17
TCI Communications, Inc. 8.75% 2015                                 2,000         2,505           .15
Tele-Communications, Inc. 9.25% 2023                                2,000         2,389           .14
Telemundo Holdings, Inc. 0%/11.50% 2008 (5)                         4,000         2,360           .14
Hearst-Argyle Television 7.50% 2027                                 2,000         2,095           .13
Sprint Capital Corp. 6.875% 2028                                    2,000         2,093           .13
CBS Corp. 7.15% 2005                                                2,000         2,077           .12
Falcon Holding Group, LP 0%/9.285% 2010 (5)                         3,000         2,077           .12
Conecel Holdings Ltd.:                                                                               
 Series A, 14.00% 2000 (2)                                          3,000         1,395           .12
 14.0% 2002                                                         1,000           560              
CEI Citicorp Holdings SA 11.25% 2007 (2)                            2,500         1,700           .10
Telesystem International Wireless Inc. 0%/13.25% 2007 (5)           3,700         1,665           .10
Cox Communications, Inc. 6.40% 2008                                 1,500         1,562           .09
Cablevision Systems Corp. 8.125% 2009 (2)                           1,250         1,337           .08
Iridium LLC, Series A, 13.00% 2005                                  1,500         1,320           .08
WorldCom, Inc. 6.40% 2005                                           1,000         1,040           .06
V2 Music (Holdings) PLC, units, 0%/14.00% 2008 (2) (5)              1,250           663           .04
Financial Services- 1.66%                                                                            
Capital One Bank:                                                                                    
 7.35% 2000                                                         5,000         5,053           .45
 6.375% 2003                                                        2,500         2,457              
GS Escrow Corp. 7.125% 2005 (2)                                     3,000         2,946           .18
Ocwen Financial Corporation 11.875% 2003                            2,850         2,508           .15
MBNA America Bank, NA 6.75% 2008                                    2,500         2,495           .15
Household Finance Corp. 6.40% 2008                                  2,250         2,304           .14
Pan Pacific Industrial Investments PLC 0% 2007 (2)                  6,000         2,100           .12
AT&T Capital Corp. 6.60% 2005                                       2,000         1,947           .12
PDVSA Finance Ltd. 7.40% 2016 (2)                                   2,250         1,943           .12
Capital One Financial Corp.  7.125% 2008                            1,500         1,433           .08
Wharf International Finance Ltd., Series A, 7.625% 2007             1,750         1,415           .08
Capital One Capital I 6.769% 2027                                   1,250         1,097           .07
Transportation- 1.62%                                                                                
Continental Airlines, Inc.:                                                                          
 Series 1996-A, 6.94% 2015                                          3,816         3,933           .57
 Series 1996-2C 10.22% 2014                                         2,135         2,519              
 Series 1998-3C 7.25% 2005                                          1,500         1,504              
 Series 1997-4A, 6.90% 2018                                         1,500         1,496              
United Air Lines, Inc.:                                                                              
 1996-A2, 7.87% 2019 (7)                                            2,500         2,544           .28
 1995-A1, 9.02% 2012                                                1,356         1,516              
 9.00% 2003                                                           500           549              
Delta Air Lines, Inc. Pass Through Trust:                                                            
 1993-A2, 10.50% 2016 (7)                                           2,000         2,568           .23
 1992-A2, 9.20% 2014 (7)                                            1,000         1,221              
Airplanes Pass Through Trust, Class 1-C, 8.15% 2019 (7)             2,948         3,037           .18
Jet Equipment Trust, Series 1995-B, 7.83% 2015 (2)                  2,311         2,424           .14
USAir, Inc., 1996-B, 7.50% 2009                                     2,322         2,386           .14
Canadian National Railway Company 6.45% 2036                        1,250         1,293           .08
Banking & Thrifts- 1.61%                                                                             
National Westminster Bank PLC:                                                                       
 7.75% 2049                                                         3,200         3,361           .27
 9.450%  2001                                                       1,000         1,091              
Imperial Capital Trust I, Series B, 9.98% 2026                      2,950         3,155           .19
MBNA Corp.:                                                                                          
 MBNA Capital A, Series A, 8.278% 2026                              2,010         2,071           .18
 MBNA Capital B, Series B, 6.019% 2027 (6)                          1,000           887              
Dime Capital Trust I, Series A, 9.33% 2027                          2,500         2,718           .16
Chase Capital II, Series B, 5.719% 2027 (6)                         2,500         2,366           .14
Bankers Trust New York Corp. 6.70% 2007                             2,080         2,145           .13
Chevy Chase Bank, FSB 9.25% 2005                                    2,000         1,980           .12
Advanta Capital Trust I 8.99% 2026                                  3,000         1,770           .10
First Union Corp. 6.82%/7.57% 2026 (5)                              1,250         1,364           .08
Korea Development Bank 6.50% 2002                                   1,300         1,159           .07
Chase Capital II 7.67% 2026                                         1,000         1,068           .06
Abbey National PLC 6.70% 2049                                       1,000           980           .06
Komercni Banka AS 9.00%/10.75% 2008 (2) (5)                         1,000           765           .05
Cellular, Paging & Wireless Communications- 0.90%                                                    
NEXTEL Communications, Inc.:                                                                         
0%/9.95% 2008 (5)                                                   4,500         2,790           .30
0%/9.75% 2007 (5)                                                   2,000         1,265              
0%/10.65% 2007 (5)                                                  1,500           994              
Clearnet Communications Inc.:                                                                        
 0%/11.75% 2007 (5)                                                 5,250         2,109           .21
 0%/10.40% 2008 (5)                                                 4,000         1,411              
McCaw International, Ltd. 0%/13.00% 2007 (5)                        6,000         3,240           .19
Esat Telecom Group PLC, 0%/12.50% 2007 (5)                          3,500         2,328           .14
Omnipoint Corp. 11.625% 2006                                        1,500           964           .06
Real Estate- 0.85%                                                                                   
CarrAmerica Realty Corp. 6.875% 2008                                3,000         2,832           .17
SocGen Real Estate Co. LLC                                                                           
 7.64%/8.40% preferred, Series A (5)                                3,000         2,799           .17
Security Capital Pacific Trust 7.20% 2013                           2,000         1,796           .11
Irvine Co., Series A, 7.46% 2006 (2) (4)                            1,500         1,506           .09
Security Capital Industrial Trust 7.95% 2008                        1,500         1,505           .09
Irvine Apartment Communities, LP 7.00% 2007                         1,500         1,454           .09
Shopping Center Associates 6.75% 2004 (2)                           1,500         1,447           .08
EOP Operating LP 7.25% 2018                                         1,000           949           .05
Energy & Related Companies- 0.72%                                                                    
Oryx Energy Co.:                                                                                     
 9.50% 1999                                                         3,000         3,086           .40
 8.375% 2004                                                        2,500         2,671              
 10.00% 1999                                                        1,000         1,022              
USX Corp. 9.125% 2013                                               2,500         2,976           .18
OXYMAR 7.50% 2016 (2)                                               2,500         2,368           .14
Collateralized Mortgage Obligations                                                                  
(Privately Originated) (7)- 0.58%                                                                    
DLJ Mortgage Acceptance Corp., Series 1996-CF2:                                                      
 Class A1, 7.29% 2021 (2)                                           3,000         3,187           .19
Morgan Stanley Capital I, Inc., Series 1998-HF2,                                                     
 Class A-2, 6.48% 2030 (6) (7)                                      3,000         3,110           .19
GMAC Commercial Mortgage Securities, Inc.,                                                           
 Series 1997-C1, Class A-1, 6.83% 2003                              1,985         2,037           .12
Asset-Backed Securities Investment Trust,                                                            
 Series 1997-D, 6.79% 2003 (2)                                      1,416         1,418           .08
Broadcasting & Publishing- 0.54%                                                                     
Chancellor Media Corp:                                                                               
 Series B, 8.75% 2007                                               2,250         2,312           .23
 8.125% 2007                                                        1,500         1,500              
News America Holdings Inc.:                                                                          
 7.43% 2026                                                         1,250         1,326           .15
 10.125% 2012                                                       1,000         1,171              
Ziff-Davis Inc. 8.50% 2008                                          1,500         1,417           .08
RBS Participacoes SA 11.00% 2007 (2)                                2,000         1,300           .08
Utilities: Electric & Gas- 0.54%                                                                     
Israel Electric Corp. Ltd.:                                                                          
 7.25% 2006 (2)                                                     2,500         2,475           .34
 7.70% 2018 (2)                                                     1,750         1,725              
 7.75% 2027 (2)                                                     1,500         1,443              
Commonwealth Edison Co., Series 75, 9.875% 2020                     1,500         1,813           .11
Energen Corp., Series B, 7.125% 2028                                1,500         1,499           .09
Food & Household Products- 0.48%                                                                     
Home Products International, Inc. 9.625% 2008                       3,000         2,910           .17
AKI Inc. 10.50% 2008                                                2,500         2,400           .14
Fage Dairy Industry SA 9.00% 2007                                   2,000         1,700           .10
Gruma, SA de CV 7.625% 2007                                         1,000           909           .06
Forest Products & Paper- 0.47%                                                                       
Fort James Corp. 6.625% 2004                                        2,500         2,540           .15
Container Corp. of America 9.75% 2003                               2,000         2,040           .12
Scotia Pacific Company LLC, Class A-2, 7.11% 2028                   2,000         1,995           .12
Norampac Inc. 9.375% 2008 (2)                                       1,000           676           .04
Pindo Deli Finance Mauritius Ltd. 10.75% 2007                       1,000           605           .04
Metals: Nonferrous- 0.41%                                                                            
Inco Ltd.:                                                                                           
 9.60% 2022                                                         2,000         2,339           .23
 9.875% 2019                                                        1,500         1,570              
Freeport-McMoRan Copper & Gold Inc. 7.20% 2026                      2,750         1,884           .11
Doe Run Resources Corp. 11.696% 2003 (6)                            1,500         1,110           .07
Health & Personal Care- 0.37%                                                                        
Allegiance Corp. 7.00% 2026                                           300         3,190           .19
Integrated Health Services, Inc., Series A:                                                          
 9.25% 2008                                                         1,750         1,706           .18
 9.50% 2007                                                         1,250         1,234              
Asset-Backed Obligations (7) - 0.28%                                                                 
SCAMT 98-2 5.25% 2008                                               3,250         3,176           .19
FIRSTPLUS Home Loan Owner Trust, Series 1997-1,                                                      
 Class A-6, 6.95% 2015                                              1,500         1,513           .09
Cable & Telephone in the United Kingdom- 0.26%                                                       
COLT Telecom Group PLC 0%/12.00% 2006 (5)                           3,750         3,216           .19
NTL Inc. 11.5% 2008                                                 1,000         1,097           .07
Merchandising- 0.21%                                                                                 
Dayton Hudson Corp. 8.50% 2022                                      2,500         2,728           .16
Woolworth Corp., Series A, 7.00% 2002                                 750           735           .05
Beverages & Tobacco- 0.18%                                                                           
Sparkling Spring Water Group Ltd. 11.50% 2007                       3,000         2,970           .18
Leisure, Tourism & Restaurants- 0.18%                                                                
Royal Caribbean Cruises Ltd. 7.00% 2007                             3,000         2,963           .18
Electrical & Electronics- 0.13%                                                                      
Philips Electronics NV 7.20% 2026                                   2,000         2,111           .13
Manufacturing & Materials- 0.11%                                                                     
Owens-Illinois, Inc. 8.10% 2007                                     1,750         1,845           .11
Machinery & Engineering- 0.08%                                                                       
United Defense Industries, Inc. 8.75% 2007                          1,400         1,414           .08
Business & Public Services- 0.06%                                                                    
Federal Express Corp., Series A-310, Class A-1,                                                      
 7.53% 2006                                                           945           968           .06
Appliances & Household Durables- 0.05%                                                               
Samsung Electronics Co., Ltd. 7.45% 2002 (2)                        1,000           870           .05
Non-U.S. Governments & Governmental                                                                  
Authorities- 0.20%                                                                                   
Canadian Government 4.36% 2026 (8)                                  2,000         1,384           .08
Mendoza (Province of) 10.00% 2007 (2)                               1,300           985           .06
Poland (Republic of), Past Due Interest Bond 5.00% 2014 (6)         1,000           940           .06
Federal Agency Obligations-Mortgage                                                                  
 Pass-Throughs (7)- 2.08%                                                                            
Fannie Mae:                                                                                          
 6.50% 2013                                                         9,578         9,716          1.59
 6.00% 2013                                                         9,669         9,681              
 8.50% 2024                                                         5,229         5,471              
 7.00% 2009                                                         1,222         1,250              
 9.00% 2019                                                           360           382              
Government National Mortgage Assn.:                                                                  
 8.50% 2027                                                         3,525         3,747           .49
 8.00% 2020-2022                                                    3,447         3,612              
 10.00% 2019                                                          777           843              
Federal Agency Obligations-Other- 0.54%                                                              
Fannie Mae:                                                                                          
 6.53% 2006                                                         5,000         4,992           .54
 7.52% 2004                                                         4,000         4,022              
U.S. Treasury Obligations- 11.40%                                                                    
 6.50% 2002-2005                                                   50,000        53,725         11.40
 7.00% 2006                                                        25,000        28,445              
 7.13% 2000                                                        25,000        25,734              
 7.25% 2004                                                        20,000        22,425              
 10.38% 2009-2012                                                  14,000        19,164              
 3.63% 2002                                                        12,500        12,747              
 8.75% 2000-2008                                                    8,000         9,054              
 8.25% 2005                                                         5,000         5,245              
 11.88% 2003                                                        2,500         3,275              
 11.13% 2003                                                        2,000         2,530              
 8.88% 1999                                                         2,500         2,521              
 7.50% 2016                                                         2,000         2,505              
 9.13% 2009                                                         1,500         1,803              
 11.75% 2010                                                          500           681              
 10.75% 2003                                                          500           619              
                                                                             ----------   ---------- 
TOTAL BONDS & NOTES (cost: $491,142,000)                                        493,684         29.55
                                                                             ----------   ---------- 

Short-Term Securities                                                                                
------------------------------------------------                                                     
Corporate Short-Term Notes- 7.88%                                                                    
BellSouth Telecommunications, Inc. 5.06% due 2/2/1999              20,000        19,820          1.19
National Ruaral Utilities Cooperative Finance Corp.                19,500        19,381          1.16
5.12% due 1/12/1999                                                                                  
International Lease Finance Corp. 5.05% due 12/1/1998              16,900        16,898          1.01
A. I. Credit Corp. 5.17% due 12/14/1998                            16,800        16,766          1.00
Lucent Technology 5.17% due 12/8/1998                              14,500        14,483           .87
St. Paul Companies 5.15%-5.25% due 12/18/1998-1/25/1999            14,000        13,925           .83
Procter & Gamble Co. 5.00% due 12/11/1998                          13,800        13,779           .82
PepsiCo Inc. 5.05% due 1/7/1999                                    10,000         9,947           .60
Ameritech Corp. 5.00% due 1/12/1999                                 6,700         6,660           .40
Federal Agency Discount Notes- 1.02%                                                                 
Fannie Mae 5.00% due 1/26-2/9/1999                                 17,200        17,043          1.02
                                                                             ----------   ---------- 
TOTAL SHORT-TERM SECURITIES (cost: $148,686,000)                                148,702          8.90
                                                                             ----------   ---------- 
TOTAL INVESTMENT SECURITIES (cost: $1,386,280,000)                            1,664,150         98.35

Excess of cash and receivables over payables                                      6,461           .39
                                                                              ---------    --------- 
NET ASSETS                                                                    1,670,611         98.74
                                                                             =========     ========= 

(1)Non-income-producing securities.                                                                  
 resale to the public may require registration or sale                                               
 only to qualified institutional buyers.                                                             
(2)Purchased in a private placement transaction;                                                     
(3)Payment in kind.  The issuer has the option of paying                                             
 additional securities in lieu of cash.                                                              
(4) Valued under procedures established by the                                                       
 Board of Trustees.                                                                                  
(5) Step bond; coupon rate will increase at a later date.                                            
(6) Coupon rate changes periodically.                                                                
(7)+A465 Pass-through securities backed by a pool of                                                 
 mortgages or other loans on which principal payments                                                
 are periodically made. Therefore, the effective                                                     
 maturity of these securities is shorter than the stated                                             
 maturity.                                                                                           
(8) Index-linked bond, which is a floating rate bond whose                                           
 principal amount moves with a government retail price                                               
 index.                                                                                              

See Notes to Financial Statements                                                                    

Equity securities appearing in the portfolio                                                         
since May 31, 1998                                                                                   

Corning Inc.                                                                                         
General Motors Corp.                                                                                 
Hewlett-Packard Co.                                                                                  
Household International, Inc.                                                                        
Millipore Corp                                                                                       
Monsanto Co.                                                                                         
Morton International, Inc.                                                                           
Schlumberger Ltd.                                                                                    
United Technologies Corp.                                                                            
Washington Mutual Savings Bank                                                                       

Equity securities eliminated from the portfolio                                                      
since May 31, 1998                                                                                   

Aluminum Co. of America                                                                              
American Radio Systems Corp                                                                          
H.F. Ahmanson                                                                                        
Nationsbank (merger with BankAmerica)                                                                
Rogers Communications Inc.                                                                           
Time Warner                                                                                          
Union Pacific Corp.                                                                                  
Wal-Mart Stores, Inc.                                                                                

                                                        [Enlarge/Download Table]
AMERICAN VARIABLE INSURANCE SERIES                                                                
BOND FUND                                                                                         
INVESTMENT PORTFOLIO - November 30, 1998                                                          
                                                                                                  

CORPORATE BONDS                                                          55.36%                   
U.S. GOVERNMENT BONDS                                                     24.47                   
EQUITY SECURITIES                                                          7.45                   
NON-U.S. GOVERNMENT BONDS                                                  2.88                   
CASH & EQUIVALENTS                                                         9.84                   

                                                                       Percent                    
                                                                         of Net                   
Largest Industry Holdings                                                Assets                   
Diversified Media, Cable Television                                                               
 & Telecommunications                                                     5.73%                   
Transportation                                                             4.21                   
Financial Services                                                         3.88                   
Manufacturing & Materials                                                  3.75                   
Energy & Related Companies                                                 3.30                   
MFS Communications                                                        1.60%                   
Ocwen Financial                                                            1.58                   
First Nationwide Holdings                                                  1.38                   
Comtel Brasileira                                                          1.34                   
USAir                                                                      1.27                   
Airplanes Pass                                                             1.08                   
Time Warner                                                                1.07                   
Kaiser Aluminum & Chemical                                                 1.00                   
McDermott                                                                  0.95                   
Jet Equipment                                                              0.87                   

Banking & Thrifts                                                          2.37                   
                                                                     Principal    Market Percent  
                                                                         Amount    Value  Of Net  
Bonds & Notes                                                             (000)    (000)  Assets  
Diversified Media, Cable Television &                                                             

