<PAGE>
Filed Pursuant to Rule 497(c)
Registration File No.: 333-17217
EQ Advisors Trust(SM)
PROSPECTUS DATED MAY 1, 2000
- --------
1 EQ Advisors Trust
- --------------------------------------------------------------------------------
This Prospectus describes the twenty-eight (28) Portfolios** offered by EQ
Advisors Trust and the Class IB shares offered by the Trust on behalf of each
Portfolio that you can choose as investment alternatives. Each Portfolio has
its own investment objective and strategies that are designed to meet different
investment goals. This Prospectus contains information you should know before
investing. Please read this Prospectus carefully before investing and keep it
for future reference.
<TABLE>
<S> <C>
DOMESTIC PORTFOLIOS
- ----------------------------------------
EQ/Aggressive Stock* INTERNATIONAL STOCK PORTFOLIOS
Alliance Common Stock ---------------------------------------
EQ/Alliance Premier Growth BT International Equity Index
Alliance Small Cap Growth Capital Guardian International
EQ/Alliance Technology Morgan Stanley Emerging Markets Equity
BT Equity 500 Index EQ/Putnam International Equity
BT Small Company Index
Capital Guardian Research FIXED INCOME PORTFOLIOS
Capital Guardian U.S. Equity ---------------------------------------
EQ/Evergreen Alliance High Yield
Lazard Large Cap Value Alliance Money Market
Lazard Small Cap Value J.P. Morgan Core Bond*
MFS Emerging Growth Companies
MFS Growth with Income BALANCED/HYBRID PORTFOLIOS
MFS Research ---------------------------------------
Mercury Basic Value Equity* EQ/Balanced*
EQ/Putnam Growth & Income Value EQ/Evergreen Foundation
EQ/Putnam Investors Growth Mercury World Strategy*
</TABLE>
* Effective May 1, 2000, the name of the Alliance Aggressive Stock Portfolio
was changed to the "EQ/Aggressive Stock Portfolio," the Alliance Balanced
Portfolio was changed to the "EQ/Balanced Portfolio," the JPM Core Bond
Portfolio was changed to the "J.P. Morgan Core Bond Portfolio," the Merrill
Lynch Basic Value Equity Portfolio was changed to the "Mercury Basic Value
Equity Portfolio," and the Merrill Lynch World Strategy Portfolio was
changed to the "Mercury World Strategy Portfolio."
** All of these Portfolios may not be available in your variable life or
annuity product. Please consult your product prospectus to see which
Portfolios are available under your contract.
- -------------------------------------------------------------------------------
YOU SHOULD BE AWARE THAT THE SECURITIES AND EXCHANGE COMMISSION HAS NOT APPROVED
OR DISAPPROVED OF THE INVESTMENT MERIT OF THESE PORTFOLIOS OR DETERMINED IF THIS
PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
Version 14
<PAGE>
Overview
- ---------
2
- --------------------------------------------------------------------------------
EQ ADVISORS TRUST
This Prospectus tells you about the twenty-eight (28) current Portfolios of EQ
Advisors Trust ("Trust") and the Class IB shares offered by the Trust on behalf
of each Portfolio. The Trust is an open-end management investment company. Each
Portfolio is a separate series of the Trust with its own investment objective,
investment strategies and risks, which are described in this Prospectus. Each of
the current Portfolios of the Trust, except for the Lazard Small Cap Value
Portfolio, the Morgan Stanley Emerging Markets Equity Portfolio and the Mercury
World Strategy Portfolio, are diversified for purposes of the Investment Company
Act of 1940, as amended ("1940 Act").
The Trust's shares are currently sold only to insurance company separate
accounts in connection with variable life insurance contracts and variable
annuity certificates and contracts (the "Contract" or collectively, the
"Contracts") issued by The Equitable Life Assurance Society of the United States
7("Equitable") and Equitable of Colorado, Inc. ("EOC") as well as insurance
companies that are not affiliated with Equitable or EOC ("non-affiliated
insurance companies") and to The Equitable Investment Plan for Employees,
Managers and Agents ("Equitable Plan"). The Prospectus is designed to help you
make informed decisions about the Portfolios that are available under your
Contract or under the Equitable Plan. You will find information about your
Contract and how it works in the accompanying prospectus for the Contracts if
you are a Contractholder or participant under a Contract.
Equitable currently serves as the Manager of the Trust. In such capacity,
Equitable currently has overall responsibility for the general management and
administration of the Trust.
Information about the Advisers for each Portfolio is contained in the
description concerning that Portfolio in the section entitled "About the
Investment Portfolios." The Manager has the ultimate responsibility to oversee
each of the Advisers and to recommend their hiring, termination and replacement.
Subject to approval by the Board of Trustees, the Manager has been granted
relief by the Securities and Exchange Commission ("SEC") ("Multi-Manager Order")
that enables the Manager without obtaining shareholder approval to: (i) select
new or additional Advisers for each of the Trust's Portfolios; (ii) enter into
new investment advisory agreements and materially modify existing investment
advisory agreements; and (iii) terminate and replace the Advisers.
<PAGE>
Table of contents
- ------
3
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
- ---
1
SUMMARY INFORMATION CONCERNING EQ
ADVISORS TRUST 4
- ----------------------------------------------- --
- ------------------------------------------------------
2
ABOUT THE INVESTMENT PORTFOLIOS 16
- ------------------------------------------------------
DOMESTIC PORTFOLIOS 19
EQ/Aggressive Stock 19
Alliance Common Stock 23
EQ/Alliance Premier Growth 26
Alliance Small Cap Growth 28
EQ/Alliance Technology 31
BT Equity 500 Index 33
BT Small Company Index 35
Capital Guardian Research 37
Capital Guardian U.S. Equity 39
EQ/Evergreen 41
Lazard Large Cap Value 43
Lazard Small Cap Value 45
MFS Emerging Growth Companies 47
MFS Growth with Income 49
MFS Research 51
Mercury Basic Value Equity 53
EQ/Putnam Growth & Income Value 56
EQ/Putnam Investors Growth 58
INTERNATIONAL STOCK PORTFOLIOS 60
BT International Equity Index 60
Capital Guardian International 63
Morgan Stanley Emerging Markets Equity 66
EQ/Putnam International Equity 70
FIXED INCOME PORTFOLIOS 73
Alliance High Yield 73
Alliance Money Market 77
J.P. Morgan Core Bond 80
BALANCED/HYBRID PORTFOLIOS 83
EQ/Balanced 83
EQ/Evergreen Foundation 88
Mercury World Strategy 90
- ------------------------------------------------------
3
MORE INFORMATION ON PRINCIPAL RISKS 93
- ------------------------------------------------------
- ------------------------------------------------------
4
MANAGEMENT OF THE TRUST 99
- ------------------------------------------------------
The Trust 99
The Manager 99
Expense Limitation Agreement 101
The Advisers 102
The Administrator 103
The Transfer Agent 103
Brokerage Practices 103
Brokerage Transactions with Affiliates 103
- ------------------------------------------------------
5
FUND DISTRIBUTION ARRANGEMENTS 104
- ------------------------------------------------------
- ------------------------------------------------------
6
PURCHASE AND REDEMPTION 105
- ------------------------------------------------------
- ------------------------------------------------------
7
HOW ASSETS ARE VALUED 106
- ------------------------------------------------------
<PAGE>
- ------------------------------------------------------
8
TAX INFORMATION 107
- ------------------------------------------------------
- ------------------------------------------------------
9
FINANCIAL HIGHLIGHTS 108
- ------------------------------------------------------
- ------------------------------------------------------
10
PRIOR PERFORMANCE OF EACH ADVISER 135
- ------------------------------------------------------
</TABLE>
<PAGE>
1
Summary information concerning EQ Advisors Trust
- -------
4
- --------------------------------------------------------------------------------
The following chart highlights the twenty-eight (28) Portfolios described in
this Prospectus that you can choose as investment alternatives under your
Contracts offered by Equitable or EOC. The chart and accompanying information
identify each Portfolio's investment objective(s), principal investment
strategies, and principal risks. "More Information on Principal Risks", which
more fully describes each of the principal risks, is provided beginning on page
93.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
- ------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- ------------------------------------------------------------------------------------------------
<S> <C>
EQ/AGGRESSIVE STOCK Seeks to achieve long-term growth of capital
- ------------------------------------------------------------------------------------------------
ALLIANCE COMMON STOCK Seeks to achieve long-term growth of capital and increased
income
- ------------------------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH Seeks long-term growth of capital by primarily investing in
equity securities of a limited number of large, carefully
selected, high quality United States companies that are
judged, by the Adviser, likely to achieve superior earnings
growth
- ------------------------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH Seeks to achieve long-term growth of capital
- ------------------------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY Seeks to achieve growth of capital. Current income is
incidental to the Portfolio's objective
- ------------------------------------------------------------------------------------------------
BT EQUITY 500 INDEX Seeks to replicate as closely as possible (before deduction
of Portfolio expenses) the total return of the S&P 500 Index
- ------------------------------------------------------------------------------------------------
BT SMALL COMPANY INDEX Seeks to replicate as closely as possible (before the
deduction of Portfolio expenses) the total return of the
Russell 2000 Index
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
5
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Stocks and other equity securities of small and General investment, small-cap and mid-cap company,
medium-sized companies (including securities of growth investing, leveraging, derivatives, liquidity,
companies in cyclical industries, companies whose securities lending, and foreign securities risks
securities are temporarily undervalued, companies in
special situations (e.g., change in management, new
products or changes in customer demand) and less widely
known companies)
- ---------------------------------------------------------------------------------------------------------------------------------
Stocks and other equity securities (including preferred General investment, foreign securities, leveraging,
stocks or convertible debt) and fixed income securities derivatives, convertible securities, small-cap and mid-cap
(including junk bonds), foreign securities, derivatives, and company, junk bond, securities lending, and fixed income
securities lending risks
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of a limited number of large, high-quality General investment, focused portfolio, growth investing,
companies that are likely to offer superior earnings growth convertible securities, derivatives, and foreign securities
risks
- ---------------------------------------------------------------------------------------------------------------------------------
Stocks and other equity securities of smaller companies General investment, small-cap and mid-cap company,
and undervalued securities (including securities of growth investing, leveraging, derivatives, liquidity,
companies in cyclical industries, companies whose securities lending, portfolio turnover and foreign securities
securities are temporarily undervalued, companies in risks
special situations (e.g., change in management, new
products or changes in customer demand) and less widely
known companies)
- ---------------------------------------------------------------------------------------------------------------------------------
Securities of companies in various industries that are General investment, sector, growth investing, small-cap
expected to benefit from technological advances and and mid-cap companies, derivatives, foreign securities,
improvements with potential for capital appreciation and fixed income, and securities lending risks
growth of capital, including well-known, established
companies or new or unseasoned companies
- ---------------------------------------------------------------------------------------------------------------------------------
Common stocks of companies in the S&P 500 Index General investment, index-fund, and fixed income risks
- ---------------------------------------------------------------------------------------------------------------------------------
Common stocks of small-cap companies in the Russell General investment, index-fund, small-cap and mid-cap
2000 Index company, derivatives, and fixed income risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
6
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
- --------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- --------------------------------------------------------------------------------------------------------
<S> <C>
CAPITAL GUARDIAN RESEARCH Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY Seeks long-term growth of capital
- --------------------------------------------------------------------------------------------------------
EQ/EVERGREEN Seeks long-term capital growth
- --------------------------------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE Seeks capital appreciation by investing primarily in equity
securities of companies with relatively large capitalizations
(i.e., companies having market capitalizations of at least
$3 billion at the time of initial purchase) that appear to the
Adviser to be inexpensively priced relative to the return on
total capital or equity
- --------------------------------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE Seeks capital appreciation by investing in equity securities
of U.S. companies with small market capitalizations (i.e.,
companies in the range of companies represented in the
Russell 2000 Index) that the Adviser considers
inexpensively priced relative to the return on total capital
or equity
- --------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES Seeks to provide long-term capital growth
- --------------------------------------------------------------------------------------------------------
MFS GROWTH WITH INCOME Seeks to provide reasonable current income and long-term
growth of capital and income
- --------------------------------------------------------------------------------------------------------
MFS RESEARCH Seeks to provide long-term growth of capital and future
income
- --------------------------------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY Seeks capital appreciation and secondarily, income by
investing in securities, primarily equities, that the Adviser
believes are undervalued and therefore represent basic
investment value
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
7
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Equity securities primarily of United States issuers and General investment, growth investing, convertible
securities whose principal markets are in the United States securities, and foreign securities risks
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities primarily of United States companies with General investment, growth investing, convertible
market capitalization greater than $1 billion at the time of securities, and foreign securities risks
purchase
- ---------------------------------------------------------------------------------------------------------------------------------
Common stocks of large U.S. companies that the Adviser General investment, mid-cap company, fixed income,
believes have anticipated earnings ranging from steady to growth investing portfolio turnover and value investing
accelerated growth and are undervalued. risks
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of companies with relatively large General investment, value investing, derivatives, and fixed
capitalizations that the Adviser believes are undervalued income risks
based on their return on equity or capital
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of small-cap U.S. companies in the range General investment, small-cap and mid-cap company,
of companies included in the Russell 2000 Index that the value investing, non-diversification, and fixed income risks
Adviser believes are undervalued based on their return on
equity or capital
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of emerging growth companies with the General investment, small-cap and mid-cap company,
potential to become major enterprises or that are major foreign securities, and growth investing risks
enterprises whose rates of earnings growth are expected to
accelerate
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities (common stock, preferred stock, General investment, mid-cap company, foreign securities,
convertible securities, warrants and depositary receipts) and growth investing risks
- ---------------------------------------------------------------------------------------------------------------------------------
Common stock or securities convertible into common stock General investment, small-cap and mid-cap company,
of companies with better than average prospects for foreign securities, fixed income, and growth investing risks
long-term growth
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities that the Adviser believes are undervalued General investment, small-cap and mid-cap company,
value investing, and foreign securities risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
8
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST DOMESTIC PORTFOLIOS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
EQ/PUTNAM GROWTH & INCOME VALUE Seeks capital growth. Current income is a secondary
objective
- ---------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH Seeks long-term growth of capital and any increased
income that results from this growth
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
9
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Common stocks (plus convertible bonds, convertible General investment, derivatives, foreign securities, value
preferred stocks, preferred stocks and debt securities) investing, and fixed income risks
- ---------------------------------------------------------------------------------------------------------------------------------
Common stocks and convertible securities of companies General investment, growth investing, small-cap and
whose earnings are believed likely to grow faster than the mid-cap company, derivatives, foreign securities, and fixed
economy as a whole income risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
10
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST INTERNATIONAL STOCK PORTFOLIOS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
BT INTERNATIONAL EQUITY INDEX Seeks to replicate as closely as possible (before deduction
of Portfolio expenses) the total return of the MSCI EAFE
Index
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN INTERNATIONAL Seeks long-term growth of capital by investing primarily in
non-United States equity securities
- ---------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY Seeks long-term capital appreciation by investing primarily
in equity securities of issuers in emerging countries
- ---------------------------------------------------------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY Seeks capital appreciation
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
11
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Equity securities of companies in the MSCI EAFE Index General investment, index-fund, foreign securities, liquidity,
and derivatives risks
- ---------------------------------------------------------------------------------------------------------------------------------
Non-United States equity securities primarily of companies General investment, foreign securities, growth investing,
located in Europe, Canada, Australia, and the Far East convertible securities, and derivatives risks
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of emerging market country companies General investment, foreign securities, convertible
securities, liquidity, derivatives, portfolio turnover,
non-diversification, and fixed income risks
- ---------------------------------------------------------------------------------------------------------------------------------
Equity securities of foreign companies General investment, foreign securities, small-cap and
mid-cap company, liquidity, portfolio turnover, and
derivatives risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
12
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST FIXED INCOME PORTFOLIOS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
ALLIANCE HIGH YIELD Seeks to achieve a high return by maximizing current
income and, to the extent consistent with that objective,
capital appreciation
- ---------------------------------------------------------------------------------------------------------------------------------
ALLIANCE MONEY MARKET Seeks to obtain a high level of current income, preserve its
assets and maintain liquidity
- ---------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN CORE BOND Seeks to provide a high total return consistent with
moderate risk of capital and maintenance of liquidity
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
13
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
High yield debt securities rated BB/Ba or below or unrated General investment, fixed income, leveraging, loan
securities of comparable quality ("junk bonds"), common participation and assignment, derivatives, liquidity, junk
stocks and other equity securities, foreign securities, bond, foreign securities, small-cap and mid-cap company,
derivatives, and securities lending and securities lending risks
- ---------------------------------------------------------------------------------------------------------------------------------
High quality U.S. dollar-denominated money market General investment, money market, leveraging, foreign
instruments (including foreign securities) and securities securities, and securities lending risks
lending
- ---------------------------------------------------------------------------------------------------------------------------------
Investment grade securities rated BBB/Baa or better at the General investment, fixed income, liquidity, portfolio
time of purchase (including foreign issuers) turnover, derivatives, and foreign securities risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
- -----
14
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
EQ ADVISORS TRUST BALANCED/HYBRID PORTFOLIOS
- ---------------------------------------------------------------------------------------------------------------------------------
PORTFOLIO INVESTMENT OBJECTIVE(S)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
EQ/BALANCED Seeks to achieve a high return through both appreciation
of capital and current income
- ---------------------------------------------------------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION Seeks to provide, in order of priority, reasonable income,
conservation of capital and capital appreciation
- ---------------------------------------------------------------------------------------------------------------------------------
MERCURY WORLD STRATEGY Seeks high total investment return by investing primarily in
a portfolio of equity and fixed income securities, including
convertible securities, of U.S. and foreign issuers
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
15
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
- ---------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL INVESTMENT STRATEGIES PRINCIPAL RISKS
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Debt and equity securities, money market instruments, General investment, asset allocation, fixed income,
foreign securities, derivatives, and securities lending derivatives, leveraging, liquidity, securities lending,
portfolio turnover, and foreign securities risks
- ---------------------------------------------------------------------------------------------------------------------------------
Common stocks, preferred stocks, securities convertible General investment, convertible securities, portfolio
into or exchangeable for common stocks, corporate debt turnover, and fixed income risks
obligations, U.S. Government securities and short-term
debt instruments
- ---------------------------------------------------------------------------------------------------------------------------------
Equity and fixed income securities of U.S. and foreign General investment, foreign securities, fixed income,
companies derivatives, non-diversification, liquidity, and portfolio
turnover risks
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------- EQ Advisors Trust
<PAGE>
2
About the investment portfolios
- ----------------
16
- --------------------------------------------------------------------------------
This section of the Prospectus provides a more complete description of the
principal investment objectives, strategies, and risks of each of the
Portfolios. Of course, there can be no assurance that any Portfolio will achieve
its investment objective.
Please note that:
o A fuller description of each of the principal risks is included in the
section "More Information on Principal Risks," which follows the
description of each Portfolio in this section of the Prospectus.
o Additional information concerning each Portfolio's strategies, investments,
and risks can also be found in the Trust's Statement of Additional
Information.
GENERAL INVESTMENT RISKS
Each of the Portfolios is subject to the following risks:
ASSET CLASS RISK: The returns from the types of securities in which a Portfolio
invests may underperform returns from the various general securities markets or
different asset classes.
MARKET RISK: You could lose money over short periods due to fluctuation in a
Portfolio's share price in reaction to stock or bond market movements, and over
longer periods during extended market downturns.
SECURITY SELECTION RISK: There is the possibility that the specific securities
selected by a Portfolio's Adviser will underperform other funds in the same
asset class or benchmarks that are representative of the general performance of
the asset class.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
THE BENCHMARKS
The performance of each of the Trust's Portfolios as shown on the following
pages compares each Portfolio's performance to that of a broad-based securities
market index, an index of funds with similar investment objectives and/or a
blended index. Each of the Portfolios' annualized rates of return are net of:
(i) its investment management fees; and (ii) its other expenses. These rates are
not representative of the actual return you would receive under your Contract.
Broad-based securities indices are unmanaged and are not subject to fees and
expenses typically associated with managed investment company portfolios.
Broad-based securities indices are also not subject to contract and
insurance-related expenses and charges. Investments cannot be made directly in a
broad-based securities index. Comparisons with these benchmarks, therefore, are
of limited use. They are included because they are widely known and may help you
to understand the universe of securities from which each Portfolio is likely to
select its holdings.
THE CREDIT SUISSE FIRST BOSTON GLOBAL HIGH YIELD INDEX ("CSFB Index") has been
maintained since January 1986 and has several modules representing different
sectors of the high yield market, including a cash paying module, a pay-in-kind
module, and a default module. The CSFB Index is priced weekly and can be sorted
by industry, rating, seniority, liquidity, country of issue, price, yield and
spread.
THE LEHMAN AGGREGATE BOND INDEX ("Lehman Aggregate Bond") is an index comprised
of investment grade fixed income securities, including U.S. Treasury,
mortgage-backed, corporate and "Yankee" bonds (U.S. dollar-denominated bonds
issued outside the United States).
<PAGE>
- ----------
17
- --------------------------------------------------------------------------------
THE LEHMAN GOVERNMENT/CORPORATE BOND INDEX ("Lehman Gov't/Corp") represents an
unmanaged group of securities widely regarded by investors as representative of
the bond market.
THE LEHMAN INTERMEDIATE GOVERNMENT BOND INDEX ("Lehman Intermediate Government
Bonds") represents an unmanaged group of securities consisting of all U.S.
Treasury and agency securities with remaining maturities of from one to ten
years and issue amounts of at least $100 million outstanding.
THE LEHMAN TREASURY BOND INDEX ("Lehman Treasury") represents an unmanaged group
of securities consisting of all currently offered public obligations of the U.S.
Treasury intended for distribution in the domestic market.
THE MERRILL LYNCH HIGH YIELD MASTER INDEX ("ML Master") represents an unmanaged
group of securities widely regarded by investors as representative of the high
yield bond market.
THE MORGAN STANLEY CAPITAL INTERNATIONAL EAFE INDEX ("MSCI EAFE") is a market
capitalization weighted equity index composed of a sample of companies
representative of the market structure of Europe, Australasia and the Far East.
MSCI EAFE Index returns assume dividends reinvested net of withholding taxes and
do not reflect any fees or expenses.
THE MORGAN STANLEY CAPITAL INTERNATIONAL EMERGING MARKETS FREE INDEX ("MSCI
EMF") is a market capitalization weighted equity index composed of companies
that are representative of the market structure of the following 25 countries:
Argentina, Brazil Free, Chile, China Free, Colombia, Czech Republic, Greece,
Hungary, India, Indonesia Free, Israel, Jordan, Korea, Mexico Free, Pakistan,
Peru, Philippines Free, Poland, Russia, South Africa, Sri Lanka, Taiwan,
Thailand Free, Turkey and Venezuela. "Free" MSCI indices excludes those shares
not purchasable by foreign investors.
THE RUSSELL 2000 INDEX ("Russell 2000") is an unmanaged index which tracks the
performance of 2,000 publicly-traded U.S. stocks. It is often used to indicate
the performance of smaller company stocks. It is compiled by the Frank Russell
Company.
THE RUSSELL 2000 GROWTH INDEX ("Russell 2000 Growth") is an unmanaged index
which measures the performance of those companies in the Russell 2000 Index with
higher price-to-book ratios and higher forecasted growth than other companies in
the Russell 2000 Index. It is compiled by the Frank Russell Company.
SALOMON BROTHERS BROAD INVESTMENT BOND INDEX ("SAL BIG") is an unmanaged
weighted index that contains approximately 4,700 individually priced investment
grade bonds.
SB WORLD (SALOMON BROTHERS NON-U.S.-DOLLAR WORLD GOVERNMENT BOND INDEX) This
index measures total-return performance of government bonds with a maturity of
one year or more in 12 countries other than the United States. The index weights
bonds based on market capitalization, so that large debt-issuing countries such
as Japan and Germany have larger representations than do smaller issuing
countries.
THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX ("S&P 500") is an
unmanaged weighted index containing common stocks of 500 industrial,
transportation, utility and financial companies, regarded as generally
representative of the larger capitalization portion of the United States stock
market. The S&P 500 returns reflect the reinvestment of dividends, if any, but
do not reflect fees, brokerage commissions or other expenses of investing.
THE STANDARD & POOR'S MIDCAP 400 INDEX ("S&P 400 MidCap") is an unmanaged
weighted index of 400 domestic stocks chosen for market size (median market
capitalization of about $610 million), liquidity, and industry group
representation. The S&P 400 returns reflect the
---------------------------- EQ Advisors Trust
<PAGE>
- ----------
18
- --------------------------------------------------------------------------------
reinvestment of dividends, if any, but do not reflect fees, brokerage
commissions or other expenses of investing.
THE VALUE LINE CONVERTIBLE INDEX ("Value Line Convertible") is comprised of 585
of the most actively traded convertible bonds and preferred stocks on an
unweighted basis.
THE LIPPER AVERAGES are contained in Lipper's survey of the performance of funds
underlying a large universe of variable life and annuity contracts, where
performance averages are based on net asset values which reflect the deduction
of investment management fees and direct operating expenses, and, for funds with
Rule 12b-1 plans, asset-based sales charges. This survey is published by Lipper
Analytical Services, Inc., a firm recognized for its reporting of performance of
actively managed funds. Performance data shown for the portfolios does not
reflect the deduction of any insurance-related expenses (which are assessed at
the contract-level).
"Blended" performance numbers (e.g., 50% S&P 400/50% Russell 2000 or 60% S&P
500/40% Lehman Gov't/Corp) assume a static mix of the two indices. We believe
that these indices reflect more closely the market sectors in which certain
Portfolios invest.
50% S&P 400 MIDCAP INDEX/50% RUSSELL 2000 INDEX - is made up of 50% of the S&P
400 Index, which is an unmanaged weighted index of 400 domestic stocks chosen
for market size (median market capitalization of about $610 million), liquidity
and industry group representation; and 50% of the Russell 2000 Index, which is
an unmanaged index which tracks the performance of 2,000 publicly-traded U.S.
stocks.
50% S&P 500 INDEX/50% LEHMAN GOV'T/CORP. INDEX - is made up of 50% of the S&P
500 Index, which is an unmanaged weighted index containing common stocks of 500
industrial, transportation, utility and financial companies, regarded as
generally representative of the larger capitalization portion of the United
States stock market, and 50% of the Lehman Government/Corporate Index, which
represents an unmanaged group of securities widely regarded by investors as
representative of the bond market.
60% S&P 500 INDEX/40% LEHMAN AGGREGATE BOND INDEX - is made up of 60% of the S&P
500 Index, which is an unmanaged weighted index containing common stocks of 500
industrial, transportation, utility and financial companies, regarded as
generally representative of the larger capitalization portion of the United
States stock market, and 40% of the Lehman Aggregate Bond Index, which is an
index comprised of investment grade fixed income securities, including U.S.
Treasury, mortgage-backed, corporate and "Yankee" bonds (U.S. dollar-denominated
bonds issued outside the United States).
MERCURY WORLD STRATEGY COMPOSITE MARKET BENCHMARK - is made up of 36% of the S&P
500 Index, which is an unmanaged weighted index containing common stocks of 500
industrial, transportation, utility and financial companies, regarded as
generally representative of the larger capitalization portion of the United
States stock market; 24% of the MSCI EAFE Index, which is a market
capitalization weighted equity index composed of a sample of companies
representative of the market structure of Europe, Australasia and the Far East;
21% of the Salomon Brothers U.S. Treasury Bond 1 year; and 14% Salomon Brothers
World Government ex U.S., and 5% U.S. Treasury Bill.
NASDAQ COMPOSITE INDEX - the Nasdaq Composite Index measures all Nasdaq domestic
and non-U.S. based common stocks listed on The Nasdaq Stock Market. The Index is
market-value weighted. This means that each company's security affects the Index
in proportion to its market value. The market value, the last sale price
multiplied by total shares outstanding, is calculated throughout the trading
day, and is related to the total value of the Index.
<PAGE>
DOMESTIC PORTFOLIOS
- ----------
19
- --------------------------------------------------------------------------------
EQ/AGGRESSIVE STOCK PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks and other equity securities
of small and medium-sized companies that, in the opinion of the Adviser, have
favorable appreciation prospects. The Portfolio may also invest in securities
of companies in cyclical industries, companies whose securities are
temporarily undervalued, companies in special situations (e.g., change in
management, new products or changes in customer demand), companies stocks
whose growth prospects are not recognized by the market and less widely known
companies.
The Portfolio may also invest up to 25% of its total assets in foreign
securities and may also make use of various other investment strategies,
(e.g., investments in debt securities, making secured loans of its portfolio
securities). The Portfolio may also use derivatives, including: writing
covered call options and purchasing call and put options on individual equity
securities, securities indexes and foreign currencies. The Portfolio may also
purchase and sell stock index and foreign currency futures contracts and
options thereon.
When market or financial conditions warrant, or it appears that the
Portfolio's investment objective will not be achieved primarily through
investments in common stocks, the Portfolio may invest in other equity-type
securities (such as preferred stocks and convertible debt instruments) and
options for hedging purposes. The Portfolio may also make temporary
investments in corporate fixed income securities, which will generally be
investment grade, or invest part of its assets in cash or cash equivalents,
including high-quality money market instruments for liquidity or defensive
purposes. Such investments could result in the Portfolio not achieving its
investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
MULTIPLE-ADVISER RISK: The EQ/Aggressive Stock Portfolio employs multiple
Advisers. Each of the Advisers independently chooses and maintains a portfolio
of common stocks for the Portfolio and each is responsible for investing a
specific allocated portion of the Portfolio's assets. Because each Adviser
will be managing its allocated portion of the Portfolio independently from the
other Advisers, the same security may be held in two different portions of the
Portfolio, or may be acquired for one portion of the Portfolio at a time when
the Adviser of another portion deems it appropriate to dispose of the security
from that other portion. Similarly, under some market conditions, one Adviser
may believe that temporary, defensive investments in short-term instruments or
cash are appropriate when the other Adviser or Advisers believe continued
exposure to the equity markets is appropriate for their portions of the
Portfolio. Because each Adviser directs the trading for its own portion of the
Portfolio, and does not aggregate its transactions with those of the other
Advisers, the Portfolio may incur higher brokerage costs than would be the
case if a single Adviser were managing the entire Portfolio.
GROWTH INVESTING RISK: Certain of the Advisers for this Portfolio may use a
growth oriented approach to stock selection. The price of growth stocks may be
more sensitive to changes in current or expected earnings than the prices of
other stocks. The price of growth stocks is also subject to the risk that the
stock price of one or more companies will fall or will fail to appreciate as
anticipated by the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because:
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
20
- --------------------------------------------------------------------------------
the securities of such companies are less well-known, held primarily by
insiders or institutional investors and may trade less frequently and in lower
volume; such companies are more likely to experience greater or more
unexpected changes in their earnings and growth prospects; such companies have
limited financial resources or may depend on a few key employees; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index; (ii) the returns of a "blended" index of two
broad-based indices; and (iii) the returns of an index of funds with similar
investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Aggressive Stock
Portfolio) managed by Alliance using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Aggressive Stock Portfolio) whose inception date is January 27,
1986. The assets of the predecessor were transferred to the Portfolio on
October 18, 1999. Following that transfer, the performance shown (for the
period October 19, 1999 through December 31, 1999) is that of the Portfolio.
For these purposes, the performance results of the Portfolio and its
predecessor registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
<PAGE>
- ----------
21
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1990 7.9%
1991 86.6%
1992 -3.4%
1993 16.5%
1994 -4.1%
1995 31.4%
1996 22.1%
1997 10.7%
1998 0.1%
1999 18.55%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
26.02% (1998 4th Quarter) (27.23)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
- --------------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EQ/Aggressive Stock Portfolio
- Class IB Shares 18.55% 16.05% 16.41%
- --------------------------------------------------------------------------------
50% S&P 400 MidCap
Index/50% Russell
2000**, *** 18.09% 19.92% 15.41%
- --------------------------------------------------------------------------------
S&P 400 MidCap Index** 14.72% 23.05% 17.32%
- --------------------------------------------------------------------------------
Lipper MidCap Growth Funds
Average** 46.25% 22.54% 16.19%
- --------------------------------------------------------------------------------
</TABLE>
* For periods prior to the inception of Class IB Shares (October 1, 1996),
performance information shown is the performance of Class IA shares
adjusted to reflect the 12b-1 fees paid by Class IB shares.
** For more information on this index, see the preceding section "The
Benchmarks."
*** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
In accordance with the Multi-Manager Order, the Manager may, among other
things, select new or additional Advisers for the Portfolio and may allocate
and re-allocate the Portfolio's assets among Advisers. Currently, Alliance
Capital Management, L.P. and Massachusetts Financial Services Company have
been selected by the Manager to serve as Advisers for this Portfolio. It is
anticipated that additional Advisers may be added in the future.
The Manager initially allocated the assets of the Portfolio and will allocate
all daily cash inflows (share purchases) and outflows (redemptions and expense
items) among the Advisers, subject to the oversight of the Board. The Manager
intends, on a periodic basis, to review the asset allocation in the Portfolio.
The Manager does not intend, but reserves the right, subject to the oversight
of the Board, to reallocate assets from one Adviser to another when it would
be in the best interest of the Portfolio and its shareholders to do so. In
some instances, the effect of the reallocation will be to shift assets from a
better performing Adviser to other Adviser(s).
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance was the exclusive Adviser to the Portfolio
and its predecessor (registered investment company) since the predecessor
commenced operations. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable. Alliance manages investment companies,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations.
ALDEN M. STEWART and RANDALL E. HAASE have been the persons principally
responsible for the day-to-day management of the Portfolio and its
predecessor since 1993. Mr. Stewart, an Executive Vice President of
Alliance, has been associated with Alliance since 1970. Mr. Haase, a Senior
Vice President of Alliance, has been associated with Alliance since 1988.
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS was added as an Adviser to the Portfolio as of May 1, 2000. MFS
is America's oldest mutual fund organization. MFS and its predecessor
organizations have a history of money management dating from 1924 and the
founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
22
- --------------------------------------------------------------------------------
The Portfolio Managers are TONI Y. SHIMURA, a Senior Vice President of MFS, who
has been employed by MFS as a portfolio manager since 1995; and JOHN W. BALLEN,
Chief Investment Officer and President of MFS, who provides general oversight in
the management of the Portfolio.
