UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number

811-21853

Northern Lights Variable Fund Trust

(Exact name of registrant as specified in charter)

17605 Wright Street, Omaha, Nebraska 68130

(Address of principal executive offices)

(Zip code)

James Ash, Gemini Fund Services, LLC.

80 Arkay Drive Suite 110, Hauppauge, NY 11788

              (Name and address of agent for service)

Registrant's telephone number, including area code:

631-470-2619

Date of fiscal year end:

12/31

Date of reporting period: 12/31/13

Item 1.  Reports to Stockholders.  

 

TOPS^® Managed Risk Flex ETF Portfolio

A series of the Northern Lights Variable Trust

Annual Report

December 31, 2013

Distributed by Northern Lights Distributors, LLC
Member FINRA

A Message from the TOPS^® Portfolio Management Team

Year end 2013 Shareholder Letter

The U.S. stock market rode a strong wave of economic growth in 2013 to the best results on the S&P 500 index since 1995. While U.S stocks enjoyed abnormal results, far above the expectations of most investors, results were mixed for many other global assets. Despite challenges that required the TOPS Portfolio Management Team to steer the ship through troubled waters, results for the TOPS portfolios exceeded assumptions. Please note that the TOPS Managed Risk Flex ETF Portfolio was launched in August of 2013, therefore, portfolio results for 2013 were limited to the short time this portfolio was available. Some items described below, which occurred prior to the launch of the TOPS Managed Risk Flex ETF Portfolio, only affected other portfolios in the TOPS fund family.

Many investors entered 2013 with high hopes for the economy and financial markets. The primary worries tempering those hopes were related to potential government actions, both in the U.S. and abroad, as it was not clear when the U.S. Federal Reserve would begin reversing its Quantitative Easing (QE) program or whether foreign central banks would be easing further. In that cautioned environment, equities recorded solid gains for the first half of 2013 and the benchmark 10 year U.S. Treasury Bond yield was at 1.6%. When the Fed began to discuss tapering their QE in the middle part of the year, the environment changed drastically as the 10 year yield started a rise toward 3.0%. 

Economic growth proved to be the horsepower necessary to drive stock market returns through the tapering uncertainty, as GDP growth for both Q2 and Q3 was surprisingly strong. In fact, the growth rate of 4.1% in Q3 was the best since the fourth quarter of 2011 and the second-fastest since the recovery began in mid-2009. Investors seemed to particularly like that an upward revision in consumer spending was a primary driver of the economic numbers being revised upwards in December. Thus, when QE Tapering was finally announced in December, equity investors interpreted it as a sign that the Fed was more confident that the economy was strengthening. This led 2013 to end with rising trends for the economy, interest rates and the stock market.

The TOPS Portfolios benefitted this year from a general strategic overweight to smaller U.S. stocks, as the S&P small cap 600 and the S&P mid cap 400 returned 42% and 33% respectively, compared to 32% for the large cap S&P 500. Developed International advanced at an above average pace as well, with the MSCI EAFE index up 22%. Why did developed country equities perform so well in 2013? As noted earlier, liquidity was plentiful due to global central banks easing (QE). Likewise, ultra-low interest rates resulted in a favorable environment for “carry-trades” (leverage) for equity investor already shopping at low prices (low P/E valuations). With low interest rates, low inflation (2013 CPI will print at about 1.5%), increased confidence in sustainable GDP growth (GDP accelerated over the course of the year), it was no surprise that valuations rose during 2013.

Returns for developed international stocks were helped by the emergence of Japan and Euro countries from recessions along with further Central Bank easing. During the course of the year, earnings expectations for Europe turned positive and valuations remained cheaper than for U.S. indexes. Although TOPS international holdings reduced returns vs a “U.S. only” strategy, we believe the longer term benefits of diversification remain intact. 

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Emerging Market (EM) stocks continued their volatile history as they switched from leading global equities in 2012 to trailing in 2013. Although local currency EM returns were positive, US Dollar investments in emerging markets lost -2.6% for the year. The return gap between developed and EM was wide most of the year and it widened further in Q4 to finish the year at the worst comparison on record. EM weakness was attributed largely to three factors: (1) EM GDP growth rates slowed across the board during 2013. With higher wage growth than in developed economies, inflation rates picked up and EM earnings growth slowed. (2) EM Central Banks were tighter than developed Central Banks due to inflation and currency concerns (3) Discussions over the U.S. taper caused worries about slowing capital flows into EM. While the impact of EM exposure on TOPS returns in 2013 was not positive, the rationale for maintaining EM exposure is alive and well. EM has stronger demographics, better GDP growth prospects and large currency reserves relative to developed economies; and valuations are now quite favorable.

Successful portfolio management is a difficult task which we believe can only be accomplished through consistent application of a disciplined process. Our process focuses on attempting to optimize the risk versus reward tradeoff. We strive to minimize two types of risk: volatility of portfolio value and risk of loss. We feel our process for searching for reward is crucial to the success of the portfolios, as we emphasize strategic decisions (longer term, driven by fundamentals such as growth, valuation and mean-reversion) rather than higher risk tactical moves (shorter term, driven by momentum and forecasting).

Fortunately, asset class and sector diversification, identification of fundamental trends, and relatively lower portfolio turnover are methods that we utilize to structure the TOPS portfolios. Two of our current portfolio components appear to have been experiencing mean-reversion, whereby trends that carry an asset far above or below its long term expected returns generally revert back to longer term trend lines. The normalization of interest rates is one such case and improved relative returns for EM is another.

For the year, positive bond market returns were difficult to earn as the widely-followed Barclays Aggregate Index recorded a rare negative return of -2.02%. In the U.S. Treasury market, only the very short end of the yield curve eked out modest gains while the 20 year Treasury lost -16.9%. Those returns illustrate how the largest detractor from 2013 bond market returns was the interest rate risk of longer maturity (duration) securities. Economic improvement and narrowing spreads meant the best results were earned by accepting some credit risk, such as corporate bonds.

Happily, that describes the interest rate management strategy that was implemented by the TOPS Portfolio Management Team over the past few years. The three part strategy consisted of duration shortening, increased diversification, and utilization of floating rate securities. Investors flocked to below investment grade securities as default rates remained low, so the best returns were reported by high yield ETFs and floating rate bank loan investments, both held in TOPS portfolios.

We are not shifting our fixed income strategy entering 2014, as it appears the rising trends for both GDP and interest rates remain intact. We are under no illusions that the fixed income environment will not be challenging this year as well. Although the Fed has pledged to keep short term rates low, some uncertainty still remains around how the market will react to the tapering program, so the TOPS Portfolio Management team will continue to closely monitor the probability of these trends continuing. 

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After our strategic results in what we viewed as a relatively difficult market for the core allocations, the TOPS Portfolio Management Team is hopeful going into 2014. The current target allocations seem well positioned for the anticipated market environment. Both developed and emerging markets international stocks seem attractively valued, with many analysts listing international equities among their best prospects for growth in the coming year. A focus for US investors will be whether the economy is genuinely heading into a healthier cycle in which job growth fuels stronger spending by consumers and businesses, or if stocks will require stimulus to advance. We feel TOPS is prepared to handle either scenario. Thank you to all of our investors in 2013. We are happy that we could provide growth for you this year and we look forward to serving you with a disciplined strategy in 2014.