Telecommunications - 7.66%                                                                        
CBS Corp. 7.15% 2005                                                      3,000  $         1.35%  
Fox/Liberty Networks, LLC:                                                                        
 0%/9.75% 2007 (1)                                                        2,250     1,609         
 8.875% 2007                                                                500      515      .92 
Time Warner Inc.:                                                                                 
 7.75% 2005                                                                 500      550          
 7.25% 2017                                                                 500      544          
 7.95% 2000                                                                 500      511      .69 
WorldCom, Inc.:                                                                                   
 8.875% 2006                                                              1,000     1,098         
 6.40% 2005                                                                 250      260      .59 
Cablevision Systems Corp. 8.125% 2009                                       1250    1,337     .58 
Comcast Corp.:                                                                                    
 Class B, 9.50% 2007                                                        500      540          
 8.875% 2017                                                                250      314          
 8.375% 2007                                                                250      292      .50 
Qwest Communications International Inc.:                                                          
 0%/9.47% 2007 (1)                                                          750      581          
 0%/8.29% 2008 (1)                                                          750      564      .49 
PanAmSat Corp. 6.125% 2005                                                1,000      980      .42 
News America Holdings Inc.:                                                                       
 6.625% 2008                                                                500      511          
 7.43% 2026                                                                 250      265      .33 
Sprint Capital Corp. 6.875% 2028                                            625      654      .28 
Tele-Communications, Inc. 9.25% 2023                                        500      597      .26 
Consorcio Ecuatoriano de Telecomunicaciones SA CONECEL:                                           
 14.00% 2002                                                                500      280          
 14.00% 2000 (2)                                                            600      279      .24 
V2 Music Holdings, units 0%/14.00% 2008 (1) (2)                          GBP575      503      .22 
TVN Entertainment Corp. 14.00% 2008                                        $550      484      .21 
Ziff-Davis Inc. 8.50% 2008                                                  500      472      .20 
SpectraSite Holdings, Inc. 0%/12.00% 2008 (1) (2)                           500      267      .12 
Northern Telecom Ltd. 6.875% 2002                                           250      259      .11 
Iridium LLC, Series A, 13.00% 2005                                          250      220      .10 
Viatel, Inc. 11.25% 2008                                                    125      125      .05 
Cellular, Paging & Wireless Communications -  7.65%                                               
Nextel Communications, Inc.:                                                                      
 0%/9.95% 2008 (1)                                                        2,625     1,627         
 0%/9.75% 2004 (1)                                                        1,000      980          
 0%/9.75% 2007 (1)                                                        1,500      949          
 12.00% 2008 (2)                                                            500      553          
 0%/10.65% 2007 (1)                                                         750      497          
 0%/12.125% 2008 (1)                                                      1,000      460     2.18 
Cable & Wireless Communications PLC:                                                              
 6.625% 2005                                                              3,660     3,689         
 6.75% 2008                                                                 500      502     1.81 
Clearnet Communications Inc.:                                                                     
 0%/11.75% 2007 (1)                                                     C$2,658     1,068         
 0%/10.40% 2008 (1)                                                       3,000     1,058     .92 
Esat Telecom Group PLC 0%/12.50% 2007 (1)                                $2,000     1,330     .57 
McCaw International, Ltd. 0%/13.00% 2007 (1)                              2,125     1,147     .50 
Omnipoint Corp. 11.625% 2006                                              1,500      964      .42 
PageMart Wireless, Inc.:                                                                          
 0%/15.00% 2005 (1)                                                         500      447          
 0%/11.25% 2008 (1)                                                         750      352      .35 
Crown Castle International Corp. 0%/10.625% 2007 (1)                      1,000      685      .30 
Cellular Communications of Puerto Rico, Inc. 10.00% 2007                    500      508      .22 
NEXTLINK Communications, Inc. 9.625% 2007                                   500      495      .21 
Globalstar LP 11.375% 2004                                                  500      382      .17 
Financial Services - 7.12%                                                                        
Capital One Bank:                                                                                 
 7.15% 2006                                                                 810      818          
 6.375% 2003                                                                500      491          
 7.125% 2008                                                                500      478          
 6.769% 2027 (2), (3)                                                       250      219      .87 
J.P. Morgan & Co. Inc. 5.861% 2012 (3), (4)                               2,000     1,789     .77 
Lindsey Morden Group Inc. 7.00% 2008 (2)                                C$2,750     1,742     .75 
MBNA Capital:                                                                                     
 Series A, 8.278% 2026                                                   $1,000     1,031         
 6.75% 2008                                                                 500      499      .66 
Toyota Motor Credit Corp. 6.00% 2003                                      1,000     1,020     .44 
Ocwen Financial Corp. 11.875% 2003                                                  1,012     .44 
AT&T Capital Corp. 6.60% 2005                                             1,000      974      .42 
Abbey National PLC 6.70% 2049                                               970      951      .41 
PDVSA Finance Ltd. 7.40% 2016 (2)                                         1,000      864      .37 
Sintab AB 7.50% 2049 (2)                                                    750      755      .33 
National Westminster Bank PLC 7.75% 2049                                    500      525      .23 
Household Finance Corp. 6.40% 2008                                          500      512      .22 
GS Escrow Corp. 7.125% 2005 (2)                                             500      491      .21 
Wharf International Finance Ltd. 7.625% 2007                                515      416      .18 
BT Capital Trust, Series A, 7.90% 2027                                      340      362      .16 
Pan Pacific Industrial Investments PLC 0% 2007 (1)                          785      275      .12 
Hutchison Whampoa Finance Ltd., Series D, 6.988% 2037 (2)                   300      272      .12 
Chase Capital I, Capital Securities, Series A, 7.67% 2026                   250      267      .12 
Bankers Trust New York Corp. 6.70% 2007                                     250      258      .11 
Bankunited Capital Trust, Bankunited Financial Corp., 10.25% 2026           250      255      .11 
Komercni Banka AS 9.00%/10.75% 2008 (1), (2)                                250      191      .08 
Collateralized Mortgage Obligations (Privately Originated) (5) - 5.73%                            
Morgan Stanley Capital I, Inc.:                                                                   
 Series 1998-HF2, Class A2, 6.48% 2030                                    2,500     2,592         
 Series 98-1, Class A5, 6.75% 2013                                          705      713     1.42 
Nomura Asset Securities Corp., Series 1998-D6, Class A-1A, 6.28% 2030     1,912     1,947     .84 
Chase Commercial Mortgage Securities Corp., Series 1998-2,                1,500     1,548     .67 
 Class A2, 6.39% 2008                                                                             
Merrill Lynch Mortgage Investors, Inc.:                                                           
 Series 1995-C3, Class A3, 7.062% 2025                                    1,000     1,038         
 Series 1995-C2, Class A, 7.009% 2021                                       213      216      .54 
CS First Boston Mortgage Securities Corp., Series 1998-C1,                1,216     1,241     .54 
Class A-1A, 6.26% 2040                                                                            
Norwest Asset Securities Corp., Series 1998-31, Class A1, 6.25% 2013      1,000      998      .43 
GMAC Commercial Mortgage Securities, Inc., Series 1997-C1:                                        
 Class A-3, 6.869% 2007                                                     500      530          
 Class A-1, 6.83% 2003                                                      397      407      .41 
Structured Asset Securities Corp., Series 1998-RF2, Class A, 8.577% 2       844      902      .39 
DLJ Mortgage Acceptance Corp., Series 1995-CF2, Class A1, 6.85% 2027        600      621      .27 
Commercial Mortgage Acceptance Corp., Series 1998-C1, Class A1, 6.23%       491      500      .22 
Broadcasting & Publishing - 3.90%                                                                 
CBS Radio, Inc. 11.375% 2009 (6)                                          1,842     2,146     .93 
Chancellor Media Corp.:                                                                           
 8.125% 2007                                                              1,000     1,000         
 Class B, 8.75% 2007                                                        750      771      .76 
Hearst-Argyle Television, Inc. 7.00% 2018                                   1500    1,528     .66 
Time Warner Telecom Inc. 9.75% 2008                                          975    1,034     .45 
Clear Channel Communications, Inc. 7.25% 2027                               750      751      .32 
Telemundo Holdings, Inc. 0%/11.50% 2008 (1), (2)                          1,000      590      .25 
Cox Communications, Inc. 6.40% 2008                                         500      521      .23 
American Radio Systems Corp. 9.00% 2006                                     400      434      .19 
RBS Participacoes SA 11.00% 2007 (2)                                        250      163      .07 
Globo Comunicacoes E Participacoes Ltda. 10.50% 2006 (2)                    120       91      .04 
Health & Personal Care - 3.25%                                                                    
Columbia/HCA Healthcare Corp.:                                                                    
 6.91% 2005                                                               2,000     1,908         
 8.85% 2007                                                                 500      524          
 7.15% 2004                                                                 500      488     1.27 
Integrated Health Services, Inc., Series A:                                                       
 9.25% 2008                                                               2,000     1,950         
 9.50% 2007                                                                 750      741     1.16 
Paracelsus Healthcare Corp. 10.00% 2006                                   1,500     1,365     .59 
Allegiance Corp. 7.00% 2026                                                 500      532      .23 
Banking & Thrifts - 2.49%                                                                         
Advanta Corp.:                                                                                    
 Series B, 7.00% 2001                                                     1,900     1,756         
 6.98% 2002                                                               1,000      892          
 6.925% 2002                                                                500      445          
 Capital Trust I, Series B, 8.99% 2026                                      500      295     1.47 
Dime Capital Trust I, Series A, 9.33% 2027                                  725      788      .34 
Imperial Capital Trust I, Series B, 9.98% 2026                              550      588      .25 
Riggs Capital Trust II 8.875% 2027 (2)                                      500      519      .22 
Chevy Chase Bank, FSB 9.25% 2008                                            500      495      .21 
Leisure, Tourism & Restaurants - 2.46%                                                            
Mirage Resorts, Inc. 6.625% 2005                                          2,000     1,961     .85 
Royal Caribbean Cruises Ltd.:                                                                     
 7.25% 2018                                                               1,000      944          
 7.00% 2007                                                                 500      494      .62 
William Hill Finance PLC 10.625% 2008                                    GBP750     1,274     .55 
Regal Cinemas, Inc. 9.50% 2008 (2)                                         $500      525      .23 
Boyd Gaming Corp. 9.50% 2007                                                500      490      .21 
Transportation -  2.44%                                                                           
Continental Airlines, Inc.:                                                                       
 Series 1998-3, Class C-2, 7.25%  2005                                      500      501          
 7.78% 2007 (5)                                                             491      498          
 Series 1998-3, Class A-2, 6.32%  2008                                      500      497          
 Series 1998-1, Class A, 6.648%  2019 (5)                                   500      496          
 Series 1996-C 9.50% 2015 (5)                                               239      268      .97 
Atlas Air, Inc., Pass-Through Trust, Series 1998-1, Class A,                                      
 7.38% 2018 (5)                                                           1,500     1,551     .67 
Jet Equipment Trust:                                                                              
 Series 1995-D, 11.44% 2014 (2)                                             300      393          
 Series 1994-A, 11.79% 2013 (2)                                             250      339      .32 
United Air Lines, Inc. 10.67% 2004                                          500      594      .26 
Airplanes Pass Through Trust, Class C, 8.15% 2019 (5)                       491      506      .22 
Utilities: Electric & Gas - 1.51%                                                                 
Israel Electric Corp. Ltd.:                                                                       
 7.70% 2018 (2)                                                           1,000      986          
 7.75% 2027 (2)                                                             620      596      .68 
Cia. de Transporte de Energia Electrica en Alta Tension                                           
 TRANSENER SA  9.25% 2008 (2)                                             1,000      940      .41 
United Utilities 6.875% 2028                                                500      491      .21 
Commonwealth Edison Co., Series 75, 9.875% 2020                             400      484      .21 
Forest Products & Paper - 1.50%                                                                   
Pindo Deli Finance Mauritius Ltd.:                                                                
 10.75% 2007                                                              1,450      877          
 10.25% 2002                                                                500      303      .51 
Container Corp. of America 9.75% 2003                                     1,000     1,020     .44 
Fort James Corp.:                                                                                 
 6.625% 2004                                                                500      508          
 6.875% 2007                                                                250      257      .33 
Norampac Inc. 9.50% 2008                                                    500      515      .22 
Multi-Industry - 1.48%                                                                            
Sony Corp. 6.125% 2003                                                    2,500     2,541    1.10 
Graham Packaging Co. 8.75% 2008                                             500      513      .22 
Reliance Industries Ltd.:                                                                         
 10.25% 2097 (2)                                                            250      188          
 Series B, 10.25% 2097                                                      250      188      .16 
Energy & Related Companies - 1.37%                                                                
Pioneer Natural Resources Co. 7.20% 2028                                  1,500     1,303     .56 
J. Ray McDermott, SA 9.375% 2006                                            500      528      .23 
McDermott Inc. 9.375% 2002                                                  400      427      .18 
Petrozuata Finance Inc. 7.63% 2009 (2)                                      750      683      .30 
Kelley Oil & Gas Corp. 10.375% 2006                                         300      237      .10 
Cable & Telephone in the United Kingdom - 1.14%                                                   
COLT Telecom Group PLC:                                                                           
 7.625% 2008                                                              DM 1,0     592          
 8.875% 2007                                                                750      467          
 0%/12.00% 2006 (1)                                                        $250      214      .55 
NTL Inc.:                                                                                         
 11.50% 2008 (2)                                                            500      549          
 Series B, 10.00% 2007                                                      250      260      .35 
Comcast UK Cable Partners Ltd. 0%/11.20% 2007 (1)                           650      562      .24 
Real Estate - 1.13%                                                                               
SocGen Real Estate Co. LLC, Series A, 7.64% 2049 (2)                      1,000      933      .40 
EOP Operating LP 6.625% 2005                                                500      491      .21 
Irvine Apartment Communities, LP 7.00% 2007                                 500      485      .21 
Security Capital Pacific Trust 7.20% 2013                                   500      449      .20 
ProLogis Trust 7.05% 2006                                                   250      246      .11 
Business & Public Services - 1.00%                                                                
Cendant Corp. 7.75% 2003                                                  2,000     2,010     .87 
Allied Waste North America, Inc. 10.25% 2006                                250      293      .13 
Asset- Backed Obligations (5) - 0.93%                                                             
Sears Credit Account Master Trust II, Series 1998-2, Class A, 5.25% 2     1,425     1,392     .60 
FIRSTPLUS Home Loan Owner Trust, Series 1997-1, Class A-6, 6.95% 2015       500      504      .22 
EQCC Home Equity Loan Trust, Asset-Backed Certificates, Series 1996-A,                            
 Class A-2, 6.95% 2012                                                      243      244      .11 
Food & Household Products - 0.69%                                                                 
Gruma, SA de CV 7.625% 2007                                               1,000      910      .39 
AKI Inc. 10.50% 2008 (2)                                                    500      480      .21 
Fage Dairy Industry SA 9.00% 2007                                           250      213      .09 
Manufacturing & Materials -  0.58%                                                                
Printpack, Inc. 10.625% 2006                                                500      520      .22 
Freeport-McMoRan Copper & Gold Inc. 7.20% 2026                              500      343      .15 
Kaiser Aluminum & Chemical Corp. 9.875% 2002                                250      253      .11 
BREED Technologies, Inc. 9.25% 2008 (2)                                     275      237      .10 
Beverages & Tobacco - 0.43%                                                                       
Sparkling Spring Water Group Ltd. 11.50% 2007                             1,000      990      .43 
Insurance - 0.32%                                                                                 
Jefferson-Pilot Corp. 8.14% 2046 (2)                                        700      731      .32 
Machinery & Engineering - 0.25%                                                                   
United Defense Industries, Inc. 8.75% 2007                                  300      303      .13 
Deere & Co. 8.95% 2019                                                      250      288      .12 
Miscellaneous Services - 0.23%                                                                    
Petro Stopping Centers, LP 10.50% 2007                                      500      526      .23 
Independent Power Producers - 0.10%                                                               
California Energy Co., Inc. 9.875% 2003                                     200      221      .10 
Non-U.S. Governments & Governmental                                                               
Authorities -  2.88%                                                                              
Canadian Government:                                                                              
 4.615% 2021 (4)                                                        C$2,000     1,462         
 4.362% 2026 (4)                                                          1,000      692      .93 
Ontario (Province of) 5.50% 2008                                         $1,500     1,508     .65 
Panama (Republic of) 8.875% 2027                                          1,250     1,182     .51 
Argentina (Republic of) 11.00% 2005                                         500      526      .23 
United Mexican States Government Eurobonds, Global, 11.375% 2016            250      269      .12 
Venezuela (Republic of) Eurobond 6.625% 2007 (3)                             452     260      .11 
Poland (Republic of) Past Due Interest Bond, Bearer, 5.00% 2014 (3)         250      235      .10 
Korea (Republic of) 8.875% 2008                                             200      198      .09 
Deutschland Republic 8.00% 2002                                             DM 2     170      .07 
Mendoza (Province of) 10.00% 2007 (2)                                      $200      151      .07 
Federal Agency Obligations - Mortgage Pass-Throughs (5) -  8.00%                                  
Government National Mortgage Assn.:                                                               
 7.00% 2023-2026                                                          4,653     4,763         
 8.00% 2023                                                               2,759     2,869         
 7.50% 2023-2024                                                          1,319     1,362         
 6.50% 2025-2028                                                          1,184     1,196         
 5.00% 2026 (3)                                                             786      794          
 6.63% 2026 (3)                                                             665      671          
 10.00% 2019                                                                518      562          
 9.50% 2021                                                                 508      548     5.52 
Fannie Mae:                                                                                       
 7.00% 2026                                                               1,500     1,533         
 6.50% 2013-2026                                                          1,197     1,212         
 6.00% 2013                                                                 947      949          
 6.131% 2033 (3)                                                            780      787          
 10.00% 2018-2025                                                           697      757          
 9.00% 2021                                                                 466      494     2.48 
Federal Agency Obligations-Other - 0.22%                                                          
Freddie Mac: 6.78% 2005                                                      500     500      .22 
U.S. Treasury Obligations - 16.25%                                                                
6.25% 2003                                                               16,000     16,94         
7.25% 2004                                                                6,330     7,105         
7.50% 2005-2016                                                           5,000     5,835         
8.875% 2017                                                               3,025     4,294         
10.375% 2009-2012                                                         1,000     1,332         
5.75% 2002                                                                1,000     1,038         
3.711% 2002 (4)                                                           1,000     1,020   16.25 
                                                                                -------- -------- 
TOTAL BONDS & NOTES (cost: $192,896,000)                                         191,298    82.71 
                                                                                -------- -------  
                                                                         Shares                   
                                                                      or Principal                
                                                                     Amount (000)                 
Stocks                                                                                            
Common & Preferred Stocks - 4.60%                                                                 
SB Treasury Co. LLC, Series A, 9.40% noncumulative                       $2,500     2,449    1.06 
preferred securities, perpetual (2)                                                               
Tokai Preferred Capital Co. LLC, Series A, 9.98%                         $1,500     1,320     .57 
noncumulative preferred securities(2)                                                             
BNP U.S. Funding LLC, Series A, 7.738% noncumulative preferred (2)       $1,300     1,255     .54 
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed perpetual                                  
 capital securities (Hong Kong) (2)                                      40,000      660      .47 
Swire Pacific Offshore Financing Ltd. 9.33% cumulative guaranteed                                 
 perpetual capital securities (Hong Kong) (2)                            25,000      438          
Fuji JGB Investment LLC, Series A, 9.87% noncumulative                                            
preferred securities, perpetual (Japan) (2)                              $1,500     1,066     .46 
ProLogis Trust(formerly Security Capital Industrial Trust),              40,000      995      .43 
Series D, 7.92% preferred                                                                         
IBJ Preferred Capital Co. LLC, Series A, 8.79%                           $1,000      870      .38 
noncumulative preferred securities (2)                                                            
Adelphia Communications Corp., Series B, 13.00% exchangeable preferre     5,000      590      .26 
CarrAmerica Realty Corp., Series B, 8.57% redeemable preferred           20,000      446      .19 
Nextel Communications, Inc.:                                                                      
 Series D, 13.00% exchangeable preferred, redeemable 2009 (6), (7)          290      299          
 Class A (7)                                                                774       17      .14 
Esat Telecom Group PLC, warrants, expire 2007 (Ireland) (2), (7)          2,000       62      .03 
COLT Telecom Group PLC, warrants, expire 2006 (United Kingdom) (2), (       250       50      .02 
Iridium World Communications Ltd. warrants, expire 2005 (2), (7)            250       36      .02 
Globalstar Telecommunications Ltd., warrants, expire 2004 (7)               500       30      .01 
Conecel Holdings Ltd., Class B, warrants, expire 2000                    15,500       23      .01 
(Ecuador) (2), (7), (8)                                                                           
Cellular Communications International, Inc., warrants, expire 2003 (7       250       18      .01 
NTL Inc., warrants, expire 2008 (United Kingdom -                           237        7      .00 
Incorporated in USA) (2), (7), (8)                                                                
McCaw International, Ltd., warrants, expire 2007 (2), (7)                 2,000        6      .00 
Viatel, Inc., Series A, 10.00% convertible preferred 2015 (6) (7)            62        4      .00 
Loral Space & Communications Ltd., warrants, expire 2007 (7)                250        3      .00 
V2 Music Holdings, warrants, expire 2000 (7)                                575               .00 

Miscellaneous - 0.22%                                                                             
Other stocks in initial period of acquisition                                        517      .22 
                                                                                -------- -------- 
TOTAL STOCKS (cost: $11,556,000)                                                  11,161     4.82 
                                                                                -------- -------- 
                                                                      Principal                   
Convertible Debentures                                               Amount (000)                 
Industrials & Services - 2.63%                                                                    
Bell Atlantic Financial Services, Inc.:                                                           
4.25% senior exchangeable note 2005 (2)                                  $2,500     2,572         
5.75% senior exchangeable note 2003 (2)                                     750      770     1.45 
Micron Technology, Inc. 7.00% convertible subordinated notes 2004         1,000     1,038     .45 
Advanced Micro Devices, Inc. 6.00% convertible subordinated notes 200       625      609      .26 
Kelley Oil & Gas Corp. 8.50% 2000                                           500      400      .17 
Sunglass Hut International, Inc. 5.25% convertible subordinated notes       600      384      .17 
MBI Finance Ltd. 0% 2001                                                    500      312      .13 
                                                                                -------- -------- 
TOTAL CONVERTIBLE DEBENTURES (cost: $5,909,000)                                    6,085     2.63 
                                                                                -------- -------- 
TOTAL EQUITY SECURITIES (cost:  $17,465,000)                                      17,246     7.45 
                                                                                -------- -------- 
Short-Term Securities                                                                             
Corporate Short-Term Notes -  10.56%                                                              
PepsiCo, Inc. 5.12% due 12/15/1998                                        3,000     2,994    1.29 
CIT Group Holdings, Inc. 5.14% due 12/14/1998                             2,500     2,495    1.08 
IBM Credit Corp. 5.30% due 1/5/1999                                       2,500     2,488    1.08 
General Mills, Inc. 5.08% due 1/8/1999                                    2,500     2,486    1.08 
Eastman Kodak Co. 5.00% due 1/25/1999                                     2,500     2,480    1.07 
Vermont American Corp. 5.11% due 12/18/1998 (2)                           2,200     2,194     .95 
Nordstrom Credit Inc. 5.12% due 12/18/1998                                2,200     2,194     .95 
General Electric Capital Corp. 5.45% due 12/1/1998                          2100    2,100     .91 
St. Paul Companies, Inc. 5.16% due 12/16/1998 (2)                           2000    1,995     .86 
Procter & Gamble Co. 5.07% due 12/22/1998                                   1500    1,495     .65 
A.I. Credit Corp. 5.14% due 1/4/1999                                        1100    1,095     .47 
Coca-Cola Co. 5.00% due 1/19/1999                                            400     397      .17 
                                                                                -------- -------  
TOTAL SHORT-TERM SECURITIES (cost: $24,413,000)                                   24,413    10.56 
                                                                                -------- -------  