<PAGE>
- ----------
23
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital and increase
income.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks and other equity-type
securities (such as preferred stocks or convertible debt) that the Adviser
believes will share in the growth of the nation's economy over a long period.
Most of the time, the Portfolio will invest primarily in common stocks that
are listed on national securities exchanges. Smaller amounts will be invested
in stocks that are traded over-the-counter and in other equity-type
securities. Current income is an incidental consideration. The Portfolio
generally will not invest more than 20% of its total assets in foreign
securities.
The Portfolio may also make use of various other investment strategies,
including making secured loans of up to 50% of its total assets. The Portfolio
may also use derivatives, including: writing covered call and put options,
buying call and put options on individual common stocks and other equity-type
securities, securities indexes, and foreign currencies. The Portfolio may also
purchase and sell stock index and foreign currency futures contracts and
options thereon.
When market or financial conditions warrant or it appears that the Portfolio's
investment objective will not be achieved by purchasing equity securities, the
Portfolio may invest a portion of its assets in debt securities, including
nonparticipating and nonconvertible preferred stocks, investment grade debt
securities and junk bonds, e.g., rated BB or lower by Standard & Poor's
("S&P") or Ba or lower by Moody's Investor Service, Inc. ("Moody's"). The
Portfolio also may make temporary investments in high-quality U.S.
dollar-denominated money market instruments. Such investment strategies could
result in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
CONVERTIBLE SECURITIES RISK: Convertible securities generally enable the
Portfolio to benefit from increases in the market price of the underlying
common stock and provide higher yields than the underlying common stocks, but
generally offer lower yields than nonconvertible securities of similar
quality. The value of convertible securities fluctuates both in relation to
changes in interest rates and changes in the value of the underlying common
stock.
----------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
24
- --------------------------------------------------------------------------------
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known, held primarily by insiders
or institutional investors and may trade less frequently and in lower volume;
such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; such companies have limited
financial resources or may depend on a few key employees; and the products or
technologies of such companies may be at a relatively early stage of
development or not fully tested.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment-grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
if it invested in higher-rated obligations because BBB-rated securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
JUNK BOND RISK: The Portfolio may invest a portion of its assets in "junk
bonds" or lower-rated securities rated BB or lower by S&P or an equivalent
rating by any other nationally recognized statistical rating organization
("NRSRO") or unrated securities of similar quality. Junk bonds have
speculative elements or are predominantly speculative credit risks, therefore,
credit risk is particularly significant for this Portfolio. This Portfolio may
also be subject to greater credit risk because it may invest in debt
securities issued in connection with corporate restructurings by highly
leveraged issuers or in debt securities not current in the payment of interest
or principal, or in default.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index and (ii) the returns of an index of funds with
similar investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Common Stock
Portfolio) managed by the Adviser using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Common Stock Portfolio) whose inception date is June 16, 1975.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
<PAGE>
- ----------
25
- --------------------------------------------------------------------------------
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1990 -8.4%
1991 37.6%
1992 3.0%
1993 24.6%
1994 -2.4%
1995 32.2%
1996 24.0%
1997 29.1%
1998 29.1%
1999 24.88%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
28.34% (1998 4th Quarter) (15.05)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
- --------------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Common Stock Portfolio
- Class IB Shares 24.88% 27.74% 18.30%
- --------------------------------------------------------------------------------
S&P 500 Index** 21.03% 28.56% 18.21%
- --------------------------------------------------------------------------------
Lipper Growth Equity Mutual
Funds Average** 31.48% 26.45% 17.79%
- --------------------------------------------------------------------------------
</TABLE>
* For periods prior to the inception of Class IB Shares (October 1, 1998),
performance information shown is the performance of Class IA shares
adjusted to reflect the 12b-1 fees paid by Class IB shares.
** For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas, New
York, New York 10105. Alliance has been the Adviser to the Portfolio and its
predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
TYLER J. SMITH has been responsible for the day-to-day management of the
Portfolio and its predecessor since 1977. Mr. Smith, a Senior Vice President of
Alliance, has been associated with Alliance since 1970.
------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
26
- --------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH
PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by primarily
investing in equity securities of a limited number of large, carefully
selected, high-quality United States companies that are judged, by the
Adviser, likely to achieve superior earnings growth.
THE INVESTMENT STRATEGY
The Portfolio invests primarily (at least 85% of its total assets) in equity
securities of United States companies. The Portfolio is diversified for
purposes of the 1940 Act, however it is still highly concentrated. The
Portfolio focuses on a relatively small number of intensively researched
companies. The Adviser selects the Portfolio's investments from a research
universe of more than 600 companies that have strong management, superior
industry positions, excellent balance sheets and superior earnings growth
prospects. An emphasis is placed on identifying securities of companies whose
substantially above-average prospective earnings growth is not fully reflected
in current market valuations.
Normally, the Portfolio invests in about 40-50 companies, with the 25 most
highly regarded of these companies usually constituting approximately 70% of
the Portfolio's net assets. In managing the Portfolio, the Adviser seeks to
capitalize on apparently unwarranted price fluctuations both to purchase or
increase positions on weakness and to sell or reduce overpriced holdings. The
Portfolio normally remains nearly fully invested and does not take significant
cash positions for market timing purposes. During market declines, while
adding to positions in favored stocks, the Portfolio becomes somewhat more
aggressive, gradually reducing the number of companies represented in its
holdings. Conversely, in rising markets, while reducing or eliminating fully
valued positions, the Portfolio becomes somewhat more conservative, gradually
increasing the number of companies represented in its holdings. Through this
approach, the Adviser seeks to gain positive returns in good markets while
providing some measure of protection in poor markets.
The Adviser expects the average market capitalization of companies represented
in the Portfolio normally to be in the range, or in excess, of the average
market capitalization of companies included in the S&P 500.
The Portfolio may invest up to 20% of its net assets in convertible securities
and 15% of its total assets in securities of foreign issuers.
The Portfolio may write covered exchange-traded call options on its securities
of up to 15% of its total assets, and purchase and sell exchange-traded call
and put options on common stocks written by others of up to, for all options,
10% of its total assets.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
FOCUSED PORTFOLIO RISK: The Portfolio invests in the securities of a limited
number of companies. Consequently, the Portfolio may incur more risk because
changes in the value of a single security may have a more significant effect,
either positive or negative, on the Portfolio's net asset value.
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in
<PAGE>
- ----------
27
- --------------------------------------------------------------------------------
relation to changes in interest rates and changes in the value of the
underlying common stock.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT L.P.: ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance's sole general partner is Alliance Capital
Management Corporation, which is an indirect wholly-owned subsidiary of
Equitable, one of the largest life insurance companies in the United States
and a wholly-owned subsidiary of The Equitable Companies Incorporated.
Therefore, the Manager and Alliance are affiliates of each other. Alliance, a
Delaware limited partnership, is a leading international investment manager.
ALFRED HARRISON is the Portfolio Manager and has been responsible for the
day-to-day management of the Portfolio since its inception. Mr. Harrison is
Vice Chairman of Alliance Capital Management Corporation and has been with
Alliance since 1978.
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
28
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in U.S. common stocks and other equity-type
securities issued by smaller companies with favorable growth prospects. The
Portfolio may at times invest in companies in cyclical industries, companies
whose securities are temporarily undervalued, companies in special situations
(e.g., change in management, new products or changes in customer demand) and
less widely known companies.
Under normal market conditions, the Portfolio intends to invest at least 65%
of its total assets in securities of small capitalization companies (currently
considered by the Adviser to mean companies with market capitalization at or
below $3 billion).
The Portfolio may invest in foreign securities and may also make use of
various other investment strategies, including making secured loans of up to
50% of its total portfolio securities. The Portfolio may also use derivatives
including: writing covered call options and purchasing call and put options on
individual equity securities, securities indexes and foreign currencies. The
Portfolio may also purchase and sell stock index and foreign currency futures
contracts and options thereon.
The Portfolio may invest up to 20% of its net asset value, measured at the
time of investment, in securities principally traded on foreign securities
markets (other than commercial paper).
When market or financial conditions warrant, the Portfolio may invest in other
equity-type securities (such as preferred stocks and convertible debt
instruments) and investment grade corporate fixed income securities. For
temporary or defensive purposes, the Portfolio may invest without limitation
in cash or cash equivalents or high-quality money market instruments. Such
investments could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known, held primarily by insiders
or institutional investors and may trade less frequently and in lower volume;
such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; such companies have limited
financial resources or may depend on a few key employees; and the products or
technologies of such companies may be at a relatively early stage of
development or not fully tested.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the
<PAGE>
- ----------
29
- --------------------------------------------------------------------------------
risk that changes in value of the derivative may not correlate perfectly with
the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate was over 100% per year.
Higher portfolio turnover (e.g., over 100% per year) will cause the Portfolio
to incur additional transaction costs that could be passes through to
shareholders.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for 1998
and 1999, the Portfolio's first two years of existence and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for one year and since inception and compares the Portfolio's
performance to: (i) the returns of a broad-based index and (ii) the returns of
an index of funds with similar investment objectives. Past performance is not
an indication of future performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Small Cap Growth
Portfolio) managed by the Adviser using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Small Cap Growth Portfolio) whose inception date is May 1, 1997.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 -4.4%
1999 27.46%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
28.22% (1999 4th Quarter) (28.09)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
--------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
30
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Alliance Small Cap Growth Portfolio
- Class IB Shares 27.46% 17.60%
- --------------------------------------------------------------------------------
Russell 2000 Growth Index* 43.09% 25.88%
- --------------------------------------------------------------------------------
Lipper Small Company Growth Funds
Average* 38.28% 19.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
BRUCE ARONOW has been responsible for the day-to-day management of the
Portfolio since February 2000. Mr. Aronow is a Vice President of Alliance and
has been associated with Alliance since May 1999. Prior thereto, he had been
associated with Invesco since May 1998, and before that a Vice President of
Chancellor LGT Asset Management since 1996 and a Vice President of Chancellor
Capital Management since before 1995.
<PAGE>
- ----------
31
- --------------------------------------------------------------------------------
EQ/ALLIANCE TECHNOLOGY PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve long-term growth of capital. Current
income is incidental to the Portfolio's objective.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of companies expected to
benefit from technological advances and improvements (i.e., companies that use
technology extensively in the development of new or improved products or
processes). The Portfolio normally will have at least 80% of its assets
invested in the securities of these companies. The Portfolio invests for
capital growth. Within this framework, the Portfolio may invest in any company
and industry and in any type of security having the potential for capital
appreciation, including well-known, established companies or new or unseasoned
companies.
Although current income is only an incidental consideration, the Portfolio may
seek income by writing listed call options. The Portfolio normally will have
substantially all its assets invested in equity securities, but it may also
invest in debt securities that offer an opportunity for price appreciation.
The Portfolio may invest in both listed and unlisted U.S. securities and may
invest up to 10% of its total assets in foreign securities, including
depositary receipts.
The Portfolio also may:
o write covered call options on its portfolio securities of up to 15% of its
total assets and may purchase exchanged-listed call and put options,
including exchange-traded index put options of up to, for all options, 10%
of its total assets;
o invest up to 10% of its total assets in warrants; and
o make loans of its portfolio securities of up to 33.3% of its total assets.
When market or financial conditions warrant, the Portfolio may invest for
temporary or defensive purposes, without limit, in preferred stocks in
investment grade or corporate fixed income securities, including U.S.
Government securities, qualifying bank high quality money market instruments,
including prime commercial paper and other types of short-term fixed income
securities. These temporary investments may also include short-term
foreign-currency denominated securities of the type mentioned above issued by
foreign governmental entities, companies, and supranational organizations.
Such investments could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
SECTOR RISK: As noted above, the Portfolio invests primarily in companies in
the technology sector. Therefore, market or economic factors affecting those
types of companies could have a major effect on the value of a Fund's
investments and, therefore, its net asset value. Many technology stocks,
especially those of smaller, less seasoned companies, tend to be more volatile
than the overall market.
GROWTH INVESTING RISK: This Portfolio uses a growth oriented approach to stock
selection. The price of growth stocks may be more sensitive to changes in
current or expected earnings than the prices of other stocks. The price of
growth stocks is also subject to the risk that the stock price of one or more
companies will fall or will fail to appreciate as anticipated by the Adviser,
regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in new or
unseasoned small-cap and mid-cap companies may be subject to more abrupt or
erratic movements in price than are those of larger, more established
companies because: the securities of such companies are less well-known, held
primarily by insiders or institutional investors and may trade less frequently
and in lower volume; such companies are more likely to experience greater or
more unexpected changes in their earnings and growth prospects; such companies
have limited financial resources or may depend on a few key employees; and the
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
32
- --------------------------------------------------------------------------------
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
DERIVATIVES RISK: The Portfolio's investments in derivatives (such as its use
of call and put options) can significantly increase the Portfolio's exposure
to market risk or the credit risk of a counterparty. Derivatives also involve
the risk of mispricing or improper valuation and the risk that changes in
value of the derivative may not correlate perfectly with the relevant assets,
rates and indices.
FOREIGN SECURITIES RISKS: To the extent that the Portfolio invests in foreign
securities including depositary receipts, its investments in foreign
securities involve risks not associated with investing in U.S. securities,
which can adversely affect the Portfolio's performance. Foreign markets,
particularly emerging markets, may be less liquid, more volatile, and subject
to less government supervision than domestic markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
trades to clear and settle. In addition, the value of foreign investments can
be adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
FIXED INCOME SECURITIES RISK: To the extent that a substantial amount of the
Portfolio's assets are invested in fixed income securities, that portion of
the Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in securities which are rated BBB by S&P or an equivalent rating by
any other nationally recognized statistical rating organization, it will be
exposed to greater risk than if it invested in higher-rated obligations
because BBB-rated securities are regarded as having only an adequate capacity
to pay principal and interest, are considered to lack outstanding investment
characteristics, and may be speculative.
SECURITIES LENDING RISK: The risks in lending portfolio securities, as with
other extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is May 1, 2000. Therefore, no prior
performance information is available.
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas, New
York, New York 10105. Alliance has been the Adviser to the Portfolio since the
Portfolio commenced its operations. Alliance, a publicly traded limited
partnership, is indirectly majority-owned by Equitable. Alliance manages
investment companies, endowment funds, insurance companies, foreign entities,
qualified and non-tax qualified corporate funds, public and private pension and
profit-sharing plans, foundations and tax-exempt organizations.
PETER ANASTOS and GERALD MALONE are principally responsible for the day-to-day
management of the Portfolio. Mr. Anastos, Senior Vice President of Alliance,
has been associated with Alliance since 1992. Mr. Malone, a Senior Vice
President of Alliance, has been associated with Alliance since 1992.
<PAGE>
- ----------
33
- --------------------------------------------------------------------------------
BT EQUITY 500 INDEX PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to replicate as closely as possible (before
deduction of Portfolio expenses) the total return of the S&P 500.
THE INVESTMENT STRATEGY
The Portfolio invests in equity securities of companies included in the S&P 500.
The Adviser seeks to match the risk and return characteristics of the S&P 500 by
investing in a statistically selected sample of the securities found in the S&P
500, using a process known as "optimization". This process selects stocks for
the Portfolio so that industry weightings, market capitalizations and
fundamental characteristics (price to book ratios, price to earnings ratios,
debt to asset ratios and dividend yields) closely match those of the securities
included in the S&P 500. This approach helps to increase the Portfolio's
liquidity and reduce costs. The securities held by the Portfolio are weighted to
make the Portfolio's total investment characteristics similar to those of the
S&P 500 as a whole.
The Adviser generally will seek to match the composition of the S&P 500 but
usually will not invest the Portfolio's stock portfolio to mirror the S&P 500
exactly. Because of the difficulty and cost of executing relatively small stock
transactions, the Portfolio may not always be invested in the less heavily
weighted S&P 500 stocks, and may at times have its portfolio weighted
differently than the S&P 500, particularly if the Portfolio has a low level of
assets. In addition, the Portfolio may omit or remove any S&P 500 stock from the
Portfolio if, following objective criteria, the Adviser judges the stock to be
insufficiently liquid or believes the merit of the investment has been
substantially impaired by extraordinary events or financial conditions.
For more information on the S&P 500, see the preceding section "The Benchmarks."
The Portfolio is not sponsored, endorsed, sold or promoted by Standard & Poor's
Corporation ("S&P") and S&P makes no guarantee as to the accuracy and/or
completeness of the S&P 500 or any data included therein.
Over time, the correlation between the performance of the Portfolio and the S&P
is expected to be 95% or higher before deduction of Portfolio expenses. The
Portfolio's ability to track the S&P 500 may be affected by, among others,
transaction costs, administration and other expenses incurred by the Portfolio,
changes in either the composition of the S&P 500 or the assets of the Portfolio,
and the timing and amount of Portfolio investor contributions and withdrawals,
if any. The Portfolio seeks securities to track the S&P 500, therefore, the
Adviser generally will not attempt to judge the merits of any particular
security as an investment.
The Portfolio may also invest up to 20% of its assets in short-term debt
securities and money market instruments to meet redemption requests or to
facilitate investment in the securities of the S&P 500. Securities index futures
contracts and related options, warrants and convertible securities may be used
for a number of reasons, including: to simulate full investment in the S&P 500
while retaining a cash balance for Portfolio management purposes; to facilitate
trading; to reduce transaction costs; or to seek higher investment returns when
a futures contract, option, warrant or convertible security is priced more
attractively than the underlying equity security or S&P 500. These instruments
are considered to be derivatives.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
34
- --------------------------------------------------------------------------------
INDEX FUND RISK: The Portfolio is not actively managed and invests in
securities included in the index regardless of their investment merit.
Therefore, the Portfolio cannot modify its investment strategies to respond to
changes in the economy and may be particularly susceptible to a general
decline in the U.S. or global stock market segment relating to the index.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998 and
1999, the Portfolio's first two years of existence, and some of the risks of
investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total returns
for the Portfolio for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance results
presented below do not reflect any insurance and Contract-related fees and
expenses, which would reduce the performance results. The Portfolio's inception
date was January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 25.14%
1999 20.30%
<S> <C>
Best quarter: Worst quarter:
21.26% (1998 4th Quarter) (10.03)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
BT Equity 500 Index Portfolio 20.30% 22.66%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 24.76%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
BANKERS TRUST COMPANY ("Bankers Trust"), 130 Liberty Street (One Bankers Trust
Plaza), New York, New York 10006. Bankers Trust has been the Adviser to the
Portfolio since it commenced operations. Bankers Trust is a wholly-owned
subsidiary of Bankers Trust Corporation. Bankers Trust conducts a variety of
general banking and trust activities and is a major wholesale supplier of
financial services, including investment management to the international and
domestic institutional markets. In 1999, Bankers Trust Corporation finalized a
merger in which Bankers Trust Corporation was acquired by and became a
subsidiary of Deutsche Bank AG.
<PAGE>
- ----------
35
- --------------------------------------------------------------------------------
BT SMALL COMPANY INDEX PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to replicate as closely as possible (before the
deduction of Portfolio expenses) the total return of the Russell 2000 Index
("Russell 2000").
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of small-cap companies
included in the Russell 2000. The Adviser seeks to match the returns of the
Russell 2000. The Portfolio invests in a statistically selected sample of the
securities found in the Russell 2000, using a process known as "optimization."
This process selects stocks for the Portfolio so that industry weightings,
market capitalizations and fundamental characteristics (price to book ratios,
price to earnings ratios, debt to asset ratios and dividend yields) closely
match those of the securities included in the Russell 2000. This approach
helps to increase the Portfolio's liquidity and reduce costs. The securities
held by the Portfolio are weighted to make the Portfolio's total investment
characteristics similar to those of the Russell 2000 as a whole.
For more information on The Russell 2000, see the preceding section "The
Benchmarks." The Portfolio is neither sponsored by nor affiliated with the
Frank Russell Company, which is the owner of the trademarks and copyrights
relating to the Russell indices.
Over time, the correlation between the performance of the Portfolio and the
Russell 2000 is expected to be 95% or higher before the deduction of Portfolio
expenses. The Portfolio's ability to track the Russell 2000 may be affected
by, among other things, transaction costs, administration and other expenses
incurred by the Portfolio, changes in either the composition of the Russell
2000 or the assets of the Portfolio, and the timing and amount of Portfolio
investor contributions and withdrawals, if any. The Portfolio seeks to track
the Russell 2000, therefore, the Adviser generally will not attempt to judge
the merits of any particular security as an investment.
Securities index futures contracts and related options, warrants and
convertible securities may be used for a number of reasons, including: to
simulate full investment in the Russell 2000 while retaining a cash balance
for fund management purposes; to facilitate trading; to reduce transaction
costs; or to seek higher investment returns when a futures contract, option,
warrant or convertible security is priced more attractively than the
underlying equity security or Russell 2000. These instruments are considered
to be derivatives.
The Portfolio may invest to a lesser extent in short-term debt securities and
money market securities to meet redemption requests or to facilitate
investment in the securities included in the Russell 2000.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
INDEX FUND RISK: The Portfolio is not actively managed and invests in
securities included in the index regardless of their investment merit.
Therefore, the Portfolio cannot modify its investment strategies to respond to
changes in the economy and may be particularly susceptible to a general
decline in the U.S. or global stock market segment relating to the index.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less known and may trade less frequently and
in lower volume; such companies are more likely to experience greater or more
unexpected changes in their earnings and growth prospects; and the products or
technologies of such companies may be at a relatively early stage of
development or not fully tested.
--------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
36
- --------------------------------------------------------------------------------
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of existence, and in some of the
risks of investing in the Portfolio by showing the yearly changes in the
Portfolio's performance. The table below shows the Portfolio's average annual
total returns for the Portfolio for one year and since inception. The table
also compares the Portfolio's performance to the returns of a broad based
index. Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results. The Portfolio's inception date was January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 -2.27%
1999 20.68%
<S> <C>
Best quarter: Worst quarter:
18.52% (1999 4th Quarter) (19.52)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
BT Small Company Index Portfolio 20.68% 8.59%
- --------------------------------------------------------------------------------
Russell 2000 Index* 21.26% 8.70%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
BANKERS TRUST COMPANY ("Bankers Trust"), 130 Liberty Street (One Bankers Trust
Plaza), New York, New York 10006. Bankers Trust has been the Adviser to the
Portfolio since it commenced operations. Bankers Trust is a wholly-owned
subsidiary of Bankers Trust New York Corporation. Bankers Trust conducts a
variety of general banking and trust activities and is a major wholesale
supplier of financial services to the international and domestic institutional
markets. Investment management is a core business of Bankers Trust built on a
tradition of excellence from its roots as a trust bank founded in 1903. In
1999, Bankers Trust Corporation finalized a merger in which Bankers Trust
Corporation was acquired by and became a subsidiary of Deutsche Bank AG.
<PAGE>
- ----------
37
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH
PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of United States issuers
and securities whose principal markets are in the United States, including
American Depositary Receipts and other United States registered foreign
securities. The Portfolio invests primarily in common stocks (or securities
convertible or exchangeable into common stocks) of companies with market
capitalization greater than $1 billion at the time of purchase.
The Portfolio may invest up to 15% of its total assets, at the time of purchase,
in securities of issuers domiciled outside the United States and not included in
the S&P 500 (i.e., foreign securities).
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in high-quality debt securities, including
short-term obligations for temporary or defensive purposes. If such action is
taken, it will detract from achievement of the Portfolio's investment objective
during such periods.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: This Portfolio uses a growth oriented approach to stock
selection. The price of growth stocks may be more sensitive to changes in
current or expected earnings than the prices of other stocks. The price of
growth stocks is also subject to the risk that the stock price of one or more
companies will fall or will fail to appreciate as anticipated by the Adviser,
regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in relation to changes in interest rates
and changes in the value of the underlying common stock.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
CAPITAL GUARDIAN TRUST COMPANY ("Capital Guardian"), 333 South Hope Street, Los
Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of Capital
Group International, Inc., which itself is a wholly owned subsidiary of The
Capital Group Companies, Inc. Capital Guardian has been providing investment
management services since 1968 and manages approximately $123 billion as of
December 31, 1999.
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
38
- --------------------------------------------------------------------------------
The Portfolio is managed by a group of investment research professionals, led by
the Research Portfolio Coordinator, each of whom has investment discretion over
a segment of the total Portfolio. The size of each segment will vary over time
and may be based upon: (1) the level of conviction of specific research
professionals as to their designated sectors; (2) industry weights within the
relevant benchmark for the Portfolio; and (3) the judgment of the Research
Portfolio Coordinator in assessing the level of conviction of research
professionals compared to industry weights within the relevant benchmark.
Sectors may be overweighted relative to their benchmark weighting if there is a
substantial number of stocks that are judged to be attractive based on the
research professionals research in that sector, or may be underweighted if there
are relatively fewer stocks viewed to be attractive in the sector. The Research
Portfolio Coordinator also coordinates the cash holdings of the Portfolio.
<PAGE>
- ----------
39
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital.
THE INVESTMENT STRATEGY
The Portfolio strives to accomplish its investment objectives through constant
supervision, careful securities selection and broad diversification.
The Portfolio invests primarily in equity securities of United States companies
with market capitalization greater than $1 billion at the time of purchase. In
selecting securities for investment, the Adviser focuses primarily on the
potential of capital appreciation.
The Portfolio may invest up to 15% of its total assets in securities of issuers
domiciled outside the United States and not included in the S&P 500 (i.e.,
foreign securities). These securities may include American Depositary Receipts.
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in high-quality debt securities, including
short-term obligations for temporary or defensive purposes. If such action is
taken, it will detract from achievement of the Portfolio's investment objective
during such periods.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: This Portfolio uses a growth oriented approach to stock
selection. The price of growth stocks may be more sensitive to changes in
current or expected earnings than the prices of other stocks. The price of
growth stocks is also subject to the risk that the stock price of one or more
companies will fall or will fail to appreciate as anticipated by the Adviser,
regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in relation to changes in interest rates
and changes in the value of the underlying common stock.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to clear
and settle. In addition, the value of foreign investments can be adversely
affected by: unfavorable currency exchange rates (relative to the U.S. dollar
for securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
CAPITAL GUARDIAN TRUST COMPANY ("Capital Guardian"), 333 South Hope Street, Los
Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of Capital
Group International, Inc., which itself is a wholly owned subsidiary of The
Capital Group Companies, Inc. Capital Guardian has been providing investment
management services since 1968 and manages approximately $123 billion as of
December 31, 1999.
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
40
- --------------------------------------------------------------------------------
Capital Guardian uses a multiple portfolio manager system under which the
Portfolio is divided into several segments. Each segment is individually
managed with the portfolio manager free to decide on company and industry
selections as well as valuation and transaction assessment. An additional
portion of the Portfolio is managed by a group of investment research
analysts.
The individual portfolio managers of each segment of the Portfolio, other than
that managed by the group of research analysts, are as follows:
DONNALISA P. BARNUM. Donnalisa Barnum is a Senior Vice President and a
portfolio manager for Capital Guardian. She joined the Capital Guardian
organization in 1986.
MICHAEL R. ERICKSON. Michael Erickson is a Senior Vice President and portfolio
manager for Capital Guardian and a Senior Vice President and Director for
Capital International Limited. He joined the Capital Guardian organization
in 1987.
DAVID I. FISHER. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
THEODORE R. SAMUELS. Theodore Samuels is a Senior Vice President and a
Director for Capital Guardian, as well as a Director of Capital International
Research, Inc. He joined the Capital Guardian organization in 1981.
EUGENE P. STEIN. Eugene Stein is Executive Vice President, a Director, a
portfolio manager, and Chairman of the Investment Committee for Capital
Guardian. He joined the Capital Guardian organization in 1972.
TERRY BERKEMEIER. Terry Berkemeier is a Vice President of Capital
International Research, Inc. with U.S. equity portfolio management
responsibility in Capital Guardian Trust Company and research responsibilities
for the global metals and mining industries. He joined the Capital Guardian
organization in 1992.
<PAGE>
- ----------
41
- --------------------------------------------------------------------------------
EQ/EVERGREEN PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term capital growth.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in the common stocks of large U.S. companies.
The Adviser selects stocks using a "growth-at-a-reasonable-price" method. This
style of diversified equity management is best defined as a blend between
growth and value stocks. "Growth" stocks are stocks of companies which the
Adviser believes have anticipated earnings ranging from steady to accelerated
growth. "Value" stocks are stocks of companies that the Adviser believes are
undervalued.
The Portfolio may also invest in preferred stocks and convertible securities.
When market financial conditions warrant, the Portfolio may invest without
limits in high quality money market instruments. Such instruments could result
in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
MID-CAP COMPANY RISK: The Portfolio's investments in mid-cap companies may be
subject to more abrupt or erratic movements in price than are those of larger,
more established companies because: the securities of such companies are less
well-known and may trade less frequently and in lower volume; such companies
are more likely to experience greater or more unexpected changes in their
earnings and growth prospects; and the products or technologies of such
companies may be at a relatively early stage of development or not fully
tested.
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a
value stock's intrinsic value may never be fully recognized or realized by the
market, or its price may go down. There is also the risk that a stock judged
to be undervalued may actually be appropriately priced.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate was over 100% per year.
Higher portfolio turnover (e.g., over 100% per year) will cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1999,
the Portfolio's first full year of operations. The table below shows the
Portfolio's average annual total returns for the Portfolio for one year and
since inception.
------------------------ EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
42
- --------------------------------------------------------------------------------
The table also compares the Portfolio's performance to the returns of a
broad-based index. Both the bar chart and table assume reinvestment of dividends
and distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results.
The inception date for this Portfolio is December 31, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1999 9.70%
<S> <C>
Best quarter: Worst quarter:
12.63% (1999 4th Quarter) (8.54)% (1999 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Evergreen Portfolio 9.70% 9.70%
- --------------------------------------------------------------------------------
S&P 500 Index*,** 21.03% 21.03%
- --------------------------------------------------------------------------------
Russell 2000 Index* 21.26% 21.26%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
EVERGREEN ASSET MANAGEMENT CORP. ("Evergreen"), 1311 Mamaroneck Avenue, White
Plains, New York 10605. Evergreen has been the Adviser to the Portfolio since
it commenced operations. Evergreen is a registered investment adviser and a
wholly-owned subsidiary of First Union Corporation. Evergreen offers a broad
range of financial services to individuals and businesses throughout the
United States.
JEAN LEDFORD and RICHARD WELSH became co-managers of the Portfolio in August
1999. Jean Ledford, CFA, became President and Chief Executive Officer of
Evergreen in August 1999. From February 1997 until she joined Evergreen, Ms.
Ledford worked as a portfolio manager at American Century Investments
("American Century"). From 1980 until she joined American Century, Ms. Ledford
was the investment director at the State of Wisconsin Investment Board.
Mr. Welsh joined Evergreen as Senior Vice President and portfolio manager in
August 1999. Prior to joining Evergreen, he worked for five years as a
portfolio manager and analyst at American Century.
<PAGE>
- ----------
43
- --------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital appreciation by investing primarily in
equity securities of companies with relatively large capitalizations (i.e.,
companies having market capitalizations of at least $3 billion at the time of
initial purchase) that appear to the Adviser to be inexpensively priced
relative to the return on total capital or equity.
THE INVESTMENT STRATEGY
The Portfolio normally invests at least 80% of its total assets primarily in
equity securities of large capitalization companies. Equity securities include
common stocks, preferred stocks and securities convertible into or
exchangeable for common stocks.
The Portfolio uses a value-oriented approach in searching for securities. The
Adviser uses a "bottom-up" approach (individual stock selection) to find
companies that have:
o low price to earnings ratios;
o high yield;
o unrecognized assets;
o the possibility of management change; and/or
o the prospect of improved profitability.
The Portfolio may also invest up to 20% of its assets in U.S. Government
securities and investment grade debt securities of domestic corporations rated
BBB or better by S&P or Baa or better by Moody's.
The Portfolio may also invest up to 10% of its assets in foreign equity or
debt securities, or depositary receipts.
The Portfolio may also invest without limitation in high-quality short-term
money market instruments. The Portfolio may engage in options transactions,
including writing covered call options or foreign currencies to offset costs
of hedging and writing and purchasing put and call options on securities.
Although the Portfolio will engage in options transactions primarily to hedge
its Portfolio, it may use options to increase returns and there is the risk
that these transactions sometimes may reduce returns or increase volatility.
When market or financial conditions warrant, the Portfolio may invest, without
limit, in money market securities for temporary or defensive purposes. Such
investment strategies could have the effect of reducing the benefit of any
upswing in the market. Such investment strategies are inconsistent with the
Portfolio's investment objectives and could result in the Portfolio not
achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a
value stock's intrinsic value may never be fully recognized or realized by the
market, or its price may go down. There is also the risk that a stock judged
to be undervalued may actually be appropriately priced.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest
------------------------ EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
44
- --------------------------------------------------------------------------------
rates fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's average annual total return for
1998 and 1999, the Portfolio's first two years of existence, and in some of the
risks of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total returns
for the Portfolio for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance results
presented below do not reflect any insurance and Contract-related fees and
expenses, which would reduce the performance results. The Portfolio's inception
date was January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 20.01%
1999 3.55%
<S> <C>
Best quarter: Worst quarter:
23.34% (1998 4th Quarter) (13.43)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Lazard Large Cap Value Portfolio 3.55% 11.46%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 24.76%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
LAZARD ASSET MANAGEMENT ("LAM"), 30 Rockefeller Plaza, New York, New York
10112. LAM has been the Adviser to the Portfolio since it commenced
operations. LAM is a division of Lazard Fr-res & Co. LLC ("Lazard Fr-res"), a
New York limited liability company, which is registered as an investment
adviser with the SEC. Lazard Fr-res provides its clients with a wide variety
of investment banking, brokerage and related services, including investment
management.
The Portfolio Managers, responsible for the day to day management of the
Portfolio are HERBERT W. GULLQUIST, a Vice-Chairman, Managing Director and Chief
Investment Officer of LAM, who has been with LAM since 1982; and EILEEN D.
