As filed with the Securities and Exchange Commission
on February 12, 1998
Registration Nos. 333-22633
811-8079
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. 2 [X]
Post-Effective Amendment No. [ ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 2 [X]
(Check appropriate box or boxes.)
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
_________________________________________________
(Exact name of registrant as specified in charter)
One East Liberty, Third Floor
Reno, Nevada 89501
________________________________________ __________
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code 1-800-887-8671
Louis G. Navellier
One East Liberty, Third Floor
Reno, Nevada 89501
(Name and Address of Agent For Service)
Copies to:
Raymond A. O'Hara III, Esq. and to Dennis A. Holtorf
Blazzard, Grodd & Hasenauer, P.C. Navellier & Associates, Inc.
P.O. Box 5108 One East Liberty, Third Floor
Westport, CT 06881 Reno, Nevada 89501
(203) 226-7866 (702) 785-9402
Approximate Date of
Proposed Public Offering:
As soon as practicable after the effective date of this Filing.
Calculation of Registration Fee under the Securities Act of 1933:
Registrant is registering an indefinite number of securities under
the Securities Act of 1933 pursuant to Investment Company Act Rule 24f-2.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
CROSS REFERENCE SHEET
(as required by Rule 404 (c))
<TABLE>
<CAPTION>
Part A
N-1A
Item No. Location
<C> <S> <C>
1. Cover Page........................... Cover Page
2. Synopsis............................. Shareholder Transaction
Expenses and Annual Fund
Operating Expenses; Summary
3. Condensed Financial Information...... Not Applicable
4. General Description of Registrant.... Investment Objective and
Policies; Risk Considerations;
Special Investment Methods and
Risks; Investment Restrictions
5. Management of the Fund............... Management of the Fund
6. Capital Stock and Other Securities... Description of Shares - Voting
Rights; Tax Status, Dividends
and Distributions
7. Purchase of Securities Being Offered. Purchases and Redemptions;
Risk Factors - Net Asset Value
8. Redemption or Repurchase............. Purchases and Redemptions
9. Pending Legal Proceedings............ Not Applicable
Part B
10. Cover Page........................... Cover Page
11. Table of Contents.................... Table of Contents
12. General Information and History...... General Information and
History
13. Investment Objectives and Policies... Investment Objective and
Policies; Investment
Restrictions
14. Management of the Fund............... Directors and Officers of the
Fund
15. Control Persons and Principal Holders
of Securities........................ Control Persons and Principal
Holders of Securities
16. Investment Advisory and Other
Services............................. The Investment Adviser,
Custodian and Transfer Agent;
The Distributor; Independent
Accountants
17. Brokerage Allocation and Other
Practices............................ Brokerage Allocation and Other
Practices
18. Capital Stock and Other Securities... Capital Stock and Other
Securities
19. Purchase, Redemption and Pricing of
Securities Being Offered............. Purchase, Redemption and
Pricing of Shares
20. Tax Status........................... Taxes
21. Underwriters......................... Not Applicable
22. Calculation of Performance Data...... Calculation of Performance
Data
23. Financial Statements................. Not Applicable
</TABLE>
PART C
Information required to be included in Part C is set forth under the appropriate
Item, so numbered, in Part C of the Registration Statement.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
FUND PROFILE
Navellier Variable Insurance Series Fund, Inc.
One East Liberty, Third Floor
Reno, NV 89501
February __, 1998
Navellier & Associates, Inc.
Investment Adviser
For Fund information, call 1-800-___-____
1. WHAT IS THE PORTFOLIO'S GOAL?
The Fund currently has authorized one series - the Navellier Growth Portfolio
("Growth Portfolio"). The investment objective of the Growth Portfolio is to
achieve long-term growth of capital primarily through investment in companies
with appreciation potential. It seeks to achieve this objective by investing in
equity securities traded in all United States markets including dollar
denominated foreign securities traded in United States markets.
2. HOW IS THE PORTFOLIO INVESTED?
The Growth Portfolio will invest up to 100% of its capital in equity securities
selected for their capital growth potential. Navellier & Associates, Inc. will
screen over 6,000 stocks, taking into account various factors and basing its
stock selection on its own model portfolio theory concepts. The Growth Portfolio
invests primarily in what Navellier & Associates, Inc. believes are undervalued
common stocks believed to have long-term growth potential.
3. WHAT ARE THE RISKS OF INVESTING IN THE PORTFOLIO?
The performance of the Growth Portfolio depends on the market value of its
holdings. Securities prices fluctuate in response to general political, economic
and market conditions as well as to the performance of individual companies.
Common stock prices can fluctuate dramatically in response to these factors.
Since many of the securities in which the Growth Portfolio may invest may have a
smaller number of shares to trade than more conventional companies, a liquidity
problem could be created by a lack of shares available for trade at a given
time. A high portfolio turnover rate may result in increased brokerage
commissions. Investments in foreign securities may involve considerations which
are not ordinarily associated with investing in domestic issuers. These
considerations include, among others, changes in currency rates, and the impact
of political, social or diplomatic developments. The Growth Portfolio uses
aggressive investment strategies and can experience substantial fluctuations so
that shares may at any time be worth more or less than you paid for them.
4. IS THE PORTFOLIO APPROPRIATE FOR YOU?
The Growth Portfolio is appropriate for investors who are willing to risk stock
market fluctuations in pursuit of long-term growth.
5. WHAT ARE THE PORTFOLIO'S EXPENSES?
The Growth Portfolio has no sales charge or fee for initial purchases,
reinvestment of distributions or redemptions. Portfolio operating expenses are
paid out of the Portfolio's assets and are not charged directly to the
Participating Insurance Company Separate Account ("Separate Account") or other
shareholders. Since the Growth Portfolio has no operating history, "Other
Expenses" and "Total Portfolio Operating Expenses" are based on estimated
amounts.
Annual Portfolio Operating Expenses/1/
(As a percentage of average net assets after applicable
expense reimbursements)
Management Fees 0.85%
12b-1 Fees None
Other Expenses/2/ 0.65%
-----
Total Portfolio Operating Expenses/1/ 1.50%
/1/Navellier & Associates, Inc. has agreed to reimburse expenses until
Total Portfolio Operating Expenses (including the advisory fee) are at or below
1.50%. Therefore, the amounts shown above reflect the anticipated expense
reimbursement. This undertaking is subject to termination at any time without
notice to shareholders after the expiration of twelve months from the date
shares of the Portfolio are first offered to the public. The estimated Total
Portfolio Operating Expenses, before any expense reimbursement, are 5%.
/2/The figure of 0.65% shown here includes the annual fee of 0.25% received
by Navellier & Associates, Inc. pursuant to the Administrative Services
Agreement.
EXAMPLE
1 Year 3 Year
------ ------
$------- $-------
You could expect to pay this much in total expenses, maintaining an average
annual investment of $1,000. The example assumes a 5% annual return, expenses as
described above and reinvestment of all dividends and distributions. The example
reflects the current fee waiver arrangement and does not reflect additional
charges and expenses which are, or may be, imposed under the variable annuity
contracts ("VA Contracts") or variable life insurance policies ("VLI Policies")
or qualified pension and retirement plans ("Qualified Plans"). Such charges and
expenses are described in the Prospectus of the Separate Account or in the
Qualified Plan documents or other informational materials supplied by Qualified
Plan sponsors. The example should not be considered a representation of past or
future expenses.
6. HOW HAS THE PORTFOLIO PERFORMED?
The Growth Portfolio is newly organized and, therefore, has no history of
operations.
7. WHO MANAGES THE PORTFOLIO?
Navellier & Associates, Inc. acts as the Growth Portfolio's investment adviser.
It presently manages over $2.02 billion in investor funds. Its owner has been in
the business of rendering advisory services to significant pools of capital such
as retirement plans and large investors since 1987. Louis Navellier and Alan
Alpers are the Portfolio Managers involved in the day-to-day investment
activities of the Growth Portfolio.
8. HOW CAN YOU BUY SHARES?
Shares may be purchased or redeemed only through VA Contracts and VLI Policies
offered by Separate Accounts of Participating Insurance Companies or through
Qualified Plans. Individual investors may not purchase or redeem shares
directly. Please refer to the prospectus of the Separate Account or to the
Qualified Plan documents or other informational materials supplied by Qualified
Plan sponsors for instructions on purchasing a VA Contract or VLI Policy and on
how to select the Portfolios as investment options for a VA Contract, VLI Policy
or Qualified Plan.
9. HOW CAN YOU SELL SHARES?
Shares can be redeemed on any business day by transmitting a redemption order to
a Participating Insurance Company or Qualified Plan.
10. WHEN WILL YOU RECEIVE DISTRIBUTIONS?
The Growth Portfolio distributes dividends at least annually and distributes its
net realized capital gains, if any, at least annually in the form of shares of
the Portfolio. Such dividends and capital gain distributions are automatically
reinvested in additional shares of the Growth Portfolio and therefore are not
currently taxable. If, alternatively, an election is made on behalf of a
Separate Account of a Participating Insurance Company or Qualified Plan to
receive distributions in cash, this would result in a taxable distribution but
requests for cash distributions are not anticipated.
11. WHAT INVESTOR SERVICES ARE AVAILABLE?
The Fund provides semi-annual and annual reports, including financial
statements, regarding the Growth Portfolio. Toll-free access to the Growth
Portfolio is also provided.
THIS PROFILE CONTAINS KEY INFORMATION ABOUT THE PORTFOLIO. IF YOU WOULD LIKE
MORE INFORMATION BEFORE YOU INVEST, PLEASE CONSULT THE PORTFOLIO'S ACCOMPANYING
PROSPECTUS. ANNUAL AND SEMI-ANNUAL REPORTS FOR THE FUND MAY BE OBTAINED AT NO
COST BY CALLING 1-800-_____-_____.
PART A
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
One East Liberty, Third Floor
Reno, Nevada 89501
Prospectus Dated _____________, 1998
Navellier Variable Insurance Series Fund, Inc. (the "Fund") is an open-end
management investment company authorized to issue multiple series of shares,
each representing a portfolio of investments (individually, a "Portfolio" and
collectively, the "Portfolios"). The Fund currently has authorized one series -
the Navellier Growth Portfolio (the "Growth Portfolio"). There can be no
assurance that any Portfolio of the Fund will achieve its investment objective.
This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. The Fund's shares are offered
only to (a) insurance companies ("Participating Insurance Companies") to fund
benefits under their variable annuity contracts ("VA Contracts") and variable
life insurance policies ("VLI Policies") and (b) tax-qualified pension and
retirement plans ("Qualified Plans"), including participant-directed Qualified
Plans which elect to make the Portfolios available as investment options for
Qualified Plan Participants.
Please read this Prospectus carefully and retain it for future reference. This
Prospectus should be read in conjunction with the prospectuses issued by the
Participating Insurance Companies for the VA Contracts and VLI Policies that
accompany this Prospectus or with the Qualified Plan documents or other
informational materials supplied by Qualified Plan sponsors. Additional
information about the Fund and the Growth Portfolio is contained in a Statement
of Additional Information which has been filed with the Securities and Exchange
Commission (the "SEC") and is available to investors without charge by calling
the Fund at 1-800-887-8671. The Statement of Additional Information, as amended
from time to time, bears the same date as this Prospectus and is incorporated by
reference in its entirety into this Prospectus.
This Prospectus does not constitute an offer to sell, or a solicitation of an
offer to buy, the securities of the Fund in any jurisdiction in which such sale,
offer to sell, or solicitation may not be lawfully made.