Summary of Milliman Managed Risk Strategy™

The TOPS Managed Risk ETF Portfolios employ the services of Milliman Financial Risk Management, LLC (MFRM) as sub advisor to the funds. MFRM applies the Milliman Managed Risk Strategy (MMRS) to the core TOPS ETF Portfolio allocations in an effort to dynamically manage the volatility and downside risk of the portfolios.  The MMRS is the combination of volatility management and a capital protection strategy.  To carry out the MMRS, the funds utilize exchange traded index based futures contracts.

In 2013, the MMRS had less of an impact on overall results than normally expected.  With overall market volatility somewhat muted, the MMRS primarily functioned to equitize cash positions normally reserved as collateral for carrying out the hedging strategy.  As was the case for most of the year, the underlying volatility of the TOPS Managed Risk ETF Portfolios was below the respective volatility targets of each Portfolio; this allowed the portfolio management team to buy long positions in index based futures contracts to bring the effective equity exposure of each Portfolio near the long term targets.

A noted exception to the generally low level of volatility in 2013 was a short spike in the summer months.  Volatility rose briefly in the summer, coinciding with concerns over a debt deal in the U.S. and uncertainty related to activity in the Japanese markets, only to subside in the following weeks.  This short term rise in volatility led the portfolio management team to reduce effective equity exposure in the Portfolios by taking short positions in selected index based futures contracts.  As volatility lessened, the short positions where closed and the Portfolios returned to equity levels near long term targets.

The TOPS Portfolio Management Team is pleased with the overall results of the MMRS in 2013.  The strategy was carried out in accordance with guidelines and results were in line with expectations.  Entering 2014, the teams at TOPS and MFRM will continue to monitor portfolio volatility and noted increases in activity in emerging markets.  If volatility increases due to market pressures, the MMRS will be active in an attempt to reduce equity exposure and overall market risk.

0436-NLD-1/30/2014

3

TOPS^® Managed Risk Flex ETF Portfolio
Portfolio Review (Unaudited)

December 31, 2013

The Portfolio’s performance figures* for the period ended December 31, 2013, as compared to its benchmark:

	Performance Since
	Inception (8/27/13)
Managed Risk Flex ETF Portfolio		6.20	%
S&P 500 Total Return Index**		14.20	%

^* The performance data quoted is historical. Past performance is no guarantee of future results. Current performance may be higher or lower than the performance data quoted. The principal value and investment return of an investment will fluctuate so that your shares, when redeemed, may be worth more or less than their original cost. The returns shown do not reflect the deduction of taxes that a shareholder would pay on Portfolio distributions or on the redemption of Portfolio shares, as well as other charges and expenses of the insurance contract or separate account. For performance information current to the most recent month-end, please call 1-855-572-5945.

^** The S&P 500 Total Return Index is an unmanaged index. Index returns assume reinvestment of dividends. Investors may not invest in the index directly; unlike the Portfolio’s returns, the Index does not reflect any fees or expenses.

Comparison of the Change in Value of a $10,000 Investment

 

Holdings by Asset Class	% of Net Assets
Equity Funds	49.5	%
Debt Funds	38.7	%
Other/Cash & Cash Equivalents	11.8	%
	100.0	%

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TOPS^® Managed Risk Flex ETF Portfolio

PORTFOLIO OF INVESTMENTS

December 31, 2013

Shares			Value
		EXCHANGE TRADED FUNDS - 88.2%
		DEBT FUNDS - 38.7%
	9,780	FlexShares iBoxx 3-Year Target Duration TIPS Index Fund	$	243,718
	1,254	iShares 3-7 Year Treasury Bond ETF		150,518
	1,131	iShares Floating Rate Bond ETF		57,364
	1,736	iShares iBoxx $ High Yield Corporate Bond ETF		161,240
	1,975	iShares iBoxx $ Investment Grade Corporate Bond ETF		225,565
	4,544	PIMCO 1-5 Year U.S. TIPS Index Exchange-Traded Fund		240,014
	2,595	PowerShares Senior Loan Portfolio		64,564
	3,857	SPDR Barclays Short Term Corporate Bond ETF		118,371
	1,041	SPDR DB International Government Inflation-Protected Bond ETF		60,846
	1,404	WisdomTree Emerging Markets Local Debt Fund		64,612
				1,386,812
		EQUITY FUNDS - 49.5%
	1,252	FlexShares Global Upstream Natural Resources Index Fund		42,956
	1,661	Guggenheim Timber ETF		43,020
	1,765	iShares Core S&P Mid-Cap ETF		236,228
	1,572	iShares Core S&P Small-Cap ETF		171,678
	483	iShares MSCI Brazil Capped ETF		21,580
	2,615	iShares S&P 500 Growth ETF		258,179
	3,272	iShares S&P 500 Value ETF		279,625
	2,360	SPDR Dow Jones International Real Estate ETF		97,232
	1,199	SPDR Dow Jones REIT ETF		85,453
	277	SPDR S&P China ETF		21,598
	255	Vanguard Energy ETF		32,252
	627	Vanguard FTSE All-World ex-US Small-Cap ETF		64,474
	5,934	Vanguard FTSE All-World ex-US ETF		301,032
	2,102	Vanguard FTSE Emerging Markets ETF		86,476
	313	Vanguard Materials ETF		32,317
				1,774,100
		TOTAL EXCHANGE TRADED FUNDS (Cost - $3,084,234)		3,160,912
		SHORT-TERM INVESTMENT - 14.6%
		MONEY MARKET FUND - 14.6%
	523,085	Invesco Short-Term Investments Trust - Liquid Assets Portfolio to yield 0.07%
		(Cost - $523,085)  (a)		523,085
		TOTAL INVESTMENTS - 102.8% (Cost - $3,607,319) (b)	$	3,683,997
		OTHER ASSETS AND LIABILITIES - NET - (2.8)%		(101,364	)
		TOTAL NET ASSETS - 100.0%	$	3,582,633

See accompanying notes to financial statements.

5

TOPS^® Managed Risk Flex ETF Portfolio

PORTFOLIO OF INVESTMENTS (Continued)

December 31, 2013

(a) Variable rate security, the money market rate shown represents the rate at December 31, 2013.

(b) Represents cost for financial reporting purposes. Aggregate cost for federal tax purposes is $3,607,319 and differs from value by net unrealized appreciation (depreciation) of securities as follows:

Unrealized appreciation:	$	80,203
Unrealized depreciation:		(3,525	)
Net unrealized appreciation:	$	76,678

			Unrealized
Contracts			Appreciation
		OPEN LONG FUTURES CONTRACTS
	1	S&P 500 Index E-Mini March 2014
		(Underlying Face Amount at Value $92,063)	$	3,487

See accompanying notes to financial statements.

6

TOPS® Managed Risk Flex ETF Portfolio

Statement of Assets and Liabilities

December 31, 2013

Assets:
Total Investments in securities, at cost	$	3,607,319
Total Investments in securities, at value		3,683,997
Deposits with broker		1,265
Interest and dividends receivable		4,883
Unrealized appreciation on futures contracts		3,487
Total Assets		3,693,632
Liabilities:
Payable for securities purchased		108,894
Payable for portfolio shares redeemed		141
Accrued investment advisory fees		693
Accrued distribution (12b-1) fees		1,040
Administrative services fee payable		231
Total Liabilities		110,999
Net Assets	$	3,582,633
Net Assets Consist Of:
Paid in capital	$	3,483,899
Undistributed net investment income		15,940
Accumulated net realized gain on investments and futures contracts		2,629
Net unrealized appreciation on investments and futures contracts		80,165
Net Assets	$	3,582,633
Total shares of beneficial interest outstanding ($0 par value, unlimited shares authorized)		337,390
Net asset value, offering and redemption price per share (Net assets ÷ Total shares of beneficial interest outstanding)	$	10.62

See accompanying notes to financial statements.