ALEXANDERSON, a Managing Director of LAM responsible for U.S./Global equity
management and overseeing the day-to-day operations of the U.S./Global equity
investment teams, who has been with LAM since 1979.
<PAGE>
- ----------
45
- --------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital appreciation by investing in equity
securities of United States companies with small market capitalizations (i.e.,
companies in the range of companies represented in the Russell 2000 Index) that
the Adviser considers inexpensively priced relative to the return on total
capital or equity.
THE INVESTMENT STRATEGY
The Portfolio is a non-diversified Portfolio that invests primarily in equity
securities of U.S. companies with small market capitalizations that the Adviser
believes are undervalued based on their return on equity or capital. The
Portfolio will have characteristics similar to the Russell 2000 Index. The
equity securities that may be purchased by the Portfolio include common stocks,
preferred stocks, securities convertible into or exchangeable for common stocks,
rights and warrants.
For more information on The Russell 2000, see the preceding section "The
Benchmarks".
A Portfolio may be considered to be "non-diversified" for federal securities law
purposes because it invests in a limited number of securities. In all cases, the
Portfolio intends to be diversified for tax purposes so that it can qualify as a
regulated investment company.
In selecting investments for the Portfolio, the Adviser looks for equity
securities of companies that have one or more of the following characteristics:
(i) are undervalued relative to their earnings, cash flow or asset values; (ii)
have an attractive price/value relationship with expectations that some catalyst
will cause the perception of value to change within two years; (iii) are out of
favor due to circumstances which are unlikely to harm the company's franchise or
earnings power; (iv) have low projected price to earnings or price-to-cash flow
multiples; (v) have the potential to become a larger factor in the company's
business; (vi) have significant debt but have high levels of free cash flow; and
(vii) have a relatively short corporate history with the expectation that the
business may grow.
Although the Portfolio will principally invest at least 80% of its assets in
small capitalization securities, the Portfolio may also invest up to 20% of its
assets in larger capitalization equity securities or investment grade debt
securities.
When market or financial conditions warrant, the Portfolio may invest without
limitation in short-term money market instruments or hold its assets in cash for
temporary or defensive purposes. Such investment strategies could have the
effect of reducing the benefit of any upswing in the market. Such investment
strategies are inconsistent with the Portfolio's investment objectives and could
result in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up or
down depending on general market conditions. Other principal risks include:
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a value
stock's intrinsic value may never be fully recognized or realized by the market,
or its price may go down. There is also the risk that a stock judged to be
undervalued may actually be appropriately priced.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap and
mid-cap companies may be subject to more abrupt or erratic movements in price
than are those of larger, more established companies because: the securities of
such companies are less-well known and may trade less frequently and in lower
volume; such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; and the products or technologies
of such companies may be at a relatively early stage of development or not fully
tested.
----------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
46
- --------------------------------------------------------------------------------
NON-DIVERSIFICATION RISK: Since a relatively high percentage of the
Portfolio's assets may be invested in the securities of a limited number of
issuers, some of which may be within the same industry, the securities of the
Portfolio may be more sensitive to changes in the market value of a single
issuer or industry or to risks associated with a single economic, political or
regulatory event than a diversified portfolio.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities, which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of existence, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the perfomance results.
The Portfolio's inception date was January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 -7.03%
1999 1.66%
<S> <C>
Best quarter: Worst quarter:
19.39% (1999 2nd Quarter) (20.10)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Lazard Small Cap Value Portfolio 1.66% (2.77)%
- --------------------------------------------------------------------------------
Russell 2000 Index* 21.26% 8.70%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
LAZARD ASSET MANAGEMENT ("LAM"), 30 Rockefeller Plaza, New York, New York 10112.
LAM has been the Adviser to the Portfolio since it commenced operations. LAM is
a division of Lazard Fr-res & Co. LLC ("Lazard Fr-res"), a New York limited
liability company, which is registered as an investment adviser with the SEC.
Lazard Freres provides its clients with a wide variety of investment banking and
related services, including investment management.
The Portfolio Managers, responsible for the day-to-day management since the
inception of the Portfolio, are: EILEEN D. ALEXANDERSON, a Managing Director
responsible for U.S./Global equity management and overseeing the day-to-day
operations of the U.S./Global equity teams, who has been with LAM since 1979,
and HERBERT W. GULLQUIST, a Vice-Chairman, Managing Director and Chief
Investment Officer of LAM, who has been with LAM since 1982.
<PAGE>
- ----------
47
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide long-term capital growth.
THE INVESTMENT STRATEGY
The Portfolio invests, under normal market conditions, primarily (at least 65%
of its total assets) in common stocks and related securities, such as
preferred stock, convertible securities and depositary receipts of emerging
growth companies. Emerging growth companies that the Adviser believes are
either:
o early in their life cycle but have the potential to become major
enterprises; or
o are major enterprises whose rates of earnings growth are expected to
accelerate because of special factors such as rejuvenated management, new
products, changes in customer demand or basic changes in the economic
environment.
For purposes of this Portfolio, emerging growth companies may be of any size
and the Adviser would expect these companies to have products, technologies,
management, markets and opportunities that will facilitate earnings growth
over time that is well above the growth rate of the overall economy and rate
of inflation. The Portfolio's investments may include securities traded in the
over-the-counter markets.
The Adviser uses a "bottom-up" investment style in managing the Portfolio.
This means the securities are selected based upon fundamental analysis (such
as an analysis of earnings, cash flows, competitive position and management's
abilities) performed by the Adviser.
In addition, up to 25% of the Portfolio's assets may be invested in foreign
securities, including those in emerging markets, or in cash and cash
equivalents.
When adverse market, financial or political conditions warrant, the Portfolio
may depart from its principal strategies for temporary or defensive purposes.
Such investment strategies are inconsistent with the Portfolio's investment
objectives and could result in the Portfolio not achieving its investment
objective.
The Portfolio may engage in active and frequent trading to achieve its
principal investment strategies. Frequent trading increases transaction costs,
which could detract from the Portfolio's performance.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known and may trade less frequently
and in lower volume; such companies are more likely to experience greater or
more unexpected changes in their earnings and growth prospects; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In
-------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
48
- --------------------------------------------------------------------------------
addition, the value of foreign investments can be adversely affected by:
unfavorable currency exchange rates (relative to the U.S. dollar for
securities denominated in foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results. The inception date for the Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 34.57%
1999 73.62%
<S> <C>
Best quarter: Worst quarter:
53.01% (1999 4th Quarter) (12.69)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
MFS Emerging Growth Companies
- --------------------------------------------------------------------------------
Portfolio 73.62% 48.20%
- --------------------------------------------------------------------------------
Russell 2000 Index* 21.26% 16.99%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS has been the Adviser to the Portfolio since it commenced
operations. MFS is America's oldest mutual fund organization. MFS and its
predecessor organizations have a history of money management dating from 1924
and the founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
The Portfolio Managers are TONI Y. SHIMURA, a Senior Vice President of MFS,
who has been employed by MFS as a portfolio manager for the Portfolio since
1995 and JOHN W. BALLEN, Chief Investment Officer and President of MFS, who
provides general oversight in the management of the Portfolio.
<PAGE>
- ----------
49
- --------------------------------------------------------------------------------
MFS GROWTH WITH INCOME PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide reasonable current income and long-term
growth of capital and income.
For purposes of this Portfolio, the words "reasonable current income" mean
moderate income.
THE INVESTMENT STRATEGY
The Portfolio invests, under normal market conditions, primarily (at least 65%
of its total assets) in equity securities, including common stocks, preferred
stocks, convertible securities, warrants and depositary receipts for those
securities. Equity securities may be listed on a securities exchange or traded
in the over-the-counter markets. While the Portfolio may invest in companies
of any size, the Portfolio generally focuses on companies with larger market
capitalizations that the Adviser believes have sustainable growth prospects
and attractive valuations based on current and expected earnings or cash flow.
The Portfolio will also seek to provide income equal to approximately 90% of
the dividend yield on the Standard & Poor's 500 Index.
The Adviser uses a "bottom-up" investment style in managing the Portfolio.
This means that securities are selected based upon fundamental analysis (such
as an analysis of earnings, cash flows, competitive position and management's
abilities) performed by the Adviser's large group of equity research analysts.
The Portfolio may invest up to 25% of its net assets in foreign securities,
including those in emerging markets and depository receipts, through which it
may have exposure to foreign currencies.
When adverse market, financial or political conditions warrant, the Portfolio
may depart from its principal strategies for temporary or defensive purposes.
Such investment strategies are inconsistent with the Portfolio's investment
objective and could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known and may trade less frequently
and in lower volume; such companies are more likely to experience greater or
more unexpected changes in their earnings and growth prospects; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and
--------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
50
- --------------------------------------------------------------------------------
custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1999,
the Portfolio's first full year of operations. The table below shows the
Portfolio's average annual total returns for the Portfolio for one year and
since inception. The table also compares the Portfolio's performance to the
returns of a broad-based index. Both the bar chart and table assume
reinvestment of dividends and distributions. Past performance is not an
indication of future performance. The performance results presented below do
not reflect any insurance and Contract-related fees and expenses, which would
reduce the performance results and if reflected the results would be reduced.
The inception date for this Portfolio is December 31, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1999 8.76%
<S> <C>
Best quarter: Worst quarter:
10.87% (1999 4th Quarter) (8.23)% (1999 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
MFS Growth with Income Portfolio 8.76% 8.76%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 21.03%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS has been the Adviser to the Portfolio since it commenced
operations. MFS is America's oldest mutual fund organization. MFS and its
predecessor organizations have a history of money management dating from 1924
and the founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
The Portfolio Managers are JOHN D. LAUPHEIMER, JR., Senior Vice President of
MFS, who has been employed as a portfolio manager by MFS since 1981; and
MITCHELL D. DYNAN, a Senior Vice President of MFS, who has been employed as a
portfolio manager by MFS since 1986.
<PAGE>
- ----------
51
- --------------------------------------------------------------------------------
MFS RESEARCH PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide long-term growth of capital and future
income.
THE INVESTMENT STRATEGY
The Portfolio invests, at least 80% of its total assets in equity securities,
such as common stocks, securities convertible into common stocks, preferred
stocks and depositary receipts of companies believed by the Adviser to have:
o favorable prospects for long-term growth;
o attractive valuations based on current and expected earnings or cash flow;
o dominant or growing market share; and
o superior management.
The Portfolio may invest in securities of companies of any size. The
Portfolio's investments may include securities traded on securities exchanges
or in the over-the-counter markets.
The Portfolio may invest up to 20% of its net assets in foreign equity
securities, including those of emerging markets. The Portfolio may invest in
foreign equity securities, through which it may have exposure to foreign
currencies.
When adverse market, financial or political conditions warrant, the Portfolio
may depart from its principal investment strategies for temporary or defensive
purposes. Such investment strategies are inconsistent with the Portfolio's
investment objectives and could result in the Portfolio not achieving its
investment objective.
The Portfolio may invest up to 10% of its assets in high yielding debt
securities rated below investment grade ("junk bonds").
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known and may trade less frequently
and in lower volume; such companies are more likely to experience greater or
more unexpected changes in their earnings and growth prospects; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative. The risk that an issuer or guarantor of a fixed income security
or counterparty to the Portfolio's fixed income transaction is unable to meets
its financial obligations is particularly significant for this Portfolio
because this Portfolio invests a
------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
52
- --------------------------------------------------------------------------------
portion of its assets in "junk bonds" (i.e., securities rated below investment
grade). Junk bonds are issued by companies with questionable credit strength
and, consequently, are considered to be speculative in nature and may be
subject to greater market fluctuations than investment grade fixed-income
securities.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results. The inception date for the Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 24.11%
1999 23.12%
<S> <C>
Best quarter: Worst quarter:
21.36% (1998 4th Quarter) (14.24)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
MFS Research Portfolio 23.12% 23.93%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 27.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
MASSACHUSETTS FINANCIAL SERVICES COMPANY ("MFS"), 500 Boylston Street, Boston,
MA 02116. MFS has been the Adviser to the Portfolio since it commenced
operations. MFS is America's oldest mutual fund organization. MFS and its
predecessor organizations have a history of money management dating from 1924
and the founding of the first mutual fund in the United States, Massachusetts
Investors Trust. MFS is a subsidiary of Sun Life of Canada (United States)
Financial Services Holdings Inc., which, in turn, is an indirect wholly-owned
subsidiary of Sun Life Assurance Company of Canada.
A committee of investment research analysts selects portfolio securities for
the Portfolio. This committee includes investment analysts employed not only
by MFS, but also by MFS International (U.K.) Limited, a wholly owned
subsidiary of MFS. The committee allocates the Portfolio's assets among
various industries. Individual analysts then select what they view as the
securities best suited to achieve the Portfolio's investment objective within
their assigned industry responsibility.
<PAGE>
- ----------
53
- --------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital appreciation and secondarily, income by
investing in securities, primarily equities, that the Adviser of the Portfolio
believes are undervalued and therefore represent basic investment value.
THE INVESTMENT STRATEGY
The Portfolio chooses securities for capital appreciation that are expected to
increase in value. In selecting securities the Adviser emphasizes stocks that
are undervalued, are selling at a discount, or seem capable of recovering from
being temporarily out of favor. The Adviser places particular emphasis on
securities with statistical characteristics associated with undervaluation.
The Adviser follows a contrary opinion/out-of-favor investment style. The
Adviser believes that favorable changes in market prices are more likely to
occur when:
o stocks are out of favor;
o company earnings are depressed;
o price/earnings ratios are relatively low;
o investment expectations are limited; and/or
o there is no general interest in a security or industry.
On the other hand, the Adviser believes that negative developments are more
likely to occur when:
o investment expectations are high;
o stock prices are advancing or have advanced rapidly;
o price/earnings ratios have been inflated; and/or
o an industry or security continues to become popular among investors.
In other words, the Adviser believes that stocks with relatively high
price/earnings ratios are more vulnerable to price declines from unexpected
adverse developments. At the same time, stocks with relatively low
price/earnings ratios are more likely to benefit from favorable but generally
unanticipated events. Thus, the Portfolio may invest a
large part of its net assets in stocks that have weak
research ratings.
The Portfolio invests primarily in common stocks of U.S. companies, but may
buy equity securities other than common stock and may also invest up to 10% of
its total assets in securities issued by foreign companies. The Portfolio may
also invest a substantial portion of its assets in companies with market
capitalizations below the largest companies. The Adviser believes that large
institutional investors may overlook these companies, making them undervalued.
The Portfolio has no minimum holding period for investments, and will buy or
sell securities whenever the Portfolio's management sees an appropriate
opportunity.
When market or financial conditions warrant, the Portfolio may invest in U.S.
Government and agency securities, money market securities and other fixed
income securities for temporary or defensive purposes. Such investment
strategies are inconsistent with the Portfolio's investment objectives and
could result in the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a
value stock's intrinsic value may never be fully recognized or realized by the
market, or its price may go down. There is also the risk that a stock judged
to be undervalued may actually be appropriately priced.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because:
------------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
54
- --------------------------------------------------------------------------------
the securities of such companies are less well-known and may trade less
frequently and in lower volume; such companies are more likely to experience
greater or more unexpected changes in their earnings and growth prospects; and
the products or technologies of such companies may be at a relatively early
stage of development or not fully tested.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results
and if reflected the results would be reduced. The inception date for the
Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 11.59%
1999 19.00%
<S> <C>
Best quarter: Worst quarter:
13.57% (1999 2nd Quarter) (10.91)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Mercury Basic Value Equity Portfolio 19.00% 17.93%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 27.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
MERCURY ASSET MANAGEMENT US ("MERCURY"), A DIVISION OF FUND ASSET MANAGEMENT,
L.P. ("FAM"), 800 Scudders Mill Road, Plainsboro, NJ 08543. Mercury, or the
Portfolio's predecessor Adviser, Merrill Lynch Asset Management, L.P.,
("MLAM") has been the Adviser to the Portfolio since it commenced operations.
FAM and MLAM are both part of the Merrill Lynch Asset Management Group and
each is an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc., a
financial services holding company. The general partner of FAM and MLAM is
Princeton Services, Inc., a wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. Mercury and its affiliates act as the manager for more than 100
registered investment companies. Mercury also offers portfolio management and
portfolio analysis services to individuals and institutions.
KEVIN RENDINO, and ROBERT J. MARTORELLI are co-Portfolio Managers of the
Portfolio. Mr. Rendino is a First Vice President of Mercury since 1997, has
been the
<PAGE>
- ----------
55
- --------------------------------------------------------------------------------
Portfolio Manager responsible for the day to day management of the Portfolio
since it commenced operations. Mr. Rendino was a Vice President of Mercury
from 1993 to 1997. Mr. Martorelli is a Senior Vice President of Mercury and
has been a co-Portfolio Manager of the Portfolio since May 2000. Mr.
Martorelli has been a First Vice President of Mercury since 1997 and was Vice
President from 1987 to 1997.
---------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
56
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE
PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital growth. Current income is a secondary
objective.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks that offer potential for
capital growth and may invest in stocks that offer potential for current
income. In analyzing companies for investment, the Adviser tries to identify
common stocks of companies that are significantly undervalued compared with
their underlying assets or earnings potential and offer growth and current
income potential.
The Portfolio may also invest in corporate bonds, notes and debentures,
preferred stocks or convertible securities (both debt securities and preferred
stocks) or U.S. Government securities.
It may also invest a portion of its assets in debt securities rated below
investment grade (commonly referred to as "junk bonds"), zero-coupon bonds and
payment-in-kind bonds, and high quality U.S. and foreign dollar-denominated
money market securities. The Portfolio may invest up to 20% of its total
assets in foreign securities, including transactions involving futures
contracts, forward contracts and options and foreign currency exchange
transactions.
There may be times when the Adviser will use additional investment strategies
to achieve the Portfolio's investment objectives. For example, the Portfolio
may engage in a variety of investment management practices such as buying and
selling derivatives, including stock index futures contracts and call and put
options.
When market or financial conditions warrant, the Portfolio may invest up to
100% of its assets in debt securities, preferred stocks or other securities
for temporary or defensive purposes. Such investment strategies are
inconsistent with the Portfolio's investment objectives and could result in
the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
VALUE INVESTING RISK: As noted above, the Portfolio uses a value-oriented
approach to stock selection. Value investing is subject to the risk that a
value stock's intrinsic value may never be fully recognized or realized by the
market, or its price may go down. There is also the risk that a stock judged
to be undervalued may actually be appropriately priced.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the
<PAGE>
- ----------
57
- --------------------------------------------------------------------------------
issuer, the duration or maturity of the Portfolio's fixed income holdings, and
adverse market or economic conditions. When interest rates rise, the value of
the Portfolio's fixed income securities, particularly those with longer
durations or maturities, will go down. When interest rates fall, the reverse
is true. In addition, to the extent that the Portfolio invests in investment
grade securities which are rated BBB by S&P or an equivalent rating by any
other NRSRO, it will be exposed to greater risk than higher-rated obligations
because BBB rated investment grade securities are regarded as having only an
adequate capacity to pay principal and interest, are considered to lack
outstanding investment characteristics, and may be speculative. The risk that
an issuer or guarantor of a fixed income security or counterparty to the
Portfolio's fixed income transaction is unable to meets its financial
obligations is particularly significant for this Portfolio because this
Portfolio invests a portion of its assets in "junk bonds" (i.e., securities
rated below investment grade). Junk bonds are issued by companies with
questionable credit strength and, consequently, are considered to be
speculative in nature and may be subject to greater market fluctuations than
investment grade fixed-income securities.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results. The inception date for the Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 12.75%
1999 -1.27%
<S> <C>
Best quarter: Worst quarter:
16.49% (1998 4th Quarter) (11.94)% (1999 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Putnam Growth & Income Value
Portfolio (1.27)% 10.13%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 27.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
PUTNAM INVESTMENT MANAGEMENT, INC. ("Putnam Management"), One Post Office
Square, Boston, MA 02109. Putnam Management has been the Adviser to the
Portfolio since the Portfolio commenced operations. Putnam Management has been
managing mutual funds since 1937. Putnam Management is a subsidiary of Putnam
Investments, Inc., which is itself a subsidiary of Marsh & McLennan Companies,
Inc.
DEBORAH KUENSTNER has been the Portfolio Manager responsible for the
day-to-day management of the Portfolio since January 2000. Ms. Kuenstner is
Managing Director, Chief Investment Officer of the Large Cap Value Equities
Group and joined Putnam in 1997 as Senior Vice President and Senior Portfolio
Manager in the International Core and Value Equity Group. Prior to joining
Putnam, Ms. Kuenstner was the Senior Portfolio Manager, International Equities
of the DuPont Pension Fund Investment from 1989 to 1997.
--------------------- EQ Advisors Trust
<PAGE>
DOMESTIC PORTFOLIOS (CONTINUED)
- ----------
58
- --------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH
PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term growth of capital and any increased
income that results from this growth.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in common stocks of companies with market
capitalizations of $3 billion or more. The Adviser gives consideration to
growth potential rather than to dividend income. The Portfolio may purchase
securities of medium-sized companies having a proprietary product or
profitable market niches and the potential to grow very rapidly.
The Adviser invests mostly in "growth" stocks whose earnings the Adviser
believes are likely to grow faster than the economy as a whole. The Adviser
evaluates a company's future earnings potential and dividends, financial
strength, working assets and competitive position in its industry.
Although the Portfolio invests primarily in U.S. stocks, the Portfolio may
invest without limit in securities of foreign issuers that are traded in U.S.
public markets. It may also, to a lesser extent, invest in securities of
foreign issuers that are not traded in U.S. public markets.
The Portfolio may also engage in a variety of transactions involving
derivatives, such as futures, options, warrants and swaps and may also invest
in convertible securities, preferred stocks and debt securities.
When market or financial conditions warrant, the Portfolio may invest without
limit in debt securities, preferred stocks, United States Government and
agency obligations, cash or money market instruments, or any other securities
for temporary or defensive purposes. Such investment strategies are
inconsistent with the Portfolio's investment objectives and could result in
the Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
GROWTH INVESTING RISK: As noted above, this Portfolio uses a growth oriented
approach to stock selection. The price of growth stocks may be more sensitive
to changes in current or expected earnings than the prices of other stocks.
The price of growth stocks is also subject to the risk that the stock price of
one or more companies will fall or will fail to appreciate as anticipated by
the Adviser, regardless of movements in the securities market.
MID-CAP COMPANY RISK: The Portfolio's investments in mid-cap companies may be
subject to more abrupt or erratic movements in price than are those of larger,
more established companies because: the securities of such companies are less
well-known and may trade less frequently and in lower volume; such companies
are more likely to experience greater or more unexpected changes in their
earnings and growth prospects; and the products or technologies of such
companies may be at a relatively early stage of development or not fully
tested.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to
<PAGE>
- ----------
59
- --------------------------------------------------------------------------------
the U.S. dollar for securities denominated in foreign currencies); inadequate
or inaccurate information about foreign companies; higher transaction,
brokerage and custody costs; adverse changes in foreign economic and tax
policies; and foreign government instability, war or other adverse political
or economic actions.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results
and if reflected the results would be reduced. The inception date for the
Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 36.27%
1999 30.24%
<S> <C>
Best quarter: Worst quarter:
25.29% (1998 4th Quarter) (11.25)% (1998 First Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Putnam Investors Growth Portfolio 30.24% 34.64%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 27.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
PUTNAM INVESTMENT MANAGEMENT, INC. ("Putnam Management"), One Post Office
Square, Boston, MA 02109. Putnam Management has been the Adviser to the
Portfolio since the Portfolio commenced operations. Putnam Management has been
managing mutual funds since 1937. Putnam Management is a subsidiary of Putnam
Investments, Inc., which is itself a subsidiary of Marsh & McLennan Companies,
Inc.
The Portfolio Managers, responsible for the day to day management of the
Portfolio since its inception, are: C. BETH COTNER, who has been employed by
Putnam Management as an investment professional* since 1995; RICHARD B.
ENGLAND, who has been employed by Putnam Management as an investment
professional* since 1992; and MANUAL WEISS HERRERRO, who has been employed by
Putnam Management as investment professional* since 1987. (*Investment
professional means that the manager was either a portfolio manager or analyst.)
------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS
- ----------
60
- --------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to replicate as closely as possible (before
deduction of Portfolio expenses) the total return of the MSCI EAFE Index.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of companies included in
the MSCI EAFE Index. The Portfolio is constructed to have aggregate investment
characteristics similar to those of the MSCI EAFE Index. The Portfolio invests
in a statistically selected sample of the securities of companies included in
the MSCI EAFE Index, although not all companies within a country will be
represented in the Portfolio at the same time. Stocks are selected based on
country of origin, market capitalization, yield, volatility and industry
sector. The Adviser will manage the Portfolio using advanced statistical
techniques to determine which securities should be purchased or sold in order
to replicate the MSCI EAFE index.
For more information on the MSCI EAFE Index see the preceding section "The
Benchmarks." The MSCI EAFE Index is the exclusive property of Morgan
Stanley. The Portfolio is not sponsored, endorsed, sold or promoted by
Morgan Stanley and Morgan Stanley makes no guarantee as to the accuracy or
completeness of the MSCI EAFE Index or any data included therein.
Over time, the correlation between the performance of the Portfolio and the
MSCI EAFE Index is expected to be 95% or higher before deduction of Portfolio
expenses. The Portfolio's ability to track the MSCI EAFE Index may be affected
by, among others, transaction costs, administration and other expenses
incurred by the Portfolio, changes in either the composition of the MSCI EAFE
Index or the assets of the Portfolio, and the timing and amount of Portfolio
investor contributions and withdrawals, if any. The Portfolio seeks to track
the MSCI EAFE Index, therefore, the Adviser generally will not attempt to
judge the merits of any particular security as an investment.
The Portfolio may invest to a lesser extent in short-term debt securities and
money market instruments to meet redemption requests or to facilitate
investment in the securities of the MSCI EAFE Index. Securities index futures
contracts and related options, warrants and convertible securities may be used
for a number of reasons, including: to simulate full investment in the MSCI
EAFE Index while retaining a cash balance for Portfolio management purposes;
to facilitate trading; to reduce transaction costs; or to seek higher
investment returns when a futures contract, option, warrant or convertible
security is priced more attractively than the underlying equity security or
MSCI EAFE Index. These instruments are considered to be derivatives.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
INDEX FUND RISK: The Portfolio is not actively managed and invests in
securities included in the index regardless of their investment merit.
Therefore, the Portfolio cannot modify its investment strategies to respond to
changes in the economy and may be particularly susceptible to a general
decline in the U.S. or global stock market segment relating to the index.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities that can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, foreign investments can be adversely affected
by: unfavorable currency exchange rates (relative to the U.S. dollar for
securities denominated in a foreign currencies);
<PAGE>
- ----------
61
- --------------------------------------------------------------------------------
inadequate or inaccurate information about foreign companies; higher
transaction, brokerage and custody costs; adverse changes in foreign economic
and tax policies; and foreign government instability, war or other adverse
political or economic actions. Other specific risks of investing in foreign
securities include:
EURO RISK: The Portfolio may invest in securities issued by European
issuers. On January 1, 1999, 11 of the 15 member states of the European
Monetary Union ("EMU") introduced the "Euro" as a common currency. During a
three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is expected
to become the sole currency of the participating states. The introduction
of the Euro will result in the redenomination of European debt and equity
securities over a period of time, which may result in various legal and
accounting differences and/or tax treatments that otherwise would not
likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies, which could
adversely affect their value.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's average annual total return for
1998 and 1999, the Portfolio's first two years of existence, and some of the
risks of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total returns
for the Portfolio for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance results
presented below do not reflect any insurance and Contract-related fees and
expenses, which would reduce the perfomance results. The Portfolio's inception
date was January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 20.07%
1999 27.50%
<S> <C>
Best quarter: Worst quarter:
20.43% (1998 4th Quarter) (13.90)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
BT International Equity Index Portfolio 27.50% 23.69%
- --------------------------------------------------------------------------------
MSCI EAFE Index* 26.96% 23.43%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
----------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
62
- --------------------------------------------------------------------------------
WHO MANAGES THE PORTFOLIO
BANKERS TRUST COMPANY ("Bankers Trust"), 130 Liberty Street (One Bankers Trust
Plaza), New York, New York 10006. Bankers Trust has been the Adviser to the
Portfolio since it commenced operations. Bankers Trust is a wholly-owned
subsidiary of Bankers Trust Corporation. Bankers Trust conducts a variety of
general banking and trust activities and is a major wholesale supplier of
financial services to the international and domestic institutional markets,
including investment management. In 1999, Bankers Trust Corporation finalized
a merger in which Bankers Trust Corporation was acquired by and became a
subsidiary of Deutsche Bank AG.
<PAGE>
- ----------
63
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN INTERNATIONAL
PORTFOLIO
INVESTMENT OBJECTIVE: To achieve long-term growth of capital by investing
primarily in non-U.S. equity securities.
THE INVESTMENT STRATEGY
The Portfolio invests primarily (at least 80% of its net assets) in securities
of non-U.S. issuers (including American Depositary Receipts and U.S.
registered securities) and securities whose principal markets are outside of
the U.S. While the assets of the Portfolio can be invested with geographic
flexibility, the Portfolio will emphasize investment in securities of
companies located in Europe, Canada, Australia, and the Far East, giving due
consideration to economic, social, and political developments, currency risks
and the liquidity of various national markets. In addition, the Portfolio may
invest in securities of issuers domiciled in other countries including
developing countries. In determining the domicile of an issuer, the Adviser
takes into account where the company is legally organized, the location of its
principal corporate offices and where it conducts its principal operations.
The Portfolio primarily invests in common stocks (or securities convertible
into common stocks), warrants, rights, and non-convertible preferred stock.
However, when the Adviser believes that market and economic conditions
indicate that it is desirable to do so, the Portfolio may also purchase
high-quality debt securities rated, at the time of purchase, within the top
three quality categories by Moody's Investors Service, Inc. ("Moody's") or
Standard & Poor's Corporation ("S&P") (or unrated securities of equivalent
quality), repurchase agreements, and short-term debt obligations denominated
in U.S. dollars or foreign currencies.
Although the Portfolio does not intend to seek short-term profits, securities
in the Portfolio will be sold whenever the Adviser believes it is appropriate
to do so without regard to the length of time a particular security may have
been held.
To the extent the Portfolio invests in non-U.S. dollar denominated securities
or holds non-U.S. dollar assets, the Portfolio may hedge against possible
variations in exchange rates between currencies by purchasing and selling
currency futures or put and call options and may also enter into forward
foreign currency exchange contracts to hedge against changes in currency
exchange rates. The Portfolio may also cross-hedge between two non-U.S.
currencies.
When market or financial conditions warrant, the Portfolio may invest a
substantial portion of its assets in short-term obligations for temporary or
defensive purposes. If such action is taken, it will detract from achievement
of the Portfolio's investment objective during such periods.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions. Other specific risks of investing in foreign securities include:
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging markets countries and/or their securities markets, such as less
diverse and less mature economic structures, less stable political
------------------------ EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
64
- --------------------------------------------------------------------------------
systems, more restrictive foreign investment policies, smaller-sized
securities markets and low trading volumes. Such risks can make investments
illiquid and more volatile than investments in developed countries and such
securities may be subject to abrupt and severe price declines.
EURO RISK: The Portfolio may invest in securities issued by European
issuers. On January 1, 1999, 11 of the 15 member states of the European
Monetary Union ("EMU") introduced the "Euro" as a common currency. During a
three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is expected
to become the sole currency of the participating states. The introduction
of the Euro will result in the redenomination of European debt and equity
securities over a period of time, which may result in various legal and
accounting differences and/or tax treatments that otherwise would not
likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies, which could
adversely affect their value.
GROWTH INVESTING RISK: This Portfolio uses a growth oriented approach to stock
selection. The price of growth stocks may be more sensitive to changes in
current or expected earnings than the prices of other stocks. The price of
growth stocks is also subject to the risk that the stock price of one or more
companies will fall or will fail to appreciate as anticipated by the Adviser,
regardless of movements in the securities markets.
CONVERTIBLE SECURITIES RISK: Convertible securities enable the Portfolio to
benefit from increases in the market price of the underlying common stock and
provide higher yields than the underlying common stocks, but generally offer
lower yields than nonconvertible securities of similar quality. The value of
convertible securities fluctuates both in relation to changes in interest
rates and changes in the value of the underlying common stock.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
PORTFOLIO PERFORMANCE
The inception date for this Portfolio is April 30, 1999. Therefore, no prior
performance is available.
WHO MANAGES THE PORTFOLIO
CAPITAL GUARDIAN TRUST COMPANY ("Capital Guardian"), 333 South Hope Street,
Los Angeles, CA 90071. Capital Guardian is a wholly-owned subsidiary of
Capital Group International, Inc., which itself is a wholly owned subsidiary
of The Capital Group Companies, Inc. Capital Guardian has been providing
investment management services since 1968 and manages approximately $123
billion as of December 31, 1999.
Capital Guardian uses a multiple portfolio manager system under which the
Portfolio is divided into several segments. Each segment is individually
managed with the portfolio manager free to decide on company and industry
selections as well as valuation and transaction assessment. An additional
portion of the Portfolio is managed by a group of investment research
analysts.
The individual portfolio managers of each segment of the Portfolio, other than
that managed by the group of research analysts, are as follows:
DAVID I. FISHER. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
<PAGE>
- ----------
65
- --------------------------------------------------------------------------------
HARTMUT GIESECKE. Hartmut Giesecke is Chairman of the Board of Capital's
Japanese investment management subsidiary, Capital International K.K., and
Managing Director Asia-Pacific, Capital Group International, Inc. He is also a
Senior Vice President and a Director of Capital International Research, Inc.
and Capital International, Inc. He joined the Capital Guardian organization in
1972.
RICHARD N. HAVAS. Richard Havas is a Senior Vice President and a portfolio
manager for Capital Guardian and Capital International Limited. He is also a
Senior Vice President and Director for Capital Guardian (Canada), Inc. and
Capital International Research, Inc. He joined the Capital Guardian
organization in 1986.