INVESTMENTS IN THE FUND ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. SHARES OF THE FUND ARE NOT FEDERALLY INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
GOVERNMENTAL AGENCY. AN INVESTMENT IN THE FUND IS SUBJECT TO RISK THAT MAY CAUSE
THE VALUE OF THE INVESTMENT TO FLUCTUATE, AND WHEN THE INVESTMENT IS REDEEMED,
THE VALUE MAY BE HIGHER OR LOWER THAN THE AMOUNT ORIGINALLY INVESTED BY THE
INVESTOR.
LIKE ALL MUTUAL FUNDS, THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
SHARES OF THE FUND ARE AVAILABLE AND ARE BEING OFFERED EXCLUSIVELY (i) AS A
POOLED FUNDING VEHICLE FOR LIFE INSURANCE COMPANIES WRITING ALL TYPES OF
VARIABLE LIFE INSURANCE POLICIES AND VARIABLE ANNUITY CONTRACTS AND (ii) TO
TAX-QUALIFIED PENSION AND RETIREMENT PLANS.
TABLE OF CONTENTS
Page
SHAREHOLDER TRANSACTION EXPENSES 1
AND ANNUAL FUND OPERATING EXPENSES
SUMMARY 2
INVESTMENT OBJECTIVE AND POLICIES 3
SPECIAL INVESTMENT METHODS AND RISKS 4
INVESTMENT RESTRICTIONS 5
RISK FACTORS 6
PERFORMANCE ADVERTISING 8
MANAGEMENT OF THE FUND 10
EXPENSES OF THE FUND 11
REPORTS AND INFORMATION 12
DESCRIPTION OF SHARES 12
TAX STATUS, DIVIDENDS AND DISTRIBUTIONS 14
PURCHASES AND REDEMPTIONS 14
ADDITIONAL INFORMATION 16
SHAREHOLDER TRANSACTION EXPENSES
AND ANNUAL FUND OPERATING EXPENSES
<TABLE>
<CAPTION>
<S> <C>
Navellier
Growth
Portfolio
Shareholder Transaction Expenses/1/
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............. 0%
Maximum Sales Load Imposed on
Reinvested Dividends........................... None
Deferred Sales Load................................ None
Redemption Fees.................................... None
Exchange Fee....................................... None
Annual Portfolio Operating Expenses/2/
(As a percentage of average net assets after
applicable expense reimbursements)
Management Fees.................................... 0.85%
12b-1 Fees......................................... None
Other Expenses/3/.................................. 0.65%
Total Portfolio Operating Expenses/2/ ............. 1.50%
</TABLE>
/1/ The above table of fees and other expenses is provided to assist you in
understanding the various potential costs and expenses that an investor in the
Portfolio may bear directly or indirectly.
/2/ Navellier & Associates, Inc. (the "Investment Adviser") has agreed to
reimburse expenses until Total Portfolio Operating Expenses (including the
advisory fee) are at or below 1.50%. Therefore, the amounts shown above reflect
the anticipated expense reimbursement. This undertaking is subject to
termination at any time without notice to shareholders after the expiration of
twelve months from the date shares of the Portfolio are first offered to the
public. The estimated Total Portfolio Operating Expenses, before any expense
reimbursement, are 5%. (See "Expenses of the Fund").
/3/ The figure of 0.65% shown here includes the annual fee of 0.25%
received by the Investment Adviser pursuant to the Administrative Services
Agreement. (See "Expenses of the Fund").
EXAMPLE:
The following example indicates the direct and indirect expenses an investor
(maintaining an average annual investment of $1,000) could expect to incur in a
single year, and three-year period respectively:
<TABLE>
<CAPTION>
Growth Portfolio
<S> <C>
One-Year...................... $ ________
Three-Year.................... $ ________
</TABLE>
The foregoing example assumes (a) that an investor maintains an average of
$1,000 invested in the Growth Portfolio; (b) no sales load; (c) a 5% annual
return; (d) percentage amounts listed above for Annual Fund Operating Expenses
remain constant (for all periods shown above); and (e) reinvestment of all
dividends and distributions.
The foregoing example is based upon estimated Total Operating Expenses for the
Growth Portfolio, as set forth in the "Annual Operating Expenses" table above
and reflects the fee waiver/expense reimbursement arrangement in effect. THE
EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES.
ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE TABLE DOES NOT
REFLECT ADDITIONAL CHARGES AND EXPENSES WHICH ARE, OR MAY BE, IMPOSED UNDER THE
VA CONTRACTS, VLI POLICIES OR QUALIFIED PLANS. SUCH CHARGES AND EXPENSES ARE
DESCRIBED IN THE PROSPECTUS OF THE PARTICIPATING INSURANCE COMPANY SEPARATE
ACCOUNT OR IN THE QUALIFIED PLAN DOCUMENTS OR OTHER INFORMATIONAL MATERIALS
SUPPLIED BY QUALIFIED PLAN SPONSORS.
SUMMARY
The Fund
The Fund is an open-end management investment company which currently offers
shares of the Growth Portfolio. Additional Portfolios may be added to the Fund
in the future. This Prospectus will be supplemented or amended to reflect the
addition of any new Portfolios.
This summary, which provides basic information about the Growth Portfolio and
the Fund, is qualified in its entirety by reference to the more detailed
information provided elsewhere in this Prospectus and in the Statement of
Additional Information.
The Growth Portfolio is designed for long-term investors and is not intended as
a trading vehicle or to be a complete investment program for the investor. An
investment in the Growth Portfolio involves certain speculative considerations;
see "Risk Factors."
The Growth Portfolio employs aggressive investment strategies and can experience
substantial fluctuations, including declines, so that shares may be worth less
than when originally purchased.
Investment Adviser
The Investment Adviser administers the assets of the Growth Portfolio and
determines which securities will be selected as investments for the Growth
Portfolio. Louis Navellier, the President and CEO of the Investment Adviser,
refined the Modern Portfolio Theory investment strategy which is applied in
managing the assets of the Growth Portfolio. He sets the strategies and
guidelines for the Growth Portfolio and oversees the Portfolio Managers'
activities. Louis Navellier and Alan Alpers, who are the Portfolio Managers
involved in the day-to-day investment activities of the Growth Portfolio, head
up a team of investment professionals who assist in managing the Portfolio,
including research analysts Jon Tesseo, Shawn Price, Michael Borgen and Arnold
Langsen. Alan Alpers has been an analyst and portfolio manager for the
Investment Adviser since 1989 and has been responsible along with Mr. Navellier
for day-to-day management of over $100 million in individual accounts for the
Investment Adviser. The Investment Adviser receives an annual advisory fee,
equal to .85% of the average daily net asset value of assets under management,
for the Growth Portfolio. The advisory fee for the Growth Portfolio is payable
monthly, based upon a percentage of the Portfolio's average daily net assets.
This advisory fee paid to the Investment Adviser is higher than those generally
paid by most other investment companies. The Growth Portfolio is paying this
higher advisory fee based on its desire to retain the Investment Adviser's
specific application of Modern Portfolio Theory, its particular method of
analyzing securities and its investment advisory services.
Distribution of Shares
Navellier Securities Corp., One East Liberty, Third Floor, Reno, NV 89501 (the
"Distributor") acts as the principal underwriter for the shares of the Growth
Portfolio. The Distributor is a corporation wholly-owned by Louis Navellier,
who also owns 100% of the Adviser.
How to Invest
Individual investors may not purchase or redeem shares of the Growth Portfolio
directly; shares may be purchased or redeemed only through VA Contracts and VLI
Policies offered by separate accounts of Participating Insurance Companies or
through Qualified Plans, including participant-directed Qualified Plans which
elect to make the Portfolio an investment option for Qualified Plan
Participants. See "Purchases and Redemptions."
Risk Factors
Investment in the Growth Portfolio involves special risks and there can be no
guarantee of profitability. Some of those risks are briefly described here. Some
of the small cap securities which the Growth Portfolio may purchase may be
difficult to liquidate on short notice or, on occasion, only a portion of the
shares of a company in which the Investment Adviser intends to trade may be
available to be bought or sold by the Growth Portfolio. There can be no
assurance of profitability or of what the percentage of the Portfolio's total
annual operating expenses will be. Investments, if any, in securities of foreign
issuers may pose greater risks. The Investment Adviser's investment style could
result in above average portfolio turnover which could result in higher
brokerage expenses. As with any equity fund, the investments may decline,
resulting in a loss of value to the shareholder. (For more detail, see "Risk
Factors".)
INVESTMENT OBJECTIVE AND POLICIES
Investment Objective of the Navellier Growth Portfolio
The investment objective of the Growth Portfolio is to achieve long-term growth
of capital primarily through investment in companies with appreciation
potential. This investment objective is fundamental and may not be changed
without shareholder approval. The Growth Portfolio invests in equity securities
traded in all United States markets including dollar denominated foreign
securities traded in United States markets. It is a diversified portfolio,
meaning it limits its investment in the securities of any single company
(issuer) to a maximum of 5% of the Portfolio assets and further limits its
investments to less than 25% of the Portfolio's assets in any one industry
group. The Growth Portfolio seeks long term capital appreciation through
investments in securities of companies which the Investment Adviser feels are
undervalued in the marketplace. Navellier & Associates, Inc. is the Investment
Adviser for the Growth Portfolio. This Portfolio should not be considered
suitable for investors seeking current income.
Other Investments
The Growth Portfolio may, for temporary defensive purposes or to maintain cash
or cash equivalents to meet anticipated redemptions, also invest in debt
securities and money market funds if, in the opinion of the Investment Adviser,
such investment will further the cash needs or temporary defensive needs of the
Portfolio. In addition, when the Investment Adviser feels that market or other
conditions warrant it, for temporary defensive purposes the Growth Portfolio may
retain cash or invest all or any portion of its assets in cash equivalents,
including money market mutual funds. Under normal conditions, the Growth
Portfolio's holdings in such non-equity securities should not exceed 35% of the
total assets of the Portfolio. If the Growth Portfolio's assets, or a portion
thereof, are retained in cash or money market funds or money market mutual
funds, such cash will, in all probability, be deposited in interest-bearing or
money market accounts or in Rushmore's money market mutual funds. Rushmore Trust
& Savings, FSB is also the Fund's Transfer Agent and Custodian. Cash deposits by
the Fund in interest bearing instruments issued by Rushmore Trust & Savings
("Transfer Agent") will only be deposited with the Transfer Agent if its
interest rates, terms, and security are equal to or better than could be
received by depositing such cash with another savings institution. Money market
investments have no FDIC protection and deposits in Rushmore Trust & Savings
accounts have only $100,000 protection.
It is anticipated that all of the Growth Portfolio's investments in corporate
debt securities (other than commercial paper) and preferred stocks will be
represented by debt securities and preferred stocks which have, at the time of
purchase, a rating within the four highest grades as determined by Moody's
Investors Service, Inc. (Aaa, Aa, A, Baa) or by Standard & Poor's Corporation
(AAA, AA, A, BBB; securities which are rated BBB/Baa have speculative
characteristics). Although investment-quality securities are subject to market
fluctuations, the risk of loss of income and principal is generally expected to
be less than with lower quality securities. In the event the rating of a debt
security or preferred stock in which the Growth Portfolio has invested drops
below investment grade, the Growth Portfolio will promptly dispose of such
investment. When interest rates go up, the market value of debt securities
generally goes down and long-term debt securities tend to be more volatile than
short term debt securities.