TOTAL INVESTMENT SECURITIES (cost: $234,774,000)                                 232,957   100.72 
Excess of payables over cash and receivables                                        1,678     .72 
                                                                                ----------------  
NET ASSETS                                                                      $231,279 100.00%  
                                                                                ------------------
                                                                                ------------------
1 Step bond; coupon rate will increase at a later date.                                           

2 Purchased in a private placement transaction;                                                   
 resale to the public may require registration or sale                                            
 only to qualified institutional buyers.                                                          

3 Coupon rate may change periodically.                                                            

4 Index-linked bond, whose principal amount moves with a government retail                        
 price index.                                                                                     

5 Pass-through securities backed by a pool of mortgages or                                        
other loans on which                                                                              
 principal payments are periodically made. Therefore,                                             
the effective maturities are                                                                      
 shorter than the stated maturities.                                                              

6 Payment in kind.  The issuer has the option of paying                                           
 additional securities in lieu of cash.                                                           

7 Non-income-producing securities.                                                                

8 Valued under procedures established by the Board of Trustees.                                   

See Notes to Financial Statements                                                                 

                                                        [Enlarge/Download Table]
AMERICAN VARIABLE INSURANCE SERIES                                                                      
HIGH-YIELD BOND FUND                                                                                    
INVESTMENT PORTFOLIO - NOVEMBER 30, 1998                                                                
                                                                                                        
CORPORATE BONDS                                                             82.00%                      
NON-U.S. GOVERNMENT BONDS                                                    1.77%                      
U.S. GOVERNMENT BONDS                                                        1.43%                      
EQUITY SECURITIES                                                            7.76%                      
CASH & EQUIVALENTS                                                           7.04%                      

                                                                         Percent                        
                                                                           of Net                       
Largest Corporate Holdings                                                 Assets                       
Nextel Communications                                                        4.76%                      
Integrated Health Services                                                   2.47                       
Container Corp. of America                                                   2.30                       
COLT Telecom                                                                 2.04                       
Viatel                                                                       1.81                       
NTL                                                                          1.66                       
Paracelsus Healthcare                                                        1.63                       
Chancellor Media                                                             1.57                       
Fox/Liberty Networks                                                         1.50                       
Falcon Holding                                                               1.45                       

                                                                       Principal       Market  Percent  
                                                                           Amount       Value    Of Net 
Bonds & Notes                                                               (000)       (000)    Assets 
Cellular, Paging & Wireless Communications - 13.97%                                                     
Nextel Communications, Inc.:                                                                            
 0%/9.95% 2008 (1)                                                        $11,000      $6,820     2.72% 
 0%/10.65% 2007 (1)                                                         7,500       4,969           
 0%/9.75% 2004 (1)                                                          3,750       3,675           
 0%/9.75% 2007 (1)                                                          3,000       1,897           
 12% 2008 (2)                                                               1,000       1,105           
Nextel International, Inc. 0%/12.125% 2008 (1)                              6,000       2,760           
Clearnet Communications Inc.:                                                                           
 0%/11.75% 2007 (1)                                                     C$ 20,825       8,364       1.38
 0%/10.40% 2008  (1)                                                        7,000       2,468           
PageMart Wireless, Inc. 0%/11.25% 2008  (1), (2)                          $21,650      10,176       1.30
Omnipoint Corp.:                                                                                        
 11.625% 2006                                                              11,200       7,196       1.10
 8.66% 2006                                                                 1,549       1,379           
Centennial Cellular Corp. 8.875% 2001                                       8,000       8,360       1.07
CCPR Services, Inc. 10.00% 2007                                             7,250       7,359        .94
American Cellular Corp. 10.50% 2008 (2)                                     5,250       5,197        .66
CTI Holdings SA 0%/11.50% 2008 (1)                                         10,500       4,804        .61
Comcast Cellular Corp., Series B, 9.50% 2007                                4,000       4,320        .55
Mobile Telecommunication Technologies Corp. 13.50% 2002                     3,500       3,920        .50
Loral Space & Communications Ltd.                                           3,900       3,744        .48
(formerly Orion Network Systems, Inc. ) 11.25% 2007                                                     
McCaw International, Ltd. 0%/13.00% 2007 (1)                                6,500       3,510        .45
Comunicacion Celular SA 0%/13.125% 2003 (1)                                 5,000       3,500        .45
Occidente Y Caribe Celular SA 0%/14.00% 2004 (1)                            3,700       2,738        .35
CellNet Data Systems, Inc. 0%/14.00% 2007 (1)                               9,982       1,897        .24
SpectraSite Holdings, Inc. 0%/12.00% 2008 (1), (2)                          3,500       1,872        .24
Western Wireless Corp. 10.50% 2006                                          1,500       1,575        .20
Telesystem International Wireless Inc. 0%/13.25% 2007 (1)                   3,450       1,552        .20
PTC International Finance BV  0%/10.75% 2007 (1)                            2,000       1,340        .17
Vanguard Cellular Systems, Inc. 9.375% 2006                                 1,000       1,130        .14
Price Communications Cellular Holdings, Inc. 11.25% 2008 (3)                1,000         975        .12
Globalstar, LP 11.375% 2004                                                 1,000         765        .10
Diversified Media, Cable Television &                                                                   
 Telecommunications - 13.95%                                                                            
Viatel Inc.:                                                                                            
 11.25% 2008                                                                6,000       6,000       1.73
 11.15% 2008                                                              DM7,000       4,064           
 0%/12.50% 2008 (1)                                                        $5,250       3,045           
 0%/12.40% 2008 (1)                                                       DM1,000         360           
Fox/Liberty Networks, LLC:                                                                              
 0%/9.75% 2007 (1)                                                         $8,765       6,267       1.50
 8.875% 2007                                                                5,250       5,407           
Falcon Holding Group, LP:                                                                               
 8.375% 2010                                                                6,250       6,438       1.45
 0%/9.285% 2010 (1)                                                         7,000       4,847           
Time Warner Telecom Inc.  9.75% 2008                                        7,625       8,083       1.03
NEXTLINK Communications LLC:                                                                            
 NEXTLINK Communications, Inc.:                                                                         
  9.625% 2007                                                               3,500       3,465        .95
  9.00% 2008                                                                3,000       2,880         . 
 NEXTLINK Capital, Inc. 12.50% 2006                                         1,000       1,100           
TVN Entertainment Corp. 14.00% 2008                                         6,500       5,720        .73
US Xchange  15.0% 2008 (2)                                                  4,625       4,856        .62
Esat Telecom Group PLC:                                                                                 
 0%/12.50% 2007 (1)                                                         4,250       2,826        .59
 11.875% 2008 (2)                                                           1,750       1,811           
V2 Music Holdings:                                                                                      
 0%/14.00% 2008 (1), (2)                                                    6,900       3,657        .58
 0%/14.00% 2008 (1), (2)                                                   L1,000         874           
Century Communications Corp. 0% 2008                                       $8,900       4,405        .56
CSC Holdings, Inc. (formerly Cablevision Systems Corp.):                                                
 9.875% 2013                                                                3,000       3,330        .56
 8.125% 2009                                                                1,000       1,070           
KMC Telecom Holdings, Inc. 0%/12.50% 2008  (1)                              8,500       4,080        .52
Netia Holdings BV:                                                                                      
 0%/11.25% 2007 (1)                                                         3,500       2,117        .44
 10.25% 2007                                                                1,500       1,328           
Global TeleSystems Group, Inc. 9.875% 2005                                  3,600       3,384        .43
GST Equipment Funding, Inc. 13.25% 2007                                     3,000       3,090        .39
Lenfest Communications, Inc. 8.25% 2008                                     3,000       3,090        .39
Multicanal Participacoes SA, Series B, 12.625% 2004                         2,600       2,411        .31
Hermes Euro Railtel BV 11.50% 2007                                          1,500       1,650        .21
Newsquest Capital PLC:                                                                                  
 11.00% 2006                                                                  900         999        .20
 Series B, 11.00% 2006                                                        500         555           
IMPSAT Corp. 12.375% 2008                                                   1,750       1,518        .19
Level 3 Communications, Inc. 9.125% 2008                                    1,500       1,496        .19
Teligent, Inc. 11.50% 2007                                                  1,500       1,432        .18
Consorcio Ecuatoriano de Telecomunicaciones SA CONECEL :                                                
 14.00% 2000 (2)                                                            1,000         465        .11
 14.00% 2002                                                                  750         420           
TEVECAP SA 12.625% 2004                                                       750         487        .06
Cellco Finance NV 15.00% 2005 (2)                                             250         215        .03
Manufacturing & Materials - 9.06%                                                                       
Anchor Glass Container Corp.:                                                                           
 11.25% 2005                                                                5,000       5,350       1.01
 9.875% 2008                                                                2,500       2,513           
BREED Technologies, Inc. 9.25% 2008 (2)                                     8,500       7,310        .93
Impress Metal Packaging Holdings BV 9.875% 2007                          DM10,250       6,661        .85
Tekni-Plex, Inc. 9.25% 2008                                                $5,500       5,720        .73
Flextronics International Ltd. 8.75% 2007                                   5,500       5,637        .72
Boyds Collection Ltd. 9.00% 2008 (2)                                        5,250       5,408        .69
Lifestyle Furnishings International Ltd. 10.875% 2006                       4,000       4,380        .56
Printpack, Inc. 10.625% 2006                                                3,750       3,900        .50
Consumers International Inc. 10.25% 2005                                    3,250       3,494        .45
Westinghouse Air Brake Co. 9.375% 2005                                      3,000       3,105        .40
Key Plastics, Inc., Series B, 10.25% 2007                                   3,000       2,850        .36
Samsung Electronics Co., Ltd. 7.45% 2002 (2)                                3,150       2,740        .35
Fairchild Semiconductor Corp. 10.125% 2007                                  2,750       2,722        .35
Kaiser Aluminum and Chemical Corp. 12.75% 2003                              2,350       2,326        .30
Advanced Micro Devices, Inc. 11.00% 2003                                    2,000       2,135        .27
Ball Corp. 7.75% 2006 (2)                                                   1,750       1,829        .23
Doe Run Resources Corp. 11.25% 2005                                         2,000       1,460        .19
DGS International Finance Co. BV 10.00% 2007 (2)                            2,000       1,360        .17
Broadcasting & Publishing - 8.11%                                                                       
Chancellor Media Corp., Series B, 8.75% 2007                                6,000       6,165       1.57
Chancellor Radio Broadcasting Co.:                                                                      
 8.125% 2007                                                                4,500       4,500           
 9.375% 2004                                                                1,500       1,590           
CBS Radio, Inc. 11.375% 2009 (3)                                            6,782       7,901       1.01
Acme Intermediate Holdings, LLC, 0%/12.00% 2005 (1)                         8,911       5,347        .68
American Radio Systems Corp. 9.00% 2006                                     4,750       5,154        .66
Ziff-Davis Inc. 8.50% 2008                                                  5,000       4,725        .60
Gray Communications Systems, Inc. 10.625% 2006                              3,750       4,031        .52
Big City Radio, Inc. 0%/11.25% 2005 (1)                                     6,000       4,020        .51
FrontierVision 11.00% 2006                                                  3,000       3,360        .43
Globo Comunicacoes E Participacoes Ltda. 10.50% 2006 (2)                    3,750       2,850        .36
Antenna TV, SA  9.00% 2007                                                  2,750       2,489        .32
TransWestern Publishing Company:                                                                        
 9.625% 2007                                                                2,000       2,090        .30
 9.625% 2007 (2)                                                              250         261           
Young Broadcasting Inc. 10.125% 2005                                        2,000       2,090        .27
Telemundo Holdings, Inc. 0%/11.50% 2008 (1), (2)                            3,000       1,770        .23
Sun Media Corp. 9.50% 2007                                                  1,300       1,372        .18
STC Broadcasting, Inc. 11.00% 2007                                          1,250       1,341        .17
Coaxial Communications of Central Ohio, Inc.  10.00% 2006                   1,000       1,005        .13
Fox Family Worldwide, Inc. 0%/10.25% 2007 (1)                               1,000         670        .09
RBS Participacoes SA 11.00% 2007 (2)                                        1,000         650        .08
Forest Products & Paper - 5.57%                                                                         
Container Corp. of America:                                                                             
 9.75% 2003                                                                14,600      14,892       2.30
 Series A, 11.25% 2004                                                      2,000       2,060           
 Series B, 10.75% 2002                                                      1,000       1,025           
Graham Packaging Co., GPC Capital Corp. I 8.75% 2008                        4,250       4,356       1.11
Graham Packaging Holdings Co. 0%/10.75% 2009 (1)                            6,250       4,344           
Paperboard Industries International Inc. 8.375% 2007                        4,000       3,960        .51
Indah Kiat Finance Mauritius Ltd.:                                                                      
 11.875% 2002                                                               2,900       2,139        .48
 10.00% 2007                                                                2,550       1,651           
Advance Agro PCL 13.00% 2007  (2)                                           4,500       3,780        .48
Pindo Deli Finance Mauritius Ltd.:                                                                      
 10.75% 2007                                                                2,200       1,331        .29
 10.25% 2002                                                                1,500         907           
Norampac Inc.:                                                                                          
 9.50% 2008                                                                 1,500       1,545        .28
 9.375% 2008                                                             C$ 1,000         676           
Copamex Industrias, SA de CV, Series B, 11.375% 2004                       $1,000         960        .12
Leisure, Tourism & Restaurants - 5.28%                                                                  
AMF Bowling Worldwide, Inc. (formerly AMF Group):                                                       
 10.875% 2006                                                               8,000       6,800       1.19
 0%/12.25% 2006  (1)                                                        4,466       2,546           
Boyd Gaming Corp.:                                                                                      
 9.25% 2003                                                                 6,250       6,406        .94
 9.50% 2007                                                                 1,000         980           
Hard Rock Hotel, Inc. 9.25% 2005                                            6,000       6,030        .77
William Hill Finance PLC 10.625% 2008                                      L3,550       6,030        .77
Friendly Ice Cream Corp. 10.50% 2007                                       $3,000       3,090        .39
Premier Parks, Inc. 0%/10.00% 2008  (1)                                     3,750       2,550        .33
Sun International Hotels Ltd., Sun International                                                        
 North America, Inc.:                                                                                   
  8.625% 2007                                                               1,500       1,549        .30
  9.00% 2007                                                                  750         787           
Regal Cinemas, Inc. 9.50% 2008 (2)                                          2,000       2,100        .27
FelCor Suites LP 7.375% 2004                                                1,750       1,617        .21
Rio Hotel & Casino, Inc. 10.625% 2005                                         750         825        .11
Health & Personal Care - 4.92%                                                                          
Integrated Health Services, Inc.:                                                                       
 Series A, 9.25% 2008                                                       6,750       6,581       2.09
 10.25% 2006                                                                5,000       5,100           
 Series A, 9.50% 2007                                                       4,750       4,691           
Paracelsus Healthcare Corp. 10.00% 2006                                    14,000      12,740       1.63
Mariner Health Group, Inc. 9.50% 2006                                       6,625       6,492        .83
Tenet Healthcare Corp. 8.00% 2005                                           1,500       1,553        .20
Unison HealthCare Corp. 13.00% 2006 (2), (4), (5)                           6,600       1,320        .17
Cable & Telephone in the United Kingdom - 4.78%                                                         
COLT Telecom Group PLC:                                                                                 
 0%/12.00% 2006 (1)                                                        11,250       9,647       1.75
 8.875% 2007                                                              DM6,500       4,049           
NTL Inc.:                                                                                               
 0%/10.75% 2008 (1), (2)                                                   L7,500       6,184       1.65
 0%/9.75% 2008 (1), (2)                                                    $5,500       3,520           
 11.5% 2008 (2)                                                             1,500       1,646           
 Series B, 10.00% 2007                                                      1,500       1,560           
Comcast UK Cable Partners Ltd. 0%/11.20% 2007 (1)                          10,000       8,650       1.11
TeleWest Communications PLC 9.625% 2006                                     2,000       2,090        .27
Food & Food Retailing -  3.57%                                                                          
Fage Dairy Industry SA 9.00% 2007                                          10,500       8,925       1.14
Home Products International, Inc. 9.625% 2008                               7,500       7,275        .93
Randall's Food Markets, Inc. 9.375% 2007                                    5,750       6,095        .78
Favorite Brands International, Inc. 10.75% 2006 (2)                         4,125       3,383        .43
Carr-Gottstein Foods Co. 12.00% 2005                                        2,000       2,300        .29
Beverages - 2.77%                                                                                       
Delta Beverage Group, Inc. 9.75% 2003                                       6,200       6,541        .84
Sparkling Spring Water Group, Ltd. 11.50% 2007                              5,500       5,445        .70
Canandaigua Wine Co., Inc.:                                                                             
 Series C, 8.75% 2003                                                       3,750       3,834        .69
 8.75% 2003                                                                 1,500       1,534           
Standard Commercial Corp. 8.875% 2005                                       4,250       4,186        .54
Energy & Related Companies - 2.73%                                                                      
Kelley Oil & Gas Corp. 10.375% 2006                                         8,000       6,320        .81
Cross Timbers Oil Co.:                                                                                  
 Series B, 9.25% 2007                                                       3,000       3,000        .54
 8.75% 2009                                                                 1,250       1,216           
Benton Oil and Gas Co.:                                                                                 
 11.625% 2003                                                               2,000       1,500        .34
 9.375% 2007                                                                1,950       1,189           
Michael Petroleum Corp. 11.50% 2005                                         2,450       1,960        .25
Pogo Producing Co. 8.75% 2007                                               2,000       1,960        .25
Crown Castle International Corp. 0%/10.625% 2007 (1)                        2,500       1,713        .22
McDermott Inc. 9.375% 2002                                                  1,000       1,068        .17
J. Ray McDermott, SA 9.375% 2006                                              250         264           
Lomak Petroleum, Inc. 8.75% 2007                                            1,250       1,188        .15
Miscellaneous Services - 1.90%                                                                          
Allied Waste North America, Inc. 10.25% 2006                                8,300       9,711       1.24
Iron Mountain Inc.:                                                                                     
 10.125% 2006                                                               1,500       1,635        .25
 8.75% 2009                                                                   350         357           
EarthWatch Inc., units, 12.50% 2001 (2), (4), (5)                           2,000       1,600        .20
Teletrac, Inc. 14.00% 2007                                                  4,100       1,435        .18
Reliance Industries Ltd. 10.50% 2046                                          250         200        .03
Banking & Financial Services - 1.82%                                                                    
Advanta Corp.:                                                                                          
 6.98% 2002                                                                 2,000       1,784        .58
 6.925% 2002                                                                2,000       1,781           
 7.50% 2000                                                                 1,000         950           
Wharf International Finance Ltd. 7.625% 2007                                3,000       2,426        .31
Dime Capital Trust I, Dime Bancorp, Inc.,                                   2,000       2,175        .28
Series A, 9.33% 2027                                                                                    
AT&T Capital Corp. 6.60% 2005                                               1,500       1,460        .19
Chase Commercial Mortgage Securities Corp. 6.39% 2008                       1,522       1,295        .17
BT Institutional Capital Trust B 7.75% 12-01-26 (2)                         1,000       1,030        .13
Komercni Finance BV 9.00%/10.75% 2008 (1), (2)                                750         574        .07
Amresco Inc. 9.875% 2005                                                      600         432        .06
Wilshire Financial Services Group Inc. 13.00% 2004                          1,500         270        .03
Transportation -  1.04%                                                                                 
Teekay Shipping Corp. 8.32% 2008                                            3,500       3,482        .45
USAir, Inc. Pass-Through Trust, Series 1993-A3,                             3,000       3,387        .43
10.375% 2013 (6)                                                                                        
Delta Air Lines, Inc., Series 1991-I, 10.00% 2014 (2)                       1,000       1,255        .16
Consumer Products - 0.90%                                                                               
AKI Inc. 10.50% 2008 (2)                                                    3,250       3,120        .53
AKI Holding Inc. 0%/13.50% 2009 (1), (2)                                    2,750       1,059           
Zilog, Inc. 9.50% 2005                                                      3,000       2,340        .30
WestPoint Stevens Inc. 7.875% 2005                                            500         515        .07
Machinery & Engineering - 0.75%                                                                         
LES, Inc. 9.25% 2008 (2)                                                    5,625       5,850        .75
Private Issue Collateralized Mortgage/                                                                  
Asset-Backed Obligations (6)                                                                            
Kmart Corp., Series K-2, 9.78% 2020                                         2,000       2,191        .28
Dr Structured Finance Corp., Series 1994 K-2, 9.35% 2019                    1,500       1,530        .20
Textiles & Apparel - 0.21%                                                                              
Tultex Corp. 10.625% 2005                                                   2,500       1,625        .21
Protection Services - 0.19%                                                                             
Protection One Alarm Monitoring, Inc. 0%/13.625% 2005 (1)                   1,300       1,482        .19
Non-U.S. Governments & Governmental                                                                     
 Authorities - 1.77%                                                                                    
Panama (Republic of):                                                                                   
 Interest Reduction Bond 3.75% 2014 (2), (7)                               $3,000       2,303        .57
 8.875% 2027                                                                2,250       2,127           
United Mexican States Government:                                                                       
 11.375% 2016                                                               2,750       2,963        .41
 11.50% 2026                                                                  250         269           
Argentina (Republic of):                                                                                
 11.00% 2006                                                                1,500       1,534        .32
 9.75% 2027                                                                   800         720           
 11.375% 2017                                                                 250         254           
Philippines (Republic of) 8.875% 2008                                       1,750       1,732        .22
Korea (Republic of)  8.875% 2008                                            1,000         989        .13
Poland (Republic of) Past Due Interest Bond 5.00% 2014  (7)                 1,000         940        .12
U.S. Treasury Obligations - 1.43%                                                                       
 7.50%  2005                                                                8,000       9,164       1.43
 6.875%  2006                                                               1,770       1,999           
TOTAL BONDS & NOTES (cost: $699,597,000)                                              666,490      82.48
                                                                          Number                        
                                                                               of                       
Stocks                                                                     Shares                       