NANCY J. KYLE. Nancy Kyle is a Senior Vice President and a Director and
member of the Executive Committee of Capital Guardian. She is also President
and a Director of Capital Guardian (Canada), Inc. and a Vice President of
Emerging Markets Growth Fund. She is an international equity and emerging
markets portfolio manager. She joined the Capital Guardian organization in
1991.
ROBERT RONUS. Robert Ronus is President and a Director of Capital Guardian. He
is also Chairman of the Board of Capital International Research, Inc. Chairman
of the Board and a Director of Capital Guardian (Canada), Inc., a Director of
The Capital Group Companies, Inc. and Capital Group International, Inc., and a
Senior Vice President of Capital International S.A. and Capital International
Limited. He joined the Capital Guardian organization in 1972.
LIONEL M. SAUVAGE. Lionel Sauvage is a Senior Vice President and portfolio
manager for Capital Guardian and a Vice President and a Director for Capital
International Research, Inc. He joined the Capital Guardian organization in
1987.
NILLY SIKORSKY. Nilly Sikorsky is President and Managing Director of Capital
International S.A., Chairman of Capital International Perspective S.A.,
Managing Director-Europe and a Director of Capital Group International, Inc.,
as well as a Director of The Capital Group Companies, Inc., Capital
International Limited, and Capital International K.K. She joined the Capital
Guardian organization in 1962.
RUDOLF M. STAEHELIN. Rudolf Staehelin is a Senior Vice President and Director
of Capital International Research, Inc. and Capital International S.A. He is a
portfolio manager for Capital Guardian, Capital International S.A., and
Capital International Limited. He joined the Capital Guardian organization in
1981.
--------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
66
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: Seeks long-term capital appreciation by investing
primarily in equity securities of issuers in emerging market countries.
THE INVESTMENT STRATEGY
The Portfolio is a non-diversified Portfolio that invests primarily in equity
securities of companies located in emerging market countries. Such equity
securities may include common stocks, preferred stocks, convertible securities,
depositary receipts, rights and warrants. The Adviser focuses on growth-oriented
companies in emerging market countries that it believes have strong developing
economies and increasingly sophisticated markets. The Portfolio generally
invests only in emerging market countries whose currencies are freely
convertible into United States dollars.
A Portfolio may be considered to be "non-diversified" for federal securities law
purposes because it invests in a limited number of securities. In all cases, the
Portfolio intends to be diversified for tax purposes so that it can qualify as a
regulated investment company.
For purposes of this Portfolio, an emerging market country security is defined
as a security of an issuer having one or more of the following characteristics:
o Its principal securities trading market is in an emerging market country;
o alone or on a consolidated basis, at least 50% of its revenues are derived
from goods produced, sales made or services performed in an emerging market
country; and
o it is organized under the laws of or has a principal office in an emerging
market country.
The Adviser's investment approach combines top-down country allocation with
bottom-up stock selection.
In a "top-down" approach, country allocations are made based on relative
economic, political and social fundamentals, stock valuations and investor
sentiment. In a "bottom-up" approach, securities are reviewed and chosen
individually.
The Portfolio may invest to a lesser extent in corporate or government-issued or
guaranteed debt securities of issuers in emerging market countries, including
debt securities that are rated or considered to be below investment grade ("junk
bonds"). The Portfolio also may, to a lesser extent, invest in equity or debt
securities (including "junk bonds") of corporate or governmental issuers located
in industrialized countries, foreign currency or investment funds and
supranational entities such as the World Bank. In addition, the Portfolio may
utilize forward foreign currency contracts, options and futures contracts and
swap transactions.
When market or financial conditions warrant, the Portfolio may invest in certain
short- and medium-term fixed income securities of issuers other than emerging
market issuers and may invest without limitation in high quality money market
instruments for temporary or defensive purposes. Such investment strategies are
inconsistent with the Portfolio's investment objectives and could result in the
Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests primarily in equity securities, therefore, its
performance may go up or down depending on general market conditions. Other
principal risks include:
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities that can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile and subject to less
government supervision than domestic markets. There
<PAGE>
- ----------
67
- --------------------------------------------------------------------------------
may be difficulties enforcing contractual obligations, and it may take more
time for trades to clear and settle. In addition, foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in a foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions. Other specific risks of investing in foreign securities include:
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging market countries and/or their securities markets, such as less
diverse and less mature economic structures, less stable political systems,
more restrictive foreign investment policies, smaller-sized securities
markets and low trading volumes. Such risks can make investments illiquid
and more volatile than investments in developed countries and such
securities may be subject to abrupt and severe price declines.
EURO RISK: The Portfolio may invest in securities issued by European
issuers. On January 1, 1999, 11 of the 15 member states of the European
Monetary Union ("EMU") introduced the "Euro" as a common currency. During a
three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is expected
to become the sole currency of the participating states. The introduction
of the Euro will result in the redenomination of European debt and equity
securities over a period of time, which may result in various legal and
accounting differences and/or tax treatments that otherwise would not
likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies, which could
adversely affect their value.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate has been over 100% per
year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through
to shareholders.
NON-DIVERSIFICATION RISK: Since a relatively high percentage of the
Portfolio's assets may be invested in the securities of a limited number of
issuers, some of which may be within the same industry, the securities of the
Portfolio may be more sensitive to changes in the market value of a single
issuer or industry or to risks associated with a single economic, political or
regulatory event than a diversified portfolio.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with
--------------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
68
- --------------------------------------------------------------------------------
longer durations or maturities, will go down. When interest rates fall, the
reverse is true. In addition, to the extent that the Portfolio invests in
investment grade securities, that are rated BBB by S&P or an equivalent rating
by any other NRSRO, it will be exposed to greater risk than higher-rated
obligations because BBB rated investment grade securities are regarded as
having only an adequate capacity to pay principal and interest and are
considered to lack outstanding investment characteristics. The risk that an
issuer or guarantor of a fixed income security or counterparty to the
Portfolio's fixed income transaction is unable to meets its financial
obligations may be is particularly significant for this Portfolio because this
Portfolio may invest a portion of its assets in "junk bonds" (i.e., securities
rated below investment grade). Junk bonds are issued by companies with
questionable credit strength and, consequently, are considered to be
speculative in nature and may be subject to greater market fluctuations than
investment grade fixed-income securities.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for the Portfolio for one year and since inception. The table also
compares the Portfolio's performance to the returns of a broad-based index.
Both the bar chart and table assume reinvestment of dividends and
distributions. Past performance is not an indication of future performance.
The performance results presented below do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results. The inception date for the Portfolio is August 20, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 -27.10%
1999 95.82%
<S> <C>
Best quarter: Worst quarter:
49.70% (1999 4th Quarter) (22.14)% (1998 2nd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Morgan Stanley Emerging Markets
Equity Portfolio 95.82% 5.76%
- --------------------------------------------------------------------------------
MSCI Emerging Markets Free* 66.41% (0.88)%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
MORGAN STANLEY ASSET MANAGEMENT ("MSAM"), 1221 Avenue of the Americas, New
York, NY 10020. MSAM has been the Adviser to the Portfolio since the Portfolio
commenced operations. MSAM conducts a worldwide investment management
business, providing a broad range of portfolio management services to
customers in the United States and abroad. MSAM serves as an investment
adviser to numerous open-end and closed-end investment companies. On December
1, 1998, Morgan Stanley Asset Management Inc. changed its name to Morgan
Stanley Dean Witter Investment Management Inc. but continues to do business in
certain instances using the name Morgan Stanley Asset Management.
The Portfolio Managers, responsible for the day to day management of the
Portfolio since the Portfolio commenced
<PAGE>
- ----------
69
- --------------------------------------------------------------------------------
operations, are: ROBERT MEYER, a Managing Director of MSAM and Morgan Stanley
& Co. Incorporated, who is head of MSAM's Emerging Markets Equity Group and
who joined MSAM in 1989; and ANDY SKOV, a Managing Director of MSAM and Morgan
Stanley & Co. Incorporated who joined MSAM in 1994.
----------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
70
- --------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO
INVESTMENT OBJECTIVE: Seeks capital appreciation.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in equity securities of companies in a number
of different countries. Such equity securities normally include common stocks,
preferred stocks, securities convertible into common or preferred stocks and
warrants. Under normal market circumstances, a majority of the Portfolio's
assets will be invested in companies located in at least three different
countries outside the United States. The countries in which the Portfolio may
invest include emerging market countries.
The Portfolio considers the following to be an issuer of securities located in
a country other than the U.S.:
o companies organized under the laws of a country other than the U.S. with a
principal office outside the U.S.; or
o companies that earn 50% or more of their total revenues from business
outside the U.S.
The Portfolio may engage in a variety of transactions using "derivatives,"
such as futures, options, warrants, forward and swap contracts on both
securities and currencies.
The Portfolio will not limit its investments to any particular type of
company. The Portfolio may invest in companies of any size whose earnings the
Adviser believes to be in a relatively strong growth trend or whose securities
the Adviser considers to be undervalued. The Adviser considers, among other
things, a company's financial strength, competitive position in its industry
and projected future earnings and dividends when deciding whether to buy or
sell investments.
When market or financial conditions warrant, the Portfolio may invest, without
limitation, in securities of any kind, including securities traded primarily
in U.S. markets, cash and money market instruments for temporary or defensive
purposes. Such investment strategies are inconsistent with the Portfolio's
investment objectives and could result in the Portfolio not achieving its
investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities that can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, foreign investments can be adversely affected
by: unfavorable currency exchange rates (relative to the U.S. dollar for
securities denominated in a foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
Other specific risks of investing in foreign securities include:
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging markets countries and/or their securities markets, such as less
diverse and less mature economic structures, less stable political systems,
more restrictive foreign investment policies, smaller-sized securities
markets and low trading volumes. Such risks can make investments illiquid
and more volatile than investments in developed countries and such
securities may be subject to abrupt and severe price declines.
EURO RISK: The Portfolio may invest in securities issued by European
issuers. On January 1, 1999, 11 of the 15 member states of the European
Monetary Union ("EMU") introduced the "Euro" as a common currency. During a
three-year transitional period, the Euro will coexist with
<PAGE>
- ----------
71
- --------------------------------------------------------------------------------
each participating state's currency and, on July 1, 2002, the Euro is
expected to become the sole currency of the participating states. The
introduction of the Euro will result in the redenomination of European debt
and equity securities over a period of time, which may result in various
legal and accounting differences and/or tax treatments that otherwise would
not likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies, which could
adversely affect their value.
SMALL-CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known and may trade less frequently
and in lower volume; such companies are more likely to experience greater or
more unexpected changes in their earnings and growth prospects; and the
products or technologies of such companies may be at a relatively early stage
of development or not fully tested.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate has been over 100% per
year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs and may result in higher
taxable gains that could be passed through to shareholders.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998 and
1999, the Portfolio's first two years of operations, and some of the risks of
investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total returns
for the Portfolio for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad-based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance results
presented below do not reflect any insurance and Contract-related fees and
expenses, which would reduce the performance results . The inception date for
the Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 19.51%
1999 60.24%
<S> <C>
Best quarter: Worst quarter:
36.26% (1999 4th Quarter) (18.48)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Putnam International Equity Portfolio 60.24% 31.98%
- --------------------------------------------------------------------------------
MSCI EAFE Index* 26.96% 18.32%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
------------------------- EQ Advisors Trust
<PAGE>
INTERNATIONAL STOCK PORTFOLIOS (CONTINUED)
- ----------
72
- --------------------------------------------------------------------------------
WHO MANAGES THE PORTFOLIO
PUTNAM INVESTMENT MANAGEMENT, INC. ("Putnam Management"), One Post Office
Square, Boston, MA 02109. Putnam Management has been the Adviser to the
Portfolio since the Portfolio commenced operations. Putnam Management has been
managing mutual funds since 1937. Putnam Management is a subsidiary of Putnam
Investments, Inc. which is itself a subsidiary of Marsh & McLennan Companies,
Inc.
The Portfolio Manager, responsible for the day to day management of the
Portfolio since the inception of the Portfolio, is OMID KAMSHAD, Managing
Director and Chief Investment Officer of Core International Equity, who has
been employed as an investment professional* by Putnam Management since 1996.
Prior to January 1996, he was a Director of Investments at Lombard Odier
International Portfolio Management Limited and prior to April 1995, he was
Director at Baring Asset Management Company. (*Investment professional means
that the manager was either a portfolio manager or analyst.)
<PAGE>
FIXED INCOME PORTFOLIOS
- ----------
73
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve a high return by maximizing current
income and, to the extent consistent with that objective, capital
appreciation.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a diversified mix of high yield fixed
income securities (so-called "junk bonds"), which generally involve greater
volatility of price and risk of principal and income than high quality fixed
income securities. Junk bonds generally have a higher current yield but are
rated either in the lower categories by NRSROs (i.e., rated Ba or lower by
Moody's or BB or lower by S&P) or are unrated securities of comparable
quality.
The Portfolio will attempt to maximize current income by taking advantage of
market developments, yield disparities and variations in the creditworthiness
of issuers. Substantially all of the Portfolio's investments will be income
producing.
The Portfolio may also make use of various other investment strategies,
including investments in common stocks and other equity-type securities (such
as convertible debt securities) and secured loans of its portfolio securities
without limitation in order to enhance its current return and to reduce
fluctuations in net asset value. The Portfolio may also use derivatives,
including: writing covered call and put options; purchasing call and put
options on individual fixed income securities, securities indexes and foreign
currencies; and purchasing and selling stock index, interest rate and foreign
currency futures contracts and options thereon. The Portfolio may also invest
in participations and assignments of loans originally made by institutional
lenders or lending syndicates.
The Portfolio will not invest more than 10% of its total assets in:
(i) fixed income securities which are rated lower than B3 or B- or their
equivalents by one NRSRO or if unrated are of equivalent quality as determined
by the Adviser; and
(ii) money market instruments of any entity which has an outstanding issue of
unsecured debt that is rated lower than B3 or B- or their equivalents by an
NRSRO or if unrated is of equivalent quality as determined by the Adviser;
however, this restriction will not apply to:
o fixed income securities which the Adviser believes have similar
characteristics to securities which are rated B3 or higher by Moody's or B-
or higher by S&P, or
o money market instruments of any entity that has an unsecured issue of
outstanding debt which the Adviser believes has similar characteristics to
securities which are so rated.
In the event that any securities held by the Portfolio fall below those
ratings, the Portfolio will not be obligated to dispose of such securities and
may continue to hold such securities if the Adviser believes that such
investments are considered appropriate under the circumstances.
The Portfolio may also invest in fixed income securities that are providing
high current yields because of risks other than credit, such as prepayment
risks, in the case of mortgage-backed securities, or currency risks, in the
case of non-U.S. dollar denominated foreign securities.
When market or financial conditions warrant, the Portfolio may also make
temporary investments in high-quality U.S. dollar-denominated money market
instruments. Such investment strategies could result in the Portfolio not
achieving its investment objective.
THE PRINCIPAL RISKS
JUNK BOND RISK: The Portfolio invests primarily in "junk bonds" or lower-rated
securities rated BB or lower by S&P or an equivalent rating by any other NRSRO
or unrated securities of similar quality. Junk bonds have speculative elements
or are predominantly speculative credit risks, therefore, credit risk is
particularly significant for this Portfolio. Although junk bonds generally
have higher yields than debt securities with higher credit ratings, they are
high-risk investments that may not pay interest or return principal as
scheduled. Junk bonds generally are also less liquid and experience more price
volatility than higher rated fixed income securities. This Portfolio may also
be subject to
----------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
74
- --------------------------------------------------------------------------------
greater credit risk because it may invest in debt securities issued in
connection with corporate restructurings by highly leveraged issuers or in
debt securities not current in the payment of interest or principal, or in
default.
FIXED INCOME RISK: This Portfolio invests primarily in fixed income
securities, therefore, the Portfolio's performance will be affected by changes
in interest rates, credit risks of the issuer, the duration and maturity of
the Portfolio's fixed income holdings, and adverse market and economic
conditions. Other risks that relate to the Portfolio's investment in fixed
income securities include:
INTEREST RATE RISK: When interest rates rise, the value (i.e., share
price and total return) of the Portfolio's fixed income securities,
particularly those with longer durations or maturities, will go down.
When interest rates fall, the reverse is true.
MORTGAGE-BACKED SECURITIES RISK: Rising interest rates may cause the
duration of mortgage-backed securities to increase, making them even more
susceptible to interest rate changes. Falling interest rates may cause
the value and yield of mortgage-backed securities to fall. Falling
interest rates also may encourage borrowers to pay off their mortgages
sooner than anticipated (pre-payment). The Portfolio would need to
reinvest the pre-paid funds at the newer, lower interest rates.
LOAN PARTICIPATION AND ASSIGNMENT RISK: In addition to the risks associated
with fixed income investments generally, the Portfolio's investments in loan
participations and assignments are subject to the risk that the financial
institution acting as agent for all interests in a loan, might fail
financially. It is also possible that, under emerging legal theories of lender
liability, the Portfolio could be held liable as a co-lender.
SMALL CAP AND MID-CAP COMPANY RISK: The Portfolio's investments in small-cap
and mid-cap companies may be subject to more abrupt or erratic movements in
price than are those of larger, more established companies because: the
securities of such companies are less well-known; held primarily by insiders
or institutional investors and may trade less frequently and in lower volume;
such companies are more likely to experience greater or more unexpected
changes in their earnings and growth prospects; such companies have limited
financial resources or may depend on a few key employees; and the products of
technologies of such companies may be at a relatively early stage of
development or not fully tested.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
<PAGE>
- ----------
75
- --------------------------------------------------------------------------------
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities without restriction. The risk in lending portfolio
securities, as with other extensions of secured credit, consist of possible
delay in receiving additional collateral, or in the recovery of the securities
or possible loss of rights in the collateral should the borrower fail
financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index and (ii) the returns of an index of funds with
similar investment objectives. Past performance is not an indication of future
performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance High Yield Portfolio)
managed by the Adviser using the same investment objectives and strategy as
the Portfolio. For these purposes, the Portfolio is considered to be the
successor entity to the predecessor registered investment company
(HRT/Alliance High Yield Portfolio) whose inception date is January 2, 1987.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance
results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN*
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1990 -1.4%
1991 24.2%
1992 12.1%
1993 22.9%
1994 -3.0%
1995 19.7%
1996 22.6%
1997 18.2%
1998 -5.4%
1999 -3.58%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
7.94% (1997 2nd Quarter) (11.02)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
- --------------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance High Yield Portfolio
- Class IB Shares (3.58)% 9.58% 9.96%
- --------------------------------------------------------------------------------
CSFB Index**,*** 3.28% 9.07% 11.06%
- --------------------------------------------------------------------------------
ML Master** 1.57% 9.61% 10.79%
- --------------------------------------------------------------------------------
Lipper High Current Yield Bond
Funds Average** 3.83% 9.48% 10.15%
- --------------------------------------------------------------------------------
</TABLE>
* For periods prior to the inception of Class IB Shares (October 1, 1996),
performance information shown is the performance of Class IA shares
adjusted to reflect the 12b-1 fees paid by Class IB shares.
** For more information on this index, see the preceding section "The
Benchmarks."
<PAGE>
*** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas, New
York, New York 10105. Alliance has been the Adviser to the Portfolio and its
predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies,
--------------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
76
- --------------------------------------------------------------------------------
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations.
NELSON JANTZEN has been responsible for the day-to-day management of the
Portfolio since January 2000. Mr. Jantzen is a Senior Vice President and
Portfolio Manager in the Global High Yield Group and is responsible for the
management of domestic high yield securities. Mr. Jantzen joined Alliance in
1993.
<PAGE>
- ----------
77
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to obtain a high level of current income, preserve
its assets and maintain liquidity.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a diversified portfolio of high-quality
U.S. dollar-denominated money market instruments. The Portfolio will maintain
a dollar-weighted average portfolio maturity of 90 days or less.
The instruments in which the Portfolio invests include:
o marketable obligations of, or guaranteed as to the timely payment of
principal and interest by, the U.S. Government, its agencies or
instrumentalities ("U.S. Government Securities");
o certificates of deposit, bankers' acceptances, bank notes, time deposits
and interest bearing savings deposits issued or guaranteed by:
(a) domestic banks (including their foreign branches) or savings and loan
associations having total assets of more than $1 billion and which are
FDIC members in the case of banks, or insured by the FDIC, in the case
of savings and loan associations; or
(b) foreign banks (either by their foreign or U.S. branches) having total
assets of at least $5 billion and having an issue of either (i)
commercial paper rated at least A-1 by S&P or Prime-1 by Moody's or
(ii) long term debt rated at least AA by S&P or Aa by Moody's;
o commercial paper (rated at least A-1 by S&P or Prime-1 by Moody's or, if
not rated, issued by domestic or foreign companies having outstanding debt
securities rated at least AA by S&P or Aa by Moody's) and participation
interests in loans extended by banks to such companies;
o mortgage-backed and asset-backed securities that have remaining maturities
of less than one year;
o corporate debt obligations with remaining maturities of less than one
year, rated at least AA by S&P or Aa by Moody's, as well as corporate debt
obligations rated at least A by S&P or Moody's, provided the corporation
also has outstanding an issue of commercial paper rated at least A-1 by
S&P or Prime-1 by Moody's;
o floating rate or master demand notes; and
o repurchase agreements covering U.S. Government securities.
If the Adviser believes a security held by the Portfolio is no longer deemed
to present minimal credit risk, the Portfolio will dispose of the security as
soon as practicable unless the Board of Trustees determines that such action
would not be in the best interest of the Portfolio.
Purchases of securities that are unrated must be ratified by the Board of
Trustees. Because the market value of debt obligations fluctuates as an
inverse function of changing interest rates, the Portfolio seeks to minimize
the effect of such fluctuations by investing only in instruments with a
remaining maturity of 397 calendar days or less at the time of investment,
except for obligations of the U.S. Government, which may have a remaining
maturity of 762 calendar days or less. Time deposits with maturities greater
than seven days are considered to be illiquid securities.
The Portfolio may make use of various other investment strategies, including
investing up to 20% of its total assets in U.S. dollar-denominated money
market instruments of foreign issuers and making secured loans of up to 50% of
its total portfolio securities.
THE PRINCIPAL RISKS
MONEY MARKET RISK: While money market funds are designed to be relatively low
risk investments, they are not entirely free of risk. Despite the short
maturities and high credit quality of the Portfolio's investments, increases
in interest rates and deteriorations in the credit quality of the instruments
the Portfolio has purchased may reduce the Portfolio's net asset value. In
addition, the Portfolio is still subject to the risk that the value of an
investment may be eroded over time by inflation. An investment in the
Portfolio is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
--------------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
78
- --------------------------------------------------------------------------------
Although the Portfolio seeks to preserve the value of your investment, it is
possible to lose money by investing in the Portfolio.
ASSET-BACKED SECURITIES RISK: The Portfolio's investments in asset-backed
securities represent interests in pools of consumer loans such as credit card
receivables, automobile loans and leases, leases on equipment such as
computers, and other financial instruments and are subject to certain
additional risks. Rising interest rates tend to extend the duration of
asset-backed securities, making them more sensitive to changes in interest
rates. As a result, in a period of rising interest rates, the Portfolio may
exhibit additional volatility. When interest rates are declining, there are
usually more prepayments of loans which will shorten the life of these
securities. Prepayments also vary based on among other factors, general
economic conditions and other demographic conditions. The reinvestment of cash
received from prepayments will, therefore, usually be at a lower interest rate
than the original investment, lowering the Portfolio's yield.
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risks will tend to be compounded.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: inadequate or inaccurate information about foreign
companies; higher transaction, brokerage and custody costs; expropriation or
nationalization; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns on three-month U.S. Treasury bills and (ii) the returns of an index of
funds with similar investment objectives. Past performance is not an
indication of future performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance Money Market
Portfolio) managed by the Adviser using the same investment objectives and
strategy as the Portfolio. For these purposes, the Portfolio is considered to
be the successor entity to the predecessor registered investment company
(HRT/Alliance Money Market Portfolio) whose inception date is July 13, 1981.
The assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not
<PAGE>
- ----------
79
- --------------------------------------------------------------------------------
reflect any insurance and Contract-related fees and expenses, which would
reduce the performance results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN*
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1990 8.0%
1991 5.9%
1992 3.3%
1993 2.7%
1994 3.8%
1995 5.5%
1996 5.1%
1997 5.2%
1998 5.1%
1999 4.71%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
1.32% (1999 4th Quarter) .44% (2000 1st Quarter)
The Portfolio's 7-day yield for the quarter ended December 31, 1999 was
5.05%.
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS*
- --------------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Money Market Portfolio
- Class IB Shares 4.71% 5.10% 4.92%
- --------------------------------------------------------------------------------
3-Month Treasury Bill 4.74% 5.20% 5.06%
- --------------------------------------------------------------------------------
Lipper Money Market Mutual
Fund Average** 4.75% 5.13% 4.87%
- --------------------------------------------------------------------------------
</TABLE>
* For periods prior to the inception of Class IB Shares (October 10, 1996),
performance information shown is the performance of Class IA shares
adjusted to reflect the 12b-1 fees paid by Class IB shares.
** For more information on this index, see the preceding section "The
Benchmarks."
WHO MANAGES THE PORTFOLIO
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance has been the Adviser to the Portfolio and
its predecessor registered investment company since the predecessor commenced
operations. Alliance, a publicly traded limited partnership, is indirectly
majority-owned by Equitable. Alliance manages investment companies, endowment
funds, insurance companies, foreign entities, qualified and non-tax qualified
corporate funds, public and private pension and profit-sharing plans,
foundations and tax-exempt organizations.
RAYMOND J. PAPERA has been responsible for the day-to-day management of the
Portfolio and its predecessor since 1990. Mr. Papera, a Senior Vice President
of Alliance, has been associated with Alliance since 1990.
-------------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
80
- --------------------------------------------------------------------------------
J.P. MORGAN CORE BOND PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide a high total return consistent with
moderate risk of capital and maintenance of liquidity. THE INVESTMENT STRATEGY
This Portfolio's total return will consist of income plus realized and
unrealized capital gains and losses. The Portfolio currently invests all of its
assets in investment grade debt securities rated BBB or better by Standard &
Poor's ("S&P") or Baa or better by Moody's Investors Services, Inc. ("Moody's")
or unrated securities of similar quality.
The Adviser actively manages the Portfolio's duration, the allocation of
securities across market sectors and the selection of specific securities within
market sectors. Based on fundamental, economic and capital markets research, the
Adviser adjusts the duration of the Portfolio based on the Adviser's view of the
market and interest rates. The Adviser also actively allocates the Portfolio's
assets among the broad sectors of the fixed income market. These securities
principally include U.S. Government and agency securities, corporate securities,
private placements, asset-backed securities, mortgage-related securities and
direct mortgage obligations. The securities can be of any duration but will
generally mature within one year of the Salomon Brothers Broad Investment Grade
Bond Index (currently about 5 years). The Portfolio may also use futures
contracts to change the duration of the Portfolio's bond holdings.
Duration is a measure of the weighted average maturity of the bonds held by the
Portfolio and can be used by the Adviser as a measure of the sensitivity of the
market value of the Portfolio to changes in interest rates. Generally, the
longer the duration of the Portfolio, the more sensitive its market value will
be to changes in interest rates.
The Portfolio may also invest up to 25% of its assets in securities of foreign
issuers, including up to 20% of its assets in debt securities denominated in
currencies of developed foreign countries.
Under normal market conditions, the Portfolio will be primarily invested in
bonds. When market or financial conditions warrant, the Portfolio may invest up
to 100% of its assets in money market securities for temporary or defensive
purposes. Such investment strategies are inconsistent with the Portfolio's
investment objective and could result in the Portfolio not achieving its
investment objective.
THE PRINCIPAL RISKS
FIXED INCOME RISK: This Portfolio invests primarily in fixed income securities,
therefore, the Portfolio's performance will be affected by changes in interest
rates, credit risks of the issuer, the duration and maturity of the Portfolio's
fixed income holdings, and adverse market and economic conditions. Other
specific risks of investing in fixed income securities include:
INTEREST RATE RISK: When interest rates rise, the value (i.e., share
price and total return) of the Portfolio's fixed income securities,
particularly those with longer durations or maturities, will go down.
When interest rates fall, the reverse is true.
INVESTMENT GRADE SECURITIES RISK: The Portfolio could lose money if the
issuer or guarantor of a debt security or counterparty to a Portfolio's
transaction is unable or unwilling to make timely principal and/or
interest payments, or to honor its financial obligations. Investment
grade securities (rated, e.g., BBB by S&P) are somewhat riskier than
higher rated obligations because they are regarded as having only an
adequate capacity to pay principal and interest, are considered to lack
outstanding investment characteristics, and may be speculative.
MORTGAGE-BACKED SECURITIES RISK: Rising interest rates may cause the
duration of mortgage-backed securities to increase. Falling interest
rates may cause the value and yield of mortgage-backed securities to
fall. Falling interest rates also may encourage borrowers to pay off
their mortgages sooner than anticipated
<PAGE>
- ----------
81
- --------------------------------------------------------------------------------
(pre-payment). The Portfolio would need to reinvest the pre-paid funds at
the newer, lower interest rates.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate has been over 100% per
year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through
to shareholders.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; adverse changes in foreign economic and tax policies; and
foreign government instability, war or other adverse political or economic
actions.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of existence, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total
returns for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad-based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance
results presented below do not reflect any insurance and Contract-related fees
and expenses, which would reduce the performance results. The Portfolio
commenced operations on January 1, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 9.02%
1999 -1.64%
<S> <C>
Best quarter: Worst quarter:
4.72% (1998 3rd Quarter) (1.62)% (1999 2nd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
J.P. Morgan Core Bond Portfolio (1.64)% 3.55%
- --------------------------------------------------------------------------------
Salomon Brothers Broad Investment
Grade Bond Index* (0.83)% 3.84%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
<PAGE>
WHO MANAGES THE PORTFOLIO
J.P. MORGAN INVESTMENT MANAGEMENT INC. ("J.P. Morgan"), 522 Fifth Avenue, New
York, New York 10036. J.P. Morgan has been the Adviser to the Portfolio since
it commenced operations. J.P. Morgan is a registered investment adviser and is
a wholly owned subsidiary of J.P. Morgan & Co. Incorporated, a bank holding
company. J.P. Morgan manages portfolios for corporations, governments,
----------------------- EQ Advisors Trust
<PAGE>
FIXED INCOME PORTFOLIOS (CONTINUED)
- ----------
82
- --------------------------------------------------------------------------------
endowments, as well as many of the largest corporate retirements plans in the
nation.
The Portfolio Managers, responsible for the day to day management of the
Portfolio since it commenced operations, are PAUL L. ZEMSKY, a Managing
Director of J.P. Morgan and a portfolio manager specializing in quantitative
techniques, who joined J.P. Morgan in 1985; and ROBERT J. TEATOM, a Managing
Director of J.P. Morgan and head of its U.S. Fixed Income Group, who joined
J.P. Morgan in 1975; and E. LUKE FARRELL, Vice President of J.P. Morgan and a
portfolio manager in the Fixed Income Group, who joined J.P. Morgan in 1993.
<PAGE>
BALANCED/HYBRID PORTFOLIOS
- ----------
83
- --------------------------------------------------------------------------------
EQ/BALANCED PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to achieve a high return through both appreciation
of capital and current income.
THE INVESTMENT STRATEGY
The Portfolio invests varying portions of its assets primarily in
publicly-traded equity and debt securities and money market instruments
depending on economic conditions, the general level of common stock prices,
interest rates and other relevant considerations, including the risks
associated with each investment medium.
The Portfolio attempts to achieve long-term growth of capital by investing in
common stock and other equity-type instruments. It will try to achieve a
competitive level of current income and capital appreciation through
investments in publicly traded debt securities and a high level of current
income through investments primarily in high-quality U.S. dollar denominated
money market instruments.
The Portfolio's investments in common stocks will primarily consist of common
stocks that are listed on national securities exchanges. Smaller amounts will
be invested in stocks that are traded over-the-counter and in other
equity-type securities. The Portfolio may also invest up to 20% of its total
assets in securities of issuers domiciled outside the United States and not
included in the S&P 500 (i.e., foreign securities).
The Portfolio at all times will hold at least 25% of its total assets in fixed
income securities (including, for these purposes, that portion of the value of
securities convertible into common stock which is attributable to the fixed
income characteristics of those securities, as well as money market
instruments). The Portfolio's equity securities will always comprise at least
25%, but never more than 75%, of the Portfolio's total assets. Consequently,
the Portfolio will have a minimum or "core holdings" of at least 25% fixed
income securities and 25% equity securities. Over time, holdings are expected
to average approximately 50% in fixed income securities and approximately 50%
in equity securities. Asset mixes will periodically be rebalanced by the
Manager to maintain the expected asset mix.
The Portfolio may also invest up to 20% of its total assets in foreign
securities (which may include American depositary receipts and other
depositary arrangements) and may also make use of various other investment
strategies, including using up to 50% of its total portfolio assets for
securities lending purposes. The Portfolio may also use derivatives,
including: writing covered call and put options, purchasing call and put
options on all the types of securities in which it may invest, as well as
securities indexes and foreign currencies. The Portfolio may also purchase and
sell stock index, interest rate and foreign currency futures contracts and
options thereon.
The debt securities will consist principally of bonds, notes, debentures and
equipment trust certificates, as well as debt securities with equity features
such as conversion or exchange rights or warrants for the acquisition of stock
or participations based on revenues, rates or profits. These debt securities
will principally be investment grade securities rated at least Baa by Moody's
or BBB by S&P, or will be U.S. Government Securities. If such Baa or BBB debt
securities held by the Portfolio fall below those ratings, the Portfolio will
not be obligated to dispose of them and may continue to hold them if an
Adviser considers them appropriate investments under the circumstances. In
addition, the Portfolio may at times hold some of its assets in cash.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
MULTIPLE-ADVISER RISK: The EQ/Balanced Portfolio employs multiple Advisers.