In determining the types of companies which will be suitable for investment by
the Growth Portfolio, the Investment Adviser will screen over 6,000 stocks and
will take into account various factors and base its stock selection on its own
model portfolio theory concepts. The Growth Portfolio invests primarily in what
the Investment Adviser believes are undervalued common stocks believed to have
long-term growth potential. Stocks are selected on the basis of an evaluation of
factors such as earnings growth, expanding profit margins, market dominance
and/or factors that create the potential for market dominance, sales growth, and
other factors that indicate a company's potential for growth. The Growth
Portfolio will invest up to 100% of its capital in equity securities selected
for their capital growth potential. The Investment Adviser will typically (but
not always) purchase common stocks of issuers which have records of
profitability and strong earnings momentum. When selecting such stocks for
investment by the Growth Portfolio, the issuers may be lesser known companies
moving from a lower to a higher market share position within their industry
groups rather than the largest and best known companies in such groups.
SPECIAL INVESTMENT METHODS AND RISKS
"Short Sales Against the Box"
The Growth Portfolio is permitted to make short sales if at the time of the
short sale the Portfolio owns or has the right to acquire a security equal in
kind and amount to the security being sold short, at no additional cost. This
investment technique is known as a "short sale against the box."
In a short sale, the seller does not immediately deliver the securities sold and
is said to have a short position in those securities until delivery occurs. To
make delivery to the purchaser, the executing broker borrows the securities
being sold short on behalf of the seller. While the short position is
maintained, the seller collateralizes its obligation to deliver the securities
sold short in an amount equal to the proceeds of the short sale plus an
additional margin amount established by the Board of Governors of the Federal
Reserve. If the Fund engages in a short sale, the collateral account will be
maintained by the Fund's custodian. While the short sale is open, the Fund will
maintain, in a segregated custodial account, an amount of securities equal in
kind and amount to the securities sold short or securities convertible into or
exchangeable for such equivalent securities at no additional cost. These
securities would constitute the Fund's long position.
The Growth Portfolio may make a short sale against the box, when it believes
that the price of a security may decline, causing a decline in the value of a
security owned by the Portfolio (or a security convertible into or exchangeable
for such security), or when the Portfolio desires to sell the security it owns
at a current attractive price, but also wishes to defer recognition of gain or
loss for federal income tax purposes and for purposes of satisfying certain
tests applicable to regulated investment companies under the Internal Revenue
Code. In such a case, any future losses in the Growth Portfolio's long position
should be reduced by a gain in the short position. The extent to which such
gains or losses are reduced would depend upon the amount of the security sold
short relative to the amount the Growth Portfolio owns. There will be certain
additional transaction costs associated with short sales against the box, but
the Growth Portfolio will endeavor to offset these costs with income from the
investment of the cash proceeds of short sales.
INVESTMENT RESTRICTIONS
The Growth Portfolio can invest up to 5% of its assets in the securities of a
single issuer and can invest up to 25% of its assets in the securities of a
single industry. The Growth Portfolio may not make investments in real estate or
commodities or commodity contracts, including futures contracts, but may
purchase securities of issuers which deal in real estate or commodities. The
Growth Portfolio is also prohibited from investing in or selling puts, calls,
straddles (or any combination thereof). The Growth Portfolio is prohibited from
investing in derivatives. The Growth Portfolio may borrow money only from banks
for temporary or emergency (not leveraging) purposes provided that, after each
borrowing, there is an asset coverage in the Portfolio of at least 300%. The
Growth Portfolio will not purchase securities if the amount of borrowing by the
Portfolio exceeds 5% of total assets of the Portfolio. In order to secure any
such borrowing, the Growth Portfolio may pledge, mortgage, or hypothecate up to
10% of the market value of the assets of the Portfolio. The investment by the
Growth Portfolio in securities, including American Depository Receipts, of
issuers or any governmental entity or political subdivision thereof, located,
incorporated or organized outside of the United States is limited to 25% of the
net asset value of the Portfolio, provided that no such foreign securities may
be purchased unless they are traded on United States securities markets.
The Fund may not purchase for any Portfolio "restricted securities" (as defined
in Rule 144(a)(3) of the Securities Act of 1933) if, as a result of such
purchase, more than 10% of the net assets (taken at market value) of such
Portfolio would be invested in such securities nor will the Fund invest in
illiquid or unseasoned securities if as a result of such purchase more than 5%
of the net assets of such Portfolio would be invested in either illiquid or
unseasoned securities. The Board of Directors will determine whether these
securities are liquid and will monitor liquidity on an ongoing basis.
In addition to the investment restrictions described above, the investment
program of the Growth Portfolio is subject to further restrictions which are
described in the Statement of Additional Information. The restrictions for the
Growth Portfolio are fundamental and may not be changed without shareholder
approval.
RISK FACTORS
Lack of Operating History and Experience
The Growth Portfolio is newly organized and has no history of operations. The
Investment Adviser was organized on May 28, 1993 and has been managing the
assets of The Navellier Series Fund since January 3, 1994 and the publicly
invested assets of The Navellier Series Fund since April 1, 1994. The Investment
Adviser also manages the assets of The Navellier Performance Funds which went
effective December 28, 1995. Although the Investment Adviser sub-contracts a
substantial portion of its responsibilities for administrative services of the
Fund's operations to various agents, including the Transfer Agent and Custodian,
the Investment Adviser still has overall responsibility for the administration
of the Growth Portfolio and oversees the administrative services performed by
others as well as servicing shareholder's needs and, along with the Fund's Board
of Directors, is responsible for the selection of such agents and their
oversight. The Investment Adviser is also responsible for the selection of
securities for investment. None of the principals, officers, legal counsel, or
directors of the Investment Adviser (including such of those persons who are
also controlling persons of the Fund) had, before June 1993, ever registered,
operated, or supervised the operations of investment companies in the past, and
there is no assurance that their past business experiences or their experience
with The Navellier Series Fund or The Navellier Performance Funds will enable
them to successfully manage the assets of the Fund in the future. The owner of
the Investment Adviser has been in the business of rendering advisory services
to significant pools of capital such as retirement plans and large investors
since 1987.
The Investment Adviser presently manages over $2.02 billion in investor funds.
The owner of the Investment Adviser is also the owner of another investment
advisory firm, Navellier Fund Management, Inc., and controls other investment
advisory entities which manage assets and/or act as sub-advisors, all of which
firms employ the same basic modern portfolio theories and select many of the
same over-the-counter stocks and other securities which the Investment Adviser
intends to employ and invest in while managing the Portfolios of the Fund.
Because many of the over-the-counter and other securities which Investment
Adviser intends to, or may, invest in have a smaller number of shares available
to trade than more conventional companies, lack of shares available at any given
time may result in one or more of the Portfolios of the Fund not being able to
purchase or sell all shares which the Investment Adviser desires to trade at a
given time or period of time, thereby creating a potential liquidity problem
which could adversely affect the performance of the Fund portfolios. Since the
Investment Adviser will be trading on behalf of the various Portfolios of the
Fund in some or all of the same securities at the same time that the Investment
Adviser, Navellier Fund Management, Inc., other Navellier controlled investment
entities, The Navellier Series Fund and The Navellier Performance Funds are
trading, the potential liquidity problem could be exacerbated. In the event the
number of shares available for purchase or sale in a security or securities is
limited and therefore the trade order cannot be fully executed at the time it is
placed, i.e., where the full trade orders of the Investment Adviser, Navellier
Fund Management, Inc., The Navellier Series Fund, The Navellier Performance
Funds and other Navellier controlled investment entities and the Fund cannot be
completed at the time the order is made, the Investment Adviser, and the other
Navellier controlled investment entities will allocate their purchase or sale
orders in proportion to the dollar value of the order made by the other
Navellier entities, and the dollar value of the order made by the Fund. For
example, if the Investment Adviser, and Navellier Fund Management, Inc., each
place a $25,000 purchase order and Investment Adviser on behalf of the Fund
places a $50,000 purchase order for the same stock and only $50,000 worth of
stock is available for purchase, the order would be allocated $12,500 each of
the stock to the Investment Adviser, and Navellier Fund Management, Inc., and
$25,000 of the stock to the Fund. As the assets of each Portfolio of the Fund
increase, the potential for shortages of buyers or sellers increases, which
could adversely affect the performance of the various Portfolios. While the
Investment Adviser generally does not anticipate liquidity problems (i.e., the
possibility that the Portfolio cannot sell shares of a company and therefore the
value of those shares drops) unless the Fund has assets in excess of two billion
dollars (although liquidity problems could still occur when the Fund has assets
of substantially less than two billion dollars), each investor is being made
aware of this potential risk in liquidity and should not invest in the Fund if
it is not willing to accept this potentially adverse risk, and by investing,
acknowledges that it is aware of the risks.
An investment in shares of any Portfolio of the Fund involves certain
speculative considerations. There can be no assurance that any of a Portfolio's
objectives will be achieved or that the value of the investment will increase.
All Portfolios intend to comply with the diversification and other requirements
applicable to regulated investment companies under the Internal Revenue Code.
All securities in which any of the Fund's Portfolios may invest are inherently
subject to market risk, and the market value of the Fund's investments will
fluctuate. From time to time the Fund may choose to close a Portfolio or
Portfolios to new investors.
Investing in Securities of Foreign Issuers
Investments in foreign securities, particularly those of non-governmental
issuers, involve considerations which are not ordinarily associated with
investing in domestic issuers. These considerations include, among others,
changes in currency rates, currency exchange control regulations, the
possibility of expropriation, the unavailability of financial information, the
difficulty of interpreting financial information prepared under laws applicable
to foreign securities markets, the impact of political, social, or diplomatic
developments, difficulties in invoking legal process abroad, and the difficulty
of assessing economic trends in foreign countries. The Investment Adviser will
use the same basic selection criteria for investing in foreign securities as it
uses in selecting domestic securities as described in the Investment Objective
and Policies section of this Prospectus.
While to some extent the risks to the Fund of investing in foreign securities
may be limited since the Growth Portfolio may not invest more than 25% of its
net asset value in such securities and may only invest in foreign securities
which are traded in the United States securities markets, the risks nonetheless
exist.
Net Asset Value
The net asset value of the Growth Portfolio is determined by adding the values
of all securities and other assets of the Portfolio, subtracting liabilities,
and dividing by the number of outstanding shares of the Portfolio. (See
"Purchases and Redemptions - Valuation of Shares" and the Statement of
Additional Information.)
Portfolio Turnover
The annual rate of portfolio turnover for the Growth Portfolio is unknown since
it has no operating history and therefore no actual portfolio turnover rate
presently exists. The Investment Adviser estimates that the annual portfolio
turnover rate for the Growth Portfolio will not exceed 300%. However, this is
not a restriction on the Investment Adviser and if in the Investment Adviser's
judgment a higher annual portfolio turnover rate is required in order to attempt
to achieve a higher overall Portfolio performance, then the Investment Adviser
is permitted to do so. However, high portfolio turnover (100% or more) will
result in increased brokerage commissions, dealer mark-ups, and other
transaction costs on the sale of securities and on reinvestment in other
securities and could therefore adversely affect Portfolio performance.
Special Risk Considerations Relating to Securities of the Growth Portfolio
For a description of certain other factors, including certain risk factors,
which investors should consider relating to the securities in which the
Portfolio will invest, see "Investment Objective and Policies".
PERFORMANCE ADVERTISING
From time to time, a Portfolio may advertise its yield and total return. These
figures will be based on historical earnings and are not intended to indicate
future performance. No representation can be made regarding actual future yields
or returns. Yield refers to the annualized income generated by an investment in
the Portfolio over a specified 30-day period. The yield is calculated by
assuming that the same amount of income generated by the investment during that
period is generated in each 30-day period over one year and is shown as a
percentage of the investment.