Common & Preferred Stocks - 6.13%                                                                       

Nextel Communications, Inc., Series E,  11.125% 2010  (3), (8)             12,881      11,594       2.04
Nextel Communications, Inc., Series D, 13.00% exchangeable                  4,078       4,201           
preferred (3), (8)                                                                                      
Nextel Communications, Inc. Class A (8)                                     5,422         117           
Nextel Communications, Inc., warrants, expire 1999 (4), (8)                 9,500           1           
Dobson Communications Corp. 12.250% 2008 (3), (8)                           4,126       3,919        .51
Fuji JGB Investment LLC, Series A, 9.87% noncumulative                                                  
preferred securities, perpetual (Japan) (2)                                $5,000       3,554        .45
Tokai Preferred Capital Co. LLC, Series A,                                 $4,000       3,520        .45
9.98% noncumulative preferred (2)                                                                       
IXC Communications, Inc. 12.50% exchangeable preferred                      2,911       3,115        .40
2009 (3), (8)                                                                                           
Swire Pacific Capital Ltd. 8.84% cumulative guaranteed                                                  
perpetual capital  securities (Hong Kong) (2)                             160,000       2,640        .34
COLT Telecom Group PLC warrants, expire 2006                               11,250       2,250        .29
(United Kingdom) (2), (8)                                                                               
Jacor Communications, Inc. (8)                                             35,000       2,037        .26
Chevy Chase Preferred Capital Corp. 10.375%                                39,000       1,989        .25
exchangeable preferred                                                                                  
Cellular Communications International, Inc. (8)                            15,300         954        .18
Cellular Communications International, Inc. warrants, expire 2003 (8)       6,500         468           
Omnipoint Corp. 7.00% convertible preferred (2)                            62,000       1,286        .16
Kelley Oil & Gas Corp., convertible preferred                              90,000       1,283        .16
Adelphia Communications Corp., preferred,                                  10,000       1,180        .15
Series B, 13.00% 2009 (8)                                                                               
IBJ Preferred Capital Co. LLC, Series A, 8.79%                                                          
noncumulative                                                                                           
preferred  securities, perpetual (2)                                       $1,000         870        .11
CellNet Data Systems, Inc.  (5), (8)                                      112,000         526        .09
CellNet Data Systems, Inc. warrants, expire 2007 (2), (8)                  20,870         167           
Comunicacion Celular SA, Class B, warrants, expire 2003                     5,000         400        .05
(Colombia) (2), (8)                                                                                     
Acme Televison, LLC  (2),  (8)                                                363         362        .05
ACME Intermediate Holdings, LLC  (2), (8)                                   5,970         358        .05
Viatel, Inc., Series A, 10.00% convertible preferred (3), (8)               5,114         337        .04
Verio Inc., warrants, expire 2004  (2), (8)                                 7,350         239        .03
EarthWatch Inc.12.00% convertible preferred,                              350,000         175        .02
Series C (2), (3), (5), (8)                                                                             
Loral Space & Communications Ltd. (formerly Orion Network                                               
 Systems, Inc. ), warrants, expire 2007 (8)                                11,250         135        .02
Protection One Alarm Monitoring, Inc. warrants,                             6,400          67        .01
expire 2005 (2), (8)                                                                                    
Globalstar Telesystem, warrants, expire 2004 (8)                            1,000          60        .01
NTL Inc., warrants, expire 2008 (United Kingdom--                           1,425          42        .01
Incorporated in USA) (2), (8)                                                                           
Conecel Holdings Ltd., Class B, warrants, expire                           25,900          39        .00
2000 (Ecuador) (2), (8)                                                                                 
Esat Telecom Group PLC, warrants, expire 2007                               1,250          39        .00
(Ireland) (2), (8)                                                                                      
KMC Telecom Holdings Inc., warrants expire 2008 (2), (8)                    9,500          24        .00
Teletrac Holdings, Inc., warrants, expire 2007 (2), (8)                     4,100          23        .00
McCaw International, Ltd. warrants, expire 2007 (2), (8)                    2,500           7        .00
V2 Music Holdings, warrants (United Kingdom):                                                           
 expire 2008 (2), (8)                                                       6,900           0        .00
 expire 2008 (8)                                                            1,000           0           

Miscellaneous - 0.18%                                                                                   
Other stocks in initial period of acquisition                                           1,386        .18
                                                                                     --------  -------- 
TOTAL STOCKS (cost: $55,131,000)                                                       49,364      6.31 
                                                                                     --------  -------- 

                                                                       Principal       Market  Percent  
                                                                           Amount       Value    Of Net 
Convertible Debentures                                                      (000)       (000)    Assets 

Industrials & Services -  1.41%                                                                         
Integrated Health Services, Inc. 5.75%  2001                              $ 3,500       3,045        .38
Advanced Micro Devices, Inc. 6.00%  2005                                    2,400       2,340        .30
Jacor Communications, Inc.0% 2018                                           4,750       2,138        .27
Sunglass Hut International, Inc. 5.25% 2003                                 2,125       1,360        .17
Pilipino Telephone International Holding Corp. 1.75% 2006                   1,875         994        .13
MBI Finance Ltd. 0.0% 2001                                                  1,500         937        .12
Viatel, Inc.10.00% 2011                                                     DM422         286        .04

Miscellaneous - 0.04%                                                                                   
Other convertible debentures in initial period of acquisition                             280        .04
                                                                                     --------  -------- 
TOTAL CONVERTIBLE DEBENTURES (cost: $11,940,000)                                       11,380       1.45
                                                                                     --------  -------- 

TOTAL EQUITY SECURITIES (cost: $67,071,000)                                            60,744       7.76
                                                                                     --------  -------- 
Short-Term Securities                                                                                   
Corporate Short-Term Notes -  2.91%                                                                     
General Electric Capital Corp. 5.45% due 12/1/98                         $ 13,100      13,098       1.68
Ameritech Corp. 5.04% due 1/12/99                                           9,700       9,641       1.23

Federal Agency Discount Notes -  2.42%                                                                  
Federal Home Loan Banks 4.81%-5.10% due 12/16/98-1/31/99                   19,000      18,943       2.42

                                                                                     --------  -------- 
TOTAL SHORT-TERM SECURITIES (cost: $41,683,000)                                        41,682       5.33
                                                                                     --------   ------- 

TOTAL INVESTMENT SECURITIES (cost: $808,351,000)                                      768,916     0.96% 
Excess of cash and receivables over payables                                           13,386       1.71
                                                                                    ---------   ------- 
NET ASSETS                                                                           $782,302      1.71 
                                                                                    =========   ======= 

(1) Step bond; coupon rate will increase at a later date.                                               

(2) Purchased in a private placement transaction; resale                                                
to the public may require registration or sale only to                                                  
qualified institutional buyers.                                                                         
(3) Payment in kind. The issuer has the option of paying                                                
additional securities in lieu of cash.                                                                  
(4) Issue in Default.                                                                                   

(5) Valued under procedures established by the Board of Trustees.                                       

(6) Pass-through securities backed by a pool of mortgages                                               
or other loans  on which principal payments are                                                         
periodically made. Therefore, the effective                                                             
 maturity of these securities is shorter than the                                                       
stated maturity.                                                                                        
(7) Coupon rate changes periodically.                                                                   

(8) Non-income-producing securities.                                                                    


                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                         
U.S. Government/AAA-Rated Securities Fund                                                  
Investment Portfolio, November 30, 1998                                                    
                                                                                           
------------------------------------------------              --------    -------- --------
U.S. TREASURY OBLIGATIONS                                        29.34%                    
FEDERAL AGENCY MORTGAGE-RELATED SECURITIES                       29.50                     
PRIVATE MORTGAGE & ASSET-BACKED SECURITIES                       33.12                     
CASH & EQUIVALENTS                                                2.11                     
CORPORATE BONDS                                                   2.91                     
OTHER FEDERAL OBLIGATIONS                                         3.02                     
------------------------------------------------              --------    -------- --------
                                                              Principal     Market Percent 
                                                                Amount      Value   of Net 
Bonds & Notes                                                   (000)       (000)   Assets 
------------------------------------------------              --------    -------- --------
U.S. Treasury Obligations - 29.34%                                                         
8.875% 2017                                                    $34,800     $49,394         
10.375% 2009                                                    27,500      35,243         
7.25% 2004                                                      17,840      20,003         
12.00% 2013                                                     10,000      15,302         
10.75% 2003                                                      9,850      12,192         
7.125% 2023                                                      7,200       8,940         
7.875% 2021                                                      5,750       7,628         
6.125% 2007                                                      4,655       5,078         
11.625% 2004                                                     2,820       3,810         
3.493% 2007 (1)                                                  2,750       2,772  29.34% 
3.65% 2028 (1)                                                   2,000       2,014         
7.50% 2005                                                       1,740       1,993         
7.00% 2006                                                       1,478       1,682         
6.25% 2007                                                         750         824         

Collateralized Mortgage Obligations                                                        
 (Privately Originated) (2) - 26.20%                                                       
Morgan Stanley Capital I, Inc.:                                                            
 Series 1998-HF2, Class A-2, 6.48% 2030                         10,000      10,367         
 Series 1998-1, Class A-5, 6.75% 2013                            8,147       8,236         
 Series 1997-HF1, Class A-1, 6.86% 2006 (3)                      4,572       4,709         
 Series 1998-HF2, Class A-1, 6.01% 2030                          3,000       3,035         
 Series 1998-WF2, Class A-1, 6.34% 2030                          2,926       2,999         
 Series 1998-WF1, Class A-1, 6.25% 2007                          2,529       2,577     5.61
Prudential-Bache CMO Trust III, 9.44% 2018                      14,000      14,066     2.47
Westam Mortgage, Class 4-H, 8.95% 2018                          11,000      11,337     1.99
Ocwen Residential MBS Corp.,                                                               
 Series 1998-R1, Class AWC, 2.459% 2027 (3)                      9,671       9,525     1.68
Structured Asset Securities Corp.:                                                         
 Series 1998-RF2, Class A, 8.577% 2027 (3)                       3,561       3,805         
 Series 1998-RF1, Class A, 8.696% 2027 (3)                       3,393       3,649         
 Series 1996-CFL, Class A1-C, 5.944% 2028                        1,465       1,462     1.57
Nomura Asset Securities Corp., Series 1998-D6,                                             
 Class A-A1, 6.28% 2030                                          7,649       7,789     1.37
G E Capital Mortgage Services, Inc., Series 1994-15,                                       
 Class A-10, 6.00% 2009                                          8,000       7,655     1.35
Deutsche Mortgage & Asset Receiving Corp., Series 1998-C1,                                 
 Class A-1, 6.22% 2031                                           7,236       7,354     1.29
Mortgage Capital Funding, Inc., Series 1998-MC1,                                           
 Class A-1, 6.42% 2030                                           6,274       6,465     1.14
CS First Boston Mortgage Securities Corp., Series 1998-C1,                                 
 Class A-1A, 6.26% 2040                                          6,131       6,257     1.10
Chase Commercial Mortgage Securities Corp.:                                                
 Series 1998-2, Class A-2, 6.39% 2008                            3,000       3,096         
 Series 1998-1, Class A-1, 6.34% 2030                            2,907       2,976     1.07
Merrill Lynch Mortgage Investors, Inc.:                                                    
 Series 1997-C1, Class A-1, 6.95% 2029 (4)                       2,803       2,916         
 Series 1995-C3, Class A-3, 7.062% 2025                          1,500       1,558         
 Series 1995-C3, Class A-2, 6.822% 2025 (4)                      1,500       1,536     1.06
Commercial Mortgage Acceptance Corp.:                                                      
 Series 1998-C1, Class A-1, 6.23% 2007                           2,454       2,501         
 Series 1998-C2, Class A-1, 5.80% 2006                           1,486       1,494      .70
AMRESCO Commercial Mortgage Funding I Corp., Series 1997-C1,                               
 Class A-1, 6.73% 2029                                           3,346       3,424      .60
J.P. Morgan Commercial Mortgage Finance Corp., Series 1995-C1,                             
 Class A-2, 7.452% 2010 (4)                                      3,000       3,041      .53
Nationsbanc Montgomery Funding Corp., Series 1998-5,                                       
 Class A-1, 6.00% 2013                                           3,000       2,974      .52
Norwest Asset Securities Corp.:                                                            
 Series 1998-8, Class A-1,6.50% 2013                             1,415       1,422         
 Series 1998-31, Class A-1, 6.25% 2014                           1,300       1,297      .48
Freddie Mac, Series 1998-A, Class A-3, 6.69% 2020 (3)            2,000       2,023      .36
LB Commercial Conduit Mortgage Trust, Series 1998-C1,                                      
 Class A-1, 6.33% 2004                                           1,901       1,940      .34
DLJ Mortgage Acceptance Corp., Series 1996-CF1,                                            
 Class A-1A, 7.28% 2028                                          1,653       1,734      .30
GMAC Commercial Mortgage Securities Inc., Series 1997-C1,                                  
 Class A-3, 6.869% 2007                                          1,500       1,590      .28
DLJ Commercial Mortgage Corp., Series 1998-CF2,                                            
 Class A-1B, 6.24% 2031                                          1,250       1,277      .23
Ryland Acceptance Corp., Series 1988-E(Z), 7.95% 2019              907         934      .16

Federal Agency Obligations - Mortgage                                                      
Pass-Throughs (2) - 25.30%                                                                 
Government National Mortgage Assn.:                                                        
7.00% 2023-2026                                                 15,377      15,744         
8.50% 2021-2023                                                  6,993       7,467         
6.875% 2021-2024 (4)                                             7,198       7,275         
6.00% 2013                                                       6,838       6,876         
6.50% 2028                                                       6,346       6,403         
8.00% 2023-2026                                                  5,837       6,070         
9.50% 2019-2021                                                  3,427       3,700    11.63
7.50% 2022-2028                                                  3,516       3,632         
7.375% 2024 (4)                                                  2,287       2,312         
10.00% 2019                                                      2,073       2,249         
7.00% 2018 (4)                                                   1,514       1,535         
5.50% 2013                                                       1,096       1,080         
9.00% 2009-2016                                                    931         998         
6.625% 2018 (4)                                                    666         677         
10.50% 2019                                                         87          96         
11.00% 2019                                                         27          30         
12.00% 2012-2014                                                     5           5         
Fannie Mae:                                                                                
6.00% 2013                                                      10,971      10,985         
6.50% 2013-2028                                                  9,166       9,267         
8.50% 2023-2027                                                  6,770       7,107         
8.00% 2024                                                       5,358       5,571         
7.00% 2026-2028                                                  5,311       5,425         
13.00% 2015                                                      2,565       3,065         
10.00% 2018                                                      2,574       2,789         
12.00% 2028                                                      1,901       2,207     9.27
7.50% 2009                                                       2,122       2,183         
9.00% 2011-2025                                                  2,023       2,137         
5.50% 2013                                                       2,012       1,982         
Freddie Mac:                                                                               
6.00% 2013                                                       8,920       8,937         
8.25% 2008-2009                                                  2,982       3,093         
8.00% 2012                                                       2,897       2,982         
6.50% 2013                                                       2,144       2,175         
5.50% 2013                                                       1,980       1,951     4.02
7.00% 2008                                                       1,873       1,917         
9.00% 2022                                                       1,240       1,311         
8.50% 2018                                                         390         412         
9.50% 2016                                                          93          99         
12.00% 2016                                                          1           1         
Freddie Mac Gold 9.00% 2028                                      2,033       2,142      .38

Asset-Backed Obligations (2) - 6.92%                                                       
Green Tree Financial Corp.:                                                                
 Series 1995-9, Class A-5, 6.80% 2027                            5,000       5,053         
 Series 1996-7, Class A-6, 7.65% 2027                            3,000       3,094         
 Series 1996-10, Class A-5, 6.83% 2028                           2,500       2,535         
 Series 1997-6, Class A-6, 6.90% 2029                            2,500       2,534         
 Series 1995-3, Class A-5, 7.30% 2025                            2,050       2,085     2.69
Sears Credit Account Master Trust, Series 1998-2,                                          
 Class A, 5.25%, 2008                                            5,300       5,179      .91
Chase Credit Card Master Trust, Series 1997-5, Class A, 6.194%   4,000       4,116      .72
ContiMortgage Home Equity Loan Trust 1996-4,                                               
 Class A-4, 6.37% 2011                                           3,742       3,734      .66
First Chicago Master Trust II, Series 1995-M,                                              
 Class A, 5.518% 2003 (4)                                        3,500       3,488      .61
Chevy Chase Master Credit Card Trust, Series 1996-C,                                       
 Class A, 5.418% 2007 (4)                                        3,000       2,962      .52
Standard Credit Card Master Trust 1994-4, Class A,                                         
 8.25% 2003                                                      2,500       2,659      .47
Bombardier Capital Mortgage Securitization Corp., Series 1998-A,                           
 Class A-3, 6.23% 2028                                           2,000       1,943      .34

Collateralized Mortgage Obligations                                                        
 (Federal Agencies) (2) - 4.20%                                                            
Freddie Mac:                                                                               
 Series 1567, Class A, 5.713% 2023 (4)                           8,145       7,873         
 Series 1948, Class PJ, 6.65% 2027                               4,000       3,971         
 Series 1716, Class A, 6.50% 2009                                2,250       2,254         
 Series 1507, Class JZ, 7.00% 2023                                 587         606         
 Series 2030, Class F, 5.778% 2028                                 379         382         
 Series 83-B, Class B-3, 12.50% 2013                               312         352     2.71
Fannie Mae:                                                                                
 Series 1997-M6, Class ZA, 6.85% 2026                            5,446       5,458         
 Series 1998-M6, Class A-2, 6.32% 2008                           1,000       1,036         
 Series 1997-28, Class C, 7.00% 2027                             1,000       1,015         
 Series 1994-4, 6.50% 2024                                         964         941     1.49

Federal Agency Obligations - Other - 3.02%                                                 
Fannie Mae:                                                                                
 5.75% 2005                                                      3,000       3,108         
 6.00% 2008                                                      2,000       2,101      .92
Freddie Mac 5.75% 2008                                           4,500       4,637      .82
Federal Home Loan Bank:                                                                    
 5.80% 2008                                                      2,000       2,062         
 5.125% 2003                                                     2,500       2,508      .80
Tennesee Valley Authority, Series G, 5.375% 2008                 2,750       2,761      .48

Development Authorities - 2.41%                                                            
Inter-American Development Bank  8.875% 2009                    10,000      12,683     2.23
Asian Development Bank  5.75% 2003                               1,000       1,021      .18

Financial - 0.31%                                                                          
Toyota Motor Credit Corp., 6.00% 2003 (Japan)                    1,750       1,785      .31

Foreign Governmental Authorities - 0.19%                                                   
KfW International Finance Inc., 7.625% 2004 (Germany)            1,000       1,100      .19

                                                                       --------------------
TOTAL BONDS & NOTES (cost: $541,273,000)                                   556,818    97.89
                                                                       --------------------

Short-Term Securities                                                                      
------------------------------------------------                                           
Corporate Short-Term Notes - 5.76%                                                         
General Motors Acceptance Corp. 5.19% due 12/14/1998            11,800      11,776     2.07
General Electric Capital Corp. 5.45% due 12/1/1998              11,000      10,998     1.93
Eastman Kodak Co. 5.11% due 12/8/1998                           10,000       9,989     1.76

Federal Agency Discount Notes - 0.61%                                                      
Freddie Mac 4.93% due 2/5/1999                                   3,500       3,467      .61
                                                                       --------------------
TOTAL SHORT-TERM SECURITIES (cost: $36,230,000)                             36,230     6.37
                                                                       --------------------
TOTAL INVESTMENT SECURITIES (cost: $577,503,000)                           593,048   104.26