Each of the Advisers independently chooses and maintains a portfolio of common
stocks for the Portfolio and each is responsible for investing a specific
allocated portion of the Portfolio's assets. Because each Adviser will be
managing its allocated portion of the Portfolio independently from the other
------------------ EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIOS (CONTINUED)
- --------
84
- --------------------------------------------------------------------------------
Advisers, the same security may be held in two different portions of the
Portfolio, or may be acquired for one portion of the Portfolio at a time when
the Adviser of another portion deems it appropriate to dispose of the security
from that other portion. Similarly, under some market conditions, one Adviser
may believe that temporary, defensive investments in short-term instruments or
cash are appropriate when the other Adviser or Advisers believe continued
exposure to the equity markets is appropriate for their portions of the
Portfolio. Because each Adviser directs the trading for its own portion of the
Portfolio, and does not aggregate its transactions with those of the other
Advisers, the Portfolio may incur higher brokerage costs than would be the
case if a single Adviser were managing the entire Portfolio.
ASSET ALLOCATION RISK: In addition to the risks associated with the securities
in which the Portfolio invests, the Portfolio is subject to the risk that the
actual allocation of the Portfolio's assets between debt and equity securities
may adversely affect the Portfolio's value between the Manager's periodic
rebalancing.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities, which can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile, and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, the value of foreign investments can be
adversely affected by: unfavorable currency exchange rates (relative to the
U.S. dollar for securities denominated in foreign currencies); inadequate or
inaccurate information about foreign companies; higher transaction, brokerage
and custody costs; expropriation or nationalization; adverse changes in
foreign economic and tax policies; and foreign government instability, war or
other adverse political or economic actions.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like which
may cause the Portfolio to lose money or be prevented from earning capital
gains.
FIXED INCOME RISK: This Portfolio invests at least 25% of its total assets in
fixed income securities, therefore, the Portfolio's performance will be
affected by changes in interest rates, credit risks of the issuer, the
duration and maturity of the Portfolio's fixed income holdings, and adverse
market and economic conditions. Other risks that relate to the Portfolio's
investment in fixed income securities include:
INTEREST RATE RISK: When interest rates rise, the value (i.e., share
price and total return) of the Portfolio's fixed income securities,
particularly those with longer durations or maturities, will go down.
When interest rates fall, the reverse is true.
INVESTMENT GRADE SECURITIES RISK: The Portfolio could lose money if the
issuer or guarantor of a debt security or counterparty to a Portfolio's
transaction is unable or unwilling to make timely principal and/or
interest payments, or to honor its financial obligations. Investment
grade securities which are rated BBB by S&P or an equivalent rating by
any other NRSRO, are somewhat riskier than higher rated obligations
because they are regarded as having only an adequate capacity to pay
principal and interest, are considered to lack outstanding investment
characteristics, and may be speculative.
<PAGE>
- ----------
85
- --------------------------------------------------------------------------------
LEVERAGING RISK: When the Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in the Portfolio will be more volatile
and all other risk will tend to be compounded.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate was over 100% per year.
Higher portfolio turnover (e.g., over 100% per year) will cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders.
SECURITIES LENDING RISK: This Portfolio may make secured loans of its
portfolio securities. The risks in lending portfolio securities, as with other
extensions of secured credit, consist of possible delay in receiving
additional collateral, or in the recovery of the securities or possible loss
of rights in the collateral should the borrower fail financially.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total returns for each
of the last ten calendar years and some of the risks of investing in the
Portfolio by showing yearly changes in the Portfolio's performance. The table
below shows the Portfolio's average annual total returns for the past one,
five and ten years and compares the Portfolio's performance to: (i) the
returns of a broad-based index; (ii) the returns of a "blended" index of
equity and fixed income securities; and (iii) the returns of an index of funds
with similar investment objectives. Past performance is not an indication of
future performance.
The Portfolio's performance shown below is principally the performance of its
predecessor registered investment company (HRT/Alliance/Balanced Portfolio)
managed by the Adviser using the same investment objectives and strategy as
the Portfolio. For these purposes, the Portfolio is considered to be the
successor entity to the predecessor registered investment company
(HRT/EQ/Balanced Portfolio) whose inception date is January 27, 1986. The
assets of the predecessor were transferred to the Portfolio on October 18,
1999. Following that transfer, the performance shown (for the period October
19, 1999 through December 31, 1999) is that of the Portfolio. For these
purposes, the performance results of the Portfolio and its predecessor
registered investment company have been linked.
Both the bar chart and table assume reinvestment of dividends and
distributions. The performance results do not reflect any insurance and
Contract-related fees and expenses, which would reduce the performance results.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1990 0.3%
1991 41.3%
1992 -2.8%
1993 12.3%
1994 -8.0%
1995 19.8%
1996 11.7%
1997 15.1%
1998 18.1%
1999 17.79%
<S> <C>
Best quarter (% and time period) Worst quarter (% and time period)
13.76% (1998 4th Quarter) (7.77)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
ONE YEAR FIVE YEARS TEN YEARS
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
EQ/Balanced Portfolio - Class
IA Shares 17.79% 16.44% 11.77%
- --------------------------------------------------------------------------------
50% S&P 500 Index/50%
Lehman Gov't/Corp.*,** 9.07% 17.93% 13.04%
- --------------------------------------------------------------------------------
S&P 500* 21.03% 28.56% 18.21%
- --------------------------------------------------------------------------------
Lipper Flex. Port. Funds
Average* 12.07% 17.11% 12.94%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
In accordance with the Multi-Manager Order, the Manager may, among other
things, select new or additional Advisers for the Portfolio and may allocate
and re-allocate the Portfolio's assets among Advisers. Currently, Alliance
Capital Management, L.P., Capital Guardian Trust Company, Prudential
Investments Fund Management LLC and Jennison Associates, LLC have been
selected by the Manager to serve
--------------------------- EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIOS (CONTINUED)
- ----------
86
- --------------------------------------------------------------------------------
as Advisers for this Portfolio. It is anticipated that additional advisers may
be added in the future.
The Manager initially allocated the assets of the Portfolio and will allocate
all daily cash inflows (share purchases) and outflows (redemptions and expense
items) among the Advisers, subject to the oversight of the Board. The Manager
intends, on a periodic basis, to review the asset allocation in the Portfolio.
The Manager does not intend, but reserves the right, subject to the oversight
of the Board, to reallocate assets from one Adviser to another when it would
be in the best interest of the Portfolio and its shareholders to do so. In
some instances, the effect of the reallocation will be to shift assets from a
better performing Adviser to other Adviser(s).
ALLIANCE CAPITAL MANAGEMENT, L.P. ("Alliance"), 1345 Avenue of the Americas,
New York, New York 10105. Alliance was the exclusive Adviser to the Portfolio
and its predecessor registered investment company since the predecessor
commenced operations. Alliance, a publicly traded limited partnership, is
indirectly majority-owned by Equitable. Alliance manages investment companies,
endowment funds, insurance companies, foreign entities, qualified and non-tax
qualified corporate funds, public and private pension and profit-sharing
plans, foundations and tax-exempt organizations.
The portfolio manager responsible for that portion of the Portfolio's total
assets that will be advised by Alliance as an Adviser is as follows:
ROBERT G. HEISTERBERG has been responsible for the day-to-day management
of the Portfolio and its predecessor since February 12, 1996. Mr.
Heisterberg, a Senior Vice President of Alliance and Global Economic
Policy Analysis, has been associated with Alliance since 1977.
CAPITAL GUARDIAN TRUST COMPANY. ("Capital Guardian"), 333 South Hope Street,
Los Angeles, CA 90071 Capital Guardian was added as an Adviser to the
Portfolio as of May 1, 2000. Capital Guardian is a wholly-owned subsidiary of
Capital Group International, Inc., which itself is a wholly owned subsidiary
of The Capital Group Companies, Inc. Capital Guardian has been providing
investment management services since 1968 and manages approximately $123
billion as of December 31, 1999.
Capital Guardian uses a multiple portfolio manager system under which assets
of the Portfolio for which Capital Guardian serves as Adviser are divided into
several segments. Each segment is individually managed with the portfolio
manager free to decide on company and industry selections as well as valuation
and transaction assessment. An additional portion of the Portfolio's total
assets allocated to Capital Guardian as Adviser is managed by a group of
investment research analysts.
The individual portfolio managers of each segment of the Portfolio's total
assets that will be advised by Capital Guardian as an Adviser, other than that
managed by the group of research analysts, are as follows:
DONNALISA P. BARNUM. Donnalisa Barnum is a Senior Vice President and a
portfolio manager for Capital Guardian. She joined the Capital Guardian
organization in 1986.
MICHAEL R. ERICKSON. Michael Erickson is a Senior Vice President and
portfolio manager for Capital Guardian and a Senior Vice President and
Director for Capital International Limited. He joined the Capital Guardian
organization in 1987.
DAVID I. FISHER. David Fisher is Chairman of the Board of Capital Group
International, Inc. and Capital Guardian. He joined the Capital Guardian
organization in 1969.
THEODORE R. SAMUELS. Theodore Samuels is a Senior Vice President and a
Director for Capital Guardian, as well as a Director of Capital
International Research, Inc. He joined the Capital Guardian organization
in 1981.
EUGENE P. STEIN. Eugene Stein is Executive Vice President, a Director, a
portfolio manager, and Chairman
<PAGE>
- ----------
87
- --------------------------------------------------------------------------------
of the Investment Committee for Capital Guardian. He joined the Capital
Guardian organization in 1972.
TERRY BERKEMEIER. Terry Berkemeier is a Vice President of Capital
International Research, Inc. with U.S. equity portfolio management
responsibility in Capital Guardian Trust Company and research
responsibilities for the global metals and mining industries. He joined
the Capital Guardian organization in 1992.
PRUDENTIAL INVESTMENTS FUND MANAGEMENT LLC ("PIFM"), Gateway Center Three, 100
Mulberry Street, Newark, New Jersey 07102 was added as an Adviser to the
Portfolio as of May 1, 2000. PIFM and its predecessors have served as manager
or administrator to investment companies since 1987. As of October 31, 1999,
PIFM served as either the manager or administrator to various investment
companies, with aggregate assets of approximately $72 billion.
JENNISON ASSOCIATES LLC ("Jennison"), 466 Lexington Avenue, New York, New York
10017 was added as an Adviser to the Portfolio as of May 1, 2000. PIFM
supervises Jennison. Jennison has served as an investment adviser to
investment companies since 1990 and manages approximately $48.4 billion in
assets as of September 30, 1999.
The individual portfolio managers for that portion of the Portfolio's total
assets that will be advised by PIFM as an Adviser and Jennison are as follows:
MICHAEL A. DEBALSO. Michael A. DeBalso is a Director, Executive Vice
President, Director of Equity Research and Equity Portfolio Manager of
Jennison. Mr. DeBalso joined Jennison in 1972.
KATHLEEN A. MCCARRAGHER. Ms. McCarragher is a Director, Executive Vice
President, Domestic Growth Equity Investment Strategist and Equity
Portfolio Manager of Jennison. Ms. McCarragher joined Jennison in 1998.
From 1992-1998, she was a Managing Director and Director of Large Cap
Growth Equities at Weiss, Peck & Greer.
PIFM and Jennison are wholly-owned subsidiaries of The Prudential Insurance
Company of America.
------------------------ EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIOS (CONTINUED)
- ----------
88
- --------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION PORTFOLIO
INVESTMENT OBJECTIVE: Seeks to provide, in order of priority, reasonable
income, conservation of capital and capital appreciation.
For purposes of this Portfolio, the words "reasonable income" mean moderate
income.
THE INVESTMENT STRATEGY
The Portfolio invests primarily in a combination of common stocks, preferred
stocks, securities that are convertible into or exchangeable for common
stocks, investment grade corporate debt securities, securities of or
guaranteed by the U.S. Government, its agencies or instrumentalities, and
short-term debt instruments, such as high quality commercial paper, and
obligations of FDIC-member banks. Investments in common stocks focus on those
that pay dividends and have the potential for capital appreciation. Common
stocks are selected based on a combination of financial strength and estimated
growth potential. Bonds are selected based on the Adviser's projections of
interest rates, varying amounts and maturities in order to achieve capital
protection and, when possible, capital appreciation. The asset allocation of
the Portfolio will vary in accordance with changing economic and market
conditions.
Under normal market conditions, at least 25% of the Portfolio's net assets
will be invested in fixed income securities. In selecting debt securities, the
Adviser will emphasize securities that the Adviser believes will not be
subject to significant fluctuations in value. The corporate debt obligations
purchased by the Portfolio will be rated A or higher by S&P and Moody's. The
Fund is not managed with a targeted maturity.
When market or financial conditions warrant, the Portfolio may invest 100% of
its assets in short-term obligations for temporary or defensive purposes. Such
investment strategies are inconsistent with the Portfolio's investment
objectives and could result in the Portfolio not achieving its investment
objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other Nationally Recognized Statistical Rating
Organization ("NRSRO"), it will be exposed to greater risk than higher-rated
obligations because BBB rated investment grade securities are regarded as
having only an adequate capacity to pay principal and interest, are considered
to lack outstanding investment characteristics, and may be speculative.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate was over 100% per year.
Higher portfolio turnover (e.g., over 100% per year) will cause the Portfolio
to incur additional transaction costs that could be passed through to
shareholders.
CONVERTIBLE SECURITIES RISK: Convertible securities generally enable the
Portfolio to benefit from increases in the market price of the underlying
common stocks, but generally offer lower yields than unconvertible securities
of similar quality. Convertible securities fluctuate both in relation to
changes in interest rates and changes in the value of the underlying common
stock.
<PAGE>
- ----------
89
- --------------------------------------------------------------------------------
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1999,
the Portfolio's first full year of operations. The table below shows the
Portfolio's average annual total returns for the Portfolio for one year and
since inception. The table also compares the Portfolio's performance to the
returns of a broad-based index. Both the bar chart and table assume
reinvestment of dividends and distributions. Past performance is not an
indication of future performance. The performance results presented below do
not reflect any insurance and Contract-related fees and expenses, which would
reduce the performance results. The inception date for this Portfolio is
December 31, 1998.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
7.38% 1999
<S> <C>
Best quarter: Worst quarter:
10.70% (1999 4th Quarter) (7.27)% (1999 4th Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Evergreen Foundation Portfolio 7.38% 7.38%
- --------------------------------------------------------------------------------
60% S&P 500/40% Lehman Aggregate
Bond*,** 11.15% 11.15%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 21.03%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
EVERGREEN ASSET MANAGEMENT CORP. ("Evergreen"), 1311 Mamaroneck Avenue, White
Plains, New York 10605. Evergreen has been the Adviser to the Portfolio since
it commenced operations. Evergreen is a registered investment adviser and a
wholly-owned subsidiary of First Union Corporation. Evergreen offers a broad
range of financial services to individuals and businesses throughout the
United States.
JEAN LEDFORD and RICHARD WELSH became co-managers of the Portfolio in August
1999. Jean Ledford, CFA, became President and Chief Executive Officer of
Evergreen in August 1999. From February 1997 until she joined Evergreen, Ms.
Ledford worked as a portfolio manager at American Century Investments
("American Century"). From 1980 until she joined American Century, Ms. Ledford
was the investment director at the State of Wisconsin Investment Board.
Mr. Welsh joined Evergreen as Senior Vice President and portfolio manager in
August 1999. Prior to joining Evergreen, he worked for five years as a
portfolio manager and analyst at American Century.
------------------------ EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIOS (CONTINUED)
- ----------
90
- --------------------------------------------------------------------------------
MERCURY WORLD STRATEGY PORTFOLIO
INVESTMENT OBJECTIVE: Seeks high total investment return by investing
primarily in a portfolio of equity and fixed income securities, including
convertible securities, of U.S. and foreign issuers.
For purposes of this Portfolio, "total investment return" consists of
interest, dividends, discount accruals and capital changes, including
changes in the value of non-dollar denominated securities and other assets
and liabilities resulting from currency fluctuations.
THE INVESTMENT STRATEGY
The Portfolio is a non-diversified Portfolio that invests in both equity
securities and fixed income securities. The Portfolio may invest entirely in
equity securities, entirely in fixed income securities, or partly in equity
securities and partly in fixed income securities.
A Portfolio may be considered to be "non-diversified" for federal
securities law purposes because it invests in a limited number of
securities. In all cases, the Portfolio intends to be diversified for tax
purposes so that it can qualify as a regulated investment company.
The Portfolio will normally invest a significant portion of its assets in
equity securities of companies throughout the world. The equity securities in
which the Portfolio invests will primarily be common stocks of large
companies.
There are no limits on the Portfolio's ability to invest in any country or
geographic region. The Portfolio can invest primarily in U.S. securities,
primarily in foreign securities, or partly in both. It normally invests in at
least three countries at any given time. The Portfolio may invest in companies
in emerging markets, but the Adviser anticipates that a substantially greater
portion of the Portfolio's equity investments will be in companies in
developed countries. At the present time, the Portfolio focuses on investments
in Canada, Western Europe, the Far East, and Latin America, as well as in the
United States. The Adviser will select the percentage of the Portfolio's
assets that will be invested in equity securities and fixed income securities,
as well as the geographic allocation of the Portfolio's investments, based on
its view of general economic and financial trends in various countries and
industries, such as inflation, commodity prices, the direction of interest and
currency movements, estimates of growth in industry output and profits, and
government fiscal policies. For example, if the Adviser believes that falling
commodity prices and decreasing estimates of industrial output globally signal
low growth and limited returns from equity securities, the Portfolio may
emphasize fixed income investments. Similarly, if the Adviser believes that
low inflation, new technologies and improvements in economic productivity in a
country or region signal a promising environment for equity securities in that
country or region the Portfolio may emphasize equity investments in that
country or region.
The Portfolio may invest in fixed-income securities of any maturity, including
United States and foreign government securities and corporate debt securities.
The Portfolio will only invest in debt securities that are rated investment
grade by S&P or Moody's or unrated securities that are of comparable quality.
The Portfolio may also invest in securities denominated in currencies other
than the U.S. dollar. The Portfolio may also engage in currency transactions
to hedge against the risk of loss from changes in currency exchange rates. In
addition, the Portfolio may also employ a variety of instruments and
techniques to enhance income and to hedge against market and currency risk.
The Portfolio has no stated minimum holding period for investments, and will
buy or sell securities whenever the Adviser sees an appropriate opportunity.
<PAGE>
- ----------
91
- --------------------------------------------------------------------------------
When market or financial conditions warrant, the Portfolio may invest up to
100% of its assets in United States Government or Government agency
securities, money market securities, other fixed income securities, or cash
for temporary or defensive purposes. Such investment strategies are
inconsistent with the Portfolio's investment objective and could result in the
Portfolio not achieving its investment objective.
THE PRINCIPAL RISKS
This Portfolio invests in common stocks, therefore, its performance may go up
or down depending on general market conditions. Other principal risks include:
CONVERTIBLE SECURITIES RISK: Convertible securities generally enable the
Portfolio to benefit from increases in the market price of the underlying
common stocks, but generally offer lower yields than unconvertible securities
of similar quality. Convertible securities fluctuate both in relation to
changes in interest rates and changes in the value of the underlying common
stock.
FOREIGN SECURITIES RISK: The Portfolio's investments in foreign securities
involve risks not associated with investing in U.S. securities that can
adversely affect the Portfolio's performance. Foreign markets, particularly
emerging markets, may be less liquid, more volatile and subject to less
government supervision than domestic markets. There may be difficulties
enforcing contractual obligations, and it may take more time for trades to
clear and settle. In addition, foreign investments can be adversely affected
by: unfavorable currency exchange rates (relative to the U.S. dollar for
securities denominated in a foreign currencies); inadequate or inaccurate
information about foreign companies; higher transaction, brokerage and custody
costs; adverse changes in foreign economic and tax policies; and foreign
government instability, war or other adverse political or economic actions.
Other specific risks of investing in foreign securities include:
REGULATORY RISK: In general, foreign companies are also not subject to
uniform accounting, auditing and financial reporting standards or to other
regulatory practices and requirements as are U.S. companies, which could
adversely affect their value.
FIXED INCOME RISK: To the extent that a substantial amount of the Portfolio's
assets are invested in fixed income securities, that portion of the
Portfolio's performance will be affected by changes in interest rates, the
credit risk of the issuer, the duration or maturity of the Portfolio's fixed
income holdings, and adverse market or economic conditions. When interest
rates rise, the value of the Portfolio's fixed income securities, particularly
those with longer durations or maturities, will go down. When interest rates
fall, the reverse is true. In addition, to the extent that the Portfolio
invests in investment grade securities which are rated BBB by S&P or an
equivalent rating by any other NRSRO, it will be exposed to greater risk than
higher-rated obligations because BBB rated investment grade securities are
regarded as having only an adequate capacity to pay principal and interest,
are considered to lack outstanding investment characteristics, and may be
speculative.
DERIVATIVES RISK: The Portfolio's investments in derivatives can significantly
increase the Portfolio's exposure to market risk or credit risk of the
counterparty. Derivatives also involve the risk of mispricing or improper
valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
NON-DIVERSIFICATION RISK: Since a relatively high percentage of the
Portfolio's assets may be invested in the securities of a limited number of
issuers, some of which may be within the same industry, the securities of the
Portfolio may be more sensitive to changes in the market value of a single
issuer or industry or to risks associated with a single economic, political or
regulatory event than a diversified portfolio.
LIQUIDITY RISK: Certain securities held by the Portfolio may be difficult (or
impossible) to sell at the time and at the
------------------------ EQ Advisors Trust
<PAGE>
BALANCED/HYBRID PORTFOLIOS (CONTINUED)
- ----------
92
- --------------------------------------------------------------------------------
price the seller would like which may cause the Portfolio to lose money or be
prevented from earning capital gains.
PORTFOLIO TURNOVER RISK: The Portfolio's turnover rate has been over 100% per
year. Higher portfolio turnover (e.g., over 100% per year) will cause the
Portfolio to incur additional transaction costs that could be passed through
to shareholders.
PORTFOLIO PERFORMANCE
The bar chart below illustrates the Portfolio's annual total return for 1998
and 1999, the Portfolio's first two years of operations, and some of the risks
of investing in the Portfolio by showing yearly changes in the Portfolio's
performance. The table below shows the Portfolio's average annual total returns
for the Portfolio for one year and since inception. The table also compares the
Portfolio's performance to the returns of a broad-based index. Both the bar
chart and table assume reinvestment of dividends and distributions. Past
performance is not an indication of future performance. The performance results
presented below do not reflect any insurance and Contract-related fees and
expenses, which would reduce the performance results. The inception date for
the Portfolio is May 1, 1997.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
CALENDAR YEAR ANNUAL TOTAL RETURN
- --------------------------------------------------------------------------------
[GRAPHIC OMITTED]
1998 6.81%
1999 21.35%
<S> <C>
Best quarter: Worst quarter:
14.72% (1999 4th Quarter) (11.15)% (1998 3rd Quarter)
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------0
AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------
SINCE
ONE YEAR INCEPTION
- --------------------------------------------------------------------------------
<S> <C> <C>
Mercury World Strategy Portfolio 21.35% 12.11%
- --------------------------------------------------------------------------------
Mercury World Strategy Composite
Market Benchmark Index*,** 13.07% 16.18%
- --------------------------------------------------------------------------------
S&P 500 Index* 21.03% 27.36%
- --------------------------------------------------------------------------------
</TABLE>
* For more information on this index, see the preceding section "The
Benchmarks."
** We believe that this index reflects more closely the market sectors in
which the Portfolio invests.
WHO MANAGES THE PORTFOLIO
MERCURY ASSET MANAGEMENT US ("MERCURY"), A DIVISION OF FUND ASSET MANAGEMENT,
L.P. ("FAM"), 800 Scudders Mill Road, Plainsboro, New Jersey 08543. Mercury,
or the Portfolio's predecessor Adviser, Merrill Lynch Asset Management, L.P.
("MLAM"), has been the Adviser to the Portfolio since it commenced operations.
FAM and MLAM are both part of the Merrill Lynch Asset Management Group and
each is an indirect wholly-owned subsidiary of Merrill Lynch & Co., Inc., a
financial services holding company. The general partner of FAM and MLAM is
Princeton Services, Inc., a wholly-owned subsidiary of Merrill Lynch & Co.,
Inc. Mercury and its affiliates act as the manager for more than 100
registered investment companies. Mercury also offers portfolio management and
portfolio analysis services to individuals and institutions.
THOMAS R. ROBINSON is the Portfolio Manager primarily responsible for the
day-to-day management of the Portfolio since it commenced operations. Mr.
Robinson has served as a First Vice President of Mercury or its predecessor
since 1997 and as a Senior Portfolio Manager of Mercury or its predecessor
since 1995.
<PAGE>
3
More information on principal risks
- ----------------
93
- --------------------------------------------------------------------------------
Risk is the chance that you will lose money on your investment or that it will
not earn as much as you expect. In general, the greater the risk, the more
money your investment can earn for you and the more you can lose. Like other
investment companies, the value of each Portfolio's shares may be affected by
the Portfolio's investment objective(s), principal investment strategies and
particular risk factors. Consequently, each Portfolio may be subject to
different principal risks. Some of the principal risks of investing in the
Portfolios are discussed below. However, other factors may also affect each
Portfolio's net asset value.
There is no guarantee that a Portfolio will achieve its investment
objective(s) or that it will not lose principal value.
GENERAL INVESTMENT RISKS: Each Portfolio is subject to the following risks:
ASSET CLASS RISK: There is the possibility that the returns from the types of
securities in which a Portfolio invests will underperform returns from the
various general securities markets or different asset classes. Different types
of securities tend to go through cycles of outperformance and underperformance
in comparison to the general securities markets.
MARKET RISK: Each Portfolio's share price moves up and down over the short
term in reaction to stock or bond market movements. This means that you could
lose money over short periods, and perhaps over longer periods during extended
market downturns.
SECURITY SELECTION RISK: The Adviser(s) for each Portfolio rely on the
insights of different specialists in making investment decisions based on the
Portfolio's particular investment objective(s) and investment strategies.
There is the possibility that the specific securities held by a Portfolio will
underperform other funds in the same asset class or benchmarks that are
representative of the general performance of the asset class because of the
Adviser's choice of portfolio securities.
As indicated in "Summary Information Concerning EQ Advisors Trust" and "About
the Investment Portfolios," a particular Portfolio may also be subject to the
following risks:
CONVERTIBLE SECURITIES RISK: Convertible securities may include both
convertible debt and convertible preferred stock. Such securities may be
converted into shares of the underlying common stock at either a stated price
or stated rate. Therefore, convertible securities enable you to benefit from
increases in the market price of the underlying common stock. Convertible
securities provide higher yields than the underlying common stocks, but
generally offer lower yields than nonconvertible securities of similar
quality. The value of convertible securities fluctuates in relation to changes
in interest rates and, in addition, fluctuates in relation to the underlying
common stock. Subsequent to purchase by a Portfolio, convertible securities
may cease to be rated or a rating may be reduced below the minimum required
for purchase by that Portfolio. Each Adviser will consider such event in its
determination of whether a Portfolio should continue to hold the securities.
DERIVATIVES RISK: Derivatives are financial contracts whose value depends on,
or is derived from the value of an underlying asset, reference rate or index.
Derivatives include stock options, securities index options, currency options,
forward currency exchange contracts, futures contracts, swaps and options on
futures contracts. Certain Portfolios can use derivatives involving the U.S.
Government and foreign government securities and currencies. Investments in
derivatives can significantly increase your exposure to market risk, or credit
risk of the counterparty. Derivatives also involve the risk of mispricing or
improper valuation and the risk that changes in value of the derivative may not
correlate perfectly with the relevant assets, rates and indices.
FIXED INCOME RISK: To the extent that any of the Portfolios invest a
substantial amount of its assets in fixed income securities, a Portfolio may
be subject to the following risks:
<PAGE>
- ----------
94
- --------------------------------------------------------------------------------
ASSET-BACKED SECURITIES RISK: The Portfolio's investments in asset-backed
securities represent interests in pools of consumer loans such as credit card
receivables, automobile loans and leases, leases on equipment such as
computers, and other financial instruments and are subject to certain
additional risks. Rising interest rates tend to extend the duration of
asset-backed securities, making them more sensitive to changes in interest
rates. As a result, in a period of rising interest rates, the Portfolio may
exhibit additional volatility. When interest rates are declining, there are
usually more prepayments of loans which will shorten the life of these
securities. Prepayments also vary based on among other factors, general
economic conditions and other demographic conditions. The reinvestment of cash
received from prepayments will, therefore, usually be at a lower interest rate
than the original investment, lowering the Portfolio's yield.
CREDIT RISK: Credit risk is the risk that the issuer or guarantor of a
debt security or counterparty to a Portfolio's transactions will be unable or
unwilling to make timely principal and/or interest payments, or otherwise will
be unable or unwilling to honor its financial obligations. Each of the
Portfolios may be subject to credit risk to the extent that it invests in debt
securities or engages in transactions, such as securities loans or repurchase
agreements, which involve a promise by a third party to honor an obligation to
the Portfolio.
Credit risk is particularly significant for the Portfolios, such as the
Alliance High Yield Portfolio, that invest a material portion of their assets
in "JUNK BONDS" or lower-rated securities (i.e., rated BB or lower by S&P or
an equivalent rating by any other NRSRO or unrated securities of similar
quality). These debt securities and similar unrated securities have
speculative elements or are predominantly speculative credit risks. Portfolios
such as the Alliance High Yield Portfolio may also be subject to greater
credit risk because they may invest in debt securities issued in connection
with corporate restructurings by highly leveraged issuers or in debt
securities not current in the payment of interest or principal, or in default.
INTEREST RATE RISK: The price of a bond or a fixed income security is
dependent upon interest rates. Therefore, the share price and total return of
a Portfolio investing a significant portion of its assets in bonds or fixed
income securities will vary in response to changes in interest rates. A rise
in interest rates causes the value of a bond to decrease, and vice versa.
There is the possibility that the value of a Portfolio's investment in bonds
or fixed income securities may fall because bonds or fixed income securities
generally fall in value when interest rates rise. The longer the term of a
bond or fixed income instrument, the more sensitive it will be to fluctuations
in value from interest rate changes. Changes in interest rates may have a
significant effect on Portfolios holding a significant portion of their assets
in fixed income securities with long term maturities.
MORTGAGE-BACKED SECURITIES RISK: In the case of mortgage-backed
securities, rising interest rates tend to extend the term to maturity of the
securities, making them even more susceptible to interest rate changes. When
interest rates drop, not only can the value of fixed income securities drop,
but the yield can drop, particularly where the yield on the fixed income
securities is tied to changes in interest rates, such as adjustable mortgages.
Also when interest rates drop, the holdings of mortgage-backed securities by a
Portfolio can reduce returns if the owners of the underlying mortgages pay off
their mortgages sooner than anticipated since the funds prepaid will have to
be reinvested at the then lower prevailing rates. This is known as prepayment
risk. When interest rates rise, the holdings of mortgage-backed securities by
a Portfolio can reduce returns if the owners of the
<PAGE>
- ----------
95
- --------------------------------------------------------------------------------
underlying mortgages pay off their mortgages later than anticipated. This
is known as extension risk.
INVESTMENT GRADE SECURITIES RISK: Debt securities are rated by national
bond ratings agencies. Securities rated BBB by S&P or Baa by Moody's are
considered investment grade securities, but are somewhat riskier than
higher rated obligations because they are regarded as having only an
adequate capacity to pay principal and interest, and are considered to lack
outstanding investment characteristics.
JUNK BONDS OR LOWER RATED SECURITIES RISK: Bonds rated below investment
grade by S&P and Moody's are speculative in nature, may be subject to
certain risks with respect to the issuing entity and to greater market
fluctuations than higher rated fixed income securities. They are usually
issued by companies without long track records of sales and earnings, or by
those companies with questionable credit strength. These bonds are
considered "below investment grade." The retail secondary market for these
"junk bonds" may be less liquid than that of higher rated securities and
adverse conditions could make it difficult at times to sell certain
securities or could result in lower prices than those used in calculating
the Portfolio's net asset value.
FOREIGN SECURITIES RISK: A Portfolio's investments in foreign securities,
including depositary receipts, involve risks not associated with investing in
U.S. securities and can affect a Portfolio's performance. Foreign markets,
particularly emerging markets, may be less liquid, more volatile and subject
to less government supervision than domestic markets. There may be
difficulties enforcing contractual obligations, and it may take more time for
trades to clear and settle. The specific risks of investing in foreign
securities, among others, include:
CURRENCY RISK: The risk that changes in currency exchange rates will
negatively affect securities denominated in, and/or receiving revenues in,
foreign currencies. Adverse changes in currency exchange rates (relative to
the U.S. dollar) may erode or reverse any potential gains from a
Portfolio's investment in securities denominated in a foreign currency or
may widen existing losses.
EMERGING MARKET RISK: There are greater risks involved in investing in
emerging market countries and/or their securities markets. Generally,
economic structures in these countries are less diverse and mature than
those in developed countries, and their political systems are less stable.
Investments in emerging markets countries may be affected by national
policies that restrict foreign investment in certain issuers or industries.
The small size of their securities markets and low trading volumes can make
investments illiquid and more volatile than investments in developed
countries and such securities may be subject to abrupt and severe price
declines. As a result, a Portfolio investing in emerging market countries
may be required to establish special custody or other arrangements before
investing.
EURO RISK: Certain of the Portfolios may invest in securities issued by
European issuers. On January 1, 1999, 11 of the 15 member states of the
European Monetary Union ("EMU") introduced the "Euro" as a common currency.
During a three-year transitional period, the Euro will coexist with each
participating state's currency and, on July 1, 2002, the Euro is expected
to become the sole currency of the participating states. The introduction
of the Euro will result in the redenomination of European debt and equity
securities over a period of time, which may result in various legal and
accounting differences and/or tax treatments that otherwise would not
likely occur. During this period, the creation and implementation of
suitable clearing and settlement systems and other operational problems may
cause market disruptions that could adversely affect investments quoted in
the Euro.
------------------------ EQ Advisors Trust
<PAGE>
- ----------
96
- --------------------------------------------------------------------------------
POLITICAL/ECONOMIC RISK: Changes in economic and tax policies, government
instability, war or other political or economic actions or factors may have
an adverse effect on a Portfolio's foreign investments.