7

TOPS^® Managed Risk Flex ETF Portfolio

Statement of Operations

For the Period Ended December 31, 2013 *

Investment Income:
Dividend income	$	20,306
Interest income		17
Total Investment Income		20,323
Expenses:
Investment advisory fees		1,547
Distribution fees (12b-1)		2,320
Administrative services fees		516
Total Expenses		4,383
Net Investment Income		15,940
Realized and Unrealized Gain (Loss) on Investments and Futures Contracts:
Net realized gain/(loss) on:
Investments		2,294
Futures contracts		(2	)
Distributions of realized gains by underlying investment companies		337
Total net realized gain		2,629
Net change in unrealized appreciation on:
Investments		76,678
Futures contracts		3,487
Total unrealized appreciation		80,165
Net Realized and Unrealized Gain on Investments		82,794
Net Increase in Net Assets Resulting from Operations	$	98,734

* TOPS^® Managed Risk Flex ETF Portfolio commenced operations on August 27, 2013.

See accompanying notes to financial statements.

8

TOPS^® Managed Risk Flex ETF Portfolio

Statement of Changes in Net Assets

	For the
	Period Ended
	December 31, 2013 *
Increase (Decrease) in Net Assets:
From Operations:
Net investment income	$	15,940
Net realized gain on investments and futures contracts		2,292
Distributions of realized gains by underlying investment companies		337
Net change in unrealized appreciation on investments and futures contracts		80,165
Net increase in net assets resulting from operations		98,734
From Shares of Beneficial Interest:
Proceeds from shares sold		3,487,564
Cost of shares redeemed		(3,665	)
Net increase in net assets from share transactions of beneficial interest		3,483,899
Total Increase In Net Assets		3,582,633
Net Assets:
Beginning of period		—
End of period *	$	3,582,633
*  Includes undistributed net investment income of:	$	15,940
SHARE ACTIVITY
Shares Sold		337,739
Shares Redeemed		(349	)
Net increase in shares of beneficial interest outstanding		337,390

* TOPS^® Managed Risk Flex ETF Portfolio commenced operations on August 27, 2013.

See accompanying notes to financial statements.

9

TOPS® Managed Risk Flex ETF Portfolio

Financial Highlights

Selected data based on a share outstanding throughout the period.

	For the
	Period Ended
	December 31, 2013 (a)
Net asset value, beginning of period	$	10.00
Income from investment operations:
Net investment income (b) (c)		0.11
Net realized and unrealized gain on investments and futures contracts		0.51
Total from investment operations		0.62
Net asset value, end of period	$	10.62
Total return (d)		6.20	%
Ratios and Supplemental Data:
Net assets, end of period (in 000’s)	$	3,583
Ratio of expenses to average net assets (e)		0.85	% (f)
Ratio of net investment income to average net assets (c) (e)		3.09	% (f)
Portfolio turnover rate		3	% (g)

(a) The TOPS^® Managed Risk Flex ETF Portfolio commenced operations on August 27, 2013.

(b) Net investment income has been calculated using the average shares method, which more appropriately presents the per share data for the period.

(c) Recognition of net investment income by the Portfolio is affected by the timing of the declaration of dividends by the underlying investment companies in which the Portfolio invests.

(d) Total returns are historical and assume changes in share price and reinvestment of dividends and capital gains distributions, if any. Total returns for periods of less than one year are not annualized.

(e) Does not include the expenses of the underlying investment companies in which the Portfolio invests.

(f) Annualized.

(g) Not annualized.

See accompanying notes to financial statements.

10

TOPS^® Managed Risk Flex ETF Portfolio

 NOTES TO FINANCIAL STATEMENTS

December 31, 2013

1. ORGANIZATION

The TOPS^® Managed Risk Flex ETF Portfolio (the “Portfolio”) is a diversified series of shares of beneficial interest of Northern Lights Variable Trust (the “Trust”), a statutory trust organized under the laws of the State of Delaware, and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end management investment company. The Portfolio is intended to be a funding vehicle for variable annuity contracts and flexible premium variable life insurance policies offered by the separate accounts of various insurance companies. The assets of the Portfolio are segregated and a shareholder’s interest is limited to the Portfolio in which shares are held. The Portfolio pays its own expenses. The Portfolio seeks to provide income and capital appreciation with less volatility than the fixed income and equity markets as a whole.

2. SIGNIFICANT ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by the Portfolio in the preparation of its financial statements. These policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

Securities valuation – Securities listed on an exchange are valued at the last reported sale price at the close of the regular trading session of the primary exchange on the business day the value is being determined, or in the case of securities listed on NASDAQ at the NASDAQ Official Closing Price (“NOCP”). In the absence of a sale such securities shall be valued at the mean between the current bid and ask prices on the day of valuation. Short-term debt obligations having 60 days or less remaining until maturity, at time of purchase, are valued at amortized cost. Futures and future options are valued at the final settled price or, in the absence of a settled price, at the last sale price on the day of valuation.

Valuation of Fund of Funds - The Portfolio may invest in portfolios of open-end investment companies (the “underlying funds”). Open-end funds are valued at their respective net asset values as reported by such investment companies. Open-end funds value securities in their portfolios for which market quotations are readily available at their market values (generally the last reported sale price) and all other securities and assets at their fair value based on the methods established by the board of directors of the open-end funds.

The Portfolio may hold securities, such as private placements, interests in commodity pools, other non-traded securities or temporarily illiquid securities, for which market quotations are not readily available or are determined to be unreliable.  These securities will be valued at their fair market value as determined using the “fair value” procedures approved by the Board of Trustees (the “Board”).  The Board has delegated execution of these procedures to a fair value team composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) Advisor and/or Sub-Advisor.  The team may also enlist third party consultants such as an audit firm or financial officer of a security issuer on an as-needed basis to assist in determining a security-specific fair value.  The Board reviews and ratifies the execution of this process and the resultant fair value prices at least quarterly to assure the process produces reliable results.

11

TOPS^® Managed Risk Flex ETF Portfolio

 NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2013

Fair Value Team and Valuation Process - This team is composed of one or more representatives from each of the (i) Trust, (ii) administrator, and (iii) Advisor and/or Sub-Advisor.  The applicable investments are valued collectively via inputs from each of these groups.  For example, fair value determinations are required for the following securities:  (i) securities for which market quotations are insufficient or not readily available on a particular business day (including securities for which there is a short and temporary lapse in the provision of a price by the regular pricing source), (ii) securities for which, in the judgment of the Advisor or Sub-Advisor, the prices or values available do not represent the fair value of the instrument.  Factors which may cause the Advisor or Sub-Advisor to make such a judgment include, but are not limited to, the following: only a bid price or an asked price is available; the spread between bid and asked prices is substantial; the frequency of sales; the thinness of the market; the size of reported trades; and actions of the securities markets, such as the suspension or limitation of trading; (iii) securities determined to be illiquid; (iv) securities with respect to which an event that will affect the value thereof has occurred (a “significant event”) since the closing prices were established on the principal exchange on which they are traded, but prior to the Portfolio’s calculation of its net asset value.  Specifically, interests in commodity pools or managed futures pools are valued on a daily basis by reference to the closing market prices of each futures contract or other asset held by a pool, as adjusted for pool expenses.  Restricted or illiquid securities, such as private placements or non-traded securities are valued via inputs from the Advisor or Sub-Advisor based upon the current bid for the security from two or more independent dealers or other parties reasonably familiar with the facts and circumstances of the security (who should take into consideration all relevant factors as may be appropriate under the circumstances).  If the Advisor or Sub-Advisor is unable to obtain a current bid from such independent dealers or other independent parties, the fair value team shall determine the fair value of such security using the following factors: (i) the type of security; (ii) the cost at date of purchase; (iii) the size and nature of the Portfolio’s holdings; (iv) the discount from market value of unrestricted securities of the same class at the time of purchase and subsequent thereto; (v) information as to any transactions or offers with respect to the security; (vi) the nature and duration of restrictions on disposition of the security and the existence of any registration rights; (vii) how the yield of the security compares to similar securities of companies of similar or equal creditworthiness; (viii) the level of recent trades of similar or comparable securities; (ix) the liquidity characteristics of the security; (x) current market conditions; and (xi) the market value of any securities into which the security is convertible or exchangeable.