The total return of a Portfolio refers to the average compounded rate of return
on a hypothetical investment for designated time periods (including but not
limited to the period from which the Portfolio commenced operations through the
specified date), assuming that the entire investment is redeemed at the end of
each period and assuming the reinvestment of all dividend and capital gain
distributions.
A Portfolio may periodically compare its performance to that of other mutual
funds tracked by mutual fund rating services (such as Lipper Analytical
Services, Inc.) or by financial and business publications and periodicals, broad
groups of comparable mutual funds, unmanaged indices which may assume investment
of dividends but generally do not reflect deductions for administrative and
management costs and other investment alternatives. A Portfolio may quote
services such as Morningstar, Inc., a service that ranks mutual funds on the
basis of risk-adjusted performance, and Ibbotson Associates of Chicago,
Illinois, which provides historical returns of the capital markets in the U.S. A
Portfolio may use long-term performance of these capital markets to demonstrate
general long-term risk versus reward scenarios and could include the value of a
hypothetical investment in any of the capital markets. A Portfolio may also
quote financial and business publications and periodicals as they relate to fund
management, investment philosophy, and investment techniques.
A Portfolio may quote various measures of volatility and benchmark correlation
in advertising and may compare these measures to those of other funds. Measures
of volatility attempt to compare historical share price fluctuations or total
returns to a benchmark while measures of benchmark correlation indicate how
valid a comparative benchmark might be. Measures of volatility and correlation
are calculated using averages of historical data and cannot be calculated
precisely.
Private Account Performance
The Investment Adviser has also managed, on an individual basis, accounts for
individuals and institutions ("Private Accounts") since 1987 employing a modern
portfolio theory style of stock analysis which uses substantially the same
investment objectives, policies and strategies that will be employed by the
Investment Adviser for the Growth Portfolio. Thus, the performance information
derived from these Private Accounts may be relevant to an investor. The basic
investment style is a proprietary system of computer based screens to analyze
over 7,000 stocks in order to determine which stocks to buy and sell (the
"Navellier system"). Louis Navellier and his staff at the Investment Adviser
have used the Navellier system since 1987 to manage the Private Accounts under
management.
Further, the performance of the Growth Portfolio will vary from the Private
Account composite information because the Growth Portfolio will be actively
managed and its investments will vary from time to time and will not be
identical to the past portfolio investments of the Private Accounts. Moreover,
the Private Accounts are not subject to certain investment limitations,
diversification requirements and other restrictions imposed by the 1940 Act and
the Internal Revenue Code of 1986, as amended, which, if applicable, may have
adversely affected the performance results of the Private Account Composites.
The Private Account composite performance figures are time-weighted rates of
return which include all income and accrued income and realized and unrealized
gains or losses.
The following tables show historical composite performance data for all Private
Accounts under the management of the Investment Adviser during the dates
indicated, as well as comparisons with the S&P 500 Index, an unmanaged index
generally considered to be representative of the stock market. The performance
figures shown represent the performance results of the composite of Private
Accounts. The figures are shown in two different ways. Table A shows the
performance results adjusted to reflect the deduction of investment advisory
fees and other expenses actually charged to the Private Accounts. Table B shows
the performance results adjusted to reflect the deduction of the fees and
expenses anticipated to be paid by the Growth Portfolio (after fee waivers).
Please refer to "Shareholder Transaction Expenses and Annual Fund Operating
Expenses" for further information concerning fees and expenses and the fee
waiver arrangements. Absent the fee waivers, the performance figures shown below
would be reduced. Neither table reflects the deduction of any insurance fees or
charges which are imposed by the Participating Insurance Company in connection
with its sale of the VA Contracts and VLI Policies nor do the figures reflect
any charges or expenses which may be attributable to any Qualified Plan.
Investors should refer to the separate account prospectuses describing the VA
Contracts and VLI Policies or to the Qualified Plan documents or other
informational materials supplied by Qualified Plan sponsors for information
pertaining to these fees and charges. These fees and charges will have a
detrimental effect on the performance of the Portfolio.
Investors should not consider the performance data of these Private Accounts as
an indication of the future performance of the Growth Portfolio.
Private Account Composite Performance
Table A
(after deduction of Private Account advisory fees and expenses)
<TABLE>
<CAPTION>
Investment Adviser S&P 500 Index
<S> <C> <C>
1987.................... _____% _____%
1988.................... _____% _____%
1989.................... _____% _____%
1990.................... _____% _____%
1991.................... _____% _____%
1992.................... _____% _____%
1993.................... _____% _____%
1994.................... _____% _____%
1995.................... _____% _____%
1996.................... _____% _____%
1997.................... _____% _____%
</TABLE>
<TABLE>
<CAPTION>
Investment Adviser S&P 500 Index
<S> <C> <C>
One Year _____% _____%
Five Years _____% _____%
Ten Years _____% _____%
</TABLE>
Table B
(after deduction of fees and expenses anticipated to be paid by the
Growth Portfolio)
<TABLE>
<CAPTION>
Investment Adviser S&P 500 Index
<S> <C> <C>
1987.................... _____% _____%
1988.................... _____% _____%
1989.................... _____% _____%
1990.................... _____% _____%
1991.................... _____% _____%
1992.................... _____% _____%
1993.................... _____% _____%
1994.................... _____% _____%
1995.................... _____% _____%
1996.................... _____% _____%
1997.................... _____% _____%
</TABLE>
<TABLE>
<CAPTION>
Investment Adviser S&P 500 Index
<S> <C> <C>
One Year _____% _____%
Five Years _____% _____%
Ten Years _____% _____%
</TABLE>
MANAGEMENT OF THE FUND
The Board of Directors
The Fund's Board of Directors directs the business and affairs of each Portfolio
of the Fund as well as supervises the Investment Adviser, Distributor,
Accountant, Transfer Agent and Custodian, as described below.
The Investment Adviser
Navellier & Associates, Inc. acts as the Investment Adviser to the Growth
Portfolio. The Investment Adviser is registered as an investment adviser under
the Investment Advisers Act of 1940. The Investment Adviser is responsible for
selecting the securities which will constitute the pool of securities which will
be selected for investment for the Growth Portfolio. Pursuant to a separate
Administrative Services Agreement, the Investment Adviser provides the Growth
Portfolio with certain administrative services, including accounting and
bookkeeping services and supervising the Custodian's and Transfer Agent's
activities and the Growth Portfolio's compliance with its reporting obligations.
The Investment Adviser may contract (and pay for out of its own resources
including the administrative fee it receives) for the performance of such
services to the Custodian, Transfer Agent, or others, and may retain all of its
0.25% administrative services fee or may share some or all of its fee with such
other person(s). The Investment Adviser also provides the Growth Portfolio with
a continuous investment program based on its investment research and management
with respect to all securities and investments. The Investment Adviser will
determine from time to time what securities and other investments will be
selected to be purchased, retained, or sold by the Fund.
The Investment Adviser is owned and controlled by its sole shareholder, Louis G.
Navellier (a 100% stockholder). In 1987, Louis Navellier was in litigation with
a business partner and on the advice of his then legal counsel, as part of a
legal strategy, filed a personal bankruptcy petition in connection with that
litigation. The bankruptcy petition was voluntarily dismissed by Mr. Navellier
less than two months later with all creditors being paid in full. Louis G.
Navellier is an affiliated person of the Fund. The Investment Adviser is
registered as an investment adviser with the Securities and Exchange Commission
and with all states which require investment adviser registration. Louis
Navellier is registered as an investment adviser representative or agent in all
states requiring such registration. Louis Navellier and the Investment Adviser
without admitting liability, did in the past agree to a two-week suspension in
California and agreed to pay civil penalties to the States of California,
Connecticut, and Maryland for allegedly not being properly registered as an
investment adviser. Navellier Management, Inc., an affiliate of the Investment
Adviser, is also and has been since January 1994, the investment adviser to The
Navellier Series Fund, an open-end diversified investment company and to The
Navellier Performance Funds, an open-end investment company, since December
1995. Louis Navellier is, and has been, in the business of rendering investment
advisory services to significant pools of capital since 1987.
For information regarding the Fund's expenses and the fees paid to the
Investment Adviser see "Expenses of the Fund".
Control Persons and Principal Holders of Securities
On January 15, 1998, in order to fulfill the requirements of Section 14(a)(1) of
the 1940 Act, one hundred percent (100%) of the issued and outstanding shares of
the Growth Portfolio was subscribed to for purchase by Louis Navellier under an
agreement dated January 15, 1998. Such subscription was made for an aggregate of
$100,000 and was allocated 100% to the Growth Portfolio (to purchase 10,000
shares).
The Distributor
Navellier Securities Corp. acts as the Fund's Distributor and is registered as a
broker-dealer under the Securities Exchange Act of 1934 and is a member of the
National Association of Securities Dealers, Inc. The Distributor renders its
services to the Fund pursuant to a distribution agreement under which it serves
as the principal underwriter of the shares of each existing Portfolio of the
Fund. The Distributor receives no compensation for serving in such capacity.
Louis G. Navellier, an affiliate of the Fund and the Investment Adviser, is an
officer, director and sole shareholder of the Distributor.
The Custodian and the Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland, 20814,
telephone: (301) 657-1510 or (800) 622-1386, is Custodian for the Fund's
securities and cash and Transfer Agent for the Fund shares.
EXPENSES OF THE FUND
General
Each Portfolio is responsible for the payment of its own expenses. These
expenses are deducted from that Portfolio's investment income before dividends
are paid. These expenses include, but are not limited to: fees paid to the
Investment Adviser, the Custodian, the Transfer Agent, and the Accountant;
Directors' fees; taxes; interest; brokerage commissions; organization expenses;
securities registration ("blue sky") fees; legal fees; auditing fees; printing
and other expenses which are not directly assumed by the Investment Adviser
under its investment advisory or expense reimbursement agreements with the Fund.
General expenses which are not associated directly with a specific Portfolio
(including fidelity bond and other insurance) are allocated to each Portfolio
based upon their relative net assets. The Investment Adviser may, but is not
obligated to, from time to time advance funds, or directly pay, for expenses of
the Fund and may seek reimbursement of or waive reimbursement of those advanced
expenses.
Compensation of the Investment Adviser
The Investment Adviser receives an annual .85% fee for investment management of
the Growth Portfolio. The fee is payable monthly, based upon the Portfolio's
average daily net assets. This advisory fee is higher than those generally paid
by most other investment companies. The Investment Adviser also receives a 0.25%
annual fee for rendering administrative services to the Fund pursuant to an
Administrative Services Agreement and is entitled to reimbursement for operating
expenses it advances for the Fund.
Brokerage Commissions
The Investment Adviser may select selected broker-dealers to execute portfolio
transactions for the Portfolios of the Fund, provided that the commissions,
fees, or other remuneration received by such party in exchange for executing
such transactions are reasonable and fair compared to those paid to other
brokers in connection with comparable transactions. In addition, when selecting
broker-dealers for Fund portfolio transactions, the Investment Adviser may
consider the record of such broker-dealers with respect to the sale of shares of
the Fund or sale of VA Contracts and VLI Policies. (See the Statement of
Additional Information.)
REPORTS AND INFORMATION
The Fund will distribute to the shareholders of each Portfolio semi-annual
reports containing unaudited financial statements and information pertaining to
matters of each Portfolio of the Fund. An annual report containing financial
statements for each Portfolio, together with the report of the independent
auditors for each Portfolio of the Fund is distributed to shareholders each
year. Shareholder inquiries should be addressed to the Fund, at One East
Liberty, Third Floor, Reno, Nevada 89501; Tel: (800) 887- 8671, or to the
Transfer Agent, Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda,
Maryland, 20814, Telephone: (301) 657-1510 or (800) 622-1386.