REGULATORY RISK: Less information may be available about foreign companies.
In general, foreign companies are not subject to uniform accounting,
auditing and financial reporting standards or to other regulatory practices
and requirements as are U.S. companies.
TRANSACTION COSTS RISK: The costs of buying and selling foreign securities,
including tax, brokerage and custody costs, generally are higher than those
involving domestic transactions.
GROWTH INVESTING RISK: Growth investing generally focuses on companies that,
due to their strong earnings and revenue potential, offer above-average
prospects for capital growth, with less emphasis on dividend income. Earnings
predictability and confidence in earnings forecasts are an important part of
the selection process. As a result, the price of growth stocks may be more
sensitive to changes in current or expected earnings than the prices of other
stocks. Advisers using this approach generally seek out companies experiencing
some or all of the following: high sales growth, high unit growth, high or
improving returns on assets and equity, and a strong balance sheet. Such
Advisers also prefer companies with a competitive advantage such as unique
management, marketing or research and development. Growth investing is also
subject to the risk that the stock price of one or more companies will fall or
will fail to appreciate as anticipated by the Advisers, regardless of
movements in the securities market.
INDEX-FUND RISK: The BT Equity 500 Index, BT Small Company Index and BT
International Equity Index Portfolios are not actively managed (which involves
buying and selling of securities based upon economic, financial and market
analysis and investment judgment). The BT Equity 500 Index, BT Small Company
Index and BT International Equity Index Portfolios utilize a "passive" or
"indexing" investment approach and attempt to duplicate the investment
performance of the particular index the Portfolio is tracking (i.e., S&P 500
Index, Russell 2000 Index or MSCI EAFE Index) through statistical procedures.
Therefore, the Portfolios will invest in the securities included in the
relevant index or substantially identical securities regardless of market
trends. The Portfolios cannot modify their investment strategies to respond to
changes in the economy, which means they may be particularly susceptible to a
general decline in the U.S. or global stock market segment relating to the
relevant index.
LEVERAGING RISK: When a Portfolio borrows money or otherwise leverages its
portfolio, the value of an investment in that Portfolio will be more volatile
and all other risks will tend to be compounded. All of the Portfolios may take
on leveraging risk by investing in collateral from securities loans and by
borrowing money to meet redemption requests.
LIQUIDITY RISK: Certain securities held by a Portfolio may be difficult (or
impossible) to sell at the time and at the price the seller would like. A
Portfolio may have to hold these securities longer than it would like and may
forego other investment opportunities. There is the possibility that a
Portfolio may lose money or be prevented from earning capital gains if it can
not sell a security at the time and price that is most beneficial to the
Portfolio. Portfolios that invest in privately-placed securities, high-yield
bonds, mortgage-backed securities or foreign or emerging market securities,
which have all experienced periods of illiquidity, are subject to liquidity
risks. A particular Portfolio may be more susceptible to some of these risks
than others, as noted in the description of each Portfolio.
MONEY MARKET RISK: Although a money market fund is designed to be a relatively
low risk investment, it is not entirely free of risk. Despite the short
maturities and high credit quality of the Alliance Money Market Portfolio's
investments, increases in interest rates and deteriorations in
<PAGE>
- ----------
97
- --------------------------------------------------------------------------------
the credit quality of the instruments the Portfolio has purchased may reduce
the Portfolio's yield. In addition, the Portfolio is still subject to the risk
that the value of an investment may be eroded over time by inflation.
MULTIPLE-ADVISER RISK: The EQ/Aggressive Stock and EQ/Balanced Portfolios
employ multiple Advisers. Each of the Advisers independently chooses and
maintains a portfolio of common stocks for the Portfolio and each is
responsible for investing a specific allocated portion of the Portfolio's
assets. Because each Adviser will be managing its allocated portion of the
Portfolio independently from the other Advisers, the same security may be held
in two different portions of the Portfolio, or may be acquired for one portion
of the Portfolio at a time when the Adviser of another portion deems it
appropriate to dispose of the security from that other portion. Similarly,
under some market conditions, one Adviser may believe that temporary,
defensive investments in short-term instruments or cash are appropriate when
the other Adviser or Advisers believe continued exposure to the equity markets
is appropriate for their portions of the Portfolio. Because each Adviser
directs the trading for its own portion of the Portfolio, and does not
aggregate its transactions with those of the other Advisers, the Portfolio may
incur higher brokerage costs than would be the case if a single Adviser were
managing the entire Portfolio.
NON-DIVERSIFICATION RISK: The Lazard Small Cap Value Portfolio, the Morgan
Stanley Emerging Markets Equity and Mercury World Strategy Portfolios are
classified as "non-diversified" investment companies, which means that the
proportion of each Portfolio's assets that may be invested in the securities
of a single issuer is not limited by the 1940 Act. Since a relatively high
percentage of each non-diversified Portfolio's assets may be invested in the
securities of a limited number of issuers, some of which may be within the
same industry, the securities of each Portfolio may be more sensitive to
changes in the market value of a single issuer or industry. The use of such a
focused investment strategy may increase the volatility of a Portfolio's
investment performance, as the Portfolio may be more susceptible to risks
associated with a single economic, political or regulatory event than a
diversified portfolio. If the securities in which the Portfolio invests
perform poorly, the Portfolio could incur greater losses than it would have
had it been invested in a greater number of securities. However to qualify as
a regulated investment company ("RIC") under the Internal Revenue Code of
1986, as amended (the "Code") and receive pass through tax treatment, each
Portfolio at the close of each fiscal quarter, may not have more than 25% of
its total assets invested in the securities of any one issuer (excluding U.S.
Government obligations) and with respect to 50% of its assets, (i) may not
have more than 5% of its total assets invested in the securities of any one
issuer and (ii) may not own more than 10% of the outstanding voting securities
of any one issuer. Each non-diversified Portfolio intends to qualify as a RIC.
PORTFOLIO TURNOVER RISK: Consistent with their investment policies, the
Portfolios also will purchase and sell securities without regard to the effect
on portfolio turnover. Higher portfolio turnover (e.g., over 100% per year)
will cause a Portfolio to incur additional transaction costs that could be
passed through to shareholders.
SECTOR RISK: Market or economic factors affecting certain companies or
industries in a particular industry sector could have a major effect on the
value of a Portfolio's investments. Many technology stocks, especially those
of smaller less-seasoned companies, tend to be more volatile than the overall
market.
SECURITIES LENDING RISK: For purposes of realizing additional income, each
Portfolio may lend securities to broker-dealers approved by the Board of
Trustees. In addition, the Alliance High Yield and Alliance Intermediate
Government Securities Portfolios may each make secured loans of its portfolio
securities without restriction. Any such loan of portfolio securities will be
continuously secured by collateral at least equal to the value of the security
loaned. Such collateral will be in the form of cash, marketable securities
issued or guaranteed by the U.S. Government or
------------------------ EQ Advisors Trust
<PAGE>
- ----------
98
- --------------------------------------------------------------------------------
its agencies, or a standby letter of credit issued by qualified banks. The
risks in lending portfolio securities, as with other extensions of secured
credit, consist of possible delay in receiving additional collateral or in the
recovery of the securities or possible loss of rights in the collateral should
the borrower fail financially. Loans will only be made to firms deemed by the
Adviser to be of good standing and will not be made unless, in the judgment of
the Adviser, the consideration to be earned from such loans would justify the
risk.
SMALL-CAP AND MID-CAP COMPANY RISK: A Portfolio's investments in small-cap and
mid-cap companies may involve greater risks than investments in larger, more
established issuers. Smaller companies may have narrower product lines, more
limited financial resources and more limited trading markets for their stock,
as compared with larger companies. Their securities may be less well-known and
trade less frequently and in more limited volume than the securities of
larger, more established companies. In addition, small-cap and mid-cap
companies are typically subject to greater changes in earnings and business
prospects than larger companies. Consequently, the prices of small company
stocks tend to rise and fall in value more frequently than the stocks of
larger companies. Although investing in small-cap and mid-cap companies offers
potential for above-average returns, the companies may not succeed and the
value of their stock could decline significantly.
VALUE INVESTING RISK: Value investing attempts to identify strong companies
selling at a discount from their perceived true worth. Advisers using this
approach generally select stocks at prices, in their view, that are
temporarily low relative to the company's earnings, assets, cash flow and
dividends. Value investing is subject to the risk that the stocks' intrinsic
value may never be fully recognized or realized by the market, or their prices
may go down. In addition, there is the risk that a stock judged to be
undervalued may actually be appropriately priced. Value investing generally
emphasizes companies that, considering their assets and earnings history, are
attractively priced and may provide dividend income.
The Trust's Portfolios are not insured by the FDIC or any other government
agency. Each Portfolio is not a deposit or other obligation of any financial
institution or bank and is not guaranteed. Each Portfolio is subject to
investment risks and possible loss of principal invested.
<PAGE>
4
Management of the Trust
- ----------------
99
- --------------------------------------------------------------------------------
This section gives you information on the Trust, the Manager and the Advisers
for the Portfolios. More detailed information concerning each of the Advisers
and portfolio managers is included in the description for each Portfolio in
the section "About The Investment Portfolios."
THE TRUST
The Trust is organized as a Delaware business trust and is registered with the
Securities and Exchange Commission ("SEC") as an open-end management
investment company. The Trust issues shares of beneficial interest that are
currently divided among forty-one (41) Portfolios, each of which has
authorized Class IA and Class IB shares. Each Portfolio has its own
objectives, investment strategies and risks, which have been previously
described in this prospectus.
THE MANAGER
The Equitable Life Assurance Society of the United States ("Equitable"), 1290
Avenue of the Americas, New York, New York 10104, currently serves as the
Manager of the Trust. EQ Financial Consultants, Inc. ("EQFC") previously
served as the Manager of the Trust, until September 17, 1999 when the Trust's
Investment Management Agreement was transferred to Equitable. Equitable is an
investment adviser registered under the Investment Advisers Act of 1940, as
amended, and a wholly-owned subsidiary of AXA Financial, Inc. ("AXA
Financial"), a subsidiary of AXA, a French insurance holding company.
Subject to the supervision and direction of the Board of Trustees, the Manager
has overall responsibility for the general management of the Trust. In the
exercise of that responsibility, and under the Multi-Manager Order, the
Manager, without obtaining shareholder approval but subject to the review and
approval by the Board of Trustees, may: (i) select new or additional Advisers
for the Portfolios; (ii) enter into new investment advisory agreements and
materially modify existing investment advisory agreements; and (iii) terminate
and replace the Advisers. The Manager also monitors each Adviser's investment
program and results, reviews brokerage matters, and carries out the directives
of the Board of Trustees. The Manager also supervises the provision of
services by third parties such as the Trust's custodian.
The contractual management fee rates payable by the Trust are at the following
annual percentages of the value of each Portfolio's average daily net assets:
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT (AS A PERCENTAGE OF AVERAGE DAILY
NET ASSETS)(FEE ON ALL ASSETS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
INDEX PORTFOLIOS
- --------------------------------------------------------------------------------
<S> <C>
BT Equity 500 Index 0.250%
BT International Equity Index 0.350%
BT Small Company Index 0.250%
- --------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
100
- --------------------------------------------------------------------------------
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
DEBT PORTFOLIOS $750 MILLION $750 MILLION $1 BILLION $2.5 BILLION THEREAFTER
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance High Yield 0.600% 0.575% 0.550% 0.530% 0.520%
Alliance Money Market 0.350% 0.325% 0.300% 0.280% 0.270%
J.P. Morgan Core Bond 0.450% 0.425% 0.400% 0.380% 0.370%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
CONTRACTUAL FEE UNDER MANAGEMENT AGREEMENT
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
FIRST NEXT NEXT NEXT
EQUITY PORTFOLIOS $1 BILLION $1 BILLION $3 BILLION $5 BILLION THEREAFTER
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EQ/Aggressive Stock 0.650% 0.600% 0.575% 0.550% 0.525%
EQ/Balanced 0.600% 0.550% 0.525% 0.500% 0.475%
Alliance Common Stock 0.550% 0.500% 0.475% 0.450% 0.425%
Alliance Small Cap Growth 0.750% 0.700% 0.675% 0.650% 0.625%
Capital Guardian International 0.850% 0.800% 0.775% 0.750% 0.725%
Capital Guardian Research 0.650% 0.600% 0.575% 0.550% 0.525%
Capital Guardian U.S. Equity 0.650% 0.600% 0.575% 0.550% 0.525%
EQ/Alliance Premier Growth 0.900% 0.850% 0.825% 0.800% 0.775%
EQ/Alliance Technology 0.900% 0.850% 0.825% 0.800% 0.775%
EQ/Evergreen Foundation 0.600% 0.550% 0.525% 0.500% 0.475%
EQ/Evergreen 0.650% 0.600% 0.575% 0.550% 0.525%
EQ/Putnam Growth & Income Value 0.600% 0.550% 0.525% 0.500% 0.475%
EQ/Putnam International Equity 0.850% 0.800% 0.775% 0.750% 0.725%
EQ/Putnam Investors Growth 0.650% 0.600% 0.575% 0.550% 0.525%
Lazard Large Cap Value 0.650% 0.600% 0.575% 0.550% 0.525%
Lazard Small Cap Value 0.750% 0.700% 0.675% 0.650% 0.625%
Mercury Basic Value Equity 0.600% 0.550% 0.525% 0.500% 0.475%
Mercury World Strategy 0.700% 0.650% 0.625% 0.600% 0.575%
MFS Emerging Growth Companies 0.650% 0.600% 0.575% 0.550% 0.525%
MFS Growth with Income 0.600% 0.550% 0.525% 0.500% 0.475%
MFS Research 0.650% 0.600% 0.575% 0.550% 0.525%
Morgan Stanley Emerging Markets Equity 1.150% 1.100% 1.075% 1.050% 1.025%
- ---------------------------------------------------------------------------------------------------------
</TABLE>
For two Portfolios (i.e., Lazard Large Cap Value and EQ/Putnam Growth & Income
Value Portfolios) the Manager has agreed not to implement any increase in the
applicable management fee rates (as approved by shareholders) until July 31,
2001, unless the Board agrees that such a management fee increase should be put
into operation earlier.
<PAGE>
- ----------
101
- --------------------------------------------------------------------------------
The table below shows the annual rate of the management fees (as a percentage
of each Portfolio's average daily net assets) that the Manager (or the
predecessor Manager for certain of the Portfolios) received in 1999 for
managing each of the Portfolios and the rate of the management fees waived by
the Manager (or the predecessor Manager for certain of the Portfolios) in 1999
in accordance with the provisions of the Expense Limitation Agreement, as
defined directly below, between the Manager and the Trust with respect to
certain of the Portfolios.
MANAGEMENT FEES PAID BY THE PORTFOLIOS IN 1999*
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ANNUAL RATE OF
RATE FEES
PORTFOLIOS RECEIVED WAIVED
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Aggressive Stock 0.54% 0.00%
EQ/Balanced 0.41% 0.00%
Alliance Common Stock 0.36% 0.00%
Alliance High Yield 0.60% 0.00%
Alliance Money Market 0.34% 0.00%
EQ/Alliance Premier Growth 0.90% 0.22%
Alliance Small Cap Growth 0.90% 0.00%
BT Equity Index 500 0.25% 0.12%
BT International Equity Index 0.35% 0.11%
BT Small Company Index 0.25% 0.49%
Capital Guardian International 0.75% 0.45%
Capital Guardian Research 0.65% 0.40%
Capital Guardian U.S. Equity 0.65% 0.28%
EQ/Evergreen 0.75% 1.81%
EQ/Evergreen Foundation 0.63% 0.99%
J.P. Morgan Core Bond 0.45% 0.09%
Lazard Large Cap Value 0.55% 0.06%
Lazard Small Cap Value 0.80% 0.10%
Mercury Basic Value 0.55% 0.11%
Mercury World Strategy 0.70% 0.20%
MFS Emerging Growth 0.55% 0.10%
Companies
MFS Growth with Income 0.55% 0.31%
MFS Research 0.55% 0.11%
Morgan Stanley Emerging 1.15% 0.64%
Markets Equity
- --------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
ANNUAL RATE OF
RATE FEES
PORTFOLIOS RECEIVED WAIVED
- --------------------------------------------------------------------------------
<S> <C> <C>
EQ/Putnam Growth & Income 0.55% 0.10%
Value
EQ/Putnam International Equity 0.70% 0.06%
EQ/Putnam Investors Growth 0.55% 0.05%
- --------------------------------------------------------------------------------
</TABLE>
* The EQ/Alliance Technology Portfolio is not included in the above table
because it had no operations during the fiscal year ended December 31,
1999.
EXPENSE LIMITATION AGREEMENT
In the interest of limiting until April 30, 2001 the expenses of each
Portfolio (except for the Portfolios for which Alliance serves as Investment
Adviser, other than EQ/Alliance Premier Growth Portfolio), the Manager has
entered into an amended and restated expense limitation agreement with the
Trust with respect to those Portfolios ("Expense Limitation Agreement").
Pursuant to that Expense Limitation Agreement, the Manager has agreed to waive
or limit its fees and to assume other expenses so that the total annual
operating expenses of each Portfolio (other than interest, taxes, brokerage
commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles, other extraordinary expenses not
incurred in the ordinary course of each Portfolio's business and amounts
payable pursuant to a plan adopted in accordance with Rule 12b-1 under the
1940 Act), are limited to the following respective expense ratios:
------------------------ EQ Advisors Trust
<PAGE>
- ----------
102
- --------------------------------------------------------------------------------
EXPENSE LIMITATION PROVISIONS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
TOTAL EXPENSES
LIMITED TO (% OF
PORTFOLIOS DAILY NET ASSETS)
- --------------------------------------------------------------------------------
<S> <C>
BT Equity 500 Index 0.35%
BT International Equity Index 0.75%
BT Small Company Index 0.50%
Capital Guardian International 0.95%
Capital Guardian Research 0.70%
Capital Guardian U.S. Equity 0.70%
EQ/Alliance Technology 0.90%
EQ/Alliance Premier Growth 0.90%
EQ/Evergreen 0.70%
EQ/Evergreen Foundation 0.70%
EQ/Putnam Growth & Income Value 0.70%
EQ/Putnam International Equity 1.00%
EQ/Putnam Investors Growth 0.70%
J.P. Morgan Core Bond 0.55%
Lazard Large Cap Value 0.70%
Lazard Small Cap Value 0.85%
Mercury Basic Value Equity 0.70%
Mercury World Strategy 0.95%
MFS Emerging Growth Companies 0.75%
MFS Growth with Income 0.70%
MFS Research 0.70%
Morgan Stanley Emerging Markets 1.50%
Equity
- --------------------------------------------------------------------------------
</TABLE>
Each Portfolio may at a later date reimburse to the Manager the management
fees waived or limited and other expenses assumed and paid by the Manager
pursuant to the Expense Limitation Agreement provided such Portfolio has
reached a sufficient asset size to permit such reimbursement to be made
without causing the total annual expense ratio of each Portfolio to exceed the
percentage limits stated above. Consequently, no reimbursement by a Portfolio
will be made unless: (i) the Portfolio's assets exceed $100 million;
(ii) the Portfolio's total annual expense ratio is less than the respective
percentages stated above; and (iii) the payment of such reimbursement has been
approved by the Trust's Board of Trustees on a quarterly basis.
The total amount of reimbursement to which the Manager may be entitled will
equal, at any time, the sum of (i) all investment management fees previously
waived or reduced by the Manager and (ii) all other payments previously
remitted by the Manager to the Portfolio in accordance with the Expense
Limitation Agreement during any of the previous five (5) fiscal years, (or
three (3) fiscal years for certain Portfolios) less any reimbursement that the
Portfolio has previously paid to the Manager with respect to (a) such
investment management fees previously waived or reduced and (b) such other
payments previously remitted by the Manager to the Portfolio.
THE ADVISERS
Each Portfolio has one or more Advisers that furnish an investment program for
the Portfolio (or portion thereof for which the entity serves as Adviser)
pursuant to an investment advisory agreement with the Manager. Each Adviser
makes investment decisions on behalf of the Portfolio (or portion thereof for
which the entity serves as Adviser), places all orders for the purchase and
sale of investments for the Portfolio's account with brokers or dealers
selected by such Adviser or the Manager and may perform certain limited
related administrative functions in connection therewith.
The Manager has received an exemptive order, the Multi-Manager Order, from the
SEC that permits the Manager, subject to board approval and without the
approval of shareholders to: (a) employ a new Adviser or additional Advisers
for any Portfolio; (b) enter into new investment advisory agreements and
materially modify existing investment advisory agreements; and (c) terminate
and replace the Advisers without obtaining approval of the relevant
Portfolio's shareholders. However, the Manager may not enter into an
investment advisory agreement with an "affiliated person" of the Manager (as
that term is defined in Section 2(a)(3) of the 1940 Act ("Affiliated
Adviser"), such as Alliance, unless the investment advisory agreement with the
Affiliated Adviser, including compensation, is approved
<PAGE>
- ----------
103
- --------------------------------------------------------------------------------
by the affected Portfolio's shareholders, including, in instances in which the
investment advisory agreement pertains to a newly formed Portfolio, the
Portfolio's initial shareholder. In such circumstances, shareholders would
receive notice of such action, including the information concerning the
Adviser that normally is provided in an information statement under Schedule
14C of the Securities Exchange Act of 1934, as amended ("1934 Act").
The Manager pays each Adviser a fee based on the Portfolio's average daily net
assets. No Portfolio is responsible for the fees paid to each of the Advisers.
THE ADMINISTRATOR
Pursuant to an agreement, Equitable currently serves as the Administrator to
the Trust. As Administrator, Equitable provides the Trust with necessary
administrative, fund accounting and compliance services, and makes available
the office space, equipment, personnel and facilities required to provide such
services to the Trust.
Equitable may carry out its responsibilities either directly or through
sub-contracting with third party service providers. For these services, the
Trust pays Equitable $30,000 for each Portfolio, and a monthly fee at the
annual rate of 0.04 of 1% of the first $3 billion of total Trust assets, 0.03
of 1% of the next $3 billion of the total Trust assets; 0.025 of 1% of the
next $4 billion of the total Trust assets; and 0.0225% of 1% of the total
Trust assets in excess of $10 billion.
THE TRANSFER AGENT
Equitable serves as the transfer agent and dividend disbursing agent of the
Trust and receives no compensation for serving in such capacity.
BROKERAGE PRACTICES
In selecting brokers and dealers in accordance with Section 28(e) of the 1934
Act, the Manager and each Adviser may consider research and brokerage services
received by the Manager, the Advisers, the Trust or any Portfolio. Subject to
seeking the most favorable net price and execution available, the Manager and
each Adviser may also consider sales of shares of the Trust as a factor in the
selection of brokers and dealers. Finally, at the discretion of the Board, the
Trust may direct the Manager to cause Advisers to effect securities
transactions through broker-dealers in a manner that would help to generate
resources to (i) pay the cost of certain expenses which the Trust is required
to pay or for which the Trust is required to arrange payment or (ii) finance
activities that are primarily intended to result in the sale of Trust shares.
BROKERAGE TRANSACTIONS WITH AFFILIATES
To the extent permitted by law, the Trust may engage in securities and other
transactions with entities that may be affiliated with the Manager or the
Advisers. The 1940 Act generally prohibits the Trust from engaging in
principal securities transactions with an affiliate of the Manager or the
Advisers unless pursuant to an exemptive order from the SEC. For these
purposes, however, the Trust has considered this issue and believes, based
upon advice of counsel, that a broker-dealer affiliate of an Adviser to one
Portfolio should not be treated as an affiliate of an Adviser to another
Portfolio for which such Adviser does not provide investment advice in whole
or in part. The Trust has adopted procedures that are reasonably designed to
provide that any commission it pays to affiliates of the Manager or Advisers
does not exceed the usual and customary broker's commission. The Trust has
also adopted procedures permitting it to purchase securities, under certain
restrictions prescribed by a rule under the 1940 Act, in a public offering in
which an affiliate of the Manager or Advisers is an underwriter.
------------------------ EQ Advisors Trust
<PAGE>
5
Fund distribution arrangements
- ----------------
104
- --------------------------------------------------------------------------------
The Trust offers two classes of shares on behalf of each Portfolio: Class IA
shares and Class IB shares. AXA Advisors, LLC ("AXA Advisors") serves as one
of the distributors for the Class IB shares of the Trust offered by this
Prospectus as well as one of the distributors for the Class IA shares.
Equitable Distributors, Inc. ("EDI") serves as the other distributor for the
Class IB shares of the Trust as well as the Class IA shares. Both classes of
shares are offered and redeemed at their net asset value without any sales
load. AXA Advisors and EDI are affiliates of Equitable. Both AXA Advisors and
EDI are registered as broker-dealers under the 1934 Act and are members of the
National Association of Securities Dealers, Inc.
The Trust has adopted a Distribution Plan under Rule 12b-1 under the 1940 Act
for the Trust's Class IB shares. Under the Class IB Distribution Plan the
Class IB shares of the Trust pay each of the distributors an annual fee to
compensate them for promoting, selling and servicing shares of the Portfolios.
The annual fees equal 0.25% of each Portfolio's average daily net assets. Over
time, the fees will increase your cost of investing and may cost you more than
other types of charges.
<PAGE>
6
Purchase and redemption
- ----------------
105
- --------------------------------------------------------------------------------
The price at which a purchase or redemption is effected is based on the next
calculation of net asset value after an order is placed by an insurance
company or qualified retirement plan investing in or redeeming from the Trust.
Net asset value per share is calculated for purchases and redemption of shares
of each Portfolio by dividing the value of total Portfolio assets, less
liabilities (including Trust expenses and class related expenses, which are
accrued daily), by the total number of outstanding shares of that Portfolio.
The net asset value per share of each Portfolio is determined each business
day at 4:00 p.m. Eastern time. Net asset value per share is not calculated on
days on which the New York Stock Exchange ("NYSE") is closed for trading.
Portfolios that invest a significant portion of their assets in foreign
securities may experience changes in their net asset value on days when a
shareholder may not purchase or redeem shares of that Portfolio because
foreign securities (other than depositary receipts) are valued at the close of
business in the applicable foreign country.
All shares are purchased and redeemed in accordance with the Trust's Amended
and Restated Declaration of Trust and By-Laws. Sales and redemptions of shares
of the same class by the same shareholder on the same day will be netted for
each Portfolio. All redemption requests will be processed and payment with
respect thereto will normally be made within seven days after tenders.
The Trust may suspend redemption, if permitted by the 1940 Act, for any period
during which the New York Stock Exchange is closed or during which trading is
restricted by the SEC or the SEC declares that an emergency exists. Redemption
may also be suspended during other periods permitted by the SEC for the
protection of the Trust's shareholders. If the Board of Trustees determines
that it would be detrimental to the best interest of the Trust's remaining
shareholders to make payment in cash, the Trust may pay redemption proceeds in
whole or in part by a distribution-in-kind of readily marketable securities.
You should note that the Trust is not designed for professional "market
timing" organizations, or other organizations or individuals engaging in a
market timing strategy, making programmed transfers, frequent transfers or
transfers that are large in relation to the total assets of each of the
Trust's Portfolios. Market timing strategies are disruptive to the Trust's
Portfolios. If we determine that your transfer patterns among the Trust's
Portfolio's reflect a market timing strategy, we reserve the right to take
action including, but not limited to: restricting the availability of transfer
through telephone requests, facsimile transmissions, automated telephone
services, internet services or any electronic transfer services. We may also
refuse to act on transfer instructions of an agent acting under a power of
attorney who is acting on behalf of more than one owner.
<PAGE>
7
How assets are valued
- ----------------
106
- --------------------------------------------------------------------------------
Values are determined according to accepted practices and all laws and
regulations that apply. The assets of each Portfolio are generally valued as
follows:
o Stocks and debt securities which mature in more than 60 days are valued on
the basis of market quotations.
o Foreign securities not traded directly, including depositary receipts, in
the United States are valued at representative quoted prices in the
currency in the country of origin. Foreign currency is converted into
United States dollar equivalents at current exchange rates. Because
foreign markets may be open at different times than the NYSE, the value of
a Portfolio's shares may change on days when shareholders are not able to
buy or sell them. If events materially affecting the values of the
Portfolios' foreign investments occur between the close of foreign markets
and the close of regular trading on the NYSE, these investments may be
valued at their fair value.
o Short-term debt securities in the Portfolios, other than the Alliance Money
Market Portfolio, which mature in 60 days or less are valued at amortized
cost, which approximates market value. Securities held in the Alliance
Money Market Portfolio are valued at prices based on equivalent yields or
yield spreads.
o Other securities and assets for which market quotations are not readily
available or for which valuation cannot be provided are valued in good
faith by the Valuation Committee of the Board of Trustees of the Trust
using its best judgment.
<PAGE>
8
Tax information
- ----------------
107
- --------------------------------------------------------------------------------
Each Portfolio of the Trust is a separate regulated investment company for
federal income tax purposes. Regulated investment companies are usually not
taxed at the entity (Portfolio) level. They pass through their income and
gains to their shareholders by paying dividends. Their shareholders include
this income on their respective tax returns. A Portfolio will be treated as a
regulated investment company if it meets specified federal income tax rules,
including types of investments, limits on investments, calculation of income,
and dividend payment requirements. Although the Trust intends that it and each
Portfolio will be operated to have no federal tax liability, if they have any
federal tax liability, that could hurt the investment performance of the
Portfolio in question. Also, any Portfolio investing in foreign securities or
holding foreign currencies could be subject to foreign taxes which could
reduce the investment performance of the Portfolio.
It is important for each Portfolio to maintain its federal income tax
regulated investment company status because the shareholders of the Portfolio
that are insurance company separate accounts will then be able to use a
favorable federal income tax investment diversification testing rule in
determining whether the Contracts indirectly funded by the Portfolio meet tax
qualification rules for variable insurance contracts. If a Portfolio fails to
meet specified investment diversification requirements, owners of non-pension
plan Contracts funded through the Trust could be taxed immediately on the
accumulated investment earnings under their Contracts and could lose any
benefit of tax deferral. Equitable, in its capacity as Administrator therefore
carefully monitors compliance with all of the regulated investment company
rules and variable insurance contract investment diversification rules.
<PAGE>
9
Financial Highlights
- -------
108
- --------------------------------------------------------------------------------
The financial highlights table is intended to help you understand the financial
performance for the Trust's Class IA and Class IB shares since May 1, 1997.
With respect to the Portfolios that are advised by Alliance (other than
EQ/Alliance Premier Growth Portfolio and the EQ/Alliance Technology Stock
Portfolio) financial information in the table below is for the past five (5)
years (or, if shorter, the period of the Portfolio's operations). Since the
EQ/Alliance Technology Stock Portfolio will commence operations on May 1, 2000,
no information for that Portfolio is provided below. The information below for
the Class IA and Class IB shares has been derived from the financial statements
of the Trust, which have been audited by PricewaterhouseCoopers LLP,
independent public accountants. PricewaterhouseCoopers LLP's report on the
Trust's financial statements as of December 31, 1999 appears in the Trust's
Annual Report. The information should be read in conjunction with the financial
statements contained in the Trust's Annual Report which are incorporated by
reference into the Trust's Statement of Additional Information (SAI) and
available upon request.