The Portfolio utilizes various methods to measure the fair value of all of its investments on a recurring basis. GAAP establishes a hierarchy that prioritizes inputs to valuation methods. The three levels of input are:

Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities that the Portfolio has the ability to access.

Level 2 – Observable inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These inputs may include quoted prices for the identical instrument in an inactive market, prices for similar instruments, interest rates, prepayment speeds, credit risk, yield curves, default rates and similar data.

Level 3 – Unobservable inputs for the asset or liability, to the extent relevant observable inputs are not available, representing the Portfolio’s own assumptions about the assumptions a market participant would use in valuing the asset or liability, and would be based on the best information available.

The availability of observable inputs can vary from security to security and is affected by a wide variety of factors, including, for example, the type of security, whether the security is new and not yet established in the marketplace, the liquidity of markets, and other characteristics particular to the security. To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgment exercised in determining fair value is greatest for instruments categorized in Level 3.

The inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement falls in its entirety, is determined based on the lowest level input that is significant to the fair value measurement in its entirety.

12

TOPS^® Managed Risk Flex ETF Portfolio

 NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2013

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following tables summarize the inputs used as of December 31, 2013 for the Portfolio’s investments measured at fair value:

TOPS^® Managed Risk Flex ETF Portfolio

Assets*		Level 1		Level 2		Level 3		Total
Exchange Traded Funds	$	3,160,912	$	—	$	—	$	3,160,912
Short-Term Investment		523,085		—		—		523,085
Long Futures Contracts **		3,487		—		—		3,487
Total	$	3,687,484	$	—	$	—	$	3,687,484

The Portfolio did not hold any Level 3 securities during the period.

There were no transfers into or out of Level 1 or Level 2 during the current period presented. It is the Portfolio’s policy to record transfers into or out of Level 1 or Level 2 at the end of the period.

* Refer to the Portfolio of Investments for security classifications.

** Cumulative appreciation (depreciation) of futures contracts is reported in the above table.

Security transactions and related income – Security transactions are accounted for on trade date. Interest income is recognized on an accrual basis. Discounts are accreted and premiums are amortized on securities purchased over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Realized gains or losses from sales of securities are determined by comparing the identified cost of the security lot sold with the net sales proceeds.

Dividends and distributions to shareholders – Dividends from net investment income and distributions from net realized capital gains if any, are declared and paid annually. Dividends and distributions to shareholders are recorded on ex-date and are determined in accordance with Federal income tax regulations, which may differ from GAAP. These “book/tax” differences are considered either temporary (e.g., deferred losses, capital loss carryforwards) or permanent in nature. To the extent these differences are permanent in nature, such amounts are reclassified within the composition of net assets based on their Federal tax-basis treatment; temporary differences do not require reclassification. These reclassifications have no effect on net assets, results from operations or net asset value per share of the Portfolio.

Federal income tax – It is the Portfolio’s policy to qualify as a regulated investment company by complying with the provisions of the Internal Revenue Code that are applicable to regulated investment companies and to distribute substantially all of its taxable income and net realized gains to shareholders. Therefore, no Federal income tax provision is required.

The Portfolio will recognize the tax benefits of uncertain tax positions only where the position is “more likely than not” to be sustained assuming examination by tax authorities. Management has analyzed the Portfolio’s tax positions, and has concluded that no liability for unrecognized tax benefits should be recorded related to uncertain tax positions expected to be taken in the Portfolio’s 2013 tax returns. The Portfolio identified its major tax jurisdictions as U.S. Federal, Nebraska and foreign jurisdictions where the Portfolio makes significant investments. The Portfolio is not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will change materially in the next twelve months.

13

TOPS^® Managed Risk Flex ETF Portfolio

 NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2013

Futures Contracts – The Portfolio is subject to equity price risk in the normal course of pursuing its investment objectives. The Portfolio may purchase or sell futures contracts to hedge against market risk and to reduce return volatility. Initial margin deposits required upon entering into futures contracts are satisfied by the segregation of specific securities or cash as collateral for the account of the broker (the Portfolio’s agent in acquiring the futures position). During the period the futures contracts are open, changes in the value of the contracts are recognized as unrealized gains or losses by “marking to market” on a daily basis to reflect the market value of the contracts at the end of each day’s trading. Variation margin payments are received or made depending upon whether unrealized gains or losses are incurred. When the contracts are closed, the Portfolio recognizes a realized gain or loss equal to the difference between the proceeds from, or cost of, the closing transaction and the Portfolio’s basis in the contract. If the Portfolio were unable to liquidate a futures contract and/or enter into an offsetting closing transaction, the Portfolio would continue to be subject to market risk with respect to the value of the contracts and continue to be required to maintain the margin deposits on the futures contracts. The Portfolio segregates liquid securities having a value at least equal to the amount of the current obligation under any open futures contract. Risks may exceed amounts recognized in the Statements of Assets and Liabilities. With futures, there is minimal counterparty credit risk to the Portfolio since futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees the futures against default.

The derivative instruments outstanding as of December 31, 2013 as disclosed in the Portfolio of Investments and the amounts of realized and changes in unrealized gains and losses on derivative instruments during the year as disclosed in the Statement of Operations serve as indicators of the volume of derivative activity for the Portfolio.

Offsetting of Financial Assets and Derivative Assets

The following table presents the Portfolio’s asset derivatives available for offset under a master netting arrangement net of collateral pledged as of December 31, 2013.

Managed Risk Flex ETF Portfolio

Description	Gross Amounts of Recognized Assets		Financial Instruments Pledged		Cash Collateral Pledged		Net Amount of Assets
Futures Contracts	$	3,487	$	—	$	1,265	$	4,752
Total	$	3,487	$	—	$	1,265	$	4,752

Exchange Traded Funds – The Portfolio may invest in exchange traded funds (“ETFs”). ETFs are atype of index fund bought and sold on a securities exchange. An ETF trades like common stock and represents a fixed portfolio of securities designed to track the performance and dividend yield of a particular domestic or foreign market index. The Portfolio may purchase an ETF to temporarily gain exposure to a portion of the U.S. or a foreign market. The risks of owning an ETF generally reflect the risks of owning the underlying securities they are designed to track, although the lack of liquidity on an ETF could result in it being more volatile. Additionally, ETFs have fees and expenses that reduce their value.

Use of Estimates – The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates.

Expenses – Expenses of the Trust that are directly identifiable to a specific portfolio are charged to that portfolio. Expenses, which are not readily identifiable to a specific portfolio, are allocated in such a manner as deemed equitable, taking into consideration the nature and type of expense and the relative sizes of the portfolios in the Trust.