Excess of payables over cash and receivables                                24,219     4.26
                                                                       --------------------
NET ASSETS                                                                $568,829 100.00% 
                                                                       ====================

(1) Index-linked bond, which is a floating rate                                            
bond whose principal amount moves with a                                                   
government retail price index.                                                             

(2) Pass-through securities backed by a pool of                                            
  mortgages or other loans on which principal                                              
  payments are periodically made.  Therefore,                                              
  the effective maturity of these securities is                                            
  shorter than the stated maturity.                                                        

(3) Purchased in a private placement transaction;                                          
  resale to the public may require registration or sale only to                            
   qualified institutional buyers.                                                         

(4) Coupon rate may change periodically.                                                   

(5) Step bond; coupon rate will                                                            
  increase at a later date.                                                                

 See Notes to Financial Statements                                                         


                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                                 
Cash Management Fund                                                                               
Investment Portfolio, November 30, 1998                                                            
                                                                                                   
                                                                 Principal      Market             
                                                                    Amount       Value   Percent of
Short-Term Securities                                                (000)       (000)   Net Assets

Corporate Short-Term Notes - 74.03%                                                                
Shell Oil Co. 5.06% due 12/10/1998                                 $10,000    $  9,986        3.52%
Procter & Gamble Co. 5.02%-5.12% due 12/11/1998-1/6/1999             8,500         8465        2.99
A.I. Credit Corp. 5.14%-5.18% due 1/4-1/12/1999                      8,100         8054        2.84
E.I. du Pont de Nemours and Co. 5.00%-5.17% due 12/7-12/8/1998       7,600       7,592         2.68
Yale University 5.20% due 1/7/1999                                   7,500         7459        2.63
Consolidated Natural Gas Co. 5.12% due 12/10/1998                    7,200         7190        2.54
Eastman Kodak Co. 5.00% due 12/17/1998                               6,700         6684        2.36
Lucent Technologies Inc. 5.05% due 1/8-1/13/1999                     6,700         6660        2.35
Harvard University 5.15% due 12/3/1998                               6,500         6497        2.29
General Electric Capital Corp. 5.23% due 12/4/1998                   6,500       6,496         2.29
American Express Credit Corp. 5.21% due 12/11/1998                     6500        6490        2.29
IBM Credit Corp. 5.30% due 1/5/1999                                  6,300       6,267         2.21
Colgate-Palmolive Co. 5.15% due 12/1/1998 (1)                        6,000       5,999         2.12
General Motors Acceptance Corp. 5.16% due 12/3/1998                  6,000         5998        2.12
Motorola, Inc. 5.17% due 12/3/1998                                   6,000       5,997         2.12
SBC Communications Inc. 4.85% due 12/11/1998 (1)                     6,000       5,991         2.11
Amoco Corp. 4.83% due 12/15/1998                                     6,000       5,988         2.11
Minnesota Mining and Manufacturing Co. 5.06% due 12/15/1998          6,000         5987        2.11
St Paul Companies, Inc. 5.16% due 12/16/1998 (1)                     6,000         5986        2.11
Rockwell International Corp. 4.87% due 12/22/1998                    6,000         5982        2.11
BellSouth Telecommunications, Inc. 4.99%-5.08%                                                     
 due 12/8/1998-1/20/1999                                             6,000         5975        2.11
General Mills Inc. 5.25% due 1/11/1999                               6,000         5963        2.10
International Lease Finance Corp. 5.11% due 1/19/1999                6,000         5957        2.10
Household Finance Corp. 5.00%-5.03% due 12/2-12/22/1998              5,900         5892        2.08
Vermont American Corp. 4.82%-5.11% due 12/18-12/31/1998 (1)          5,100         5083        1.79
Hershey Foods Corp. 4.97% due 12/10/1998                             5,000         4993        1.76
Ameritech Corp. 5.00% due 1/12/1999                                  5,000       4,970         1.75
Duke Energy Corp. 5.05% due 1/12/1999                                5,000         4970        1.75
Duke University 5.10% due 1/15/1999                                  5,000         4967        1.75
Gannett Co. 5.05% due 1/11/1999 (1)                                  4,500         4474        1.58
Ford Motor Credit Co. 5.24% due 1/29/1999                            4,200       4,163         1.47
H.J. Heinz Co. 5.15% due 12/1/1998                                   4,000         3999        1.41
Coca-Cola Co. 5.00% due 1/19/1999                                    4,000       3,972         1.40
PepsiCo, Inc. 5.05% due 1/5/1999                                     3,800       3,781         1.33
Walt Disney Co. 5.13% due 12/7/1998                                  3,600       3,596         1.27
Johnson & Johnson 5.00% due 12/14/1998 (1)                           3,600       3,593         1.27
CIT Group Holdings, Inc. 5.24% due 1/14/1999                         3,500       3,477         1.23
Nordstrom Credit Inc. 5.12% due 12/18/1998                           2,000       1,995         0.70
Schering Corp. 5.00% due 12/2/1998                                   1,372       1,372         0.48
Pfizer Inc 5.09% due 12/2/1998 (1)                                     900         900         0.32

Federal Agency Discount Notes - 22.66%                                                             
Federal Home Loan Banks 5.00%-5.056% due 12/4/1998-1/29/1999        25,300        25246        8.90
Fannie Mae 5.00%-5.12% due 12/22/1998-1/15/1999                     22,643        22514        7.94
Freddie Mac 5.05%-5.06% due  12/1-12/2/1998                         16,500        16497        5.82

                                                                            ----------   ----------
TOTAL INVESTMENT SECURITIES (cost: $284,117,000)                                 284117      100.21
Excess of payables over cash and receivables                                        601        0.21
                                                                            ----------   ----------
NET ASSETS                                                                    $283,516      100.00%
                                                                            ==========   ==========

(1) Purchased in a private placement transaction; resale to the                                    
    public may require registration or sale only to qualified                                      
    institutional buyers.                                                                          

See Notes to Financial Statements                                                                  

                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                             
FINANCIAL STATEMENTS                                                                           
                                                                                               
Statement of Assets and Liabilities                                                            
at November 30, 1998                                                                           
(dollars in thousands, except per-share                                                        
 data)                                                       Global                            
                                             Global           Small                      Inter-
                                             Growth  Capitalization       Growth       national
                                               Fund            Fund         Fund           Fund
---------------------------------        ----------      ----------   ----------     ----------
ASSETS:                                                                                        
Investment securities at market            $253,930         $73,712   $5,651,380     $2,726,885
Cash                                             78                                            
Receivables for-                                                                               
 Sales of investments                                                     18,927          4,275
 Sales of fund's shares                         100             105          911            174
 Open forward currency                                                                         
  contracts                                      -               -            -                
 Dividends and                                                                                 
  interest                                      149              61          964          6,725
                                        ----------      ----------   ----------     ---------- 
                                            257,490          73,914    5,672,213      2,738,354
LIABILITIES:                            ----------      ----------   ----------     ---------- 
Payables for-                                                                                  
 Purchases of investments                     2,010           1,618       43,658         15,322
 Repurchases of fund's shares                                              3,503               
 Open forward currency                                                                         
  contracts                                      -               -            -              - 
 Management services                            139              46        1,754          1,254
 Distribution fees - Class 2                                                                   
 Other expenses                                  14               2          130            407
                                        ----------      ----------   ----------     ---------- 
                                              2,188           1,672       49,105         19,641
NET ASSETS AT                            ----------      ----------   ----------     ----------
 November 30, 1998 (Total $19,473,619)     $255,302         $72,242   $5,623,108     $2,718,713
                                        ===========     ===========  ===========    ===========
Investment securities at cost              $228,514         $77,420   $4,026,891     $2,112,182
                                        ===========     ===========  ===========    ===========

Class 1 (unlimited shares authorized):                                                         
 Net assets                                $131,691         $54,833   $5,312,603     $2,592,639
 Shares of beneficial interest                                                                 
  outstanding                            10,111,982       6,019,266   96,747,129    156,465,710
 Net asset value per share                   $13.02           $9.11       $54.91         $16.57

Class 2 (unlimited shares authorized):                                                         
 Net assets                                $123,611         $17,409     $310,505       $126,074
 Shares of beneficial interest                                                                 
  outstanding                             9,496,959       1,912,201    5,657,846      7,612,694
 Net asset value per share                   $13.02           $9.10       $54.88         $16.56

                                            Growth-           Asset                  High-Yield
                                             Income      Allocation         Bond           Bond
                                               Fund            Fund         Fund           Fund
---------------------------------        ----------      ----------   ----------     ----------
ASSETS:                                                                                        
Investment securities at market          $7,264,400      $1,664,150     $232,957       $768,916
Cash                                            382              85            4             30
Receivables for-                                                                               
 Sales of investments                        18,088             823           -             231
 Sales of fund's shares                       1,218             419          334            873
 Open forward currency                                                                         
  contracts                                      -               -                            -
 Dividends and                                                                                 
  interest                                    9,854           9,064        3,363         13,692
                                        ----------      ----------   ----------     ---------- 
                                          7,293,942       1,674,541      236,677        783,742
LIABILITIES:                            ----------      ----------   ----------     ---------- 
Payables for-                                                                                  
 Purchases of investments                    21,270           3,268        5,289          1,065
 Repurchases of fund's shares                                                                21
 Open forward currency                                                                         
  contracts                                      -               -            -               9
 Management services                          2,037             586           95            308
 Distribution fees - Class 2                                                                   
 Other expenses                                 191              40            3             24
                                        ----------      ----------   ----------     ---------- 
                                             26,225           3,930        5,398          1,440
NET ASSETS AT                            ----------      ----------   ----------     ----------
 November 30, 1998 (Total $19,473,619)   $7,267,717      $1,670,611     $231,279       $782,302
                                        ===========     ===========  ===========    ===========
Investment securities at cost            $5,798,153      $1,386,280     $234,774       $808,351
                                        ===========     ===========  ===========    ===========

Class 1 (unlimited shares authorized):                                                         
 Net assets                              $6,703,872      $1,497,375     $186,105       $714,640
 Shares of beneficial interest                                                                 
  outstanding                           164,600,954      90,363,732   17,950,462     51,917,114
 Net asset value per share                   $40.73          $16.57       $10.37         $13.77

Class 2 (unlimited shares authorized):                                                         
 Net assets                                $563,845        $173,236      $45,174        $67,662
 Shares of beneficial interest                                                                 
  outstanding                            13,852,224      10,460,667    4,359,683      4,918,329
 Net asset value per share                   $40.70          $16.56       $10.36         $13.76

                                               U.S.                                            
                                        Government/                                            
                                          AAA-Rated            Cash                            
                                         Securities      Management                            
                                               Fund            Fund                            
---------------------------------        ----------      ----------                            
ASSETS:                                                                                        
Investment securities at market            $593,048        $284,117                            
Cash                                             26              30                            
Receivables for-                                                                               
 Sales of investments                         1,771              -                             
 Sales of fund's shares                         259             695                            
 Open forward currency                                                                         
  contracts                                      -               -                             
 Dividends and                                                                                 
  interest                                    4,624                                            
                                        ----------      ----------                             
                                            599,728         284,842                            
LIABILITIES:                            ----------      ----------                             
Payables for-                                                                                  
 Purchases of investments                    30,162              -                             
 Repurchases of fund's shares                                             1,202                
 Open forward currency                                                                         
  contracts                                      -               -                             
 Management services                            238             108                            
 Distribution fees - Class 2                                                      7            
 Other expenses                                  18               9                            
                                        ----------      ----------                             
                                             30,899           1,326                            
NET ASSETS AT                            ----------      ----------                            
 November 30, 1998 (Total $19,473,619)     $568,829        $283,516                            
                                        ===========     ===========                            
Investment securities at cost              $577,503        $284,117                            
                                        ===========     ===========                            

Class 1 (unlimited shares authorized):                                                         
 Net assets                                $536,795        $249,403                            
 Shares of beneficial interest                                                                 
  outstanding                            46,973,661      22,406,554                            
 Net asset value per share                   $11.43          $11.13                            

Class 2 (unlimited shares authorized):                                                         
 Net assets                                 $32,034         $34,113                            
 Shares of beneficial interest                                                                 
  outstanding                             2,804,954       3,066,851                            
 Net asset value per share                   $11.42          $11.12                            

See Notes to Financial Statements                                                              

                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                                               
FINANCIAL STATEMENTS                                                                                             

Statement of Operations                                                                                          
for the year ended November 30, 1998                                                                             
(dollars in thousands)                                                                                           
                                                                                                                 

                                                                                Global                           
                                                               Global            Small                    Inter- 
                                                               Growth   Capitalization       Growth     national 
                                                                 Fund         Fund (1)         Fund         Fund 
                                                           ----------       ----------   ----------   ---------- 
INVESTMENT INCOME:                                                                                               
Income:                                                                                                          
 Dividends                                                     $2,147             $249      $17,697      $45,118 
 Interest                                                       1,510              425       23,289       10,544 
                                                           ----------       ----------   ----------   ---------- 
                                                                3,657              674       40,986       55,662 
                                                           ----------       ----------   ----------   ---------- 
Expenses:                                                                                                        
 Management services fee                                        1,341              240       20,494       15,732 
 Distribution fees - Class 2                                      217               13          479          225 
 Reports to shareholders                                            6                1          155           82 
 Registration statement and                                                                                      
  prospectus                                                       38                2          125           87 
 Postage, stationery and                                                                                         
  supplies                                                          2                1           67           37 
 Trustees' fees                                                     2                -           55           30 
 Auditing and legal fees                                            2                -           54           30 
 Custodian fee                                                     61                7          112        2,067 
 Taxes other than federal                                                                                        
  income tax                                                        3                -           58           49 
 Other expenses                                                     5                1           28           92 
                                                           ----------       ----------   ----------   ---------- 
                                                                1,677              265       21,627       18,431 
                                                           ----------       ----------   ----------   ---------- 
 Net investment income                                          1,980              409       19,359       37,231 
                                                           ----------       ----------   ----------   ---------- 
REALIZED GAIN AND                                                                                                
 UNREALIZED APPRECIATION                                                                                         
 (DEPRECIATION) ON INVESTMENTS:                                                                                  
Realized gain                                                   9,087              925      847,243       47,635 
                                                           ----------       ----------   ----------   ---------- 
Net change in unrealized appreciation                                                                            
 (depreciation) on investments                                 26,951           (3,708)     296,599      337,298 
Net change in unrealized appreciation                                                                            
 (depreciation) on open forward currency                                                                         
 contracts                                                          -                -            -       (1,826)
                                                           ----------       ----------   ----------   ---------- 
Net unrealized appreciation                                                                                      
 (depreciation)                                                26,951           (3,708)     296,599      335,472 
                                                           ----------       ----------   ----------   ---------- 
Net realized gain and                                                                                            
 unrealized appreciation (depreciation)                                                                          
 on investments                                                36,038           (2,783)   1,143,842      383,107 
                                                           ----------       ----------   ----------   ---------- 
NET INCREASE (DECREASE) IN NET ASSETS                                                                            
 RESULTING FROM OPERATIONS                                    $38,018  $                 $1,163,201     $420,338 
                                                            =========        =========    =========  =========== 

                                                                                                           High- 
                                                              Growth-            Asset                     Yield 
                                                               Income       Allocation         Bond         Bond 
                                                                 Fund             Fund         Fund         Fund 
                                                            ---------       ----------   ----------   ---------- 
INVESTMENT INCOME:                                                                                               
Income:                                                                                                          
 Dividends                                                   $101,871          $19,125    $     505       $2,097 
 Interest                                                      44,403           45,430       13,230       72,491 
                                                           ----------       ----------   ----------   ---------- 
                                                              146,274           64,555       13,735       74,588 
                                                           ----------       ----------   ----------   ---------- 
Expenses:                                                                                                        
 Management services fee                                       24,542            6,916          952        4,018 
 Distribution fees - Class 2                                      917              268           70          116 
 Reports to shareholders                                          211               48            6           24 
 Registration statement and                                                                                      
  prospectus                                                      250               75           20           38 
 Postage, stationery and                                                                                         
  supplies                                                         92               20            2           11 
 Trustees' fees                                                    75               17            2            9 
 Auditing and legal fees                                           75               16            2            9 
 Custodian fee                                                    155               44            9           33 
 Taxes other than federal                                                                                        
  income tax                                                       81               14            2            5 
 Other expenses                                                    47                9            2            6 
                                                           ----------       ----------   ----------   ---------- 
                                                               26,445            7,427        1,067        4,269 
                                                           ----------       ----------   ----------   ---------- 
 Net investment income                                        119,829           57,128       12,668       70,319 
                                                           ----------       ----------   ----------   ---------- 
REALIZED GAIN AND                                                                                                
 UNREALIZED APPRECIATION                                                                                         
 (DEPRECIATION) ON INVESTMENTS:                                                                                  
Realized gain                                               1,068,839          115,877        1,054        6,948 
                                                           ----------       ----------   ----------   ---------- 
Net change in unrealized appreciation                                                                            
 (depreciation) on investments                               (236,509)           6,383       (4,900)     (66,641)
Net change in unrealized appreciation                                                                            
 (depreciation) on open forward currency                                                                         
 contracts                                                                                       12         (133)
                                                           ----------      -----------  -----------   ---------- 
Net unrealized appreciation                                                                                      
 (depreciation)                                              (236,509)           6,383       (4,888)     (66,774)
                                                           ----------      -----------  -----------   ---------- 
Net realized gain and                                                                                            
 unrealized appreciation (depreciation)                                                                          
 on investments                                               832,330          122,260       (3,834)     (59,826)
                                                           ----------       ----------   ----------   ---------- 
NET INCREASE (DECREASE) IN NET ASSETS                                                                            
 RESULTING FROM OPERATIONS                                   $952,159         $179,388       $8,834      $10,493 
                                                            =========        =========    =========    ========= 

                                                                 U.S.                                            
                                                          Government/             Cash                           
                                                            AAA-Rated          Manage-                           
                                                           Securities             ment                           
                                                                 Fund             Fund                           
                                                      ---------------       ----------                           
INVESTMENT INCOME:                                                                                               
Income:                                                                                                          
 Dividends                                           $                              -                            
 Interest                                                      33,531          $14,295                           
                                                           ----------       ----------                           
                                                               33,531           14,295                           
                                                           ----------       ----------                           
Expenses:                                                                                                        
 Management services fee                                        2,553            1,164                           
 Distribution fees - Class 2                                       42               56                           
 Reports to shareholders                                           16                8                           
 Registration statement and                                                                                      
  prospectus                                                       -                 2                           
 Postage, stationery and                                                                                         
  supplies                                                          6                3                           
 Trustees' fees                                                     4                3                           
 Auditing and legal fees                                            5                3                           
 Custodian fee                                                     16                7                           
 Taxes other than federal                                                                                        
  income tax                                                        2                -                           
 Other expenses                                                     2                4                           
                                                           ----------       ----------                           
                                                                2,646            1,250                           
                                                           ----------       ----------                           
 Net investment income                                         30,885           13,045                           
                                                           ----------       ----------                           
REALIZED GAIN AND                                                                                                
 UNREALIZED APPRECIATION                                                                                         
 (DEPRECIATION) ON INVESTMENTS:                                                                                  
Realized gain                                                   4,748                1                           
                                                           ----------       ----------                           
Net change in unrealized appreciation                                                                            
 (depreciation) on investments                                  5,763                -                           
Net change in unrealized appreciation                                                                            
 (depreciation) on open forward currency                                                                         
 contracts                                                          -                -                           
                                                      ---------------       ----------                           
Net unrealized appreciation                                                                                      
 (depreciation)                                                 5,763                -                           
                                                      ---------------       ----------                           
Net realized gain and                                                                                            
 unrealized appreciation (depreciation)                                                                          
 on investments                                                10,511                                    1       
                                                           ----------       ----------                           
NET INCREASE (DECREASE) IN NET ASSETS                                                                            
 RESULTING FROM OPERATIONS                                    $41,396          $13,046                           
                                                      ===============        =========                           
(1)  For the period April 30, 1998, commencement of                                                              
 operations, through November 30, 1998.                                                                          

See Notes to Financial Statements                                                                                

                                                        [Enlarge/Download Table]
American Variable Insurance Series                                                                                       
FINANCIAL STATEMENTS                                                                                                     
                                                                                                                         