EQ/AGGRESSIVE STOCK PORTFOLIO (fka ALLIANCE AGGRESSIVE STOCK PORTFOLIO)(d)(e):
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 34.15 $ 36.22 $ 35.85 $ 35.68 $ 30.63
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... 0.12 0.09 0.04 0.09 0.10
Net realized and unrealized gain
(loss) on investments ................. 6.22 (0.28) 3.71 7.52 9.54
--------- ---------- --------- --------- ---------
Total from investment operations........ 6.34 (0.19) 3.75 7.61 9.64
--------- ---------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.12) (0.16) (0.05) (0.09) (0.10)
Dividends in excess of net
investment income ..................... - - - - -
Distributions from realized gains ...... (2.36) (1.72) (3.33) (7.33) (4.49)
Distributions in excess of realized
gains ................................. - - - (0.02) -
Tax return of capital distributions .... - - - - -
---------- ---------- ---------- ---------- ----------
Total dividends and distributions ...... (2.48) (1.88) (3.38) (7.44) (4.59)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period ........... $ 38.01 $ 34.15 $ 36.22 $ 35.85 $ 35.68
========== ========== ========== ========== ==========
Total return ............................. 18.84% 0.29% 10.94% 22.20% 31.63%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $4,368,877 $4,346,907 $4,589,771 $3,865,256 $2,700,515
Ratio of expenses to average net
assets ................................. 0.56% 0.56% 0.54% 0.48% 0.49%
Ratio of net investment income (loss)
to average net assets .................. 0.33% 0.24% 0.11% 0.24% 0.28%
Portfolio turnover rate .................. 87% 105% 123% 108% 127%
<CAPTION>
CLASS IB
--------------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
------------------------------------- DECEMBER 31,
1999 1998 1997 1996
------------ ------------ ----------- ------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 34.01 $ 36.13 $ 35.83 $ 37.28
------- ------- ------- ----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... 0.03 0.01 (0.11) (0.01)
Net realized and unrealized gain
(loss) on investments ................. 6.20 (0.29) 3.77 0.85
------- -------- ------- ----------
Total from investment operations........ 6.23 (0.28) 3.66 0.84
------- -------- ------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.05) (0.12) (0.03) -
Dividends in excess of net
investment income ..................... - - - (0.02)
Distributions from realized gains ...... (2.36) (1.72) (3.33) (0.23)
Distributions in excess of realized
gains ................................. - - - (2.04)
Tax return of capital distributions .... - - - -
-------- -------- ------- ----------
Total dividends and distributions ...... (2.41) (1.84) (3.36) (2.29)
-------- -------- ------- ----------
Net asset value, end of period ........... $ 37.83 $ 34.01 $ 36.13 $ 35.83
======== ======== ======= ==========
Total return ............................. 18.55% 0.05% 10.66% 2.32%(b)
======== ======== ======= ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $233,265 $153,782 $73,486 $ 613
Ratio of expenses to average net
assets ................................. 0.81% 0.82% 0.81% 0.73%(a)
Ratio of net investment income (loss)
to average net assets .................. 0.07% 0.02% (0.28)% (0.10)%(a)
Portfolio turnover rate .................. 87% 105% 123% 108%
</TABLE>
<PAGE>
- -----
109
- --------------------------------------------------------------------------------
EQ/BALANCED PORTFOLIO (fka ALLIANCE BALANCED PORTFOLIO)(d)(e):
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 18.51 $ 17.58 $ 16.64 $ 16.76 $ 14.87
--------- --------- --------- --------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .................. 0.52 0.56 0.58 0.53 0.54
Net realized and unrealized gain
on investments and foreign
currency transactions ................. 2.69 2.54 1.86 1.31 2.36
--------- --------- --------- --------- ---------
Total from investment operations ....... 3.21 3.10 2.44 1.84 2.90
--------- --------- --------- --------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.56) (0.50) (0.59) (0.53) (0.54)
Dividends in excess of net
investment income ..................... - - - - -
Distributions from realized gains ...... (1.98) (1.67) (0.91) (1.40) (0.47)
Distributions in excess of realized
gains ................................. - - - (0.03) -
Tax return of capital distributions .... - - - - -
---------- ---------- ---------- ---------- ----------
Total dividends and distributions ...... (2.54) (2.17) (1.50) (1.96) (1.01)
---------- ---------- ---------- ---------- ----------
Net asset value, end of period ........... $ 19.18 $ 18.51 $ 17.58 $ 16.64 $ 16.76
========== ========== ========== ========== ==========
Total return ............................. 17.79% 18.11% 15.06% 11.68% 19.75%
========== ========== ========== ========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $2,126,313 $1,936,429 $1,724,089 $1,637,856 $1,523,142
Ratio of expenses to average net
assets ................................. 0.44% 0.45% 0.45% 0.41% 0.40%
Ratio of net investment income to
average net assets ..................... 2.68% 3.00% 3.30% 3.15% 3.33%
Portfolio turnover rate .................. 107% 95% 146% 177% 186%
<CAPTION>
CLASS IB
-------------------------------------
JULY 8, 1998*
YEAR ENDED TO
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------ ------------------
<S> <C> <C>
Net asset value, beginning of period ..... $ 18.51 $ 19.48
------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .................. 0.47 0.24
Net realized and unrealized gain
on investments and foreign
currency transactions ................. 2.69 0.66
------- ---------
Total from investment operations ....... 3.16 0.90
------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ (0.54) (0.20)
Dividends in excess of net
investment income ..................... - -
Distributions from realized gains ...... (1.98) (1.67)
Distributions in excess of realized
gains ................................. - -
Tax return of capital distributions .... - -
------- ---------
Total dividends and distributions ...... (2.52) (1.87)
------- ---------
Net asset value, end of period ........... $ 19.15 $ 18.51
======= =========
Total return ............................. 17.50% 4.92%(b)
======= =========
<PAGE>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $10,701 $ 10
Ratio of expenses to average net
assets ................................. 0.69% 0.70%(a)
Ratio of net investment income to
average net assets ..................... 2.43% 2.65%(a)
Portfolio turnover rate .................. 107% 95%
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
110
- --------------------------------------------------------------------------------
ALLIANCE COMMON STOCK PORTFOLIO(d)(e):
<TABLE>
<CAPTION>
CLASS IA
-------------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ......................... $24.35 $21.61 $18.23 $16.48 $13.36
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income........... 0.17 0.18 0.14 0.15 0.20
Net realized and unrealized
gain on investments and
foreign currency transactions . 5.84 5.99 5.12 3.73 4.12
------ ------ ------ ------ ------
Total from investment
operations..................... 6.01 6.17 5.26 3.88 4.32
------ ------ ------ ------ ------
LESS DISTRIBUTIONS:
Dividends from net investment
income......................... (0.16) (0.15) (0.11) (0.15) (0.20)
Dividends in excess of net
investment income.............. -- -- -- -- (0.02)
Distributions from realized
gains.......................... (4.03) (3.28) (1.77) (1.76) (0.95)
Distributions in excess of
realized gains................. -- -- -- (0.22) (0.03)
Tax return of capital
distributions.................. -- -- -- -- --
------ ------ ------ ------ ------
Total dividends and
distributions.................. (4.19) (3.43) (1.88) (2.13) (1.20)
------ ------ ------ ------ ------
Net asset value, end of period .. $26.17 $24.35 $21.61 $18.23 $16.48
====== ====== ====== ====== ======
Total return .................... 25.19% 29.39% 29.40% 24.28% 32.45%
====== ====== ====== ====== ======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's)......................... $14,951,495 $12,061,977 $9,331,994 $6,625,390 $4,879,677
Ratio of expenses to average net
assets.......................... 0.38% 0.39% 0.39% 0.38% 0.38%
Ratio of net investment income
to average net assets........... 0.65% 0.75% 0.69% 0.85% 1.27%
Portfolio turnover rate.......... 57% 46% 52% 55% 61%
<PAGE>
<CAPTION>
CLASS IB
-----------------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
-------------------------------------------- DECEMBER 31,
1999 1998 1997 1996
--------------- ------------- ------------ --------------
<S> <C> <C> <C>
$24.30 $21.58 $18.22 $17.90
--------------- ------------- ------------ --------------
0.10 0.10 0.10 0.02
5.82 6.00 5.11 1.52
--------------- ------------- ------------ --------------
5.92 6.10 5.21 1.54
--------------- ------------- ------------ --------------
(0.14) (0.10) (0.08) --
-- -- -- (0.03)
(4.03) (3.28) (1.77) (0.16)
-- -- -- (1.03)
-- -- -- --
--------------- ------------- ------------ --------------
(4.17) (3.38) (1.85) (1.22)
--------------- ------------- ------------ --------------
$26.05 $24.30 $21.58 $18.22
=============== ============= ============ ==============
24.88% 29.06% 29.07% 8.49%(B)
=============== ============= ============ ==============
$1,642,066 $834,144 $228,780 $1,244
0.63% 0.64% 0.64% 0.63%(a)
0.39% 0.44% 0.46% 0.61%(a)
57% 46% 52% 55%
</TABLE>
<PAGE>
- -----
111
- --------------------------------------------------------------------------------
ALLIANCE HIGH YIELD PORTFOLIO(d)(e):
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------------------------------
YEAR ENDED DECEMBER 31,
-----------------------------------------------------------------
1999 1998 1997 1996 1995
------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of
period ............................. $ 8.71 $ 10.41 $ 10.02 $ 9.64 $ 8.91
------- ------- ------- ------- -------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .............. 0.90 1.07 1.04 1.02 0.98
Net realized and unrealized
gain (loss) on investments......... (1.19) (1.56) 0.75 1.07 0.73
------- ------- ------- ------- -------
Total from investment
operations ........................ (0.29) (0.49) 1.79 2.09 1.71
------- ------- ------- ------- -------
LESS DISTRIBUTIONS:
Dividends from net
investment income ................. (0.96) (1.03) (0.97) (0.98) (0.94)
Dividends in excess of net
investment income ................. - - - (0.03) (0.04)
Distributions from realized
gains ............................. (0.01) (0.18) (0.43) (0.70) -
Distributions in excess of
realized gains .................... - - - - -
Return of capital distributions..... (0.02) - - - -
------- ------- -------- -------- --------
Total dividends and
distributions ..................... (0.99) (1.21) (1.40) (1.71) (0.98)
------- ------- -------- -------- --------
Net asset value, end of period ....... $ 7.43 $ 8.71 $ 10.41 $ 10.02 $ 9.64
======= ======= ======== ======== ========
Total return ......................... (3.35)% (5.15)% 18.48% 22.89% 19.92%
======= ======= ======== ======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ............................ $336,292 $405,308 $355,473 $199,360 $118,129
Ratio of expenses to average net
assets ............................. 0.63% 0.63% 0.62% 0.59% 0.60%
Ratio of net investment income
to average net assets .............. 10.53% 10.67% 9.82% 9.93% 10.34%
Portfolio turnover rate .............. 178% 181% 390% 485% 350%
<CAPTION>
CLASS IB
-------------------------------------------------------
OCTOBER 2,*
YEAR ENDED DECEMBER 31, 1996 TO
-------------------------------------- DECEMBER 31,
1999 1998 1997 1996
------------ ------------- ----------- ----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of
period ............................. $ 8.69 $ 10.39 $ 10.01 $ 10.25
------- ------- ------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income .............. 0.87 1.04 1.05 0.19
Net realized and unrealized
gain (loss) on investments......... (1.18) (1.56) 0.71 0.15
------- ------- ------- ---------
Total from investment
operations ........................ (0.31) (0.52) 1.76 0.34
------- ------- ------- ---------
LESS DISTRIBUTIONS:
Dividends from net
investment income ................. (0.95) (1.00) (0.95) (0.03)
Dividends in excess of net
investment income ................. - - - (0.25)
Distributions from realized
gains ............................. (0.01) (0.18) (0.43) (0.01)
Distributions in excess of
realized gains .................... - - - (0.29)
Return of capital distributions..... (0.02) - - -
------- ------- ------- ---------
Total dividends and
distributions ..................... (0.98) (1.18) (1.38) (0.58)
------- ------- ------- ---------
Net asset value, end of period ....... $ 7.40 $ 8.69 $ 10.39 $ 10.01
======= ======= ======= =========
Total return ......................... (3.58)% (5.38)% 18.19% 3.32%(b)
======= ======= ======= =========
<PAGE>
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000's) ............................ $230,290 $207,042 $66,338 $ 685
Ratio of expenses to average net
assets ............................. 0.88% 0.88% 0.88% 0.82%(a)
Ratio of net investment income
to average net assets .............. 10.25% 10.60% 9.76% 8.71%(a)
Portfolio turnover rate .............. 178% 181% 390% 485%
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
112
- --------------------------------------------------------------------------------
ALLIANCE MONEY MARKET PORTFOLIO(d)(e):
<TABLE>
<CAPTION>
CLASS IA
----------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------
1999 1998 1997 1996 1995
--------------- -------------- -------------- --------------- --------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.22 $ 10.18 $ 10.17 $ 10.16 $ 10.14
---------- --------- --------- ---------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ................ 0.51 0.53 0.54 0.54 0.57
Net realized and unrealized gain
(loss) on investments ............... - - - (0.01) -
----------- ---------- ---------- ----------- ----------
Total from investment operations...... 0.51 0.53 0.54 0.53 0.57
----------- ---------- ---------- ----------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment
income .............................. (0.45) (0.49) (0.53) (0.52) (0.55)
Dividends in excess of net
investment income ................... - - - - -
Dividends from realized gains ........ - - - - -
----------- ---------- ---------- ----------- ----------
Total dividends and distributions..... (0.45) (0.49) (0.53) (0.52) (0.55)
----------- ---------- ---------- ----------- ----------
Net asset value, end of period ......... $ 10.28 $ 10.22 $ 10.18 $ 10.17 $ 10.16
=========== ========== ========== =========== ==========
Total return ........................... 4.96% 5.34% 5.42% 5.33% 5.74%
=========== ========== ========== =========== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...... $883,988 $723,311 $449,960 $463,422 $386,691
Ratio of expenses to average net
assets ............................... 0.37% 0.37% 0.39% 0.43% 0.44%
Ratio of net investment income to
average net assets ................... 4.91% 5.13% 5.28% 5.17% 5.53%
<CAPTION>
CLASS IB
------------------------------------------------------------------
OCTOBER 2,
YEAR ENDED DECEMBER 31, 1996* TO
------------------------------------------------ DECEMBER 31,
1999 1998 1997 1996
--------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 10.21 $ 10.17 $ 10.16 $ 10.16
---------- ----------- ---------- ---------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income ................ 0.49 0.49 0.52 0.11
Net realized and unrealized gain
(loss) on investments ............... (0.01) 0.02 - 0.01
----------- ----------- ----------- ---------
Total from investment operations...... 0.48 0.51 0.52 0.12
----------- ----------- ----------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment
income .............................. (0.44) (0.47) (0.51) (0.02)
Dividends in excess of net
investment income ................... - - - (0.10)
Dividends from realized gains ........ - - - -
----------- ------------ ----------- ---------
Total dividends and distributions..... (0.44) (0.47) (0.51) (0.12)
----------- ------------ ----------- ---------
Net asset value, end of period ......... $ 10.25 $ 10.21 $ 10.17 $ 10.16
=========== ============ =========== =========
Total return ........................... 4.71% 5.08% 5.16% 1.29%(b)
=========== ============ =========== =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ...... $559,713 $386,718 $123,675 $ 3,184
Ratio of expenses to average net
assets ............................... 0.62% 0.62% 0.63% 0.67%(a)
Ratio of net investment income to
average net assets ................... 4.68% 4.82% 5.02% 4.94%(a)
</TABLE>
<PAGE>
- -----
113
- --------------------------------------------------------------------------------
EQ/ALLIANCE PREMIER GROWTH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA CLASS IB
---------------------- ------------------------
MAY 1, 1999* MAY 1, 1999*
TO TO
DECEMBER 31, 1999 DECEMBER 31, 1999
---------------------- ------------------------
<S> <C> <C>
Net asset value, beginning of period ............................................... $ 10.00 $ 10.00
----------- -----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ............................................................ 0.02 0.01
Net realized and unrealized gain on investments and foreign currency transactions 1.89 1.89
----------- -----------
Total from investment operations ................................................. 1.91 1.90
----------- -----------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................. (0.01) (0.01)
Dividends in excess of net investment income ..................................... - -
Distributions from realized gains ................................................ (0.03) (0.03)
Distributions in excess of realized gains ........................................ - -
Tax return of capital distributions .............................................. - -
----------- -----------
Total dividends and distributions ................................................ (0.04) (0.04)
----------- -----------
Net asset value, end of period ..................................................... $ 11.87 $ 11.86
=========== ===========
Total return ....................................................................... 19.14%(b) 18.97%(b)
=========== ===========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .................................................. $ 28,834 $ 451,323
Ratio of expenses to average net assets after waivers .............................. 0.90%(a)(c) 1.15%(a)(c)
Ratio of expenses to average net assets before waivers (f) ......................... 1.12%(a)(c) 1.37%(a)(c)
Ratio of net investment income to average net assets after waivers ................. 0.45%(a)(c) 0.20%(a)(c)
Ratio of net investment income to average net assets before waivers (f) ............ 0.23%(a)(c) (0.02)%(a)(c)
Portfolio turnover rate ............................................................ 29% 29%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ...................................... $ 0.01 $ 0.01
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
114
- --------------------------------------------------------------------------------
ALLIANCE SMALL CAP GROWTH PORTFOLIO(d)(e):
<TABLE>
<CAPTION>
CLASS IA
-----------------------------------------------
YEAR ENDED DECEMBER 31,
-------------------------- MAY 1, 1997*
TO
1999 1998 DECEMBER 31, 1997
------------ ------------- --------------------
<S> <C> <C> <C>
Net asset value, beginning of period ..... $ 11.82 $ 12.35 $ 10.00
-------- ------- ------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... (0.05) 0.01 0.01
Net realized and unrealized gain
(loss) on investments ................. 3.34 (0.54) 2.65
-------- ------- ------------
Total from investment operations ....... 3.29 (0.53) 2.66
-------- ------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ - - (0.01)
Dividends in excess of net
investment income ..................... - - -
Distributions from realized gains ...... - - (0.30)
Tax return of capital distributions .... - - -
-------- ------- ------------
Total dividends and distributions ...... - - (0.31)
-------- ------- ------------
Net asset value, end of period ........... $ 15.11 $ 11.82 $ 12.35
======== ======= ============
Total return ............................. 27.75% (4.28)% 26.74%(b)
=========== ======= ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $241,000 $198,360 $ 94,676
Ratio of expenses to average net
assets ................................. 0.95% 0.96% 0.95% (a)
Ratio of net investment income (loss)
to average net assets .................. (0.40)% 0.08% 0.10% (a)
Portfolio turnover rate .................. 221% 94% 96%
<CAPTION>
CLASS IB
--------------------------------------------------
YEAR ENDED DECEMBER 31, MAY 1, 1997*
--------------------------- TO
1999 1998 DECEMBER 31, 1997
------------- ------------- ----------------------
<S> <C> <C> <C>
Net asset value, beginning of period ..... $ 11.79 $ 12.34 $ 10.00
--------- ------- ------------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... (0.08) (0.02) (0.01)
Net realized and unrealized gain
(loss) on investments ................. 3.32 (0.53) 2.65
--------- ------- ------------
Total from investment operations ....... 3.24 (0.55) 2.64
--------- ------- ------------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ - - -
Dividends in excess of net
investment income ..................... - - -
Distributions from realized gains ...... - - (0.30)
Tax return of capital distributions .... - - -
--------- ------- ------------
Total dividends and distributions ...... - - (0.30)
--------- ------- ------------
Net asset value, end of period ........... $ 15.03 $ 11.79 $ 12.34
========= ======= ============
Total return ............................. 27.46 % (4.44)% 26.57%(b)
============= ======= ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $ 162,331 $112,254 $ 46,324
Ratio of expenses to average net
assets ................................. 1.20% 1.20% 1.15% (a)
Ratio of net investment income (loss)
to average net assets .................. (0.65)% (0.17)% (0.12)% (a)
Portfolio turnover rate .................. 221% 94% 96%
</TABLE>
<PAGE>
- -----
115
- --------------------------------------------------------------------------------
BT EQUITY 500 INDEX PORTFOLIO:**
<TABLE>
<CAPTION>
CLASS IB
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period .................................................... $ 12.45 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................................................. 0.08 0.06
Net realized and unrealized gain on investments and foreign currency transactions ..... 2.44 2.45
------- -------
Total from investment operations ...................................................... 2.52 2.51
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .................................................. (0.08) (0.06)
Distributions from realized gains ..................................................... (0.04) -
-------- --------
Total dividends and distributions ..................................................... (0.12) (0.06)
-------- --------
Net asset value, end of period .......................................................... $ 14.85 $ 12.45
======== ========
Total return ............................................................................ 20.30% 25.14%
======== ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....................................................... $683,544 $224,247
Ratio of expenses to average net assets after waivers ................................... 0.55% 0.55%
Ratio of expenses to average net assets before waivers (f) .............................. 0.67% 0.83%
Ratio of net investment income to average net assets after waivers ...................... 0.84% 1.22%
Ratio of net investment income to average net assets before waivers (f) ................. 0.72% 0.94%
Portfolio turnover rate ................................................................. 2% 2%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ........................................... $ 0.01 $ 0.01
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
116
- --------------------------------------------------------------------------------
BT INTERNATIONAL EQUITY INDEX PORTFOLIO:**
<TABLE>
<CAPTION>
CLASS IA
------------------------------------------
NOVEMBER 24, 1998*
YEAR ENDED TO
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ----------------------
<S> <C> <C>
Net asset value, beginning of period ..................... $ 11.84 $11.67
--------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................. 0.16 0.03
Net realized and unrealized gain (loss) on
investments and foreign currency transactions ......... 3.10 0.31
--------- -------
Total from investment operations ....................... 3.26 0.34
--------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ................... (0.13) (0.17)
Dividends in excess of net investment income ........... (0.01) -
Distributions from realized gains ........................ (0.11) -
--------- -------
Total dividends and distributions ...................... (0.25) (0.17)
--------- -------
Net asset value, end of period ........................... $ 14.85 $ 11.84
========= =======
Total return ............................................. 27.75% 2.94%(b)
========= =========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................ $ 3,629 $ 735
Ratio of expenses to average net assets after waivers..... 0.69%(c) 0.59%(a)(c)
Ratio of expenses to average net assets before
waivers (f) ............................................ 0.80%(c) 1.24%(a)(c)
Ratio of net investment income to average net assets
after waivers .......................................... 1.21%(c) 1.36%(a)(c)
Ratio of net investment income to average net assets
before waivers (f) ..................................... 1.10%(c) 0.71%(a)(c)
Portfolio turnover rate .................................. 7% 3%
Average commission rate paid .............................
Effect of voluntary expense limitation during the
period: (f)
Per share benefit to net investment income ............ $ 0.03 $ 0.26
<CAPTION>
CLASS IB
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ..................... $11.85 $ 10.00
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................. 0.10 0.08
Net realized and unrealized gain (loss) on
investments and foreign currency transactions ......... 3.15 1.92
------- --------
Total from investment operations ....................... 3.25 2.00
------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income ................... (0.10) (0.15)
Dividends in excess of net investment income ........... (0.02) -
Distributions from realized gains ........................ (0.11) -
------- --------
Total dividends and distributions ...................... (0.23) (0.15)
------- --------
Net asset value, end of period ........................... $14.87 $ 11.85
======= ========
Total return ............................................. 27.50% 20.07%
======= ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................ $94,581 $48,075
Ratio of expenses to average net assets after waivers..... 0.94%(c) 0.84%(c)
Ratio of expenses to average net assets before
waivers (f) ............................................ 1.05%(c) 1.49%(c)
Ratio of net investment income to average net assets
after waivers .......................................... 0.96%(c) 1.11%(c)
Ratio of net investment income to average net assets
before waivers (f) ..................................... 0.85%(c) 0.46%(c)
Portfolio turnover rate .................................. 7% 3%
Average commission rate paid .............................
Effect of voluntary expense limitation during the
period: (f)
Per share benefit to net investment income ............ $ 0.03 $ 0.05
</TABLE>
<PAGE>
- -----
117
- --------------------------------------------------------------------------------
BT SMALL COMPANY INDEX PORTFOLIO:**
<TABLE>
<CAPTION>
CLASS IB
--------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ............................................ $ 9.56 $ 10.00
------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.09 0.07
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ 1.85 (0.30)
------- --------
Total from investment operations .............................................. 1.94 (0.23)
------- --------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... (0.09) (0.07)
Distributions from realized gains ............................................. (0.56) (0.13)
Distributions in excess of realized gains ..................................... - (0.01)
------- --------
Total dividends and distributions ............................................. (0.65) (0.21)
------- --------
Net asset value, end of period .................................................. $ 10.85 $ 9.56
======= ========
Total return .................................................................... 20.68% (2.27)%
======= ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $59,931 $32,609
Ratio of expenses to average net assets after waivers ........................... 0.71% 0.60%
Ratio of expenses to average net assets before waivers (f) ...................... 1.20% 1.81%
Ratio of net investment income to average net assets after waivers .............. 1.11% 1.18%
Ratio of net investment income to average net assets before waivers (f) ......... 0.62% (0.03)%
Portfolio turnover rate ......................................................... 59% 35%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.04 $ 0.07
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
118
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN INTERNATIONAL PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
------------------
MAY 1, 1999*
TO
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period ............................................ $ 10.00
----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... -
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ 4.10
----------
Total from investment operations .............................................. 4.10
----------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... -
----------
Total dividends and distributions ............................................. -
----------
Net asset value, end of period .................................................. $ 14.10
==========
Total return .................................................................... 41.00%(b)
==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $ 52,049
Ratio of expenses to average net assets after waivers ........................... 1.20%(a)
Ratio of expenses to average net assets before waivers (f) ...................... 1.65%(a)
Ratio of net investment income to average net assets after waivers .............. 0.02%(a)
Ratio of net investment income to average net assets before waivers (f) ......... (0.43)%(a)
Portfolio turnover rate ......................................................... 28%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income .................................... $ 0.02
</TABLE>
<PAGE>
- -----
119
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN RESEARCH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
------------------
MAY 1, 1999*
TO
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period ............................................ $ 10.00
---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions................................................................. 0.69
---------
Total from investment operations .............................................. 0.71
---------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... (0.02)
Dividends in excess of net investment income .................................. -
---------
Total dividends and distributions ............................................. (0.02)
---------
Net asset value, end of period .................................................. $ 10.69
=========
Total return .................................................................... 7.10%(b)
=========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $ 33,903
Ratio of expenses to average net assets after waivers ........................... 0.95%(a)
Ratio of expenses to average net assets before waivers (f) ...................... 1.35%(a)
Ratio of net investment income to average net assets after waivers .............. 0.37%(a)
Ratio of net investment income to average net assets before waivers (f) ......... (0.03)%(a)
Portfolio turnover rate ......................................................... 36%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.02
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
120
- --------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
------------------
MAY 1, 1999*
TO
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period .................................................... $ 10.00
--------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................................................. 0.02
Net realized and unrealized gain on investments and foreign currency transactions ..... 0.35
--------
Total from investment operations ...................................................... 0.37
--------
LESS DISTRIBUTIONS:
Dividends from net investment income .................................................. (0.02)
Dividends in excess of net investment income .......................................... -
Distributions from realized gains ..................................................... (0.02)
Distributions in excess of realized gains ............................................. (0.01)
Tax return of capital distributions ................................................... -
--------
Total dividends and distributions ..................................................... (0.05)
--------
Net asset value, end of period .......................................................... $ 10.32
========
Total return ............................................................................ 3.76%(b)
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....................................................... $67,472
Ratio of expenses to average net assets after waivers ................................... 0.95%(a)
Ratio of expenses to average net assets before waivers (f) .............................. 1.23%(a)
Ratio of net investment income to average net assets after waivers ...................... 0.63%(a)
Ratio of net investment income to average net assets before waivers (f) ................. 0.35%(a)
Portfolio turnover rate ................................................................. 50%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ........................................... $ 0.01
</TABLE>
<PAGE>
- -----
121
- --------------------------------------------------------------------------------
EQ/EVERGREEN PORTFOLIO:***
<TABLE>
<CAPTION>
CLASS IB
------------------
YEAR ENDED
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period .................................................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ................................................................. 0.04
Net realized and unrealized gain on investments and foreign currency transactions ..... 0.93
-------
Total from investment operations ...................................................... 0.97
-------
LESS DISTRIBUTIONS:
Dividends from net investment income .................................................. (0.04)
Dividends in excess of net investment income .......................................... -
Distributions from realized gains ..................................................... -
Distributions in excess of realized gains ............................................. -
Tax return of capital distributions ................................................... -
-------
Total dividends and distributions ..................................................... (0.04)
-------
Net asset value, end of period .......................................................... $ 10.93
=======
Total return ............................................................................ 9.70%
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ....................................................... $ 4,818
Ratio of expenses to average net assets after waivers ................................... 1.05%
Ratio of expenses to average net assets before waivers (f) .............................. 2.86%
Ratio of net investment income to average net assets after waivers ...................... 0.63%
Ratio of net investment income to average net assets before waivers (f) ................. (1.18)%
Portfolio turnover rate ................................................................. 148%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ........................................... $ 0.11
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
122
- --------------------------------------------------------------------------------
EQ/EVERGREEN FOUNDATION PORTFOLIO:***
<TABLE>
<CAPTION>
CLASS IB
------------------
YEAR ENDED
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period ..................................................... $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................................................. 0.12
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ......................................................................... 0.62
-------
Total from investment operations ....................................................... 0.74
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ................................................... (0.12)
--------
Total dividends and distributions ...................................................... (0.12)
--------
Net asset value, end of period ........................................................... $ 10.62
--------
Total return ............................................................................. 7.38%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................................ 8,887
Ratio of expenses to average net assets after waivers and reimbursements ................. 0.95%
Ratio of expenses to average net assets before waivers and reimbursements (f) ............ 1.94%
Ratio of net investment income to average net assets after waivers and reimbursements .... 2.03%
Ratio of net investment income to average net assets before waivers and reimbursements (f) 1.04%
Portfolio turnover rate .................................................................. 105%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................................ $ 0.06
</TABLE>
<PAGE>
- -----
123
- --------------------------------------------------------------------------------
J.P. MORGAN CORE BOND PORTFOLIO (fka JPM CORE BOND PORTFOLIO):**
<TABLE>
<CAPTION>
CLASS IB
----------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ............................................ $ 10.57 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.49 0.21
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ (0.66) 0.70
------- -------
Total from investment operations .............................................. (0.17) 0.91
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... (0.48) (0.21)
Dividends in excess of net investment income .................................. - (0.01)
Distributions from realized gains ............................................. - (0.11)
Distributions in excess of realized gains ..................................... - (0.01)
------- --------
Total dividends and distributions ............................................. (0.48) (0.34)
------- --------
Net asset value, end of period .................................................. $ 9.92 $ 10.57
======= ========
Total return (b) ................................................................ (1.64)% 9.02%
======= ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $156,581 $103,326
Ratio of expenses to average net assets after waivers ........................... 0.80% 0.80%
Ratio of expenses to average net assets before waivers (f) ...................... 0.89% 1.03%
Ratio of net investment income to average net assets after waivers .............. 5.53% 4.95%
Ratio of net investment income to average net assets before waivers (f) ......... 5.44% 4.72%
Portfolio turnover rate ......................................................... 233% 428%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.01 $ 0.01
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
124
- --------------------------------------------------------------------------------
LAZARD LARGE CAP VALUE PORTFOLIO:**
<TABLE>
<CAPTION>
CLASS IB
----------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ............................................ $ 11.94 $ 10.00
------- ---------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.11 0.06
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ 0.31 1.94
------- ---------
Total from investment operations .............................................. 0.42 2.00
------- ---------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... (0.11) (0.06)
Dividends in excess of net investment income .................................. - -
Distributions from realized gains ............................................. (0.19) -
-------- ----------
Total dividends and distributions ............................................. (0.30) (0.06)
-------- ----------
Net asset value, end of period .................................................. $ 12.06 $ 11.94
======== ==========
Total return .................................................................... 3.55% 20.01%
======== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $133,503 $ 74,588
Ratio of expenses to average net assets after waivers ........................... 0.94% 0.90%
Ratio of expenses to average net assets before waivers (f) ...................... 1.00% 1.20%
Ratio of net investment income to average net assets after waivers .............. 1.10% 1.19%
Ratio of net investment income to average net assets before waivers (f) ......... 1.04% 0.89%
Portfolio turnover rate ......................................................... 32% 37%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.01 $ 0.02
</TABLE>
<PAGE>
- -----
125
- --------------------------------------------------------------------------------
LAZARD SMALL CAP VALUE PORTFOLIO:**
<TABLE>
<CAPTION>
CLASS IB
----------------------------------------
YEAR ENDED YEAR ENDED
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ............................................ $ 9.27 $ 10.00
------ -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.04 0.02
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ 0.11 (0.72)
------ -------
Total from investment operations .............................................. 0.15 (0.70)
------ -------
LESS DISTRIBUTIONS:
Dividends from net investment income .......................................... (0.04) (0.03)
Distributions from realized gains ............................................. (0.06) -
------- -------
Total dividends and distributions ............................................. (0.10) (0.03)
------- -------
Net asset value, end of period .................................................. $ 9.32 $ 9.27
======= =======
Total return .................................................................... 1.66% (7.03)%
======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $72,607 $51,046
Ratio of expenses to average net assets after waivers ........................... 1.20% 1.20%
Ratio of expenses to average net assets before waivers (f) ...................... 1.30% 1.54%
Ratio of net investment income to average net assets after waivers .............. 0.48% 0.52%
Ratio of net investment income to average net assets before waivers (f) ......... 0.39% 0.18%
Portfolio turnover rate ......................................................... 48% 21%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.01 $ 0.02
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
126
- --------------------------------------------------------------------------------
MERCURY BASIC VALUE EQUITY PORTFOLIO (fka MERRILL LYNCH BASIC VALUE EQUITY
PORTFOLIO):
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ....................................... $ 12.36
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................................... 0.17
Net realized and unrealized gain on investments and foreign
currency transactions ................................................... 2.15
-------
Total from investment operations ......................................... 2.32
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ..................................... (0.18)
Dividends in excess of net investment income ............................. -
Distributions from realized gains ........................................ (0.74)
Distributions in excess of realized gains ................................ -
--------
Total dividends and distributions ........................................ (0.92)
--------
Net asset value, end of period ............................................. $ 13.76
========
Total return ............................................................... 19.00%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......................................... $300,467
Ratio of expenses to average net assets after waivers ...................... 0.85%
Ratio of expenses to average net assets before waivers (f) ................. 0.96%
Ratio of net investment income to average net assets after waivers ......... 1.42%
Ratio of net investment income to average net assets before waivers (f) 1.31%
Portfolio turnover rate .................................................... 71%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income .............................. $ 0.01
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ....................................... $ 11.58 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income .................................................... 0.12 0.06
Net realized and unrealized gain on investments and foreign
currency transactions ................................................... 1.21 1.64
------- -------
Total from investment operations ......................................... 1.33 1.70
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ..................................... (0.12) (0.06)
Dividends in excess of net investment income ............................. - -
Distributions from realized gains ........................................ (0.43) (0.05)
Distributions in excess of realized gains ................................ - (0.01)
-------- -------
Total dividends and distributions ........................................ (0.55) (0.12)
-------- -------
Net asset value, end of period ............................................. $ 12.36 $ 11.58
======== =======
Total return .............................................................. 11.59% 16.99%(b)
======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) .......................................... $174,104 $49,495
Ratio of expenses to average net assets after waivers ...................... 0.85% 0.85%(a)
Ratio of expenses to average net assets before waivers (f) ................. 1.06% 1.89%(a)
Ratio of net investment income to average net assets after waivers ......... 1.41 % 1.91%(a)
Ratio of net investment income to average net assets before waivers (f) 1.20 % 0.87%(a)
Portfolio turnover rate .................................................... 83% 25%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income .............................. $ 0.02 $ 0.03
</TABLE>
<PAGE>
- -----
127
- --------------------------------------------------------------------------------
MERCURY WORLD STRATEGY PORTFOLIO (fka MERRILL LYNCH WORLD STRATEGY
PORTFOLIO):
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 10.93
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.11
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 2.22
-------
Total from investment operations .......................................... 2.33
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.08)
Dividends in excess of net investment income .............................. (0.03)
Distributions from realized gains ......................................... (0.17)
Distributions in excess of realized gains ................................. -
-------
Total dividends and distributions ......................................... (0.28)
-------
Net asset value, end of period .............................................. $ 12.98
=======
Total return ................................................................ 21.35%
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $35,722
Ratio of expenses to average net assets after waivers ....................... 1.20%
Ratio of expenses to average net assets before waivers (f) .................. 1.40%
Ratio of net investment income to average net assets after waivers .......... 0.99%
Ratio of net investment income to average net assets before waivers (f) ..... 0.79%
Portfolio turnover rate ..................................................... 116%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.02
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.31 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.15 0.08
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 0.55 0.39
------- -------
Total from investment operations .......................................... 0.70 0.47
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.04) (0.05)
Dividends in excess of net investment income .............................. (0.04) -
Distributions from realized gains ......................................... - -
Distributions in excess of realized gains ................................. - (0.11)
------- -------
Total dividends and distributions ......................................... (0.08) (0.16)
------- -------
Net asset value, end of period .............................................. $ 10.93 $ 10.31
======= =======
Total return ................................................................ 6.81% 4.70%(b)
======= =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $30,631 $18,210
Ratio of expenses to average net assets after waivers ....................... 1.20% 1.20%(a)
Ratio of expenses to average net assets before waivers (f) .................. 1.61% 3.05%(a)
Ratio of net investment income to average net assets after waivers .......... 1.63% 1.89%(a)
Ratio of net investment income to average net assets before waivers (f) ..... 1.22% 0.04%(a)
Portfolio turnover rate ..................................................... 115% 58%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.04 $ 0.08
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
128
- --------------------------------------------------------------------------------
MFS EMERGING GROWTH COMPANIES PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IA
--------------------------------------------
NOVEMBER 24, 1998*
YEAR ENDED TO
DECEMBER 31, 1999 DECEMBER 31, 1998
------------------- ------------------------
<S> <C> <C>
Net asset value, beginning of period ..... $ 16.04 $ 14.18
--------- -----------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... 0.01 -
Net realized and unrealized gain on
investments and foreign currency
transactions .......................... 11.83 1.86
--------- -----------
Total from investment operations ....... 11.84 1.86
--------- -----------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ - -
Dividends in excess of net
investment income ..................... - -
Distributions from realized gains ...... (0.48) -
Distributions in excess of realized
gains ................................. - -
--------- -----------
Total dividends and distributions ...... (0.48) -
--------- -----------
Net asset value, end of period ........... $ 27.40 $ 16.04
========= ============
Total return ............................. 74.43% 13.12%(b)
========= ============
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $ 46,248 $ 5,978
Ratio of expenses to average net
assets after waivers ................... 0.60 %(c) 0.60%(a)(c)
Ratio of expenses to average net
assets before waivers (f) .............. 0.70 %(c) 0.79%(a)(c)
Ratio of net investment income to
average net assets after waivers ....... 0.09 %(c) (0.05)%(a)(c)
Ratio of net investment income to
average net assets before
waivers (f) ............................ (0.01)%(c) (0.24)%(a)(c)
Portfolio turnover rate .................. 184 % 79%
Effect of voluntary expense
limitation during the period: (f)
Per share benefit to net
investment income .................... $ 0.01 $ -
<CAPTION>
CLASS IB
----------------------------------------------------------
MAY 1, 1997*
YEAR ENDED YEAR ENDED TO
DECEMBER 31, 1999 DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------- ------------------
<S> <C> <C> <C>
Net asset value, beginning of period ..... $ 16.04 $ 11.92 $ 10.00
--------- ------- --------
INCOME FROM INVESTMENT
OPERATIONS:
Net investment income (loss) ........... (0.02) (0.03) 0.02
Net realized and unrealized gain on
investments and foreign currency
transactions .......................... 11.79 4.15 2.21
--------- ------- --------
Total from investment operations ....... 11.77 4.12 2.23
--------- ------- --------
LESS DISTRIBUTIONS:
Dividends from net investment
income ................................ - - (0.02)
Dividends in excess of net
investment income ..................... - - -
Distributions from realized gains ...... (0.48) - (0.18)
Distributions in excess of realized
gains ................................. - - (0.11)
--------- ------- --------
Total dividends and distributions ...... (0.48) - (0.31)
--------- ------- --------
Net asset value, end of period ........... $ 27.33 $ 16.04 $ 11.92
========= ======= ========
Total return ............................. 73.62% 34.57% 22.42%(b)
========= ======= ========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........ $1,665,635 $461,307 $ 99,317
Ratio of expenses to average net
assets after waivers ................... 0.85%(c) 0.85%(c) 0.85%(a)
Ratio of expenses to average net
assets before waivers (f) .............. 0.95%(c) 1.04%(c) 1.82%(a)
Ratio of net investment income to
average net assets after waivers ....... (0.16)%(c) (0.30)%(c) 0.61%(a)
Ratio of net investment income to
average net assets before
waivers (f) ............................ (0.26)%(c) (0.49)%(c) (0.36)%(a)
Portfolio turnover rate .................. 184% 79 % 116%
Effect of voluntary expense
limitation during the period: (f)
Per share benefit to net
investment income .................... $ 0.01 $ 0.02 $ 0.04
</TABLE>
<PAGE>
- -----
129
- --------------------------------------------------------------------------------
MFS GROWTH WITH INCOME PORTFOLIO:***
<TABLE>
<CAPTION>
CLASS IB
------------------
YEAR ENDED
DECEMBER 31, 1999
------------------
<S> <C>
Net asset value, beginning of period ............................................ $ 10.00
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ......................................................... 0.04
Net realized and unrealized gain (loss) on investments and foreign currency
transactions ................................................................ 0.84
-------
Total from investment operations .............................................. 0.88
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ............................................ (0.04)
Dividends in excess of net investment income .................................... -
--------
Total dividends and distributions ............................................... (0.04)
--------
Net asset value, end of period .................................................. $ 10.84
========
Total return .................................................................... 8.76%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ............................................... $109,828
Ratio of expenses to average net assets after waivers ........................... 0.85%
Ratio of expenses to average net assets before waivers (f) ...................... 1.16%
Ratio of net investment income to average net assets after waivers .............. 0.80%
Ratio of net investment income to average net assets before waivers (f) ......... 0.49%
Portfolio turnover rate ......................................................... 64%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ................................... $ 0.01
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
130
- --------------------------------------------------------------------------------
MFS RESEARCH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 14.21
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.02
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 3.24
-------
Total from investment operations .......................................... 3.26
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.02)
Dividends in excess of net investment income .............................. -
Distributions from realized gains ......................................... (0.39)
Distributions in excess of realized gains ................................. -
--------
Total dividends and distributions ......................................... (0.41)
--------
Net asset value, end of period .............................................. $ 17.06
========
Total return ................................................................ 23.12%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $685,270
Ratio of expenses to average net assets after waivers ....................... 0.85%
Ratio of expenses to average net assets before waivers (f) .................. 0.96%
Ratio of net investment income to average net assets after waivers .......... 0.12%
Ratio of net investment income to average net assets before waivers (f) ..... 0.01%
Portfolio turnover rate ..................................................... 91%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.01
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 11.48 $ 10.00
------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.04 0.02
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 2.73 1.58
------- ----------
Total from investment operations .......................................... 2.77 1.60
------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.04) (0.02)
Dividends in excess of net investment income .............................. - -
Distributions from realized gains ......................................... - (0.01)
Distributions in excess of realized gains ................................. - (0.09)
-------- ----------
Total dividends and distributions ......................................... (0.04) (0.12)
-------- ----------
Net asset value, end of period .............................................. $ 14.21 $ 11.48
======== ==========
Total return ................................................................ 24.11% 16.07%(b)
======== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $407,619 $ 114,754
Ratio of expenses to average net assets after waivers ....................... 0.85% 0.85%(a)
Ratio of expenses to average net assets before waivers (f) .................. 1.05% 1.78%(a)
Ratio of net investment income to average net assets after waivers .......... 0.44% 0.65%(a)
Ratio of net investment income to average net assets before waivers (f) ..... 0.24% (0.28)%(a)
Portfolio turnover rate ..................................................... 73% 51%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.02 $ 0.03
</TABLE>
<PAGE>
- -----
131
- --------------------------------------------------------------------------------
MORGAN STANLEY EMERGING MARKETS EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 5.79
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .............................................. (0.01)
Net realized and unrealized gain (loss) on investments and foreign
currency transactions .................................................... 5.55
--------
Total from investment operations .......................................... 5.54
--------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... -
Distributions from realized gains ......................................... (0.11)
--------
Total dividends and distributions ......................................... (0.11)
--------
Net asset value, end of period .............................................. $ 11.22
========
Total return ................................................................ 95.82%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $191,581
Ratio of expenses to average net assets after waivers ....................... 1.75%
Ratio of expenses to average net assets before waivers (f) .................. 2.38%
Ratio of net investment income to average net assets after waivers .......... (0.18)%
Ratio of net investment income to average net assets before waivers (f) ..... (0.82)%
Portfolio turnover rate ..................................................... 138%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.02
<CAPTION>
CLASS IB
--------------------------------------
AUGUST 20, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 7.96 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income/(loss) .............................................. 0.03 0.04
Net realized and unrealized gain (loss) on investments and foreign
currency transactions .................................................... (2.18) (2.06)
------- -------
Total from investment operations .......................................... (2.15) (2.02)
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.02) (0.02)
Distributions from realized gains ......................................... - -
------- -------
Total dividends and distributions ......................................... (0.02) (0.02)
------- -------
Net asset value, end of period .............................................. $ 5.79 $ 7.96
======= =======
Total return ................................................................ (27.10)% (20.16)%(b)
======== ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $41,359 $21,433
Ratio of expenses to average net assets after waivers ....................... 1.75% 1.75%(a)
Ratio of expenses to average net assets before waivers (f) .................. 2.63% 2.61%(a)
Ratio of net investment income to average net assets after waivers .......... 0.73% 1.96%(a)
Ratio of net investment income to average net assets before waivers (f) ..... (0.09)% 1.10%(a)
Portfolio turnover rate ..................................................... 114% 25%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.03 $ 0.02
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
132
- --------------------------------------------------------------------------------
EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 12.77
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.16
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. (0.34)
-------
Total from investment operations .......................................... (0.18)
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.16)
Dividends in excess of net investment income .............................. -
Distributions from realized gains ......................................... (0.74)
Distributions in excess of realized gains ................................. (0.13)
-------
Total dividends and distributions ......................................... (1.03)
-------
Net asset value, end of period .............................................. $ 11.56
=======
Total return ................................................................ (1.27)%
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $544,271
Ratio of expenses to average net assets after waivers ....................... 0.85%
Ratio of expenses to average net assets before waivers (f) .................. 0.95%
Ratio of net investment income to average net assets after waivers .......... 1.29%
Ratio of net investment income to average net assets before waivers (f) ..... 1.19%
Portfolio turnover rate ..................................................... 77%
Effect of voluntary expense limitation during the period: (f) .............