DESCRIPTION OF SHARES
The Fund is a Maryland corporation organized on February 28, 1997. The Fund is
authorized to issue 500,000,000 shares of the Growth Portfolio and to create
additional portfolios of the Fund. Each share of the Growth Portfolio represents
an equal proportionate interest in that Portfolio with each other share. Shares
are entitled upon liquidation to a pro rata share in the net assets of the
Growth Portfolio available for distribution to shareholders. Shareholders have
no preemptive rights. All consideration received by the Fund for shares of any
Portfolio and all assets in which such consideration is invested would belong to
that Portfolio and would be subject to the liabilities related thereto.
The Fund reserves the right to create classes of shares.
Voting Rights
Each share held entitles the shareholder of record to one vote. Shareholders of
each Portfolio will vote separately on matters relating solely to it, such as
approval of advisory agreements and changes in fundamental policies, and matters
affecting some but not all Portfolios of the Fund will be voted on only by
shareholders of the affected Portfolios. Shareholders of all Portfolios of the
Fund will vote together in matters affecting the Fund generally, such as the
election of Directors or selection of accountants. As a Maryland corporation,
the Fund is not required to hold annual meetings of shareholders but shareholder
approval will be sought for certain changes in the operation of the Fund and for
the election of Directors under certain circumstances. In addition, a Director
may be removed by the remaining Directors or by shareholders at a special
meeting called upon written request of shareholders owning at least 10% of the
outstanding shares of the Fund. In the event that such a meeting is requested,
the Fund will provide appropriate assistance and information to the shareholders
requesting the meeting. Under current law, a Participating Insurance Company is
required to request voting instructions from VA Contract owners and VLI Policy
owners and must vote all shares held in the separate account in proportion to
the voting instructions received. Qualified Plans may or may not pass through
voting rights to Qualified Plan participants, depending on the terms of the
Qualified Plan's governing documents. For a more complete discussion of voting
rights, refer to the Participating Insurance Company separate account prospectus
or the Qualified Plan documents or other informational materials supplied by
Qualified Plan sponsors.
Conflicts of Interest. The Portfolios offers their shares to (i) VA Contracts
and VLI Policies offered through separate accounts of Participating Insurance
Companies which may or may not be affiliated with each other and (ii) Qualified
Plans including Participant-directed Plans which elect to make the Portfolios
available as investment options for Qualified Plan participants. Due to
differences of tax treatment and other considerations, the interests of VA
Contract and VLI Policy owners and Qualified Plan participants participating in
the Portfolios may conflict. The Board will monitor the Portfolios for any
material conflicts that may arise and will determine what action, if any, should
be taken. If a conflict occurs, the Board may require one or more Participating
Insurance Company separate accounts and/or Qualified Plans to withdraw its
investments in the Portfolios. As a result, the Portfolios may be forced to sell
securities at disadvantageous prices and orderly portfolio management could be
disrupted. In addition, the Board may refuse to sell shares of the Portfolios to
any VA Contract, VLI Policy or Qualified Plan or may suspend or terminate the
offering of shares of the Portfolios if such action is required by law or
regulatory authority or is in the best interests of the shareholders of the
Portfolios.
To mitigate the possibility that a Portfolio will be adversely affected by
personal trading of employees, the Fund and the Adviser have adopted a Code of
Ethics under Rule 17j-1 of the 1940 Act. This Code contains policies restricting
securities trading in personal accounts of the portfolio managers and others who
normally come into possession of information on portfolio transactions. This
Code complies, in all material respects, with the recommendations of the
Investment Company Institute.
TAX STATUS, DIVIDENDS AND DISTRIBUTIONS
Taxes
For a discussion of the tax status of a VA Contract, VLI Policy or Qualified
Plan, refer to the Participating Insurance Company separate account prospectus
or Qualified Plan documents or other informational materials supplied by
Qualified Plan sponsors.
Each Portfolio intends to qualify and elect to be treated as a regulated
investment company that is taxed under the rules of Subchapter M of the Internal
Revenue Code. As such, a Portfolio will not be subject to federal income tax on
its net ordinary income and net realized capital gains to the extent such income
and gains are distributed to the separate accounts of Participating Insurance
Companies and Qualified Plans which hold its shares. Because shares of the
Portfolios may be purchased only through VA Contracts, VLI Policies and
Qualified Plans, it is anticipated that any income, dividends or capital gain
distributions from the Portfolios are taxable, if at all, to the Participating
Insurance Companies and Qualified Plans and will be exempt from current taxation
of the VA Contract owner, VLI Policy owner, or Qualified Plan participant if
left to accumulate within the VA Contract, VLI Policy or Qualified Plan.
Internal Revenue Service Requirements
The Portfolios intend to comply with the diversification requirements currently
imposed by the Internal Revenue Service on separate accounts of insurance
companies as a condition of maintaining the tax-deferred status of VA Contracts
and VLI Policies. See the Statement of Additional Information for more specific
information.
Dividends and Distributions
Each of the Portfolios will declare and distribute dividends from net ordinary
income at least annually and will distribute its net realized capital gains, if
any, at least annually. Distributions of ordinary income and capital gains will
be made in shares of such Portfolios unless an election is made on behalf of a
separate account of a Participating Insurance Company to receive distributions
in cash. Participating Insurance Companies and Qualified Plan sponsors will be
informed at least annually about the amount and character of distributions from
the fund for federal income tax purposes.
PURCHASES AND REDEMPTIONS
Individual investors may not purchase or redeem shares of the Portfolios
directly; shares may be purchased or redeemed only through VA Contracts and VLI
Policies offered by separate accounts of Participating Insurance Companies or
through Qualified Plans, including participant-directed Qualified Plans which
elect to make the Portfolios investment options for Qualified Plan participants.
Please refer to the prospectus of the sponsoring Participating Insurance Company
separate account or to the Qualified Plan documents or other informational
materials supplied by Qualified Plan sponsors for instructions on purchasing a
VA Contract or VLI Policy and on how to select the Portfolios as investment
options for a VA Contract, VLI Policy or Qualified Plan.
Purchases. All investments in the Portfolios are credited to a Participating
Insurance Company's separate account immediately upon acceptance of the
investments by the Portfolios. Each Participating Insurance Company receives
orders from its contract owners to purchase or redeem shares of each Portfolio
on each day that the Portfolio calculates its net asset value (a "Business
Day"). That night, all orders received by the Participating Insurance Company
prior to the close of regular trading on the New York Stock Exchange Inc. (the
"NYSE") (currently 4:00 p.m., Eastern time) on that Business Day are aggregated,
and the Participating Insurance Company places a net purchase or redemption
order for shares of the Portfolios during the morning of the next Business Day.
These orders are executed at the net asset value (described below under "Net
Asset Value") next computed after receipt of such order by the Participating
Insurance Company.
Qualified Plan participants may invest in shares of the Portfolios through their
Qualified Plans by directing the Qualified Plan trustee to purchase shares for
their account. Participants should contact their Qualified Plan sponsors for
information concerning the appropriate procedure for investing in the
Portfolios. All investments in the Portfolios by Qualified Plans are credited to
the Qualified Plans immediately upon acceptance of the investments by the
Portfolios. All orders received from Qualified Plans are executed at the net
asset value next computed after receipt of such orders by the Portfolios.
The Portfolios reserve the right to reject any specific purchase order. Purchase
orders may be refused if, in the Investment Adviser's opinion, they are of a
size that would disrupt the management of the Portfolio. A Portfolio may
discontinue sales of its shares if management believes that a substantial
further increase in assets may adversely effect the Portfolio's ability to
achieve its investment objective. In such event, however, it is anticipated that
existing VA Contract owners, VLI Policy owners and Qualified Plan participants
would be permitted to continue to authorize investments in the Portfolios and to
reinvest any dividends or capital gains distributions.
Redemptions. Shares of a Portfolio may be redeemed on any Business Day.
Redemption orders which are received by a Participating Insurance Company or
Qualified Plan prior to the close of regular trading on the NYSE on any Business
Day and transmitted to the Fund or its specified agent during the morning of the
next Business Day will be processed at the next net asset value computed after
receipt of such order by the Participating Insurance Company or Qualified Plan.
Redemption proceeds will normally be wired to the Participating Insurance
Company or Qualified Plan the Business Day following receipt of the redemption
order by the Participating Insurance Company or Qualified Plan, but in no event
later than seven days after receipt of such order.
Valuation of Shares
The net asset value of the shares of each Portfolio of the Fund are determined
once daily as of 4 p.m. New York Time, on days when the New York Stock Exchange
is open for trading. In the event that the New York Stock Exchange or the
national securities exchanges on which Portfolio stocks are traded adopt
different trading hours on either a permanent or temporary basis, the Directors
of the Fund will reconsider the time at which net asset value is to be computed.
The net asset value is determined by adding the values of all securities and
other assets of the Portfolio, subtracting liabilities, and dividing by the
number of outstanding shares of the Portfolio. The price at which a purchase is
effected is based on the next calculation of net asset value after the order is
received.
In determining the value of the assets of each Portfolio, the securities for
which market quotations are readily available are valued at market value. Debt
securities (other than short-term obligations) are normally valued on the basis
of valuations provided by a pricing service when such prices are believed to
reflect the fair value of such securities. All other securities and assets are
valued at their fair value as determined in good faith by the Directors,
although the actual calculations may be made by persons acting pursuant to the
direction of the Directors.
ADDITIONAL INFORMATION
The Statement of Additional Information, available upon request, without charge
from the Fund, provides a further discussion of certain sections of the
Prospectus and other information which may be of interest to certain investors.
This Prospectus and the Statement of Additional Information do not contain all
the information included in the Registration Statement filed with the Securities
and Exchange Commission with respect to the securities being sold, certain
portions of which have been omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The Registration Statement, including the
exhibits filed therewith, may be examined at the office of the Securities and
Exchange Commission in Washington, D.C.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and, in each instance,
reference is made to the Statement of Additional Information and the copy of
such contract or other document filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, each such statement being
qualified in all respects by such reference.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
Investment Adviser
Navellier & Associates, Inc.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Distributor
Navellier Securities Corp.
One East Liberty, Third Floor
Reno, NV 89501
(800) 887-8671
Independent Auditors
Tait, Weller & Baker
Eight Penn Center Plaza, Suite 800
Philadelphia, PA 19103
Transfer Agent and Custodian
Rushmore Trust & Savings, FSB
4922 Fairmont Avenue
Bethesda, MD 20814
(800) 622-1386
Counsel
Blazzard, Grodd & Hasenauer, P.C.
943 Post Road East
Westport, CT 06880
(203) 226-7866
PART B
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
DATED _____________, 1998
This Statement of Additional Information, which is not a prospectus, should be
read in conjunction with the Prospectus of the Navellier Variable Insurance
Series Fund, Inc. (the "Fund"), dated ______________, 1998, a copy of which
Prospectus may be obtained, without charge, by contacting the Fund, at its
mailing address: One East Liberty, Third Floor, Reno, Nevada 89501; Tel:
1-800-887-8671.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
GENERAL INFORMATION AND HISTORY
INVESTMENT OBJECTIVE AND POLICIES
DIRECTORS AND OFFICERS OF THE FUND
OFFICERS
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
THE INVESTMENT ADVISER, CUSTODIAN, AND TRANSFER AGENT
THE DISTRIBUTOR
INDEPENDENT ACCOUNTANTS
BROKERAGE ALLOCATION AND OTHER PRACTICES
CAPITAL STOCK AND OTHER SECURITIES
PURCHASE, REDEMPTION, AND PRICING OF SHARES
TAXES
CALCULATION OF PERFORMANCE DATA
FINANCIAL STATEMENTS
APPENDIX
</TABLE>
GENERAL INFORMATION AND HISTORY
The Fund is a corporation (organized under the laws of the State of Maryland on
February 28, 1997) and has commenced regular investment operations as of the
date of this Prospectus.