                                                                                              Global Small               
Statement of Changes in Net Assets                              Global                      Capitalization               
(dollars in thousands)                                      Growth Fund                            Fund                  
                                                          -------------  -------------       -------------               
                                                             Year ended   Period ended        Period ended               
                                                           November 30,   November 30,        November 30,               
                                                                    1998      1997 (1)             1998(2)               
----------------------------------                          -----------    -----------         -----------               
OPERATIONS:                                                                                                              
Net investment income                                            $1,980           $549                $409               
Net realized gain (loss) on investments                           9,087            (99)                925               
Net unrealized appreciation (depreciation)                                                                               
 on investments                                                  26,951         (1,529)             (3,708)              
                                                            -----------    -----------         -----------               
 Net increase (decrease) in net assets                                                                                   
  resulting from operations                                      38,018         (1,079)             (2,374)              
                                                            -----------    -----------         -----------               
DIVIDENDS AND DISTRIBUTIONS                                                                                              
 PAID TO SHAREHOLDERS:                                                                                                   
Dividends from net investment income:                                                                                    
 Class 1                                                         (1,226)          (176)               (194)              
 Class 2                                                           (766)           (62)                (36)              
                                                            -----------    -----------         -----------               
  Total dividends from net investment income                     (1,992)          (238)               (230)              
Distributions from net realized gain on                                                                                  
 investments                                                       (277)             -                   -               
                                                            -----------    -----------         -----------               
Total dividends and distributions                                (2,269)          (238)               (230)              
                                                            -----------    -----------         -----------               
CAPITAL SHARE TRANSACTIONS:                                                                                              
 Class 1:                                                                                                                
  Proceeds from shares sold                                      45,339         81,956              50,353               
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                 1,395            176                 194               
  Cost of shares repurchased                                    (15,055)        (6,631)             (2,874)              
                                                            -----------    -----------         -----------               
  Net increase (decrease) from Class 1 transactions              31,679         75,501              47,673               
                                                            -----------    -----------         -----------               
 Class 2:                                                                                                                
  Proceeds from shares sold                                      61,131         47,516              17,199               
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                   874             62                  36               
  Cost of shares repurchased                                       (893)             -                 (62)              
                                                            -----------    -----------         -----------               
  Net increase from Class 2 transactions                         61,112         47,578              17,173               
 Net increase (decrease) in net                             -----------    -----------         -----------               
  assets resulting from capital share                                                                                    
  transactions                                                   92,791        123,079              64,846               
                                                            -----------    -----------         -----------               
TOTAL INCREASE (DECREASE) IN NET ASSETS                         128,540        121,762              62,242               

NET ASSETS:                                                                                                              
Beginning of year                                               126,762          5,000              10,000               
                                                            -----------    -----------         -----------               
End of year                                                    $255,302       $126,762             $72,242               
                                                           ============   ============        ============               
Undistributed net investment income                                $296           $311                $182               
                                                           ============   ============        ============               
SHARES OF BENEFICIAL INTEREST:                                                                                           
 Class 1:                                                                                                                
  Shares sold                                                 3,748,614      7,649,183           5,351,886               
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                            118,716         15,620              23,072               
  Shares repurchased                                         (1,315,104)      (605,047)           (355,692)              
                                                            -----------    -----------         -----------               
   Net increase (decrease) in shares outstanding              2,552,226      7,059,756           5,019,266               
                                                           ============   ============        ============               
 Class 2:                                                                                                                
  Shares sold                                                 5,120,157      4,376,072           1,915,704               
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                             73,850          5,510               4,349               
  Shares repurchased                                            (78,598)           (32)             (7,852)              
                                                            -----------    -----------         -----------               
   Net increase in shares outstanding                         5,115,409      4,381,550           1,912,201               
                                                           ============   ============        ============               

                                                            Growth Fund                 International Fund               
                                                          -------------                      -------------               
                                                             Year ended     Year ended          Year ended    Year ended 
                                                           November 30,   November 30,        November 30,  November 30, 
                                                                    1998          1997                 1998         1997 
----------------------------------                          -----------    -----------         -----------   ----------- 
OPERATIONS:                                                                                                              
Net investment income                                           $19,359        $24,821             $37,231       $41,594 
Net realized gain (loss) on investments                         847,243        561,323              47,635       277,748 
Net unrealized appreciation (depreciation)                                                                               
 on investments                                                 296,599        342,407             335,472       (92,076)
                                                            -----------    -----------         -----------   ----------- 
 Net increase (decrease) in net assets                                                                                   
  resulting from operations                                   1,163,201        928,551             420,338       227,266 
                                                            -----------    -----------         -----------   ----------- 
DIVIDENDS AND DISTRIBUTIONS                                                                                              
 PAID TO SHAREHOLDERS:                                                                                                   
Dividends from net investment income:                                                                                    
 Class 1                                                        (16,761)       (24,809)            (45,333)      (43,541)
 Class 2                                                           (125)           (50)             (1,201)         (166)
                                                            -----------    -----------         -----------   ----------- 
  Total dividends from net investment income                    (16,886)       (24,859)            (46,534)      (43,707)
Distributions from net realized gain on                                                                                  
 investments                                                   (580,855)      (268,039)           (272,318)      (94,763)
                                                            -----------    -----------         -----------   ----------- 
Total dividends and distributions                              (597,741)      (292,898)           (318,852)     (138,470)
                                                            -----------    -----------         -----------   ----------- 
CAPITAL SHARE TRANSACTIONS:                                                                                              
 Class 1:                                                                                                                
  Proceeds from shares sold                                     109,347        238,801              41,886       208,181 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                               586,639        292,848             312,120       138,304 
  Cost of shares repurchased                                   (589,670)      (354,956)           (471,251)     (196,240)
                                                            -----------    -----------         -----------   ----------- 
  Net increase (decrease) from Class 1 transactions             106,316        176,693            (117,245)      150,245 
                                                            -----------    -----------         -----------   ----------- 
 Class 2:                                                                                                                
  Proceeds from shares sold                                     195,304         72,649              68,884        51,308 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                11,102             50               6,732           166 
  Cost of shares repurchased                                       (457)           (11)             (1,263)          (24)
                                                            -----------    -----------         -----------   ----------- 
  Net increase from Class 2 transactions                        205,949         72,688              74,353        51,450 
 Net increase (decrease) in net                             -----------    -----------         -----------   ----------- 
  assets resulting from capital share                                                                                    
  transactions                                                  312,265        249,381             (42,892)      201,695 
                                                            -----------    -----------         -----------   ----------- 
TOTAL INCREASE (DECREASE) IN NET ASSETS                         877,725        885,034              58,594       290,491 

NET ASSETS:                                                                                                              
Beginning of year                                             4,745,383      3,860,349           2,660,119     2,369,628 
                                                            -----------    -----------         -----------   ----------- 
End of year                                                  $5,623,108     $4,745,383          $2,718,713    $2,660,119 
                                                           ============   ============        ============  ============ 
Undistributed net investment income                              $7,091         $4,612  $                         $9,642 
                                                           ============   ============        ============  ============ 
SHARES OF BENEFICIAL INTEREST:                                                                                           
 Class 1:                                                                                                                
  Shares sold                                                 2,196,906      5,361,345           2,567,211    12,876,841 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                         13,311,288      7,259,293          21,440,773     8,982,981 
  Shares repurchased                                        (11,951,567)    (8,120,252)        (30,137,030)  (11,853,859)
                                                            -----------    -----------         -----------   ----------- 
   Net increase (decrease) in shares outstanding              3,556,627      4,500,386          (6,129,046)   10,005,963 
                                                           ============   ============        ============  ============ 
 Class 2:                                                                                                                
  Shares sold                                                 3,926,116      1,488,730           4,258,892     2,969,078 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                            252,355          1,040             460,573         9,366 
  Shares repurchased                                            (10,179)          (216)            (83,746)       (1,469)
   Net increase in shares outstanding                       -----------    -----------         -----------   ----------- 
                                                              4,168,292      1,489,554           4,635,719     2,976,975 
                                                           ============   ============        ============  ============ 

                                                         Growth-Income                               Asset               
                                                                   Fund                    Allocation Fund               
                                                          -------------                      -------------               
                                                             Year ended     Year ended          Year ended    Year ended 
                                                           November 30,   November 30,        November 30,  November 30, 
                                                                    1998          1997                 1998         1997 
----------------------------------                          -----------    -----------         -----------   ----------- 
OPERATIONS:                                                                                                              
Net investment income                                          $119,829       $117,807             $57,128       $46,387 
Net realized gain (loss) on investments                       1,068,839        631,933             115,877        78,404 
Net unrealized appreciation (depreciation)                                                                               
 on investments                                                (236,509)       464,898               6,383        86,689 
                                                            -----------    -----------         -----------   ----------- 
 Net increase (decrease) in net assets                                                                                   
  resulting from operations                                     952,159      1,214,638             179,388       211,480 
                                                            -----------    -----------         -----------   ----------- 
DIVIDENDS AND DISTRIBUTIONS                                                                                              
 PAID TO SHAREHOLDERS:                                                                                                   
Dividends from net investment income:                                                                                    
 Class 1                                                       (115,861)      (112,850)            (51,238)      (43,924)
 Class 2                                                         (5,220)          (568)             (3,336)         (267)
                                                            -----------    -----------         -----------   ----------- 
  Total dividends from net investment income                   (121,081)      (113,418)            (54,574)      (44,191)
Distributions from net realized gain on                                                                                  
 investments                                                   (633,062)      (373,625)            (78,277)      (72,976)
                                                            -----------    -----------         -----------   ----------- 
Total dividends and distributions                              (754,143)      (487,043)           (132,851)     (117,167)
                                                            -----------    -----------         -----------   ----------- 
CAPITAL SHARE TRANSACTIONS:                                                                                              
 Class 1:                                                                                                                
  Proceeds from shares sold                                      79,575        258,887              55,514        94,533 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                               730,769        486,475             126,847       116,900 
  Cost of shares repurchased                                   (713,841)      (287,990)           (120,895)      (52,765)
                                                            -----------    -----------         -----------   ----------- 
  Net increase (decrease) from Class 1 transactions              96,503        457,372              61,466       158,668 
                                                            -----------    -----------         -----------   ----------- 
 Class 2:                                                                                                                
  Proceeds from shares sold                                     363,643        152,837             121,817        40,846 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                23,374            568               6,004           267 
  Cost of shares repurchased                                       (829)            (2)               (195)         (203)
                                                            -----------    -----------         -----------   ----------- 
  Net increase from Class 2 transactions                        386,188        153,403             127,626        40,910 
 Net increase (decrease) in net                             -----------    -----------         -----------   ----------- 
  assets resulting from capital share                                                                                    
  transactions                                                  482,691        610,775             189,092       199,578 
                                                            -----------    -----------         -----------   ----------- 
TOTAL INCREASE (DECREASE) IN NET ASSETS                         680,707      1,338,370             235,629       293,891 

NET ASSETS:                                                                                                              
Beginning of year                                             6,587,010      5,248,640           1,434,982     1,141,091 
                                                            -----------    -----------         -----------   ----------- 
End of year                                                  $7,267,717     $6,587,010          $1,670,611    $1,434,982 
                                                           ============   ============        ============  ============ 
Undistributed net investment income                             $28,393        $29,653             $14,723       $12,170 
                                                           ============   ============        ============  ============ 
SHARES OF BENEFICIAL INTEREST:                                                                                           
 Class 1:                                                                                                                
  Shares sold                                                 2,066,094      7,261,018           3,472,672     6,313,389 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                         20,193,738     14,498,052           8,206,467     8,156,386 
  Shares repurchased                                        (18,531,056)    (7,793,511)         (7,525,015)   (3,428,456)
                                                            -----------    -----------         -----------   ----------- 
   Net increase (decrease) in shares outstanding              3,728,776     13,965,559           4,154,124    11,041,319 
                                                           ============   ============        ============  ============ 
 Class 2:                                                                                                                
  Shares sold                                                 9,296,520      3,921,601           7,514,429     2,569,382 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                            643,598         14,358             385,691        16,640 
  Shares repurchased                                            (23,804)           (49)            (12,673)      (12,802)
   Net increase in shares outstanding                       -----------    -----------         -----------   ----------- 
                                                              9,916,314      3,935,910           7,887,447     2,573,220 
                                                           ============   ============        ============  ============ 

                                                                                               High-Yield                
                                                              Bond Fund                          Bond Fund               
                                                          -------------                      -------------               
                                                             Year ended     Year ended          Year ended    Year ended 
                                                           November 30,   November 30,        November 30,  November 30, 
                                                                    1998          1997                 1998         1997 
----------------------------------                          -----------    -----------         -----------   ----------- 
OPERATIONS:                                                                                                              
Net investment income                                           $12,668         $7,007             $70,319       $64,918 
Net realized gain (loss) on investments                           1,054          1,649               6,948        14,913 
Net unrealized appreciation (depreciation)                                                                               
 on investments                                                  (4,888)         1,007             (66,774)        5,122 
                                                            -----------    -----------         -----------   ----------- 
 Net increase (decrease) in net assets                                                                                   
  resulting from operations                                       8,834          9,663              10,493        84,953 
                                                            -----------    -----------         -----------   ----------- 
DIVIDENDS AND DISTRIBUTIONS                                                                                              
 PAID TO SHAREHOLDERS:                                                                                                   
Dividends from net investment income:                                                                                    
 Class 1                                                         (9,573)        (5,948)            (65,776)      (61,513)
 Class 2                                                         (1,605)          (126)             (3,726)         (387)
                                                            -----------    -----------         -----------   ----------- 
  Total dividends from net investment income                    (11,178)        (6,074)            (69,502)      (61,900)
Distributions from net realized gain on                                                                                  
 investments                                                     (1,717)             -              (8,320)            - 
                                                            -----------    -----------         -----------   ----------- 
Total dividends and distributions                               (12,895)        (6,074)            (77,822)      (61,900)
                                                            -----------    -----------         -----------   ----------- 
CAPITAL SHARE TRANSACTIONS:                                                                                              
 Class 1:                                                                                                                
  Proceeds from shares sold                                      64,860         52,881              45,293        74,311 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                11,132          5,948              73,843        61,513 
  Cost of shares repurchased                                    (18,584)        (7,585)           (107,252)      (55,586)
                                                            -----------    -----------         -----------   ----------- 
  Net increase (decrease) from Class 1 transactions              57,408         51,244              11,884        80,238 
                                                            -----------    -----------         -----------   ----------- 
 Class 2:                                                                                                                
  Proceeds from shares sold                                      33,674         11,571              49,128        20,198 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                 1,763            126               3,979           387 
  Cost of shares repurchased                                     (1,431)           (29)             (1,418)           (3)
                                                            -----------    -----------         -----------   ----------- 
  Net increase from Class 2 transactions                         34,006         11,668              51,689        20,582 
 Net increase (decrease) in net                             -----------    -----------         -----------   ----------- 
  assets resulting from capital share                                                                                    
  transactions                                                   91,414         62,912              63,573       100,820 
                                                            -----------    -----------         -----------   ----------- 
TOTAL INCREASE (DECREASE) IN NET ASSETS                          87,353         66,501              (3,756)      123,873 

NET ASSETS:                                                                                                              
Beginning of year                                               143,926         77,425             786,058       662,185 
                                                            -----------    -----------         -----------   ----------- 
End of year                                                    $231,279       $143,926            $782,302      $786,058 
                                                           ============   ============        ============  ============ 
Undistributed net investment income                              $3,506         $2,081             $17,744       $17,389 
                                                           ============   ============        ============  ============ 
SHARES OF BENEFICIAL INTEREST:                                                                                           
 Class 1:                                                                                                                
  Shares sold                                                 6,220,296      5,092,091           3,143,506     5,078,465 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                          1,070,589        579,221           5,138,832     4,250,842 
  Shares repurchased                                         (1,789,981)      (732,975)         (7,540,786)   (3,792,325)
                                                            -----------    -----------         -----------   ----------- 
   Net increase (decrease) in shares outstanding              5,500,904      4,938,337             741,552     5,536,982 
                                                           ============   ============        ============  ============ 
 Class 2:                                                                                                                
  Shares sold                                                 3,219,589      1,098,637           3,361,669     1,355,310 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                            169,961         12,011             280,937        26,144 
  Shares repurchased                                           (137,744)        (2,771)           (105,506)         (225)
   Net increase in shares outstanding                       -----------    -----------         -----------   ----------- 
                                                              3,251,806      1,107,877           3,537,100     1,381,229 
                                                           ============   ============        ============  ============ 

                                                       U.S. Government/                                                  
                                                              AAA-Rated                    Cash Management               
                                                        Securities Fund                               Fund               
                                                          -------------                      -------------               
                                                             Year ended     Year ended          Year ended    Year ended 
                                                           November 30,   November 30,        November 30,  November 30, 
                                                                    1998          1997                 1998         1997 
----------------------------------                          -----------    -----------         -----------   ----------- 
OPERATIONS:                                                                                                              
Net investment income                                           $30,885        $32,546             $13,045       $12,382 
Net realized gain (loss) on investments                           4,748         (9,383)                  1             - 
Net unrealized appreciation (depreciation)                                                                               
 on investments                                                   5,763          6,202                   -             - 
                                                            -----------    -----------         -----------   ----------- 
 Net increase (decrease) in net assets                                                                                   
  resulting from operations                                      41,396         29,365              13,046        12,382 
                                                            -----------    -----------         -----------   ----------- 
DIVIDENDS AND DISTRIBUTIONS                                                                                              
 PAID TO SHAREHOLDERS:                                                                                                   
Dividends from net investment income:                                                                                    
 Class 1                                                        (29,472)       (34,740)            (11,431)      (11,948)
 Class 2                                                           (938)          (123)               (984)         (182)
                                                            -----------    -----------         -----------   ----------- 
  Total dividends from net investment income                    (30,410)       (34,863)            (12,415)      (12,130)
Distributions from net realized gain on                                                                                  
 investments                                                          -              -                   -             - 
                                                            -----------    -----------         -----------   ----------- 
Total dividends and distributions                               (30,410)       (34,863)            (12,415)      (12,130)
                                                            -----------    -----------         -----------   ----------- 
CAPITAL SHARE TRANSACTIONS:                                                                                              
 Class 1:                                                                                                                
  Proceeds from shares sold                                      97,521         23,001             269,818       252,946 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                29,472         34,740              11,431        11,948 
  Cost of shares repurchased                                    (71,432)       (93,774)           (258,426)     (279,424)
                                                            -----------    -----------         -----------   ----------- 
  Net increase (decrease) from Class 1 transactions              55,561        (36,033)             22,823       (14,530)
                                                            -----------    -----------         -----------   ----------- 
 Class 2:                                                                                                                
  Proceeds from shares sold                                      26,930          8,344              40,995        19,573 
  Proceeds from shares issued on reinvestment                                                                            
   of dividends and distributions                                   938            123                 984           182 
  Cost of shares repurchased                                     (3,235)        (1,538)            (21,792)       (5,950)
                                                            -----------    -----------         -----------   ----------- 
  Net increase from Class 2 transactions                         24,633          6,929              20,187        13,805 
 Net increase (decrease) in net                             -----------    -----------         -----------   ----------- 
  assets resulting from capital share                                                                                    
  transactions                                                   80,194        (29,104)             43,010          (725)
                                                            -----------    -----------         -----------   ----------- 
TOTAL INCREASE (DECREASE) IN NET ASSETS                          91,180        (34,602)             43,641          (473)

NET ASSETS:                                                                                                              
Beginning of year                                               477,649        512,251             239,875       240,348 
                                                            -----------    -----------         -----------   ----------- 
End of year                                                    $568,829       $477,649            $283,516      $239,875 
                                                           ============   ============        ============  ============ 
Undistributed net investment income                              $7,936         $7,461              $3,971        $3,341 
                                                           ============   ============        ============  ============ 
SHARES OF BENEFICIAL INTEREST:                                                                                           
 Class 1:                                                                                                                
  Shares sold                                                 8,582,116      2,087,594          24,352,691    22,809,829 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                          2,630,834      3,195,318           1,037,352     1,083,759 
  Shares repurchased                                         (6,349,283)    (8,543,011)        (23,299,957)  (25,187,883)
                                                            -----------    -----------         -----------   ----------- 
   Net increase (decrease) in shares outstanding              4,863,667     (3,260,099)          2,090,086    (1,294,295)
                                                           ============   ============        ============  ============ 
 Class 2:                                                                                                                
  Shares sold                                                 2,379,800        756,866           3,700,810     1,763,820 
  Shares issued on reinvestment of dividends                                                                             
   and distributions                                             83,414         11,218              89,256        16,540 
  Shares repurchased                                           (287,245)      (139,099)         (1,966,921)     (536,654)
   Net increase in shares outstanding                       -----------    -----------         -----------   ----------- 
                                                              2,175,969        628,985           1,823,145     1,243,706 
(1) For the period April 30, 1997, commencement            ============   ============        ============  ============ 
  of operations, through November 30, 1997.                                                                              
(2) For the period April 30, 1998, commencement                                                                          
  of operations, through November 30, 1998.                                                                              
(3) Represents initial capitalization from the sale                                                                      
   of 500,000 Class 1 shares of beneficial interest.                                                                     
(4) Represents initial capitalization from the sale                                                                      
   of 1,000,000 Class 1 shares of beneficial interest.                                                                   

See Notes to Financial Statements                                                                                        

Notes to Financial Statements                                                   

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES                             

ORGANIZATION -- American Variable Insurance Series (the "series") is registered 
under the Investment Company Act of 1940 as an open-end, diversified management 
investment company with 10 different funds. The 10th fund, the Global Small     
Capitalization Fund, commenced operations on April 30, 1998. The assets of each 
fund are segregated, with each fund accounted for separately. The funds'        
investment objectives are as follows: Global Growth Fund - growth of capital by 
investing primarily in common stocks or securities with common stock            
characteristics of issuers domiciled around the world; Global Small             
Capitalization Fund - long-term growth of capital by investing primarily in     
smaller companies in the U.S. and around the world; Growth Fund - growth of     
capital by investing primarily in common stocks or securities with common stock 
characteristics; International Fund - long-term growth of capital by investing  
primarily in securities of issuers domiciled outside the United States;         
Growth-Income Fund - growth of capital and income by investing primarily in     
common stocks or other securities which demonstrate the potential for           
appreciation and/or dividends; Asset Allocation Fund - high total return        
(including income and capital gains) consistent with long-term preservation of  
capital; Bond Fund - as high a level of current income as is consistent with    
the preservation of capital by investing primarily in fixed-income securities;  
High-Yield Bond Fund - high current income and secondarily capital appreciation 
by investing primarily in intermediate and long-term corporate obligations,     
with emphasis on higher yielding, higher risk, lower rated or unrated           
securities; U.S. Government/AAA-Rated Securities Fund - a high level of current 
income consistent with prudent investment risk and preservation of capital by   
investing primarily in a combination of securities guaranteed by the U.S.       
government and other debt securities rated AAA or Aaa; Cash Management Fund -   
high current yield while preserving capital by investing in a diversified       
selection of high-quality money market instruments.                             