Per share benefit to net investment income ............................... $ 0.01
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 11.52 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.11 0.06
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 1.35 1.56
------- -------
Total from investment operations .......................................... 1.46 1.62
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.11) (0.06)
Dividends in excess of net investment income .............................. - -
Distributions from realized gains ......................................... - (0.01)
Distributions in excess of realized gains ................................. (0.10) (0.03)
-------- -------
Total dividends and distributions ......................................... (0.21) (0.10)
-------- -------
Net asset value, end of period .............................................. $ 12.77 $ 11.52
======== =======
Total return ................................................................ 12.75% 16.23%(b)
======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $460,744 $150,260
Ratio of expenses to average net assets after waivers ....................... 0.85% 0.85%(a)
Ratio of expenses to average net assets before waivers (f) .................. 1.04% 1.75%(a)
Ratio of net investment income to average net assets after waivers .......... 1.30% 1.67%(a)
Ratio of net investment income to average net assets before waivers (f) ..... 1.11% 0.77%(a)
Portfolio turnover rate ..................................................... 74% 61%
Effect of voluntary expense limitation during the period: (f) .............
Per share benefit to net investment income ............................... $ 0.02 $ 0.03
</TABLE>
<PAGE>
- -----
133
- --------------------------------------------------------------------------------
EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 13.01
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.07
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 7.69
-------
Total from investment operations .......................................... 7.76
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.13)
Dividends in excess of net investment income .............................. (0.22)
Distributions from realized gains ......................................... (1.07)
Distributions in excess of realized gains ................................. -
--------
Total dividends and distributions ......................................... (1.42)
--------
Net asset value, end of period .............................................. $ 19.35
========
Total return ................................................................ 60.24%
========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $299,159
Ratio of expenses to average net assets after waivers ....................... 1.20%
Ratio of expenses to average net assets before waivers (f) .................. 1.26%
Ratio of net investment income to average net assets after waivers .......... 0.54%
Ratio of net investment income to average net assets before waivers (f) ..... 0.48%
Portfolio turnover rate ..................................................... 119%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.01
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 10.89 $ 10.00
------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income ..................................................... 0.05 0.03
Net realized and unrealized gain on investments and foreign currency
transactions ............................................................. 2.07 0.93
------- -------
Total from investment operations .......................................... 2.12 0.96
------- -------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... - (0.02)
Dividends in excess of net investment income .............................. - -
Distributions from realized gains ......................................... - (0.01)
Distributions in excess of realized gains ................................. - (0.04)
-------- -------
Total dividends and distributions ......................................... - (0.07)
-------- -------
Net asset value, end of period .............................................. $ 13.01 $ 10.89
======== =======
Total return ................................................................ 19.51% 9.58%(b)
======== =======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $143,721 $55,178
Ratio of expenses to average net assets after waivers ....................... 1.20% 1.20%(a)
Ratio of expenses to average net assets before waivers (f) .................. 1.46% 2.53%(a)
Ratio of net investment income to average net assets after waivers .......... 0.64% 0.74%(a)
Ratio of net investment income to average net assets before waivers (f) ..... 0.38% (0.59)%(a)
Portfolio turnover rate ..................................................... 94% 43%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.02 $ 0.05
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
134
- --------------------------------------------------------------------------------
EQ/PUTNAM INVESTORS GROWTH PORTFOLIO:
<TABLE>
<CAPTION>
CLASS IB
-------------------
YEAR ENDED
DECEMBER 31, 1999
-------------------
<S> <C>
Net asset value, beginning of period ........................................ $ 16.79
-------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .............................................. (0.03)
Net realized and unrealized gain (loss) on investments and foreign
currency transactions .................................................... 5.09
-------
Total from investment operations .......................................... 5.06
-------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... -
Distributions from realized gains ......................................... (0.44)
Distributions in excess of realized gains ................................. -
-------
Total dividends and distributions ......................................... (0.44)
-------
Net asset value, end of period .............................................. $ 21.41
=======
Total return ................................................................ 30.24%
=======
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $384,175
Ratio of expenses to average net assets after waivers ....................... 0.93%
Ratio of expenses to average net assets before waivers (f) .................. 0.98%
Ratio of net investment income to average net assets after waivers .......... (0.20)%
Ratio of net investment income to average net assets before waivers (f) ..... (0.25)%
Portfolio turnover rate ..................................................... 76%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.01
<CAPTION>
CLASS IB
--------------------------------------
MAY 1, 1997*
YEAR ENDED TO
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- ------------------
<S> <C> <C>
Net asset value, beginning of period ........................................ $ 12.33 $ 10.00
------- ----------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .............................................. 0.01 0.02
Net realized and unrealized gain (loss) on investments and foreign
currency transactions .................................................... 4.46 2.45
------- ----------
Total from investment operations .......................................... 4.47 2.47
------- ----------
LESS DISTRIBUTIONS:
Dividends from net investment income ...................................... (0.01) (0.03)
Distributions from realized gains ......................................... - (0.04)
Distributions in excess of realized gains ................................. - (0.07)
------- ----------
Total dividends and distributions ......................................... (0.01) (0.14)
------- ----------
Net asset value, end of period .............................................. $ 16.79 $ 12.33
======= ==========
Total return ................................................................ 36.27% 24.70%(b)
======= ==========
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000's) ........................................... $175,015 $ 39,695
Ratio of expenses to average net assets after waivers ....................... 0.85% 0.85%(a)
Ratio of expenses to average net assets before waivers (f) .................. 1.09% 2.13%(a)
Ratio of net investment income to average net assets after waivers .......... 0.14% 0.58%(a)
Ratio of net investment income to average net assets before waivers (f) ..... (0.10)% (0.70)%(a)
Portfolio turnover rate ..................................................... 64% 47%
Effect of voluntary expense limitation during the period: (f)
Per share benefit to net investment income ............................... $ 0.02 $ 0.05
</TABLE>
- ----------
* Commencement of Operations
** Commenced operations on January 1, 1998.
*** Commenced operations on January 1, 1999.
+ The amount shown for a share outstanding throughout the period does not
accord with the aggregate net gains on investments for that period because
of the timing of sales and repurchases of the Portfolio shares in relation
to fluctuating market value of the investments in the Portfolio.
(a) Annualized
(b) Total return is not annualized.
(c) Reflects overall Portfolio ratios for investment income and non-class
specific expense.
(d) On October 18, 1999, this Portfolio received, through a substitution
transaction, the assets and liabilities of the Hudson River Trust Portfolio
that followed the same investment objectives as this Portfolio. The
information for each of the preceding periods is that of the predecessor
Hudson River Trust Portfolio. Information for the year ended December 31,
1999 includes the results of operations of the predecessor Hudson River
Trust Portfolio from January 1, 1999 through October 17, 1999.
(e) Net investment income and capital changes per share are based on monthly
average shares outstanding.
(f) For further information concerning fee waivers see the section entitled
"Expense Limitation Agreement" in this Prospectus.
<PAGE>
10
Prior performance of each adviser
- ----------------
135
- --------------------------------------------------------------------------------
The following table provides information concerning the historical performance
of another registered investment company (or series) and/or other
institutional private accounts managed by each Adviser that have investment
objectives, policies, strategies and risks substantially similar to those of
the respective Portfolio(s) of the Trust for which it serves as Adviser. The
data is provided to illustrate the past performance of the Advisers in
managing substantially similar investment vehicles as measured against
specified market indices. This data does not represent the past performance of
any of the Portfolios or the future performance of any Portfolio or its
Adviser. Consequently, potential investors should not consider this
performance data as an indication of the future performance of any Portfolio
of the Trust or of its Adviser and should not confuse this performance data
with performance data for each of the Trust's Portfolios, which is shown for
each Portfolio under the caption "ABOUT THE INVESTMENT PORTFOLIOS."
Each Adviser's performance data shown below for other registered investment
companies (or series thereof) was calculated in accordance with standards
prescribed by the SEC for the calculation of average annual total return
information for registered investment companies. Average annual total return
reflects changes in share prices and reinvestment of dividends and
distributions and is net of fund expenses. In each such instance, the share
prices and investment returns will fluctuate, reflecting market conditions as
well as changes in company-specific fundamentals of portfolio securities.
Composite performance data relating to the historical performance of
institutional private accounts managed by the relevant Adviser was calculated
on a total return basis and includes all losses. As specified below, this
composite performance data is provided only for the J.P. Morgan Active Fixed
Income Composite, the Capital Guardian U.S. Equity Research Portfolio
Diversified Composite, the Capital Guardian U.S. Equity Composite, and the
Capital Guardian Non-U.S Equity Composite (collectively, the "Composites").
The total returns for each Composite reflect the deduction of investment
advisory fees, brokerage commissions and execution costs paid by J.P. Morgan's
and Capital Guardian's institutional private accounts, without provision for
federal or state income taxes. Custodial fees, if any, were not included in
the calculation. Each Composite includes all actual, fee-paying, discretionary
institutional private accounts managed by J.P. Morgan and Capital Guardian
that have investment objectives, policies, strategies and risks substantially
similar to those of the relevant Portfolio. Securities transactions are
accounted for on the trade date and accrual accounting is utilized. Cash and
equivalents are included in performance returns. The institutional private
accounts that are included in the Composite are not subject to the same types
of expenses to which the relevant Portfolio is subject or to the
diversification requirements, specific tax restrictions and investment
limitations imposed on the Portfolio by the 1940 Act or Subchapter M of the
Internal Revenue Code. Consequently, the performance results for the Composite
could have been adversely affected if the institutional private accounts
included in the Composite had been regulated as investment companies under the
federal securities laws.
The major difference between the SEC prescribed calculation of average annual
total returns for registered investment companies or (series thereof) and
total returns for composite performance is that average annual total returns
reflect all fees and charges applicable to the registered investment company
in question and the total return calculation for the Composite reflects only
those fees and charges described in the paragraph directly above.
The performance results for the registered investment companies or Composite
presented below are generally subject to somewhat lower fees and expenses than
the relevant Portfolios although in most instances the fees and expenses are
substantially similar. In addition, holders of Contracts representing
interests in the Portfolios below will be subject to charges and expenses
relating to such
<PAGE>
- -----
136
- --------------------------------------------------------------------------------
Contracts. The performance results presented below do not reflect any
insurance related expenses and would be reduced if such charges were
reflected.
The investment results presented below are unaudited. For more information on
the specified market indices used below, see the section "The Benchmarks."
ANNUAL RATES OF RETURN OF OTHER FUNDS OR ACCOUNTS MANAGED BY ADVISERS
AS OF 12/31/99
The name of the other fund or account managed by the Adviser is shown in BOLD.
The name of the Trust Portfolio is shown in (parentheses). The name of the
benchmark is shown in italics.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1 5 10 Since Inception
OTHER FUND OR ACCOUNT MANAGED BY ADVISER (EQAT Portfolio) Year Years Years Inception Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Benchmark
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE PREMIER GROWTH FUND, INC. - ADVISOR CLASS(9),(12) (EQ/ALLIANCE PREMIER GROWTH PORTFOLIO)
29.42% N/A N/A 38.65% 10/1/96
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% N/A N/A 21.60%
- --------------------------------------------------------------------------------------------------------------------------------
ALLIANCE TECHNOLOGY FUND - ADVISOR CLASS(12) (EQ/ALLIANCE TECHNOLOGY PORTFOLIO)
71.78% 38.52% 29.98% N/A 3/1/82
- --------------------------------------------------------------------------------------------------------------------------------
NASDAQ Composite Index 85.59% 40.17% 24.50% N/A
- --------------------------------------------------------------------------------------------------------------------------------
BT ADVISORS FUNDS - EAFE EQUITY INDEX FUND - INSTITUTIONAL CLASS(11) (BT INTERNATIONAL EQUITY INDEX PORTFOLIO)
27.95% N/A N/A 14.07% 1/24/96
- --------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(5) 26.96% N/A N/A 13.88%
- --------------------------------------------------------------------------------------------------------------------------------
BT ADVISORS FUNDS - SMALL CAP INDEX FUND-INSTITUTIONAL CLASS(11) (BT SMALL COMPANY INDEX PORTFOLIO)
21.70% N/A N/A 14.41% 7/10/96
- --------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) 21.26% N/A N/A 14.52%
- --------------------------------------------------------------------------------------------------------------------------------
BT INSTITUTIONAL FUNDS - EQUITY 500 INDEX FUND - INSTITUTIONAL CLASS(11) (BT EQUITY 500 INDEX PORTFOLIO)
20.75% 28.46% N/A 21.45% 12/31/92
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56% N/A 21.53%
- --------------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN NON-U.S. EQUITY COMPOSITE(12) (CAPITAL GUARDIAN INTERNATIONAL PORTFOLIO)
70.77% 23.99% 15.31% N/A 12/31/78
- --------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(5) 26.96% 12.83% 7.01% N/A
- --------------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY COMPOSITE(12) (CAPITAL GUARDIAN U.S. EQUITY PORTFOLIO)
23.83% 27.70% 17.97% N/A 12/31/66
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56% 18.19% N/A
- --------------------------------------------------------------------------------------------------------------------------------
CAPITAL GUARDIAN U.S. EQUITY RESEARCH PORTFOLIO - DIVERSIFIED COMPOSITE(12) (CAPITAL GUARDIAN RESEARCH PORTFOLIO)
24.23% 29.43% N/A 22.62% 3/31/93
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56% N/A 21.58%
- --------------------------------------------------------------------------------------------------------------------------------
EVERGREEN FUND - CLASS Y SHARES(12) (EQ/EVERGREEN PORTFOLIO)
16.05% 21.21% 14.17% N/A 10/15/71
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56% 18.19% N/A
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
- -----
137
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1 5
OTHER FUND OR ACCOUNT MANAGED BY ADVISER (EQAT Portfolio) Year Years
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
EVERGREEN FOUNDATION FUND - CLASS Y SHARES(12) (EQ/EVERGREEN FOUNDATION PORTFOLIO)
13.69% 18.32%
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56%
- --------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN ACTIVE FIXED INCOME COMPOSITE(11) (J.P. MORGAN CORE BOND PORTFOLIO)
0.08% 8.29%
- --------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Broad Investment Grade Bond Index(1) (0.82)% 7.74%
- --------------------------------------------------------------------------------------------------------------------------------
THE LAZARD FUNDS, INC. - LAZARD EQUITY PORTFOLIO(11) (LAZARD LARGE CAP VALUE PORTFOLIO)
4.23% 20.36%
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.55%
- --------------------------------------------------------------------------------------------------------------------------------
THE LAZARD FUNDS, INC. - LAZARD SMALL CAP PORTFOLIO(11) (LAZARD SMALL CAP VALUE PORTFOLIO)
1.77% 11.39%
- --------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) 21.26% 16.69%
- --------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS INVESTORS TRUST(2),(11) (MFS GROWTH WITH INCOME PORTFOLIO)
0.81% 23.42%
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.55%
- --------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - MERRILL LYNCH BASIC VALUE FOCUS FUND(11) (MERCURY BASIC VALUE EQUITY PORTFOLIO)
21.12% 19.35%
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.55%
- --------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - MERRILL LYNCH GLOBAL STRATEGY FOCUS FUND(11) (MERCURY WORLD STRATEGY PORTFOLIO)
21.37% 13.11%
- --------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(5) 26.96% 12.83%
- --------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH FUND(6),(12) (MFS EMERGING GROWTH COMPANIES PORTFOLIO)
41.45% 28.05%
- --------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) 21.26% 16.69%
- --------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH FUND(10),(11) (MFS RESEARCH PORTFOLIO)
16.70% 24.43%
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.56%
- --------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY INSTITUTIONAL FUND, INC. - EMERGING MARKETS PORTFOLIO(7),(12) (MORGAN STANLEY EMERGING MARKETS
EQUITY PORTFOLIO)
105.14% 9.20%
- --------------------------------------------------------------------------------------------------------------------------------
IFC Global Total Return Composite Index(8) 62.69% 0.75%
- --------------------------------------------------------------------------------------------------------------------------------
PUTNAM GROWTH & INCOME FUND II(10),(11) (EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO)
(0.91)% N/A
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% N/A
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
10 Since Inception
OTHER FUND OR ACCOUNT MANAGED BY ADVISER (EQAT Portfolio) Years Inception Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EVERGREEN FOUNDATION FUND - CLASS Y SHARES(12) (EQ/EVERGREEN FOUNDATION PORTFOLIO)
N/A 16.57% 1/2/90
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) N/A 16.16%
- --------------------------------------------------------------------------------------------------------------------------------
J.P. MORGAN ACTIVE FIXED INCOME COMPOSITE(11) (J.P. MORGAN CORE BOND PORTFOLIO)
8.44% 9.91% 5/31/77
- --------------------------------------------------------------------------------------------------------------------------------
Salomon Brothers Broad Investment Grade Bond Index(1) 7.75% N/A
- --------------------------------------------------------------------------------------------------------------------------------
THE LAZARD FUNDS, INC. - LAZARD EQUITY PORTFOLIO(11) (LAZARD LARGE CAP VALUE PORTFOLIO)
14.83% 14.08% 6/87
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 18.21% 16.85%
- --------------------------------------------------------------------------------------------------------------------------------
THE LAZARD FUNDS, INC. - LAZARD SMALL CAP PORTFOLIO(11) (LAZARD SMALL CAP VALUE PORTFOLIO)
N/A 14.24% 10/1/91
- --------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) N/A 14.77%
- --------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS INVESTORS TRUST(2),(11) (MFS GROWTH WITH INCOME PORTFOLIO)
15.83% N/A 7/15/24
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 18.21% N/A
- --------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - MERRILL LYNCH BASIC VALUE FOCUS FUND(11) (MERCURY BASIC VALUE EQUITY
PORTFOLIO)
N/A 16.60% 7/1/93
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) N/A 22.46%(2)
- --------------------------------------------------------------------------------------------------------------------------------
MERRILL LYNCH VARIABLE SERIES FUNDS, INC. - MERRILL LYNCH GLOBAL STRATEGY FOCUS FUND(11) (MERCURY WORLD
STRATEGY PORTFOLIO)
N/A 11.00% 2/28/92
- --------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(5) N/A 12.00%
- --------------------------------------------------------------------------------------------------------------------------------
MFS EMERGING GROWTH FUND(6),(12) (MFS EMERGING GROWTH COMPANIES PORTFOLIO)
24.72% N/A 12/29/86
- --------------------------------------------------------------------------------------------------------------------------------
Russell 2000 Index(4) 13.40% N/A
- --------------------------------------------------------------------------------------------------------------------------------
MFS RESEARCH FUND(10),(11) (MFS RESEARCH PORTFOLIO)
17.53% N/A 10/13/71
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 18.21% N/A
- --------------------------------------------------------------------------------------------------------------------------------
MORGAN STANLEY INSTITUTIONAL FUND, INC. - EMERGING MARKETS PORTFOLIO(7),(12) (MORGAN STANLEY EMERGING MARKETS
EQUITY PORTFOLIO)
N/A 16.40% 9/25/92
- --------------------------------------------------------------------------------------------------------------------------------
IFC Global Total Return Composite Index(8) N/A 7.73%
- --------------------------------------------------------------------------------------------------------------------------------
PUTNAM GROWTH & INCOME FUND II(10),(11) (EQ/PUTNAM GROWTH & INCOME VALUE PORTFOLIO)
N/A 17.65% 1/5/95
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) N/A 28.58%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
------------------------ EQ Advisors Trust
<PAGE>
- -----
138
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
1 5 10 Since Inception
OTHER FUND OR ACCOUNT MANAGED BY ADVISER (EQAT Portfolio) Year Years Years Inception Date
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PUTNAM INTERNATIONAL GROWTH FUND(10),(12) (EQ/PUTNAM INTERNATIONAL EQUITY PORTFOLIO)
60.77% 24.41% N/A 17.82% 2/28/91
- --------------------------------------------------------------------------------------------------------------------------------
MSCI EAFE Index(5) 26.96% 12.83% N/A 9.62%
- --------------------------------------------------------------------------------------------------------------------------------
PUTNAM INVESTORS FUND(10), (11) (EQ/PUTNAM INVESTORS GROWTH PORTFOLIO)
30.14% 31.69% 19.81% N/A 12/1/25
- --------------------------------------------------------------------------------------------------------------------------------
S&P 500 Index(3) 21.04% 28.51% 18.21% N/A
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
1 The Salomon Brothers Broad Investment Grade Bond Index is an unmanaged,
market-weighted index that contains approximately 4,700 individually priced
investment grade bonds. The index does not include fees or operating
expenses and is not available for actual investment.
2 Since inception percentage was calculated as of 6-30-93.
3 The S&P 500 Index ("S&P 500") is an unmanaged index containing common
stocks of 500 industrial, transportation, utility and financial companies,
regarded as generally representative of the larger capitalization portion
of the United States stock market. The S&P 500 reflects the reinvestment of
income dividends and capital gain distributions, if any, but does not
reflect fees, brokerage commissions, or other expenses of investing.
4 The Russell 2000 Index is an unmanaged index (with no defined investment
objective) composed of approximately 2,000 small-capitalization stocks and
includes reinvestments of dividends. The index does not include fees or
operating expenses and is not available for actual investment. It is
compiled by the Frank Russell Company.
5 The Morgan Stanley Capital International EAFE Index ("EAFE Index") is an
unmanaged capitalization-weighted measure of stock markets in Europe,
Australasia and the Far East. The returns of the EAFE Index assume
dividends are reinvested net of withholding tax and do not reflect any fees
or operating expenses. The index is not available for actual investment.
6 The results for the MFS Emerging Growth Fund (Class B shares) do not
reflect sales charges that may be imposed on the such shares.
7 The Class B shares of the Morgan Stanley Institutional Fund, Inc. -
Emerging Markets Portfolio are subject to a Rule 12b-1 fee equal to 0.25%
of the Portfolio's assets. The expense ratio of Morgan Stanley
Institutional Fund, Inc. - Emerging Markets Portfolio has been capped at
1.75% since inception.
8 The IFC Global Total Return Composite Index is an unmanaged index of common
stocks and includes developing countries in Latin America, East and South
Asia, Europe, the Middle East and Africa. The Index assumes dividends are
reinvested.
9 Annualized performance for the Advisor Class shares. The Advisor Class
shares had a total expense ratio of 1.26% of its average daily net assets
for the year ended December 31, 1998. Other share classes have different
expenses and their performance will vary.
10 Performance for the Class A shares. The Class A shares are in many
instances subject to a front-end sales charge of up to 5.75%. Other share
classes have different expenses and their performance will vary.
11 The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were less than that of the relevant Trust Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used
in the calculation of the performance of the similar registered investment
company (or composite) that performance would be reduced.
12 The annual fees and expenses of the similar registered investment company
(or series thereof) (or composite) whose prior performance is shown in the
table above were higher than that of the relevant Trust Portfolio.
Consequently, if the Trust Portfolio's annual fees and expenses were used
in the calculation of the performance of the similar registered investment
company (or composite) that performance would be increased.
<PAGE>
- ----------------
139
- --------------------------------------------------------------------------------
If you wish to know more, you will find additional information about the Trust
and its Portfolios in the following documents, which are available, free of
charge by calling our toll-free number at 1-800-528-0204:
ANNUAL AND SEMI-ANNUAL REPORTS
The Annual and Semi-Annual Reports include more information about the Trust's
performance and are available upon request free of charge. The reports usually
include performance information, a discussion of market conditions and the
investment strategies that affected the Portfolios' performance during the
last fiscal year.
STATEMENT OF ADDITIONAL INFORMATION (SAI)
The SAI, dated May 1, 2000, is incorporated into this Prospectus by reference
and is available upon request free of charge by calling our toll free number
at 1-800-528-0204.
You may visit the SEC's website at www.sec.gov to view the SAI and other
information about the Trust. You can also review and copy information about
the Trust, including the SAI, at the SEC's Public Reference Room in
Washington, D.C. or by electronic request at [email protected] or by writing
the SEC's Public Reference Section, Washington, D.C. 20549-0102 You may have
to pay a duplicating fee. To find out more about the Public Reference Room,
call the SEC at 1-202-942-8090.
Investment Company Act File Number: 811-07953