INVESTMENT OBJECTIVE AND POLICIES
Investment Policies. The investment objective and policies of the Growth
Portfolio are described in the "Investment Objective and Policies" section of
the Prospectus. The following general policies supplement the information
contained in that section of the Prospectus.
Certificates of Deposit. Certificates of deposit are generally short-term,
interest-bearing, negotiable certificates issued by banks or savings and loan
associations against funds deposited in the issuing institution.
Time Deposits. Time deposits are deposits in a bank or other financial
institution for a specified period of time at a fixed interest rate for which a
negotiable certificate is not received.
Banker's Acceptances. A banker's acceptance is a time draft drawn on a
commercial bank by a borrower usually in connection with an international
commercial transaction (to finance the import, export, transfer, or storage of
goods). The borrower, as well as the bank, is liable for payment, and the bank
unconditionally guarantees to pay the draft at its face amount on the maturity
date. Most acceptances have maturities of six months or less and are traded in
secondary markets prior to maturity.
Commercial Paper. Commercial paper refers to short-term, unsecured
promissory notes issued by corporations to finance short-term credit needs.
Commercial paper is usually sold on a discount basis and has a maturity at the
time of issuance not exceeding nine months.
Corporate Debt Securities. Corporate debt securities with a remaining
maturity of less than one year tend to become liquid and can sometimes be traded
as money market securities.
United States Government Obligations. Securities issued or guaranteed as to
principal and interest by the United States government include a variety of
Treasury securities, which differ only in their interest rates, maturities, and
times of issuance. Treasury bills have a maturity of one year or less. Treasury
notes have maturities of one to seven years, and Treasury bonds generally have a
maturity of greater than five years.
Agencies of the United States government which issue or guarantee
obligations include, among others, export-import banks of the United States,
Farmers' Home Administration, Federal Housing Administration, Government
National Mortgage Association, Maritime Administration, Small Business
Administration, the Defense Security Assistance Agency of the Department of
Defense, and the Tennessee Valley Authority. Obligations of instrumentalities of
the United States government include securities issued or guaranteed by, among
others, the Federal National Mortgage Association, Federal Intermediate Credit
Banks, Banks for Cooperatives, and the United States Postal Service. Some of the
securities are supported by the full faith and credit of the United States
government; others are supported by the right of the issuer to borrow from the
Treasury, while still others are supported only by the credit of the
instrumentality.
Investment Restrictions. The Fund's fundamental policies as they affect a
Portfolio cannot be changed without the approval of a vote of a majority of the
outstanding securities of such Portfolio. A proposed change in fundamental
policy or investment objective will be deemed to have been effectively acted
upon with respect to any Portfolio if a majority of the outstanding voting
securities of that Portfolio votes for the matter. Such a majority is defined as
the lesser of (a) 67% or more of the voting shares of the Fund present at a
meeting of shareholders of the Portfolio, if the holders of more than 50% of the
outstanding shares of the Portfolio are present or represented by proxy or (b)
more than 50% of the outstanding shares of the Portfolio. For purposes of the
following restrictions (except the percentage restrictions on borrowing and
illiquid securities -- which percentage must be complied with) and those
contained in the Prospectus: (i) all percentage limitations apply immediately
after a purchase or initial investment; and (ii) any subsequent change in any
applicable percentage resulting from market fluctuations or other changes in the
amount of total assets does not require elimination of any security from the
Portfolio.
The following investment restrictions are fundamental policies of the Fund
with respect to the Growth Portfolio and may not be changed except as described
above. The Growth Portfolio may not:
1. Purchase any securities or other property on margin; provided, however,
that the Portfolio may obtain short-term credit as may be necessary for the
clearance of purchases and sales of securities.
2. Make cash loans, except that the Portfolio may purchase bonds, notes,
debentures, or similar obligations which are customarily purchased by
institutional investors whether publicly distributed or not.
3. Make securities loans, except that the Portfolio may make loans of its
portfolio securities, provided that the market value of the securities subject
to any such loans does not exceed 33-1/3% of the value of the total assets
(taken at market value) of the Portfolio.
4. Make investments in real estate or commodities or commodity contracts,
including futures contracts, although the Portfolio may purchase securities of
issuers which deal in real estate or commodities although this is not a primary
objective of the Portfolio.
5. Invest in oil, gas, or other mineral exploration or development
programs, although the Portfolio may purchase securities of issuers which engage
in whole or in part in such activities.
6. Purchase securities of companies for the purpose of exercising
management or control.
7. Participate in a joint or joint and several trading account in
securities.
8. Issue senior securities or borrow money, except that the Portfolio may
(i) borrow money only from banks for temporary or emergency (not leveraging)
purposes, including the meeting of redemption requests, that might otherwise
require the untimely disposition of securities, provided that any such borrowing
does not exceed 10% of the value of the total assets (taken at market value) of
the Portfolio, and (ii) borrow money only from banks for investment purposes,
provided that (a) after each such borrowing, when added to any borrowing
described in clause (i) of this paragraph, there is an asset coverage of at
least 300% as defined in the Investment Company Act of 1940 (the "1940 Act"),
and (b) is subject to an agreement by the lender that any recourse is limited to
the assets of the Portfolio with respect to which the borrowing has been made.
As an operating policy, the Portfolio may not invest in portfolio securities
while the amount of borrowing of the Portfolio exceeds 5% of the total assets of
the Portfolio.
9. Pledge, mortgage, or hypothecate the assets of the Portfolio to an
extent greater than 10% of the total assets of the Portfolio to secure
borrowings made pursuant to the provisions of Item 8 above.
10. Purchase "restricted securities" (as defined in Rule 144(a)(3) of the
Securities Act of 1933), if, as a result of such purchase, more than 10% of the
net assets (taken at market value) of the Portfolio would then be invested in
such securities nor will the Portfolio invest in illiquid or unseasoned
securities if as a result of such purchase more than 5% of the net assets of the
Portfolio would be invested in either illiquid or unseasoned securities.
11. Invest more than 5% of the assets of the Portfolio in securities of any
single issuer.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values of portfolio securities or amount of net assets shall not be
considered a violation of the restrictions, except as to the 5%, 10% and 300%
percentage restrictions on borrowing specified in Restriction Number 8 above.
Portfolio Turnover. The Growth Portfolio's annual rate of portfolio
turnover is calculated by dividing the lesser of purchases or sales of portfolio
securities during the fiscal year by the monthly average of the value of the
Portfolio's securities (excluding from the computation all securities, including
options, with maturities at the time of acquisition of one year or less). A high
rate of portfolio turnover generally involves correspondingly greater expenses
to the Portfolio, including brokerage commission expenses, dealer mark-ups, and
other transaction costs on the sale of securities, which must be borne directly
by the Portfolio. Turnover rates may vary greatly from year to year as well as
within a particular year and may also be affected by cash requirements for
redemptions of the Portfolio's shares and by requirements which enable the Fund
to receive certain favorable tax treatment. Because the Growth Portfolio is a
new fund portfolio which has not been in operation for a year, no actual
turnover rate can be given at this time. The Fund will attempt to limit the
annual portfolio turnover rate of the Growth Portfolio to 300% or less, however,
this rate may be exceeded if in the Investment Adviser's discretion securities
are or should be sold or purchased in order to attempt to increase the
Portfolio's performance.
DIRECTORS AND OFFICERS OF THE FUND
The following information is provided with respect to each director and officer
of the Fund:
<TABLE>
<CAPTION>
<S> <C> <C>
Position(s) Held With Principal Occupation(s)
Name and Address Registrant and its Affiliates During Past Five Years
- ---------------- ----------------------------- ----------------------
Louis G. Navellier President CEO and President of
One East Liberty Navellier & Associates
Third Floor Inc., an investment
Reno, NV 89501 management company since
Age: 40 1988; CEO and President
of Navellier Management,
Inc., one of the Portfolio
Managers for the Investment
Adviser to this Fund, The
Navellier Series Fund and
The Navellier Performance
Funds; President and CEO
of Navellier Securities
Corp., the principal
underwriter to The Navellier
Performance Funds and The
Navellier Series Fund; CEO
and President of Navellier
Fund Management, Inc., an
investment advisory company,
since November 30, 1995.
Dennis A. Holtorf/1/ Treasurer
One East Liberty
Third Floor
Reno, NV 89501
Age: 50
Dean H. Hamilton Director Managing Director, BHJ, LLC,
BHJ, LLC Consultant, Navellier a consulting firm, since July,
30 Stanford Drive & Associates, Inc. 1992.
Farmington, CT 06032
Age: 57
Robert S. Hardy Director President, Zephyr Associates,
Zephyr Associates a financial software company,
312 Dorla Court from April 1994 to present;
Suite 204 prior thereto, Vice President,
Zephyr Cove, NV 89448 Balch, Hardy, et all., a
Age: 55 money management company
from 1973 - April 1994.
Robert G. Sharp Director Director, JMC Corp., a marketing
843 Knapp Drive company for annuities and mutual
Santa Barbara, CA 93108 funds, May 1995 to present;
Age: 62 President and Chief Executive
Officer, Keyport Life Insurance
Company from 1979 until his
retirement in 1993.
</TABLE>
/1/ This person is an interested person affiliated with the Investment
Adviser.
OFFICERS
The officers of the Fund are affiliated with the Investment Adviser and receive
no salary or fee from the Fund. The Fund's disinterested Directors are each
compensated by the Fund with $1,500 for each Board meeting attended and $250 for
attendance of any Committee meeting held on a day on which no Board meeting is
held. The Directors' fees may be adjusted according to increased
responsibilities if the Fund's assets exceed one billion dollars. In addition,
each disinterested Director receives reimbursement for actual expenses of
attendance at Board of Directors meetings.
The Fund does not expect, in its current fiscal year, to pay aggregate
remuneration in excess of $60,000 for services in all capacities to any (a)
Director, (b) officer, (c) affiliated person of the Fund (other than the
Investment Adviser), (d) affiliated person of an affiliate or principal
underwriter of the Fund, or (e) all Directors and officers of the Fund as a
group.
The Board of Directors is permitted by the Fund's By-Laws to appoint an advisory
committee which shall be composed of persons who do not serve the Fund in any
other capacity and which shall have no power to dictate corporate operations or
to determine the investments of the Fund. The Fund currently has no advisory
committee. The Audit Committee of the Board of Directors is composed of Messrs.
Sharp and Hardy. The Pricing Committee is composed of Messrs. Hardy and
Holtorf.
<TABLE>
<CAPTION>
Remuneration Table
<S> <C> <C> <C>
Aggregate Remuneration/*/
Capacity In Which Aggregate Remuneration/*/ From Registrant and
Remuneration Received From Registrant Fund Complex
Dean H. Hamilton/**/ Director N/A N/A
Robert S. Hardy Director $6,000 $6,000
Robert G. Sharp Director $6,000 $6,000
</TABLE>
/*/ Based on projections for fiscal year 1998.
/**/ Mr. Hamilton may be deemed to be an "interested person" of the Fund,
as that term is defined in the 1940 Act, and consequently will be
receiving no compensation from the Fund.
CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES
On January 15, 1998, in order to fulfill the requirements of Section 14(a)(1) of
the 1940 Act, one hundred percent (100%) of the issued and outstanding shares of
the Growth Portfolio was purchased by Louis G. Navellier under a subscription
agreement dated January 15, 1998. Such subscription for acquisition was made for
an aggregate of $100,000 allocated 100% to the Growth Portfolio (to purchase
10,000 shares).
THE INVESTMENT ADVISER, CUSTODIAN AND TRANSFER AGENT
(a) The Investment Adviser
The offices of the Investment Adviser (Navellier & Associates, Inc.) are
located at One East Liberty, Third Floor, Reno, Nevada 89501. The Investment
Adviser began operation in May 1993 and advises this Fund, The Navellier Series
Fund and The Navellier Performance Funds.
(i) The following individual owns the enumerated shares of outstanding
stock of the Investment Adviser and, as a result, maintains control over
the Investment Adviser:
<TABLE>
<CAPTION>
<S> <C> <C>
Shares of Outstanding Stock Percentage of Outstanding
Name of the Investment Adviser Shares
Louis G. Navellier 1,000 100%
</TABLE>
(ii) The following individual is affiliated with the Investment
Adviser:
<TABLE>
<CAPTION>
<S> <C>
Name Position
Louis G. Navellier Trustee, President, and Treasurer of The
Navellier Series Fund and The Navellier
Performance Funds; Director, CEO, President,
Secretary, and Treasurer of Navellier
Management, Inc.,; Director, President, CEO,
Secretary, and Treasurer of Navellier
Securities Corp.; one of the Portfolio
Managers of the Navellier Series Fund and The
Navellier Performance Funds.
</TABLE>
(iii) The management fee payable to the Investment Adviser under the
terms of the Investment Advisory Agreement (the "Advisory Agreement")
between the Investment Adviser and the Fund is payable monthly and is based
upon .85% of the Growth Portfolio's average daily net assets. The
Investment Adviser has the right, but not the obligation, to waive any
portion or all of its management fee, from time to time.
Expenses not expressly assumed by the Investment Adviser under the Advisory
Agreement are paid by the Fund. The Advisory Agreement lists examples of
expenses paid by the Fund for the account of the Growth Portfolio, the major
categories of which relate to taxes, fees to Directors, legal, accounting, and
audit expenses, custodian and transfer agent expenses, certain printing and
registration costs, and non-recurring expenses, including litigation.
The Advisory Agreement provides that the Investment Adviser shall not be liable
for any error of judgment or mistake of law or for any loss suffered by the Fund
or its investors except for losses (i) resulting from the willful misfeasance,
bad faith, or gross negligence on its part, (ii) resulting from reckless
disregard by it of its obligations and duties under the Advisory Agreement, or
(iii) a loss for which the Investment Adviser would not be permitted to be
indemnified under the Federal Securities laws.
Pursuant to an Administrative Services Agreement, the Investment Adviser
receives an annual fee of .25% of the value of the assets under management and
provides or is responsible for the provision of certain administrative services
to the Fund, including, among others, the preparation and maintenance of certain
books and records required to be maintained by the Fund under the Investment
Company Act of 1940. The Administrative Services Agreement permits the
Investment Adviser to contract out for all of its duties thereunder; however, in
the event of such contracting, the Investment Adviser remains responsible for
the performance of its obligations under the Administrative Services Agreement.
The Investment Adviser has entered into an agreement with Rushmore Trust &
Savings, FSB, to perform, in addition to custodian and transfer agent services,
some or all administrative services and may contract in the future with other
persons or entities to perform some or all of its administrative services. All
of these contracted services are and will be paid for by the Investment Adviser
out of its fees or assets.
In exchange for its services under the Administrative Services Agreement, the
Fund reimburses the Investment Adviser for certain expenses incurred by the
Investment Adviser in connection therewith but does not reimburse Investment
Adviser (over the amount of the 0.25% annual Administrative Services Fee) to
reimburse it for fees Investment Adviser pays to others for administrative
services. The agreement also allows Investment Adviser to pay to its delegate
part or all of such fees and reimbursable expense payments incurred by it or its
delegate.
The Advisory Agreement permits the Investment Adviser to act as investment
adviser for any other person, firm, or corporation, and designates the
Investment Adviser as the owner of the name "Navellier" or of any use or
derivation of the word Navellier. If the Investment Adviser shall no longer act
as investment adviser to the Fund, the right of the Fund to use the name
"Navellier" as part of its title may, solely at the Investment Adviser's option,
be withdrawn.
The Fund's organizational expenses have been paid by the Adviser.
(b) The Custodian and Transfer Agent
Rushmore Trust & Savings, FSB, 4922 Fairmont Avenue, Bethesda, Maryland
20814, serves as the custodian of the Fund's portfolio securities and as the
Fund's transfer agent and, in those capacities, maintains certain accounting and
other records of the Fund and processes requests for the purchase or the
redemption of shares, maintains records of ownership for shareholders, and
performs certain other shareholder and administrative services on behalf of the
Fund.
(c) Legal Counsel
Blazzard, Grodd & Hasenauer, P.C., is legal counsel to the Fund.
THE DISTRIBUTOR
The Fund's Distributor is Navellier Securities Corp., a Delaware corporation
organized and incorporated on May 10, 1993. The Fund's shares will be
continuously distributed by the Distributor, located at One East Liberty, Third
Floor, Reno, Nevada 89501, pursuant to a Distribution Agreement, dated
_____________, 1998.
INDEPENDENT ACCOUNTANTS
Tait, Weller & Baker, Philadelphia, Pennsylvania, serves as the independent
accountants of the Fund and, in such capacity, audits and reports on the Fund's
annual financial statements, assists in the preparation of the Fund's federal
tax returns and performs other professional accounting, auditing and advisory
services when engaged to do so by the Fund.
BROKERAGE ALLOCATION AND OTHER PRACTICES
In effecting portfolio transactions for the Fund, the Investment Adviser adheres
to the Fund's policy of seeking best execution and price, determined as
described below, except to the extent it is permitted to pay higher brokerage
commissions for "brokerage and research services," as defined herein. The
Investment Adviser may cause the Fund to pay a broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission which another broker or dealer would have charged for effecting the
transaction if the Investment Adviser determines in good faith that such amount
of commission is reasonable in relation to the value of the brokerage and
research services provided by such broker or dealer or that any offset of direct
expenses of a Portfolio yields the best net price. As provided in Section 28(e)
of the Securities Exchange Act of 1934, "brokerage and research services"
include giving advice as to the value of securities, the advisability of
investing in, purchasing, or selling securities, and the availability of
securities; furnishing analysis and reports concerning issuers, industries,
economic facts and trends, portfolio strategy and the performance of accounts;
and effecting securities transactions and performing functions incidental
thereto (such as clearance and settlement). Brokerage and research services
provided by brokers to the Fund or to the Investment Adviser are considered to
be in addition to and not in lieu of services required to be performed by the
Investment Adviser under its contract with the Fund and may benefit both the
Fund and other clients of the Investment Adviser or customers of or affiliates
of the Investment Adviser. Conversely, brokerage and research services provided
by brokers to other clients of the Investment Adviser or its affiliates may
benefit the Fund.
If the securities in which a particular Portfolio of the Fund invests are traded
primarily in the over-the-counter market, where possible, the Fund will deal
directly with the dealers who make a market in the securities involved unless
better prices and execution are available elsewhere. Such dealers usually act as
principals for their own account. There is generally no stated commission in the
case of securities traded in the over-the-counter market, but the price paid by
a Portfolio usually includes an undisclosed dealer commission or mark-up. On
occasion, securities may be purchased directly from the issuer. There may be
customary mark-ups on principal transactions. Bonds and money market instruments
are generally traded on a net basis and do not normally involve either brokerage
commissions or transfer taxes.
The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations including, without limitation, the overall direct net economic
result to the Fund (involving both price paid or received and any net
commissions and other costs paid), the efficiency with which the transaction is
effected, the ability to effect the transaction at all where a large block is
involved, the availability of the broker to stand ready to execute possibly
difficult transactions in the future, and the financial strength and stability
of the broker. Such considerations are judgmental and are weighed by the
Investment Adviser in determining the overall reasonableness of brokerage
commissions paid by the Fund. Some portfolio transactions are subject to the
Rules of Fair Practice of the National Association of Securities Dealers, Inc.,
and subject to obtaining best prices and executions, effected through dealers
who sell shares of the Fund and/or possibly the VA Contracts and/or VLI
Policies.
The Board of Directors of the Fund will periodically review the performance of
the Investment Adviser of its respective responsibilities in connection with the
placement of portfolio transactions on behalf of the Fund and review the
commissions paid by the Fund over representative periods of time to determine if
they are reasonable in relation to the benefits to the Fund.
The Board of Directors will periodically review whether the recapture for the
benefit of the Fund of some portion of the brokerage commissions or similar fees
paid by the Fund on portfolio transactions is legally permissible and advisable.
At present, no recapture arrangements are in effect. The Board of Directors will
review whether recapture opportunities are available and are legally
permissible, and, if so, will determine, in the exercise of their business
judgment, whether it would be advisable for the Fund to seek such recapture.
CAPITAL STOCK AND OTHER SECURITIES
The rights and preferences attached to the shares of each Portfolio are
described in the Prospectus. (See "Description of Shares".) The 1940 Act
requires that where more than one class or series of shares exists, each class
or series must be preferred over all other classes or series in respect of
assets specifically allocated to such class or series. Rule 18f-2 under the 1940
Act provides that any matter required to be submitted by the provisions of the
1940 Act or applicable state law, or otherwise, to the holders of the
outstanding voting securities of an investment company such as the Fund shall
not be deemed to have been effectively acted upon unless approved by the holders
of a majority of the outstanding shares of each series affected by such matter.
Rule 18f-2 further provides that a series shall be deemed to be affected by a
matter unless the interests of each series in the matter are substantially
identical or that the matter does not affect any interest of such series.
However, the Rule exempts the selection of independent public accountants, the
approval of principal distribution contracts, and the election of Directors from
the separate voting requirements of the Rule.
PURCHASE, REDEMPTION, AND PRICING OF SHARES
Redemption of Shares. The Prospectus, under "Purchases and Redemptions"
describes the requirements and methods available for effecting redemption. The
Fund may suspend the right of redemption or delay payment more than seven days
(a) during any period when the New York Stock Exchange or any other applicable
exchange, is closed (other than a customary weekend and holiday closing), (b)
when trading on the New York Stock Exchange, or any other applicable exchange,
is restricted, or an emergency exists as determined by the Securities and
Exchange Commission ("SEC") or the Fund so that disposal of the Fund's
investments or a fair determination of the net asset values of the Portfolios is
not reasonably practicable, or (c) for such other periods as the SEC by order
may permit for protection of the Portfolio's shareholders.
The Fund normally redeems shares for cash. However, the Board of Directors can
determine that conditions exist making cash payments undesirable. If they should
so determine (and if a proper election pursuant to Rule 18f-1 of the 1940 Act
has been made by the Fund), redemption payments could be made in securities
valued at the value used in determining net asset value. There generally will be
brokerage and other costs incurred by the redeeming shareholder in selling such
securities.