Each fund in the series is authorized to offer multiple classes of shares.  
Currently, each fund offers two classes of shares: Class 1 and Class 2.  Class  
1 shares are not subject to either an initial or contingent deferred sales      
charge nor have they adopted a plan of distribution to cover any distribution   
expenses.  Class 2 shares are subject to certain fees pursuant to a Plan of     
Distribution as described below.  Both classes of shares have identical voting, 
dividend, liquidation and other rights and shall have exclusive rights to vote  
on matters affecting only individual classes.  Income, expenses, and any        
realized capital gains and losses not specific to a particular class will be    
allocated to each class on the basis of the net asset value of that class in    
relation to net assets of the fund.  Class-specific expenses will be allocated  
to that particular class on a specific identification basis.                    

SIGNIFICANT ACCOUNTING POLICIES -- The following is a summary of the            
significant accounting policies consistently followed by the series in the      
preparation of its financial statements:                                        

SECURITY VALUATION -- Equity securities, including depositary receipts, are     
valued at the last reported sale price on the exchange or market on which such  
securities are traded, as of the close of business on the day the securities    
are being valued or, lacking any sales, at the last available bid price.  In    
cases where equity securities are traded on more than one exchange, the         
securities are valued on the exchange or market determined by the investment    
adviser to be the broadest and most representative market, which may be either  
a securities exchange or the over-the-counter market.  Fixed-income securities  
are valued at prices obtained from a pricing service, when such prices are      
available; however, in circumstances where the investment adviser deems it      
appropriate to do so, such securities will be valued at the mean quoted bid and 
asked prices or at prices for securities of comparable maturity, quality and    
type. Securities with original maturities of one year or less having 60 days or 
less to maturity are amortized to maturity based on their cost if acquired      
within 60 days of maturity or, if already held on the 60th day, based on the    
value determined on the 61st day.  Forward currency contracts are valued at the 
mean of their representative quoted bid and asked prices. Securities and assets 
for which representative market quotations are not readily available are valued 
at fair value as determined in good faith by a committee appointed by the Board 
of Trustees.                                                                    

NON-U.S. CURRENCY TRANSLATION -- Assets or liabilities initially expressed in   
terms of non-U.S. currencies are translated into U.S. dollars at the prevailing 
market rates at the end of the reporting period.  Purchases and sales of        
securities and income and expenses are translated into U.S. dollars at the      
prevailing market rates on the dates of such transactions. The effects of       
changes in non-U.S. currency exchange rates on investment securities are        
included with the net realized and unrealized gain or loss on investment        
securities.                                                                     

SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- As is customary in the   
mutual fund industry, securities transactions are accounted for on the date the 
securities are purchased or sold. In the event the series purchases securities  
on a delayed delivery or "when-issued" basis, it will segregate with its        
custodian liquid assets in an amount sufficient to meet its payment obligations 
in these transactions. Realized gains and losses from securities transactions   
are reported on an identified cost basis. Dividend and interest income is       
reported on the accrual basis. Discounts and premiums on securities purchased   
are amortized.                                                                  

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS -- Dividends and distributions paid 
to shareholders are recorded on the ex-dividend date.                           

FORWARD CURRENCY CONTRACTS -- The series may enter into forward currency        
contracts, which represent agreements to exchange currencies of different       
countries at specified future dates at specified rates.  The series enters into 
these contracts to reduce its exposure to fluctuations in foreign exchange      
rates arising from investments denominated in non-U.S. currencies.  The series' 
use of forward currency contracts involves market risk in excess of the amount  
recognized in the statement of assets and liabilities.  The contracts are       
recorded in the statement of assets and liabilities at their net unrealized     
value.  The series records realized gains or losses at the time the forward     
contract is closed or offset by a matching contract.  The face or contract      
amount in U.S. dollars reflects the total exposure the series has in that       
particular contract.  Risks may arise upon entering these contracts from the    
potential inability of counterparties to meet the terms of their contracts and  
from possible movements in non-U.S. exchange rates and securities values        
underlying these instruments.                                                   

COMMON EXPENSES -- Common expenses incurred by the series are allocated among   
the funds, based upon relative net assets.  In all other respects, expenses are 
charged to each fund as incurred on a specific identification basis.            

2. FEDERAL INCOME TAXATION                                                      
It is the series' policy to continue to comply with the requirements of the     
Internal Revenue Code applicable to regulated investment companies and to       
distribute all of its net taxable income, including any net realized gain on    
investments, to its shareholders. Therefore, no federal income tax provision is 
required.                                                                       

During the year ended November 30, 1998, the U.S. Government/AAA-Rated        
Securities Fund utilized a capital loss carryforward of $4,051,000 to offset,   
for tax purposes, capital gains realized during the period up to such amount.   
The U.S. Government/AAA-Rated Securities Fund had available at November 30,     
1998 capital loss carryforward totaling $15,528,000, which may be used to       
offset capital gains realized during subsequent years through November 30,      
2005, and thereby relieve the fund and its shareholders of any federal income   
tax liability with respect to the capital gains that are so offset. It is the   
intention of this fund not to make distributions from capital gains while there 
is a capital loss carryforward.                                                 

Additional tax basis disclosures for and as of the year ended November 30, 1998 
are as follows:                                                                 

                                                        [Enlarge/Download Table]
                                                                                                         
                                                                                             (dollars in 
                                                                                              thousands) 
                                     Global    Global Small                                      Growth- 
                                     Growth  Capitalization       Growth           Interna-       Income 
                                       Fund            Fund         Fund        tional Fund         Fund 

For the year                                                                                             
 ended November 30, 1998                                                                                 

 Tax basis net capital                                                                                   
  gain                                8,723        $1,054 *     $827,001            $47,635   $1,068,847 
 Tax basis net currency                                                                                  
  gain (loss)                            (3)            3 *            9                  -           (8)
 Losses during the period                                                                                
  November 1, 1998 to                                                                                    
  November 30, 1998 deferred to                                                                          
  fiscal year ending                                                                                     
  November 30,1999 related to                                                                            
  the following:                                                                                         
   Currency                               -               -            3                  -            - 
   Capital gains                          -             132          132                  -            - 

As of November 30, 1998 (tax                                                                             
 basis amounts,                                                                                          
 excluding forward                                                                                       
 currency contracts):                                                                                    

 Unrealized                                                                                              
  appreciation                       42,825           6,330    1,892,039            776,874    1,743,049 
 Unrealized                                                                                              
  depreciation                       17,409          10,038      267,550            162,171      276,802 
 Net unrealized                                                                                          
  appreciation                                                                                           
  (depreciation)                     25,416          (3,708)   1,624,489            614,703    1,466,247 
 Cost of portfolio                                                                                       
  securities                        228,514          77,420    4,026,891          2,112,182    5,798,153 

                                                                                             (dollars in 
                                                                                              thousands) 
                                      Asset                   High-Yield   U.S. Government/         Cash 
                                 Allocation            Bond         Bond          AAA-Rated   Management 
                                       Fund            Fund         Fund    Securities Fund         Fund 

For the year                                                                                             
 ended November 30, 1998                                                                                 

 Tax basis net capital                                                                                   
  gain                             $115,878          $1,107      $10,784             $4,051           $1 
 Tax basis net currency                                                                                  
  gain (loss)                            (1)            (53)        (595)                 -            - 
 Losses during the period                                                                                
  November 1, 1998 to                                                                                    
  November 30, 1998 deferred to                                                                          
  fiscal year ending                                                                                     
  November 30,1999 related to                                                                            
  the following:                                                                                         
   Currency                               -               -            -                  -            - 
   Capital gains                          -               -        3,903                  -            - 

As of November 30, 1998 (tax                                                                             
 basis amounts,                                                                                          
 excluding forward                                                                                       
 currency contracts):                                                                                    

 Unrealized                                                                                              
  appreciation                      330,738           5,476       24,943             17,543            - 
 Unrealized                                                                                              
  depreciation                       52,868           7,274       64,378              1,998            - 
 Net unrealized                                                                                          
  appreciation                                                                                           
  (depreciation)                    277,870          (1,798)      39,435             15,545            - 
 Cost of portfolio                                                                                       
  securities                      1,386,280         234,774      808,351            577,503      284,117 

*  For the period                                                                                        
April 30, 1998,                                                                                          
commencement of operations,                                                                              
through November 30, 1998.                                                                               

3. FEES AND TRANSACTIONS WITH RELATED PARTIES                                   

INVESTMENT ADVISORY FEE -- The fees for management services were incurred       
pursuant to an  agreement with Capital Research and Management Company (CRMC),  
with which certain officers and Trustees of the series are affiliated. The      
Investment Advisory and Service Agreement provides for monthly fees, accrued    
daily, based on the following annual rates: Global Growth Fund - 0.69% of       
average net assets; Global Small Capitalization Fund - 0.80% of average net     
assets; Growth Fund - 0.50% of the first $600 million of average net assets;    
0.45% of such assets in excess of $600 million but not exceeding $1.2 billion;  
0.42% of such assets in excess of $1.2 billion but not exceeding $2.0 billion;  
0.37% of such assets in excess of $2.0 billion but not exceeding $3.2 billion;  
and 0.35% of such assets in excess of $3.2 billion; International Fund -0.78%   
of the first $600 million of average net assets; 0.60% of such assets in excess 
of $600 million but not exceeding $1.2 billion; 0.48% of such assets in excess  
of $1.2 billion but not exceeding $2.0 billion; and 0.465% of such assets in    
excess of $2.0 billion; Growth-Income Fund - 0.50% of the first $600 million of 
average net assets; 0.45% of such assets in excess of $600 million but not      
exceeding $1.5 billion; 0.40% of such assets in excess of $1.5 billion but not  
exceeding $2.5 billion; 0.32% of such assets in excess of $2.5 billion but not  
exceeding $4.0 billion; and 0.285% of such assets in excess of $4.0 billion;    
Asset Allocation Fund - 0.50% of the first $600 million of average net assets;  
0.42% of such assets in excess of $600 million but not exceeding $1.2 billion;  
and 0.36% of such assets in excess of $1.2 billion; Bond Fund - 0.60% of the    
first $30 million of average net assets; and 0.50% of such assets in excess of  
$30 million; High-Yield Bond Fund - 0.60% of the first $30 million of average   
net assets; 0.50% of such assets in excess of $30 million but not exceeding     
$600 million; and 0.46% of such assets in excess of $600 million; U.S.          
Government/AAA-Rated Securities Fund - 0.60% of the first $30 million of        
average net assets; 0.50% of such assets in excess of $30 million but not       
exceeding $600 million; and 0.40% of such assets in excess of $600 million;     
Cash Management Fund - 0.50% of the first $100 million of average net assets;   
0.42% of such assets in excess of $100 million but not exceeding $400 million;  
and 0.38% of such assets in excess of $400 million.                             

 The Board of Trustees has approved an amended Investment Advisory and Service
Agreement, which provides for reduced fees for the Global Growth Fund, Global   
Small Capitalization Fund, Growth Fund, Growth-Income Fund, and Asset           
Allocation Fund effective December 1, 1998, at the following annual rates:      
Global Growth Fund - 0.69% of the first $600 million of average net assets;     
0.59% of such assets in excess of $600 million but not exceeding $1.2 billion;  
and 0.53% of such assets in excess of $1.2 billion; Global Small Capitalization 
Fund - 0.80% of the first $600 million of average net assets; and 0.74% of such 
assets in excess of $600 million; Growth Fund - 0.50% of the first $600 million 
of average net assets; 0.45% of such assets in excess of $600 million but not   
exceeding $1.2 billion; 0.42% of such assets in excess of $1.2 billion but not  
exceeding $2.0 billion; 0.37% of such assets in excess of $2.0 billion but not  
exceeding $3.2 billion; 0.35% of such assets in excess of $3.2 billion but not  
exceeding $5.2 billion; 0.33% of such assets in excess of $5.2 billion but not  
exceeding $8.4 billion;  and 0.315% of such assets in excess of $8.4 billion;   
Growth-Income Fund - 0.50% of the first $600 million of average net assets;     
0.45% of such assets in excess of $600 million but not exceeding $1.5 billion;  
0.40% of such assets in excess of $1.5 billion but not exceeding $2.5 billion;  
0.32% of such assets in excess of $2.5 billion but not exceeding $4.0 billion;  
0.285% of such assets in excess of $4.0 billion but not exceeding $6.5 billion; 
0.256% of such assets in excess of $6.5 billion but not exceeding $10.5         
billion; and 0.242% of such assets in excess of $10.5 billion; Asset Allocation 
Fund - 0.50% of the first $600 million of average net assets; 0.42% of such     
assets in excess of $600 million but not exceeding $1.2 billion; 0.36% of such  
assets in excess of $1.2 billion but not exceeding $2.0 billion; and 0.32% of   
such assets in excess of $2.0 billion.  Beginning July 1, 1998, CRMC has        
voluntarily agreed to waive its management fees in excess of those provided by  
the amended agreement. For the Growth Fund and the Growth-Income Fund, the      
amounts waived were $15,000 and $55,000 respectively.                           

DISTRIBUTION EXPENSES -- Pursuant to a Plan of Distribution, each fund is       
authorized to pay an annual rate of 0.25% of the average daily net assets of    
Class 2 shares in connection with certain distribution services and related     
activities.  During the year ended November 30, 1998, Plan expenses for the     
series aggregated $2,403,000.  As of November 30, 1998, accrued and unpaid      
distribution expenses were $293,000.                                            

DEFERRED TRUSTEES' FEES -- Trustees who are unaffiliated with CRMC may elect to 
defer part or all of the fees earned for services as members of the Board.      
Amounts deferred are not funded and are general unsecured liabilities of the    
series. As of November 30,1998, aggregate amounts deferred and earnings thereon 
were $386,000. Certain trustees and officers of the series are or may be        
considered to be affiliated with CRMC.  No such persons received any            
remuneration directly from the series.                                          

4. INVESTMENT TRANSACTIONS AND OTHER DISCLOSURES                                

The following table presents additional information for and as of November 30,
1998:                                                                           

                                                        [Enlarge/Download Table]
                                                                                               
                                                                                    (dollars in
                                                                                    thousands) 

                                  Global  Global Small                                 Growth- 
                                  Growth Capitalization      Growth        Interna-     Income 
                                    Fund          Fund         Fund     tional Fund       Fund 
For the year                                                                                   
 ended November 30,1998:                                                                       
 Purchases of                                                                                  
  investment                                                                                   
  securities (1)                 121,673        70,231 (2)2,396,436         875,181  2,658,486 
 Sales of invest-                                                                              
  ment securities (1)             48,490        10,644 (2)2,632,263       1,133,256  2,734,346 
 Book basis net currency                                                                       
  gain (loss) on dividends,                                                                    
  interest, withholding                                                                        
  taxes reclaimable, and                                                                       
  sale of non-U.S. bonds              (3)            3 (2)        6            (775)        (8)

As of November 30, 1998:                                                                       
 Accumulated                                                                                   
  undistributed                                                                                
  net realized                                                                                 
  gain (loss) on                                                                               
  Investments                     $8,714          $922     $827,391         $50,374 $1,067,309 
 Reclassification from (to)                                                                    
  undistributed net investment                                                                 
  income to (from)undistributed                                                                
  net realized gain                    3            (3)          (6)            828          8 
 Paid-in capital                 220,870        74,846    3,164,137       2,053,868  4,705,764 

                                                                                    (dollars in
                                                                                    thousands) 

                                   Asset                  High-YieldU.S. Government/      Cash 
                               Allocation         Bond         Bond       AAA-Rated Management 
                                    Fund          Fund         Fund Securities Fund       Fund 
For the year                                                                                   
 ended November 30,1998:                                                                       
 Purchases of                                                                                  
  investment                                                                                   
  securities (1)                 478,986       195,963      542,112         520,241          - 
 Sales of invest-                                                                              
  ment securities (1)            397,678        98,164      497,096         419,153          - 
 Book basis net currency                                                                       
  gain (loss) on dividends,                                                                    
  interest, withholding                                                                        
  taxes reclaimable, and                                                                       
  sale of non-U.S. bonds              (1)         (145)        (112)              -          - 

As of November 30, 1998:                                                                       
 Accumulated                                                                                   
  undistributed                                                                                
  net realized                                                                                 
  gain (loss) on                                                                               
  Investments                   $115,451        $1,062       $6,826      $  (15,657)        $1 
 Reclassification from (to)                                                                    
  undistributed net investment                                                                 
  income to (from)undistributed                                                                
  net realized gain                    1            65          462               -          - 
 Paid-in capital               1,262,567       228,509      797,143         561,005    254,071 

(1)  Excludes short-                                                                           
term securities                                                                                

(2)  For the period                                                                            
April 30, 1998,                                                                                
commencement of operations,                                                                    
through November 30, 1998.                                                                     

Pursuant to the custodian agreement, each fund within the series receives     
credits against its custodian fee for imputed interest on certain balances with 
the custodian bank. Custodian fees for the series aggregated $2,511,000, of     
which $132,000 was paid by these credits rather than in cash.                   

Dividend and interest income for the Global Growth Fund, the Global Small     
Capitalization Fund and the International Fund is recorded net of non-U.S.      
taxes paid. For the year ended November 30, 1998, such non-U.S. taxes were      
$187,000, $29,000 and $5,327,000, respectively.                                 