Indemnification – The Trust indemnifies its officers and Trustees for certain liabilities that may arise from the performance of their duties to the Trust. Additionally, in the normal course of business, the Portfolio enters into contracts that contain a variety of representations and warranties and which provide general indemnities. The Portfolio’s maximum exposure under these arrangements is unknown, as this would involve future claims that may be made against the Portfolio that have not yet occurred. However, based on experience, the Portfolio expects the risk of loss due to these warranties and indemnities to be remote.

14

TOPS^® Managed Risk Flex ETF Portfolio

NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2013

3. INVESTMENT TRANSACTIONS

For the period ended December 31, 2013, cost of purchases and proceeds from sales of portfolio securities, other than short-term investments, amounted to $3,121,616 and $39,676, respectively.

4. INVESTMENT ADVISORY AGREEMENT / TRANSACTIONS WITH AFFILIATES

ValMark Advisors, Inc. serves as the Portfolio’s Investment Advisor (the “Advisor”). The Advisor has engaged Milliman Financial Risk Management, LLC. as the Portfolio’s Sub-Advisor (the “Sub-Advisor”). The Portfolio has employed Gemini Fund Services, LLC (“GFS”) to provide administration, fund accounting and transfer agent services. A Trustee and certain officers of the Trust are also officers of GFS.

Pursuant to an Advisory Agreement with the Trust, the Advisor, on behalf of the Portfolio, under the oversight of the Board, directs the daily investment operations of the Portfolio and supervises the performance of administrative and professional services provided by others. As compensation for its services and the related expenses borne by the Advisor, the Portfolio pays the Advisor a management fee, computed on average daily net assets and accrued daily and paid monthly, at an annual rate of 0.30% of the Portfolio’s average daily net assets. Pursuant to a sub-advisory agreement, the Advisor pays the Sub-Advisor a fee, which is computed and accrued daily and paid monthly.

The Board has adopted, on behalf of the Portfolio, a Distribution Plan (the “Plan”) pursuant to Rule 12b-1 under the 1940 Act. The fee is calculated at an annual rate of 0.45% of the average daily net assets attributable to the Portfolio’s Shares, and is paid to Northern Lights Distributors, LLC (the “Distributor”) to provide compensation for ongoing shareholder servicing and distribution related activities and/or maintenance of the Portfolio’s shareholder accounts, not otherwise required to be provided by the Advisor. The Distributor is an affiliate of GFS.

Pursuant to the terms of an administrative servicing agreement with GFS, the Portfolio pays to GFS a monthly fee for all operating expenses of the Portfolio, which is calculated by the Portfolio on its average daily net assets. Operating expenses include but are not limited to Fund Accounting, Fund Administration, Transfer Agency, Legal Fees, Audit Fees, Compliance Services, Shareholder Reporting Expense, Trustees Fees and Custody Fees. For the period ended December 31, 2013, the Trustees received fees in the amount of $1,459. The approved entities may be affiliates of GFS. GFS provides a Principal Executive Officer and a Principal Financial Officer to the Portfolio.

In addition, certain affiliates of GFS provide ancillary services to the Portfolio as follows:

Northern Lights Compliance Services, LLC (“NLCS”), an affiliate of GFS, provides a Chief Compliance Officer to the Trust, as well as related compliance services, pursuant to a consulting agreement between NLCS and the Trust. Under the terms of such agreement, NLCS receives customary fees from GFS under the administrative servicing agreement.

Gemcom, LLC (“Gemcom”), an affiliate of GFS, provides EDGAR conversion and filing services as well as print management services for the Portfolio on an ad-hoc basis. For the provision of these services, Gemcom receives customary fees from GFS under the administrative servicing agreement.

5. CONTROL OWNERSHIP

The beneficial ownership, either directly or indirectly, of more than 25% of the voting securities of the Portfolio creates presumption of the control of the Portfolio, under section 2(a) 9 of the 1940 Act. As of December 31, 2013, Minnesota Life Insurance Company held 100% of the voting securities of the Portfolio. The Trust has no knowledge as to whether all or any portion of the shares owned of record are also owned beneficially.

15

TOPS^® Managed Risk Flex ETF Portfolio

 NOTES TO FINANCIAL STATEMENTS (Continued)

December 31, 2013

6. DISTRIBUTIONS TO SHAREHOLDERS AND TAX COMPONENTS OF CAPITAL

As of December 31, 2013, the components of accumulated earnings/(deficit) on a tax basis were as follows:

Undistributed		Undistributed		Capital Loss		Other		Post October Loss		Unrealized		Total
Ordinary		Long-Term		Carry		Book/Tax		and		Appreciation/		Accumulated
Income		Gains		Forwards		Differences		Late Year Loss		(Depreciation)		Earnings/(Deficits)
$	19,628	$	2,428	$	—	$	—	$	—	$	76,678	$	98,734

The difference between book basis and tax basis undistributed ordinary income, accumulated realized gains and unrealized appreciation is primarily attributable to the tax treatment of short-term capital gains and mark to market on 1256 contracts.

7. SUBSEQUENT EVENTS

Subsequent events after the date of the Statement of Assets and Liabilities have been evaluated through the date the financial statements were issued.   Management has concluded that there are no subsequent events requiring adjustment or disclosure in the financial statements.

16

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders of TOPS® Managed Risk Flex ETF Portfolio and

Board of Trustees of Northern Lights Variable Trust

We have audited the accompanying statement of assets and liabilities of TOPS® Managed Risk Flex ETF Portfolio, a series of shares of beneficial interest of Northern Lights Variable Trust (the “Portfolio”), including the portfolio of investments, as of December 31, 2013, and the related statements of operations and changes in net assets and the financial highlights for the period from August 27, 2013 (commencement of operations) through December 31, 2013. These financial statements and financial highlights are the responsibility of the Portfolio’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of securities owned as of December 31, 2013 by correspondence with the custodian and brokers. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of TOPS® Managed Risk Flex ETF Portfolio as of December 31, 2013, and the results of its operations, the changes in its net assets and its financial highlights for the period from August 27, 2013 through December 31, 2013, in conformity with accounting principles generally accepted in the United States of America.

	BBD, LLP
Philadelphia, Pennsylvania
February 13, 2014

17

TOPS^® Managed Risk Flex ETF Portfolio

 EXPENSE EXAMPLES (Unaudited)

December 31, 2013

As a shareholder of the TOPS^® Managed Risk Flex ETF Portfolio, you incur ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Portfolio expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.

The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period from July 1, 2013* through December 31, 2013.

Actual Expenses

The “Actual” expenses line in the table below provides information about actual account values and actual expenses. You may use the information below together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical Example for Comparison Purposes

The “Hypothetical” line in the table below provides information about hypothetical account values and hypothetical expenses based on the Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balances or expenses you paid for the period. You may use this information to compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, or other expenses charged by your insurance contract or separate account. Therefore, the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.

			Actual		Hypothetical (5% return before expenses)
	Portfolio’s Annualized Expense Ratio	Beginning Account Value 7-1-13	Ending Account Value 12-31-13	Expenses Paid During Period *	Ending Account Value 12-31-13	Expenses Paid During Period*
TOPS Managed Risk Flex ETF Portfolio *	0.85%	$1,000.00	$1,062.00	$3.03	$1,020.92	$4.33

* “Actual” expense information for the Managed Risk Flex ETF Portfolio is for the period from 8/27/13 (date of initial investment) to 12/31/13. Actual expenses are equal to the Portfolio’s annualized net expense ratio multiplied by 126/365 (to reflect the period from initial investment to December 31, 2013). “Hypothetical” expense information for the Portfolio is presented on the basis of the full one-half year period to enable comparison to other funds. It is based on assuming the same net expense ratio and average account value over the period, but it is multiplied by 184/365 (to reflect the full half-year period).