At November 30, 1998, the Bond Fund and the High-Yield Bond Fund had          
outstanding forward currency contracts to sell non-U.S. currencies as follows:  

                                                        [Enlarge/Download Table]
                                                                                        
Non-U.S. Currency Sale Contracts                                                        
                                                  Contract             Amount           
                                                  ---------            ---------        

                                             Fund             Non-U.S.             U.S. 
                                        ---------            ---------        --------- 
Deutsche Marks                                                                          
 expiring 2/3/1999                           Bond       DM     983,000      $   600,000 
 expiring 2/3-2/25/1999           High-Yield Bond           21,424,000       12,723,000 
Great British Pound                                                                     
 expiring 12/21/1998-8/10/1999    High-Yield Bond       GBP  6,696,000       10,950,000 

                                                  U.S. Valuation       at 11/30/98      
                                                  ---------            ---------        
                                                                             Unrealized 
                                                                           Appreciation 
                                             Fund               Amount   (Depreciation) 
                                        ---------            ---------        --------- 
Deutsche Marks                                                                          
 expiring 2/3/1999                           Bond          $   581,000       $   19,000 
 expiring 2/3-2/25/1999           High-Yield Bond           12,675,000           48,000 
Great British Pound                                                                     
 expiring 12/21/1998-8/10/1999    High-Yield Bond           10,984,000          (34,000)

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PER-SHARE DATA AND RATIOS                                                                           
                                                                                                    

                                                                 Net gains        Total   Dividends 
                                       Net asset        Net    or losses on        from   (from net 
                                          value,    invest-      securities     invest-     invest- 
Year                                   beginning       ment  (both realized        ment        ment 
Ended                                    of year     income and unrealized)  operations     income) 
---------                              ---------  ---------       ---------   ---------   --------- 
Global Growth Fund (1)                                                                              
 Class 1                                                                                            
1997                                      $10.00       $.06           $ .59       $ .65       $(.03)
1998                                       10.62        .13            2.43        2.56        (.14)
 Class 2 (3)                                                                                        
1997                                       10.00        .03             .60         .63        (.02)
1998                                       10.61        .10            2.44        2.54        (.11)
Global Small Capitalization Fund (4)                                                                
 Class 1                                                                                            
1998                                      $10.00       $.06           $(.91)      $(.85)      $(.04)
 Class 2                                                                                            
1998                                       10.00        .04            (.91)       (.87)       (.03)
Growth Fund                                                                                         
 Class 1                                                                                            
1994                                   $               $.24            $.69        $.93       $(.24)
1995                                       31.94        .33           10.63       10.96        (.29)
1996                                       41.81        .24            5.17        5.41        (.29)
1997                                       43.53        .27            9.61        9.88        (.27)
1998                                       50.12        .19           10.91       11.10        (.17)
 Class 2 (3)                                                                                        
1997                                       40.59        .11            9.51        9.62        (.12)
1998                                       50.09        .08           10.90       10.98        (.05)
International Fund                                                                                  
 Class 1                                                                                            
1994                                   $               $.25  $               $                $(.20)
1995                                       13.27        .34            1.02        1.36        (.33)
1996                                       13.89        .28            1.96        2.24        (.31)
1997                                       15.53        .25            1.18        1.43        (.27)
1998                                       16.07        .22            2.21        2.43        (.28)
 Class 2 (3)                                                                                        
1997                                       15.86        .13             .23         .36        (.16)
1998                                       16.06        .20            2.19        2.39        (.24)
Growth Income Fund                                                                                  
 Class 1                                                                                            
1994                                   $               $.68            $.14        $.82       $(.65)
1995                                       25.30        .73            7.20        7.93        (.73)
1996                                       31.47        .71            5.55        6.26        (.74)
1997                                       35.73        .73            6.78        7.51        (.72)
1998                                       39.97        .67            4.60        5.27        (.68)
 Class 2 (3)                                                                                        
1997                                       34.10        .37            5.82        6.19        (.35)
1998                                       39.94        .58            4.60        5.18        (.59)
Asset Allocation Fund                                                                               
 Class 1                                                                                            
1994                                   $               $.51          $ (.57)     $ (.06)      $(.52)
1995                                       11.25        .50            2.69        3.19        (.50)
1996                                       13.77        .53            1.89        2.42        (.53)
1997                                       15.18        .55            1.94        2.49        (.54)
1998                                       16.16        .58            1.27        1.85        (.57)
 Class 2 (3)                                                                                        
1997                                       14.43        .29            1.69        1.98        (.26)
1998                                       16.15        .53            1.28        1.81        (.53)
Bond Fund (5)                                                                                       
 Class 1                                                                                            
1996                                      $10.00       $.40            $.16        $.56       $(.25)
1997                                       10.31        .63             .30         .93        (.62)
1998                                       10.62        .67            (.15)        .52        (.65)
 Class 2 (3)                                                                                        
1997                                       10.11        .35             .46         .81        (.31)
1998                                       10.61        .65            (.15)        .50        (.63)
High-Yield Bond Fund                                                                                
 Class 1                                                                                            
1994                                   $          $                 $ (2.07)     $ (.80)    $ (1.23)
1995                                       12.89       1.32            1.10        2.42       (1.32)
1996                                       13.99       1.28             .54        1.82       (1.30)
1997                                       14.51       1.29             .43        1.72       (1.27)
1998                                       14.96       1.26           (1.04)        .22       (1.25)
 Class 2 (3)                                                                                        
1997                                       14.28        .69             .61        1.30        (.63)
1998                                       14.95       1.23           (1.04)        .19       (1.22)
U.S. Government/                                                                                    
AAA-Rated Securities Fund                                                                           
 Class 1                                                                                            
1994                                   $               $.76          $(1.30)     $ (.54)      $(.74)
1995                                       10.80        .82             .71        1.53        (.81)
1996                                       11.52        .83            (.24)        .59        (.82)
1997                                       11.29        .76            (.07)        .69        (.80)
1998                                       11.18        .68             .26         .94        (.69)
 Class 2 (3)                                                                                        
1997                                       10.83        .38             .33         .71        (.37)
1998                                       11.17        .68             .24         .92        (.67)
Cash Management Fund                                                                                
 Class 1                                                                                            
1994                                   $               $.37           $ .02        $.39       $(.32)
1995                                       11.09        .63            (.02)        .61        (.59)
1996                                       11.11        .54             .01         .55        (.54)
1997                                       11.12        .57            (.01)        .56        (.55)
1998                                       11.13        .57            (.01)        .56        (.56)
 Class 2 (3)                                                                                        
1997                                       11.07        .28             .03         .31        (.26)
1998                                       11.12        .55            (.02)        .53        (.53)

                                         Distri-                                                    
                                         butions                  Net asset             Net assets, 
                                           (from      Total         value,                   end of 
Year                                     capital    distri-          end of       Total    year (in 
Ended                                     gains)    butions            year      return   millions) 
---------                              ---------  ---------       ---------   ---------   --------- 
Global Growth Fund (1)                                                                              
 Class 1                                                                                            
1997                                           -      $(.03)         $10.62   6.45% (2)        $ 80 
1998                                       $(.02)      (.16)          13.02      24.26          132 
 Class 2 (3)                                                                                        
1997                                           -       (.02)          10.61    6.28 (2)          46 
1998                                        (.02)      (.13)          13.02      24.06          124 
Global Small Capitalization Fund (4)                                                                
 Class 1                                                                                            
1998                                                  $(.04) $              (8.31)% (2)         $55 
 Class 2                                                                                            
1998                                                   (.03)           9.10  (8.49) (2)          17 
Growth Fund                                                                                         
 Class 1                                                                                            
1994                                      $(1.09)    $(1.33) $                    2.92%      $2,027 
1995                                        (.80)     (1.09)          41.81      35.35        3,154 
1996                                       (3.40)     (3.69)          43.53      14.32        3,860 
1997                                       (3.02)     (3.29)          50.12      24.57        4,671 
1998                                       (6.14)     (6.31)          54.91      25.27        5,313 
 Class 2 (3)                                                                                        
1997                                           -       (.12)          50.09   23.73 (2)          75 
1998                                       (6.14)     (6.19)          54.88      24.97          310 
International Fund                                                                                  
 Class 1                                                                                            
1994                                      $ (.22)    $ (.42) $                   10.48%      $1,405 
1995                                        (.41)      (.74)          13.89      10.78        1,703 
1996                                        (.29)      (.60)          15.53      16.66        2,370 
1997                                        (.62)      (.89)          16.07       9.52        2,612 
1998                                       (1.65)     (1.93)          16.57      16.94        2,593 
 Class 2 (3)                                                                                        
1997                                           -       (.16)          16.06    2.20 (2)          48 
1998                                       (1.65)     (1.89)          16.56      16.63          126 
Growth Income Fund                                                                                  
 Class 1                                                                                            
1994                                      $ (.88)   $ (1.53) $                    3.21%      $2,740 
1995                                       (1.03)     (1.76)          31.47      33.14        3,953 
1996                                       (1.26)     (2.00)          35.73      21.02        5,249 
1997                                       (2.55)     (3.27)          39.97      22.92        6,430 
1998                                       (3.83)     (4.51)          40.73      14.77        6,704 
 Class 2 (3)                                                                                        
1997                                            -      (.35)          39.94   18.18 (2)         157 
1998                                       (3.83)     (4.42)          40.70      14.49          564 
Asset Allocation Fund                                                                               
 Class 1                                                                                            
1994                                       $(.18)    $ (.70) $                    (.54)      $  637 
1995                                        (.17)      (.67)          13.77      29.45          870 
1996                                        (.48)     (1.01)          15.18      18.65        1,141 
1997                                        (.97)     (1.51)          16.16      17.90        1,393 
1998                                        (.87)     (1.44)          16.57      12.32        1,497 
 Class 2 (3)                                                                                        
1997                                           -       (.26)          16.15   13.80 (2)          42 
1998                                        (.87)     (1.40)                     12.05          173 
Bond Fund (5)                                                                                       
 Class 1                                                                                            
1996                                           -      $(.25)         $10.31   5.74% (2)        $ 77 
1997                                           -       (.62)          10.62       9.36          132 
1998                                       $(.12)      (.77)          10.37       5.12          186 
 Class 2 (3)                                                                                        
1997                                           -       (.31)          10.61    8.09 (2)          12 
1998                                        (.12)      (.75)          10.36       4.85           45 
High-Yield Bond Fund                                                                                
 Class 1                                                                                            
1994                                      $ (.25)    $(1.48) $                  (5.71)%        $390 
1995                                           -      (1.32)          13.99      19.81          534 
1996                                           -      (1.30)          14.51      13.75          662 
1997                                           -      (1.27)          14.96      12.45          765 
1998                                        (.16)     (1.41)          13.77       1.44          715 
 Class 2 (3)                                                                                        
1997                                           -       (.63)          14.95    9.20 (2)          21 
1998                                        (.16)     (1.38)          13.76       1.18           68 
U.S. Government/                                                                                    
AAA-Rated Securities Fund                                                                           
 Class 1                                                                                            
1994                                       $(.07)    $ (.81) $                  (4.58)%        $463 
1995                                           -       (.81)          11.52      14.73          542 
1996                                           -       (.82)          11.29       5.49          512 
1997                                           -       (.80)          11.18       6.49          471 
1998                                           -       (.69)          11.43       8.72          537 
 Class 2 (3)                                                                                        
1997                                           -       (.37)          11.17    6.65 (2)           7 
1998                                           -       (.67)          11.42       8.46           32 
Cash Management Fund                                                                                
 Class 1                                                                                            
1994                                           -      $(.32) $                    3.59%        $221 
1995                                           -       (.59)          11.11       5.65          193 
1996                                           -       (.54)          11.12       5.09          240 
1997                                           -       (.55)          11.13       5.21          226 
1998                                           -       (.56)          11.13       5.17          250 
 Class 2 (3)                                                                                        
1997                                           -       (.26)                   2.87 (2)          14 
1998                                           -       (.53)                      4.92           34 

                                                      Ratio                                         
                                        Ratio of     of net                                         
                                        expenses  income to      Portfolio                          
Year                                  to average    average        turnover                         
Ended                                 net assets net assets            rate                         
---------                              ---------  ---------       ---------                         
Global Growth Fund (1)                                                                              
 Class 1                                                                                            
1997                                    .44% (2)   .80% (2)      13.22% (2)                         
1998                                          .75       1.14           25.56                        
 Class 2 (3)                                                                                        
1997                                     .57 (2)    .56 (2)       13.22 (2)                         
1998                                         1.00        .87           25.56                        
Global Small Capitalization Fund (4)                                                                
 Class 1                                                                                            
1998                                    .51% (2)   .86% (2)     28.20% (2)                          
 Class 2                                                                                            
1998                                     .62 (2)    .63 (2)       28.2 (2)                          
Growth Fund                                                                                         
 Class 1                                                                                            
1994                                        .49%       .78%          29.58%                         
1995                                          .47        .92           35.47                        
1996                                          .44        .61           30.88                        
1997                                          .42        .59           45.14                        
1998                                          .41        .38           49.91                        
 Class 2 (3)                                                                                        
1997                                     .37 (2)    .08 (2)            45.14                        
1998                                          .66        .15           49.91                        
International Fund                                                                                  
 Class 1                                                                                            
1994                                        .80%      2.03%          19.66%                         
1995                                          .75       2.64           24.66                        
1996                                          .69       1.99           32.08                        
1997                                          .67       1.56           50.12                        
1998                                          .66       1.36           34.08                        
 Class 2 (3)                                                                                        
1997                                     .53 (2)    .34 (2)            50.12                        
1998                                          .91       1.03           34.08                        
Growth Income Fund                                                                                  
 Class 1                                                                                            
1994                                        .47%      2.72%          29.26%                         
1995                                          .44       2.70           26.91                        
1996                                          .41       2.26           31.27                        
1997                                          .38       2.01           37.55                        
1998                                          .36       1.74           42.72                        
 Class 2 (3)                                                                                        
1997                                     .35 (2)    .93 (2)            37.55                        
1998                                          .61       1.02           42.72                        
Asset Allocation Fund                                                                               
 Class 1                                                                                            
1994                                        .53%      4.55%          36.13%                         
1995                                          .52       4.11           39.89                        
1996                                          .49       3.88           50.62                        
1997                                          .47       3.63           34.14                        
1998                                          .45       3.63           27.97                        
 Class 2 (3)                                                                                        
1997                                     .40 (2)   1.81 (2)            34.14                        
1998                                          .70       3.39           27.97                        
Bond Fund (5)                                                                                       
 Class 1                                                                                            
1996                                    .52% (2)  6.18% (2)      32.83% (2)                         
1997                                          .55       6.63           52.93                        
1998                                          .54       6.89           61.54                        
 Class 2 (3)                                                                                        
1997                                     .44 (2)   3.50 (2)            52.93                        
1998                                          .78       6.62           61.54                        
High-Yield Bond Fund                                                                                
 Class 1                                                                                            
1994                                        .54%      9.37%          38.46%                         
1995                                          .54      10.12           31.73                        
1996                                          .53       9.27           44.81                        
1997                                          .51       8.92           50.22                        
1998                                          .51       8.66           65.80                        
 Class 2 (3)                                                                                        
1997                                     .43 (2)   4.92 (2)            50.22                        
1998                                          .76       8.60           65.80                        
U.S. Government/                                                                                    
AAA-Rated Securities Fund                                                                           
 Class 1                                                                                            
1994                                        .54%      6.69%         45.21%                          
1995                                          .54       7.37           30.11                        
1996                                          .53       7.33           30.45                        
1997                                          .52       6.73           53.80                        
1998                                          .51       6.11           89.25                        
 Class 2 (3)                                                                                        
1997                                     .44 (2)    3.45 (2            53.80                        
1998                                          .75       5.68           89.25                        
Cash Management Fund                                                                                
 Class 1                                                                                            
1994                                        .49%      3.60%                -                        
1995                                          .49       5.37               -                        
1996                                          .47       4.94               -                        
1997                                          .47       4.99               -                        
1998                                          .46       5.07               -                        
 Class 2 (3)                                                                                        
1997                                     .41 (2)   2.80 (2)                -                        
1998                                          .70       4.75               -                        

1 Commenced operations                                                                              
 April 30, 1997.                                                                                    
2  Based on operations                                                                              
 for the period shown                                                                               
 and, accordingly, not                                                                              
 representative of a                                                                                
 full year.                                                                                         
3  Shares offered for                                                                               
  sale commencing                                                                                   
 April 30, 1997.                                                                                    
4  Commenced operations                                                                             
 April 30, 1998.                                                                                    
5  Commenced operations                                                                             
 January 2, 1996.                                                                                   

See Notes to Financial Statements                                                                   

REPORT OF INDEPENDENT ACCOUNTANTS                                               
_________________________________________________________________               
To the Board of Trustees and Shareholders of                                    
American Variable Insurance Series:                                             

In our opinion, the accompanying statements of assets and liabilities,          
including the schedules of investment portfolios, and the related statements of 
operations and of changes in net assets and the  per-share data and ratios      
present fairly, in all material respects, the financial position of the Global  
Growth Fund, the Global Small Capitalization Fund, the  Growth Fund, the        
International Fund, the Growth-Income Fund, the Asset Allocation Fund, the Bond 
Fund, the High-Yield Bond Fund, the U.S. Government/AAA-Rated Securities Fund   
and the Cash Management Fund (constituting the American Variable Insurance      
Series, hereafter referred to as the "Series") at November 30, 1998, the        
results of each of their operations for the year then ended, the changes in     
each of their net assets for the years indicated, and the per-share data and    
ratios for the years indicated, in conformity with generally accepted           
accounting principles.  These financial statements and per-share data and       
ratios (hereafter referred to as "financial statements") are the responsibility 
of the Series' management; our responsibility is to express an opinion on these 
financial statements based on our audits.  We conducted our audits of these     
financial statements in accordance with generally accepted auditing standards   
which require that we plan and perform the audit to obtain reasonable assurance 
about whether the financial statements are free of material misstatement.  An   
audit includes examining, on a test basis, evidence supporting the amounts and  
disclosures in the financial statements, assessing the accounting principles    
used and significant estimates made by management, and evaluating the overall   
financial statement presentation.  We believe that our audits, which included   
confirmation of securities at November 30, 1998 by correspondence with the      
custodian and brokers and the application of alternative auditing procedures    
where confirmations from brokers were not received, provide a reasonable basis  
for the opinion expressed above.                                                

PricewaterhouseCoopers LLP                                                      
Los Angeles, California                                                         
January 8, 1999                                                                 

AMERICAN VARIABLE INSURANCE SERIES                                              
BOARD OF TRUSTEES                                                               

CHARLES H. BLACK                                                                
Pacific Palisades, California                                                   
Private investor and consultant; former                                         
Executive Vice President and Director,                                          
KaiserSteel Corporation                                                         

H. FREDERICK CHRISTIE                                                           
Rolling Hills Estates, California                                               
Private investor; former President and                                          
Chief Executive Officer,                                                        
The Mission Group; former President,                                            
Southern California Edison Company                                              

JOE E. DAVIS                                                                    
Encino, California                                                              
Private investor; former Chairman of the Board,                                 
Linear Corporation; former President and                                        
Chief Executive Officer,                                                        
National Health Enterprises, Inc.                                               

MARTIN FENTON, JR.                                                              
San Diego, California                                                           
Chairman of the Board,                                                          
Senior Resource Group, Inc.                                                     
(senior living centers management)                                              

MARY MYERS KAUPPILA                                                             
Boston, Massachusetts                                                           
Private investor;                                                               
former owner and President,                                                     
Energy Investment, Inc.                                                         

KIRK P. PENDLETON                                                               
Southampton, Pennsylvania                                                       
Chairman of the Board and                                                       
Chief Executive Officer,                                                        
Cairnwood, Inc.                                                                 
(venture capital investment)                                                    

JAMES F. ROTHENBERG                                                             
Los Angeles, California                                                         
President of the series                                                         
President and Director,                                                         
Capital Research and Management Company                                         

THOMAS E. TERRY                                                                 
Los Angeles, California                                                         
Chairman of the Board of the series                                             
Consultant;                                                                     
former Vice President and Secretary,                                            
Capital Research and Management Company                                         

OTHER OFFICERS                                                                  
JAMES K. DUNTON                                                                 
Los Angeles, California                                                         
Senior Vice President of the series                                             
Senior Vice President and Director,                                             
Capital Research and Management Company                                         

ABNER D. GOLDSTINE                                                              
Los Angeles, California                                                         
Senior Vice President of the series                                             
Senior Vice President and Director,                                             
Capital Research and Management Company                                         

ALAN N. BERRO                                                                   
Los Angeles, California                                                         
Vice President of the series                                                    
Senior Vice President,                                                          
Capital Research Company                                                        

MICHAEL J. DOWNER                                                               
Los Angeles, California                                                         
Vice President of the series                                                    
Senior Vice President - Fund Business                                           
Management Group,                                                               
Capital Research and Management Company                                         

CLAUDIA P. HUNTINGTON                                                           
Los Angeles, California                                                         
Vice President of the series                                                    
Senior Vice President,                                                          
Capital Research and Management Company                                         

ROBERT W. LOVELACE                                                              
Los Angeles, California                                                         
Vice President of the series                                                    
Executive Vice President and Director,                                          
Capital Research Company                                                        

DONALD D. O'NEAL                                                                
San Francisco, California                                                       
Vice President of the series                                                    
Vice President,                                                                 
Capital Research and Management Company                                         

JOHN H. SMET                                                                    
Los Angeles, California                                                         
Vice President of the series                                                    
Vice President,                                                                 
Capital Research and Management Company                                         

CHAD L. NORTON                                                                  
Los Angeles, California                                                         
Secretary of the series                                                         
Vice President - Fund Business                                                  
Management Group,                                                               
Capital Research and Management Company                                         

ROBERT P. SIMMER                                                                
Norfolk, Virginia                                                               
Treasurer of the series                                                         
Vice President - Fund Business                                                  
Management Group,                                                               
Capital Research and Management Company                                         

SHERYL F. JOHNSON                                                               
Norfolk, Virginia                                                               
Assistant Treasurer of the series                                               
Vice President - Fund Business                                                  
Management Group,                                                               
Capital Research and Management Company                                         

OFFICES OF THE SERIES AND OF                                                    
THE INVESTMENT ADVISER,                                                         
CAPITAL RESEARCH AND                                                            
MANAGEMENT COMPANY                                                              
333 South Hope Street                                                           
Los Angeles, California 90071-1443                                              

135 South State College Boulevard                                               
Brea, California 92821-5823                                                     

CUSTODIAN OF ASSETS                                                             
State Street Bank and Trust Company                                             
225 Franklin Street                                                             
Boston, Massachusetts 02105-1713                                                

COUNSEL                                                                         
Paul, Hastings, Janofsky & Walker LLP                                           
555 South Flower Street                                                         
Los Angeles, California 90071-2371                                              

INDEPENDENT ACCOUNTANTS                                                         
PricewaterhouseCoopers LLP                                                      
400 South Hope Street                                                           
Los Angeles, California 90071-2889                                              

This report is for the information of American Variable Insurance Series        
investors, but it may also be used as sales literature when preceded or         
accompanied by the current prospectus for American Variable Insurance Series    
and the prospectus for the applicable insurance contract, which gives details   
about charges, expenses, investment objectives and operating policies. If used  
as sales material after March 31, 1999, this report must be accompanied by an   
American Legacy III Statistical Update for the most recently completed calendar 
quarter.                                                                        

Printed on recycled paper                                                       
Litho in USA A/L/3929                                                           
(c) 1999 American Funds Distributors, Inc.                                      
Lit. No. VI3-011-0199                                                           

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-30D’ Filing		Date		First		Last			Other Filings
		11/30/05		1
		3/31/99		2					485BPOS
Filed on:		2/9/99							N-30D
		1/14/99		1
		1/8/99		2
		12/31/98		1
		12/1/98		1
For Period End:		11/30/98		1		2			24F-2NT,  N-30D,  NSAR-B
		11/1/98		1
		7/1/98		1
		5/31/98		1					N-30D,  NSAR-A
		4/30/98		1		2			497
		11/30/97		1					N-30D,  NSAR-B
		4/30/97		1		2
		1/2/96		2
									List all Filings