18

TOPS^® Managed Risk Flex ETF Portfolio 

PROXY VOTING (Unaudited)

December 31, 2013

At a Special Meeting of Shareholders of the Trust, held at the offices of GFS, 80 Arkay Drive, Suite 110, Hauppauge, NY 11788, on Tuesday, September 10, 2013, Trust shareholders of record as of the close of business on July 22, 2013 voted to approve the following proposal:

Proposal 1: To elect Mark Garbin, Mark D. Gersten, John V. Palancia, Andrew Rogers and Mark H. Taylor to the Board of Trustees of the Trust.

	Shares Voted In Favor	Shares Voted Against or Abstentions
Mark Garbin	191,076,081	7,609,470
Mark D. Gersten	190,585,659	8,099,891
John V. Palancia	190,435,396	8,250,154
Andrew Rogers	190,731,148	7,954,403
Mark H. Taylor	190,710,362	7,975,188

Effective September 24, 2013, Michael Miola resigned from the Board of Trustees.

19

TOPS^® Managed Risk Flex ETF Portfolio

SUPPLEMENTAL INFORMATION (Unaudited)

December 31, 2013

TOPS® Managed Risk Flex ETF Portfolio (formerly TOPS ® Protected Flex ETF Portfolio (Adviser – ValMark Advisers, Inc. Sub-Adviser – Milliman, Inc.)

In connection with the regular meeting held on March 27-28, 2013, the Board of Trustees (the “Trustees”) of the Northern Lights Variable Trust (the “Trust”), the Trustees, including a majority of the Trustees who are not “interested persons” as that term is defined in the Investment Company Act of 1940, as amended (the “Independent Trustees”), discussed the approval of an investment advisory agreement (the “Advisory Agreement”) between ValMark Advisers, Inc (“ValMark”) and the Trust, with respect to the TOPS® Managed Risk Flex ETF Portfolio (the “Fund”), and the approval of an investment sub-advisory agreement (the “Sub-Advisory Agreement”) between ValMark and Milliman, Inc. (“Milliman”) with respect to the Fund.

The Trustees were assisted by independent legal counsel throughout the Advisory and Sub-Advisory Agreement review process. The Trustees relied upon the advice of independent legal counsel and their own business judgment in determining the material factors to be considered in evaluating the Advisory and Sub-Advisory Agreements and the weight to be given to each such factor. The conclusions reached by the Trustees were based on a comprehensive evaluation of all of the information provided and were not the result of any one factor. Moreover, each Trustee may have afforded different weight to the various factors in reaching his conclusions with respect to the Advisory and Sub-Advisory Agreements.

Nature, Extent, and Quality of Services. The Trustees noted that ValMark has assets under management amounting to over $3.3 billion, specializing in insurance related products and investment companies. The Trustees recognized that the team responsible for servicing the Fund is comprised of highly qualified professionals, and that ValMark currently advises 8 other funds in the Trust. The Trustees also noted that ValMark had reported no compliance issues, but that a recent SEC examination had been completed. The Trustees discussed the SEC’s findings and ValMark’s responses. The Trustees indicated that they were satisfied with the nature, extent, and quality of services the adviser provides to the Trust and welcomed the opportunity to expand the relationship with ValMark.

The Trustees acknowledged that Milliman is recognized as an industry leader in risk management solutions and hedging strategies, providing risk management support for over $500 billion in retirement savings accounts, including over $70 billion in assets where Milliman serves as the adviser responsible for hedging market risk. The Trustees noted that Milliman will employ a risk management overlay for TOPS® Flex. The Trustees also noted that there appears to be a strong culture of compliance at Milliman. They concluded that Milliman well qualified and will provide a level of service that will benefit all shareholders and compliment the services provided by ValMark.

Performance. The Trustees discussed the performance of the 3 other funds managed by Milliman and ValMark in the Trust (the “TOPS Managed Risk Funds”), each of which has lagged the S&P 500 over the 1-year period and since inception in mid-2011. The Trustees noted that this underperformance would be expected of a protected fund in an up market, as has existed since the TOPS Managed Risk Funds’ inception. After discussion, they concluded that ValMark and Milliman together have the potential to provide favorable investment returns for the Fund and its future shareholders.

Fees and Expenses. The Trustees evaluated the proposed advisory fee of 0.30% and the estimated net expense ratio of 1.11%, and compared it to the Fund’s peer group and Morningstar category, as well as to the similar accounts managed by ValMark. The Trustees noted that both the advisory fee and net expense ratio were lower than the peer group and the Morningstar category averages, while the advisory fee is equal to what ValMark charges for the other TOPS Managed Risk funds. After evaluating the materials provided, the Trustees concluded that the advisory fee was acceptable.

The Trustees also evaluated the proposed sub-advisory fee in comparison to sub-advisory fees charged by Milliman for other funds they sub-advise, including the other TOPS Managed Risk funds. Each of the NLVT funds for which Milliman serves as sub-adviser has an identical 20 bps sub-advisory fee. They discussed the fact that Milliman charges less than 20 bps in only one instance, where the size of the fund allows for a reduced rate of 15 bps. After evaluating the materials provided, the Trustees concluded that the sub-advisory fee was acceptable.

Economies of Scale. The Trustees considered whether economies of scale would materialize with respect to the management of the Fund. Given the aggressive fee level proposed for the Fund, the Trustees did not feel it was necessary to negotiate breakpoints at this time. After discussion, it was the consensus of the Trustees that economies of scale would be revisited at some point in the future.

20

TOPS^® Managed Risk Flex ETF Portfolio

SUPPLEMENTAL INFORMATION (Unaudited) (Continued)

December 31, 2013

Profitability. The Trustees considered the anticipated profits to be realized by ValMark in connection with the operation of the Fund and whether the amount of profit is a fair entrepreneurial profit with respect to the advisory services to be provided to the Fund. The Trustees noted that ValMark estimates that during the first fiscal year it will not turn a profit, but will come close to breakeven, and could be highly profitable after two years. The Trustees concluded that the anticipated level of profit for the initial term of the agreement was reasonable.

The Trustees considered the anticipated profits to be realized by Milliman in connection with the operation of the Fund and whether the amount of profit is a fair entrepreneurial profit with respect to the sub-advisory services to be provided to the Fund. The Trustees noted that the Sub-adviser estimates that during the first fiscal year it will turn a moderate profit, but concluded that the anticipated level of profit was reasonable.

Conclusion. Having requested and received such information from ValMark and Milliman as the Trustees believed to be reasonably necessary to evaluate the terms of the Advisory Agreement and the Sub-Advisory Agreement, and as assisted by the advice of independent counsel, the Trustees concluded that the fee structure is reasonable and that approval of the Advisory and Sub-Advisory Agreements are in the best interests of the Trust and the future shareholders of the TOPS® Managed Risk Flex ETF Portfolio.

21

TOPS^® Managed Risk Flex ETF Portfolio 

SUPPLEMENTAL INFORMATION (Unaudited) (Continued)

December 31, 2013

The following is a list of the Trustees and executive officers of the Trust and each person’s principal occupation over the last five years. Unless otherwise noted, the address of each Trustee and Officer is 17605 Wright Street, Suite 2, Omaha, Nebraska 68130.

Independent Trustees

Name, Address and Year of Birth	Position/Term of Office*	Principal Occupation During the Past Five Years	Number of Portfolios in Fund Complex** Overseen by Trustee	Other Directorships held by Trustee During the Past Five Years
Anthony J. Hertl^ Born in 1950	Trustee Since 2006; Chairman of the Board since 2013	Consultant to small and emerging businesses (since 2000).	105	AdvisorOne Funds (16 portfolios) (2004-2013); Alternative Strategies Fund (since June 2010); Satuit Capital Management Trust; The Z-Seven Fund, Inc. (2007 – May, 2010), Greenwich Advisers Trust (2007- February 2011), Global Real Estate Fund (2008-2011), The World Funds Trust (2010-2013) and Northern Lights Fund Trust (since 2005)
Gary W. Lanzen^ Born in 1954	Trustee Since 2006	President, Orizon Investment Counsel, Inc. (2000-2006); Chief Investment Officer (2000 -2010); Founder and Partner, Orizon Group, Inc. (a financial services company) (2000-2006).	105	AdvisorOne Funds (16 portfolios) (since 2003); Alternative Strategies Fund (2010-2011); Northern Lights Fund Trust (since 2005)
Mark H. Taylor^ Born in 1964	Trustee Since 2007	Andrew D. Braden Professor of Accounting and Auditing, Weatherhead School of Management, Case Western Reserve University (since 2009); John P. Begley Endowed Chair in Accounting, Creighton University (2002 – 2009); Former member of the AICPA Auditing Standards Board, AICPA (2008-2011).	131	Alternative Strategies Fund (since 2010); Lifetime Achievement Mutual Fund, Inc.  (LFTAX) (Director and Audit Committee Chairman) (2007-2012); NLFT III (since February 2012); Northern Lights Fund Trust (since 2007)
John V. Palancia Born in 1954	Trustee Since 2011	Retired (since 2011). Formerly, Director of Futures Operations, Merrill Lynch, Pierce, Fenner & Smith Inc. (1975-2011).	131	Northern Lights Fund Trust (since 2011); NLFT III (since February 2012); Alternative Strategies Fund (since  2012)
Mark D. Gersten Born in 1950	Trustee Since 2013	Independent Consultant (since 2012); Senior Vice President – Global Fund Administration Mutual Funds & Alternative Funds, AllianceBernstein LP (1985 – 2011)	105	Schroder Global Series Trust and Two Roads Shared Trust (since 2012); Northern Lights Fund Trust (since 2013)
Mark Garbin Born in 1951	Trustee Since 2013	Managing Principal, Coherent Capital Management LLC (since 2007); Managing Director and Head of Equity Derivatives -Americas, Rabobank International (2006-2007)	105	Two Roads Shared Trust (since 2012); Forethought Variable Insurance Trust (since 2013) (Lead Independent and Chairman of the Valuation Committee); Northern Lights Fund Trust (since 2013)

12/31/13-NLVT-V2

22

TOPS^® Managed Risk Flex ETF Portfolio 

SUPPLEMENTAL INFORMATION (Unaudited) (Continued)

December 31, 2013

Interested Trustees and Officers

Name, Address and Year of Birth	Position/Term of Office*	Principal Occupation During the Past Five Years	Number of Portfolios in Fund Complex ** Overseen by Trustee	Other Directorships held by Trustee During the Past Five Years
Andrew Rogers 80 Arkay Drive*** Hauppauge, NY  11788 Born in 1969	Trustee Since 2013; President Since 2006	Chief Executive Officer, Gemini Alternative Funds, LLC (since 2013); Chief Executive Officer , Gemini Hedge Fund Services, LLC (since 2013); Chief Executive Officer, Gemini Fund Services, LLC (since 2012); President and Manager, Gemini Fund Services, LLC (2006 - 2012); Formerly Manager, Northern Lights Compliance Services, LLC (2006 – 2008); and President and Manager, GemCom LLC (2004 - 2011).	105	Northern Lights Fund Trust (since 2013)
Kevin E. Wolf 80 Arkay Drive Hauppauge, NY  11788 Born in 1969	Treasurer Since 2006	President, Gemini Fund Services, LLC (since 2012); Director of Fund Administration, Gemini Fund Services, LLC (2006 - 2012); and Vice-President, GemCom, LLC (2004 - 2013).	N/A	N/A
James P. Ash 80 Arkay Drive Hauppauge, NY  11788 Born in 1976	Secretary Since 2011	Senior Vice President, Gemini Fund Services, LLC (since 2012); Vice President, Gemini Fund Services, LLC (2011 - 2012); Director of Legal Administration, Gemini Fund Services, LLC (2009 - 2011); Assistant Vice President of Legal Administration, Gemini Fund Services, LLC (2008 - 2011).	N/A	N/A
Emile R. Molineaux Born in 1962	Chief Compliance Officer Since 2011	Senior Compliance Officer of Northern Lights Compliance Services, LLC (since 2011); General Counsel, CCO and Senior Vice President, Gemini Fund Services, LLC (2004 - June 2012); Secretary and CCO, Northern Lights Compliance Services, LLC;  (2003-2011); In-house Counsel, The Dreyfus Funds (1999 – 2003).	N/A	N/A

* The term of office for each Trustee and officer listed above will continue indefinitely until the individual resigns or is removed.

** The term “Fund Complex” includes the Northern Lights Fund Trust (“NLFT”), Northern Lights Fund Trust III (“NLFT III”) and the Northern Lights Variable Trust (“NLVT”).

*** Andrew Rogers is an “interested person” of the Trust as that term is defined under the 1940 Act, because of his affiliation with Gemini Fund Services, LLC, (the Trust’s Administrator, Fund Accountant, Transfer Agent).

^ These Trustees were named in the SEC order instituting settled administrative proceedings against Northern Lights Compliance Services, LLC, Gemini Fund Services, LLC and certain Trustees. For more information, please see the “Legal Proceedings” in the Statement of Additional Information (“SAI”).

The Portfolio’s Statement of Additional Information includes additional information about the Trustees and is available free of charge, upon request, by calling toll-free at 1-855-572-5945.

12/31/13-NLVT-V2

23

PRIVACY NOTICE

Northern Lights Variable Trust

Rev. August 2011

FACTS WHAT DOES NORTHERN LIGHTS VARIABLE TRUST DO WITH YOUR PERSONAL INFORMATION?

Why? Financial companies choose how they share your personal information.  Federal law gives consumers the right to limit some, but not all sharing.  Federal law also requires us to tell you how we collect, share, and protect your personal information.  Please read this notice carefully to understand what we do.

What? The types of personal information we collect and share depends on the product or service that you have with us. This information can include: ●         Social Security number and wire transfer instructions ●         account transactions and transaction history ●         investment experience and purchase history When you are no longer our customer, we continue to share your information as described in this notice.

How? All financial companies need to share customers’ personal information to run their everyday business.  In the section below, we list the reasons financial companies can share their customers’ personal information; the reasons Northern Lights Variable Trust chooses to share; and whether you can limit this sharing.

Reasons we can share your personal information:	Does Northern Lights Variable Trust share information?	Can you limit this sharing?
For our everyday business purposes - such as to process your transactions, maintain your account(s), respond to court orders and legal investigations, or report to credit bureaus.	YES	NO
For our marketing purposes - to offer our products and services to you.	NO	We don’t share
For joint marketing with other financial companies.	NO	We don’t share
For our affiliates’ everyday business purposes - information about your transactions and records.	NO	We don’t share
For our affiliates’ everyday business purposes - information about your credit worthiness.	NO	We don’t share
For nonaffiliates to market to you	NO	We don’t share

QUESTIONS?   Call 1-402-493-4603

24

PRIVACY NOTICE

Northern Lights Variable Trust

Page 2

What we do:
How does Northern Lights Variable Trust protect my personal information?	To protect your personal information from unauthorized access and use, we use security measures that comply with federal law. These measures include computer safeguards and secured files and buildings. Our service providers are held accountable for adhering to strict policies and procedures to prevent any misuse of your nonpublic personal information.
How does Northern Lights Variable Trust collect my personal information?	We collect your personal information, for example, when you ●     open an account or deposit money ●     direct us to buy securities or direct us to sell your securities ●     seek advice about your investments We also collect your personal information from others, such as credit bureaus, affiliates, or other companies.
Why can’t I limit all sharing?	Federal law gives you the right to limit only: ●     sharing for affiliates’ everyday business purposes – information about your creditworthiness. ●     affiliates from using your information to market to you. ●     sharing for nonaffiliates to market to you. State laws and individual companies may give you additional rights to limit sharing.

Definitions
Affiliates	Companies related by common ownership or control. They can be financial and nonfinancial companies. ●     Northern Lights Variable Trust has no affiliates.
Nonaffiliates	Companies not related by common ownership or control. They can be financial and nonfinancial companies. ●     Northern Lights Variable Trust doesn’t share with nonaffiliates so they can market to you.
Joint marketing	A formal agreement between nonaffiliated financial companies that together market financial products or services to you. ●     Northern Lights Variable Trust doesn’t jointly market.

25

PROXY VOTING POLICY

Information regarding how the Portfolio voted proxies relating to portfolio securities for the most recent twelve month period ended June 30 as well as a description of the policies and procedures that the Portfolio uses to determine how to vote proxies is available without charge, upon request, by calling 1-855-572-5945 or by referring to the Securities and Exchange Commission’s (“SEC”) website at http://www.sec.gov.

PORTFOLIO HOLDINGS

The Portfolio files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. Form N-Q is available on the SEC’s website at http://www.sec.gov and may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC (1-800-SEC-0330). The information on Form N-Q is available without charge, upon request, by calling 1-855-572-5945.

INVESTMENT ADVISOR

ValMark Advisers, Inc.

130 Springside Drive

Akron, OH 44333

INVESTMENT SUB-ADVISOR

Milliman, Inc.

71 S. Wacker Drive, 31st Floor  

Chicago, IL 60606  

ADMINISTRATOR

Gemini Fund Services, LLC

80 Arkay Drive, Suite 110

Hauppauge, New York 11788

Item 2. Code of Ethics.  

(a)

As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party.

(b)

For purposes of this item, “code of ethics” means written standards that are reasonably designed to deter wrongdoing and to promote:

(1)

Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships;

(2)

Full, fair, accurate, timely, and understandable disclosure in reports and documents that a registrant files with, or submits to, the Commission and in other public communications made by the registrant;

(3)

Compliance with applicable governmental laws, rules, and regulations;

(4)

The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and

(5)

Accountability for adherence to the code.

(c)

Amendments:  During the period covered by the report, there have not been any amendments to the provisions of the code of ethics.

(d)

Waivers:  During the period covered by the report, the registrant has not granted any express or implicit waivers from the provisions of the code of ethics.

(e)         The Code of Ethics is not posted on Registrant’ website.

(f)          A copy of the Code of Ethics is attached as an exhibit.

Item 3. Audit Committee Financial Expert.

(a)

The board of directors of the fund has determined that Mark Taylor, Anthony Hertl and Mark Gersten are independent audit committee financial experts.

Item 4. Principal Accountant Fees and Services.

(a)

Audit Fees

FYE 2013 - $10,000

(b)

Audit-Related Fees

FYE 2013 - None

(c)

Tax Fees

FYE 2013 - $2,000

Preparation of Federal & State income tax returns, assistance with calculation of required income, capital gain and excise distributions and preparation of Federal excise tax returns.

(d)

All Other Fees

FYE 2013 - None

 (e)

(1)

Audit Committee’s Pre-Approval Policies

The registrant’s Audit Committee is required to pre-approve all audit services and, when appropriate, any non-audit services (including audit-related, tax and all other services) to the registrant.  The registrant’s Audit Committee also is required to pre-approve, when appropriate, any non-audit services (including audit-related, tax and all other services) to its adviser, or any entity controlling, controlled by or under common control with the adviser that provides ongoing services to the registrant, to the extent that the services may be determined to have an impact on the operations or financial reporting of the registrant.  Services are reviewed on an engagement by engagement basis by the Audit Committee.

(2)

Percentages of Services Approved by the Audit Committee

2013

Audit-Related Fees:

0.00%

Tax Fees:

0.00%

All Other Fees:

0.00%

(f)

During the audit of registrant's financial statements for the most recent fiscal year, less than 50 percent of the hours expended on the principal accountant's engagement were attributed to work performed by persons other than the principal accountant's full-time, permanent employees.

(g)

The aggregate non-audit fees billed by the registrant's accountant for services rendered to the registrant, and rendered to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the adviser that provides ongoing services to the registrant:

2013 - $10,000

(h)

The registrant's audit committee has considered whether the provision of non-audit services to the registrant's investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant, that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X, is compatible with maintaining the principal accountant's independence.

Item 5. Audit Committee of Listed Companies.  Not applicable to open-end investment companies.

Item 6.  Schedule of Investments.  Schedule of investments in securities of unaffiliated issuers is included under Item 1.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Funds.  Not applicable to open-end investment companies.

Item 8.  Portfolio Managers of Closed-End Management Investment Companies.  Not applicable to open-end investment companies.

Item 9.  Purchases of Equity Securities by Closed-End Funds.  Not applicable to open-end investment companies.

Item 10.  Submission of Matters to a Vote of Security Holders.  None

Item 11.  Controls and Procedures.  

(a)

Based on an evaluation of the Registrant’s disclosure controls and procedures as of a date within 90 days of filing date of this Form N-CSR, the principal executive officer and principal financial officer of the Registrant have concluded that the disclosure controls and procedures of the Registrant are reasonably designed to ensure that the information required in filings on Form N-CSR is recorded, processed, summarized, and reported by the filing date, including that information required to be disclosed is accumulated and communicated to the Registrant’s management, including the Registrant’s principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b)

There were no significant changes in the Registrant’s internal control over financial reporting that occurred during the Registrant’s last fiscal half-year that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

Item 12.  Exhibits.  

(a)(1)

Not applicable.

(a)(2)

Certifications required by Section 302 of the Sarbanes-Oxley Act of 2002 (and Item 11(a)(2) of Form N-CSR) are filed herewith.

(a)(3)

Not applicable for open-end investment companies.

(b)

Certifications required by Section 906 of the Sarbanes-Oxley Act of 2002 (and Item 11(b) of Form N-CSR) are filed herewith.

SIGNATURES

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

(Registrant) Northern Lights Variable Fund Trust

By (Signature and Title)

/s/ Andrew B. Rogers

       Andrew B. Rogers, President

Date  

2/28/14

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

By (Signature and Title)

/s/ Andrew B. Rogers

        Andrew B. Rogers, President

Date

2/28/14

By (Signature and Title)

/s/ Kevin E. Wolf

       Kevin E. Wolf, Treasurer

Date

2/28/14