Determination of Net Asset Value. As described in the Prospectus under
"Purchases and Redemptions - Valuation of Shares," the net asset value of shares
of each Portfolio of the Fund is determined once daily as of 4 p.m. New York
time on each day during which the New York Stock Exchange, or other applicable
exchange, is open for trading. The New York Stock Exchange is scheduled to be
closed for trading on the following days: New Year's Day, Washington's Birthday,
Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and
Christmas Day. The Board of Directors of the Exchange reserves the right to
change this schedule. In the event that the New York Stock Exchange or the
national securities exchanges on which small cap equities are traded adopt
different trading hours on either a permanent or temporary basis, the Board of
Directors of the Fund will reconsider the time at which net asset value is to be
computed.
Valuation of Assets. In determining the value of the assets of any
Portfolio of the Fund, the securities for which market quotations are readily
available are valued at market value, which is currently determined using the
last reported sale price, or, if no sales are reported - as is the case with
many securities traded over-the-counter - the last reported bid price. Debt
securities (other than short-term obligations, i.e., obligations which have 60
days or less left to maturity, which are valued on the basis of amortized cost)
are normally valued on the basis of valuations provided by a pricing service
when such prices are believed to reflect the fair value of such securities.
Prices provided by a pricing service may be determined without exclusive
reliance on quoted prices and take into account appropriate factors such as
institution-size trading in similar groups of securities, yield, quality of
issue, trading characteristics, and other market data. All other securities and
assets are valued at their fair value as determined in good faith by the Board
of Directors, although the actual calculations may be made by persons acting
pursuant to the direction of the Board of Directors.
TAXES
In the case of a "series fund" (that is, a regulated investment company having
more than one segregated portfolio of investments the beneficial interests in
which are owned by the holders of a separate series of stock), each investment
portfolio is treated as a separate corporation for federal income tax purposes.
The Fund will be deemed a series fund for this purpose and, thus, each Portfolio
will be deemed a separate corporation for such purpose.
Each Portfolio of the Fund intends to qualify as a regulated investment company
for federal income tax purposes. Such qualification requires, among other
things, that each Portfolio (a) make a timely election to be a regulated
investment company, (b) derive at least 90% of its gross income from dividends,
interest, payments with respect to securities loans, and gains from the sale or
other disposition of stock or securities (including options and futures) or
foreign currencies, and (c) diversify its holdings so that at the end of each
fiscal quarter (i) 50% of the market value of its assets is represented by cash,
government securities, securities of other regulated investment companies, and
securities of one or more other issuers (to the extent the value of the
securities of any one such issuer owned by the Portfolio does not exceed 5% of
the value of its total assets and 10% of the outstanding voting securities of
such issuer) and (ii) not more than 25% of the value of its assets is invested
in the securities (other than government securities and securities of other
regulated investment companies) of any one industry. These requirements may
limit the ability of the Portfolios to engage in transactions involving options
and futures contracts.
If each Portfolio qualifies as a regulated investment company, it will not be
subject to federal income tax on its "investment company taxable income"
(calculated by excluding the amount of its net capital gain, if any, and by
excluding the dividends-received and net operating loss deductions) or "net
capital gain" (the excess of its long-term capital gain over its net short-term
capital loss) which is distributed to shareholders. In determining taxable
income, however, a regulated investment company holding stock on the record date
for a dividend is required to include the dividend in income on the later of the
ex-dividend date or the date of acquisition.
Section 817 Diversification Requirements
Section 817(h) of the Code imposes certain diversification standards on the
underlying assets of segregated asset accounts that fund contracts such as the
VA Contracts and VLI Policies (that is, the assets of the Portfolios), which are
in addition to the diversification requirements imposed on the Portfolios by the
1940 Act and Subchapter M. Failure to satisfy those standards would result in
imposition of Federal income tax on a VA Contract or VLI Policy owner with
respect to the increase in the value of the VA Contract or VLI Policy. Section
817(h)(2) provides that a segregated asset account that funds contracts such as
the VA Contracts and VLI Policies is treated as meeting the diversification
standards if, as of the close of each calendar quarter, the assets in the
account meet the diversification requirements for a regulated investment company
and no more than 55% of those assets consist of cash, cash items, U.S.
Government securities and securities of other regulated investment companies.
The Treasury Regulations amplify the diversification standards set forth in
Section 817(h) and provide an alternative to the provision described above.
Under the regulations, an investment portfolio will be deemed adequately
diversified if (i) no more than 55% of the value of the total assets of the
portfolio is represented by any one investment; (ii) no more than 70% of such
value is represented by any two investments; (iii) no more than 80% of such
value is represented by any three investments; and (iv) no more than 90% of such
value is represented by any four investments. For purposes of these Regulations
all securities of the same issuer are treated as a single investment, but each
United States government agency or instrumentality shall be treated as a
separate issuer.
Each Portfolio will be managed with the intention of complying with these
diversification requirements. It is possible that, in order to comply with these
requirements, less desirable investment decisions may be made which would affect
the investment performance of a Portfolio.
CALCULATION OF PERFORMANCE DATA
Performance information for each Portfolio may appear in advertisements, sales
literature, or reports to shareholders or prospective shareholders. Performance
information in advertisements and sales literature may be expressed as total
return on the applicable Portfolio.
The average annual total return on such Portfolios represents an annualization
of each Portfolio's total return ("T" in the formula below) over a particular
period and is computed by finding the current percentage rate which will result
in the ending redeemable value ("ERV" in the formula below) of a $1,000
payment/*/ ("P" in the formula below) made at the beginning of a one-, five-, or
ten-year period, or for the period from the date of commencement of the
Portfolio's operation, if shorter ("n" in the formula below). The following
formula will be used to compute the average annual total return for the
Portfolio:
N
P (1 + T) = ERV
In addition to the foregoing, each Portfolio may advertise its total return over
different periods of time by means of aggregate, average, year-by-year, or other
types of total return figures.
Performance information for the Portfolios shall reflect only the performance of
a hypothetical investment in the Portfolios during the particular time period on
which the calculations are based. Performance information should be considered
in light of the investment objectives and policies, characteristics and quality
of the particular Portfolio, and the market conditions during the given time
period, and should not be considered as a representation of what may be achieved
in the future.
Each Portfolio may, from time to time, include in advertisements containing
total return the ranking of those performance figures relative to such figures
for groups of mutual funds categorized by Lipper Analytical Services, or other
services, as having the same investment objectives. The total return may also be
used to compare the performance of the Portfolio against certain widely
acknowledged outside standards or indices for stock and bond market performance.
The Standard & Poor's Composite Stock Price Index of 500 stocks ("S&P 500") is a
market value-weighted and unmanaged index showing the changes in the aggregate
market value of 500 stocks relative to the base period 1941-43. The S&P 500 is
composed almost entirely of common stocks of companies listed on the New York
Stock Exchange, although the common stocks of a few companies listed on the
American Stock Exchange or traded over-the-counter are included.
As summarized in the Prospectus under the heading "Performance Advertising", the
total return and/or yield of a Portfolio may be quoted in advertisements and
sales literature.
FINANCIAL STATEMENTS
A Statement of Assets and Liabilities of the Growth Portfolio as of January 15,
1998, and the report of Tait, Weller & Baker, Independent Accountants, with
respect thereto, is set forth below.
TAIT, WELLER & BAKER
CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Shareholders and Directors
Navellier Growth Portfolio
Reno, Nevada
We have audited the accompanying statement of assets and liabilities of the
Navellier Growth Portfolio, a series of shares of Navellier Variable Insurance
Series Fund, Inc. (the "Fund") as of January 15, 1998. This financial statement
is the responsibility of the Fund's management. Our responsibility is to express
an opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of assets and liabilities is free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the statement of assets and
liabilities. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit of the statement of
assets and liabilities provides a reasonable basis for our opinion.
In our opinion, the statement of assets and liabilities referred to above
presents fairly, in all material respects, the financial position of the
Navellier Growth Portfolio as of January 15, 1998 in conformity with generally
accepted accounting principles.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
January 16, 1998
NAVELLIER GROWTH PORTFOLIO
STATEMENT OF ASSETS AND LIABILITIES
January 15, 1998
- --------------------------------------------------------------------------------
ASSETS
Cash $100,000
--------
Total assets 100,000
LIABILITIES -
--------
NET ASSETS
(500,000,000 shares authorized; 10,000 shares outstanding) $100,000
--------
--------
Net asset value and redemption price per share
$100,000 / 10,000 shares $10.00
------
------
See notes to statement of assets and liabilities
NAVELLIER GROWTH PORTFOLIO
NOTES TO STATEMENT OF ASSETS AND LIABILITIES
January 15, 1998
- --------------------------------------------------------------------------------
(1) ORGANIZATION
The Navellier Growth Portfolio (the "Portfolio") is a series of The Navellier
Variable Insurance Series Fund, Inc. (the "Fund"), a diversified, open-end
investment company. The Fund was incorporated on February 28, 1997 as a
Maryland Corporation. The Fund and the Portfolio have had no operations
through January 15, 1998 other than those relating to organizational matters
and the sale and issuance of 10,000 shares at $10.00 per share to the initial
shareholder.
APPENDIX
A-1 and P-1 Commercial Paper Ratings
The Growth Portfolio will invest only in commercial paper which, at the date of
investment, is rated A-1 by Standard & Poor's Corporation ("S&P") or P- 1 by
Moody's Investors Services, Inc. ("Moody's"), or, if not rated, is issued or
guaranteed by companies which at the date of investment have an outstanding debt
issue rated AA or higher by Standard & Poor's or Aa or higher by Moody's.
Commercial paper rated A-1 by S&P has the following characteristics: (1)
liquidity ratios are adequate to meet cash requirements; (2) long-term senior
debt is rated "A" or better; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowance made for unusual circumstances; (5) typically, the
issuer's industry is well established and the issuer has a strong position
within the industry; and (6) the reliability and quality of management are
unquestioned.
The rating P-1 is the highest commercial paper rating assigned by Moody's. Among
the factors considered by Moody's in assigning ratings are the following: (1)
evaluation of the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public interest questions and preparations
to meet such obligations.
PART C
OTHER INFORMATION
Item 24 Financial Statements and Exhibits
(a) Financial Statements:
The Financial Statements filed as part of this Registration
Statement are as follows:
Statement of Assets and Liabilities of the Navellier Growth
Portfolio as of January 15, 1998*
Report of Independent Accountants - January 16, 1998*
*Included in Part B of this Registration Statement
(b) Exhibits:
Exhibit
Number Description
______ ________________
1. Articles of Incorporation of Registrant*
2. By-Laws of Registrant**
3. None
4. None
5. Form of Investment Advisory Agreement between Registrant
and Navellier & Associates, Inc.**
6. Form of Distribution Agreement between the Registrant and
Navellier Securities Corp.**
7. None
8. Administrative Services, Custodian, Transfer Agent Agreement
with Rushmore Trust & Savings, FSB (to be filed by amendment)
9.1 Navellier Administrative Services Agreement by and between
the Registrant and Navellier & Associates, Inc.**
9.3 Form of Expense Limitation Agreement between the Registrant
and Navellier Management, Inc.**
9.4(a) Form of Fund Participation Agreement**
9.4.(b) Form of Fund Participation Agreement between the Registrant,
the Adviser, American General Life Insurance Company and
American General Securities Incorporated**
10. Opinion and Consent of Counsel**
11. Consent of Independent Accountants
12. None
13. Subscription Agreement between Navellier Variable Insurance
Series Fund, Inc. and Louis G. Navellier, dated January 15,
1998**
14. None
15. None
16. None
17. None
18. None
24. None
27. None
*Incorporated herein by reference to Registrant's Registration Statement
on Form N-1A (File No. 333-22633), as filed electronically on
February 28, 1997.
**Incorporated herein by reference to Registrant's Pre-Effective Amendment
No. 1 to Registrant's Registration Statement on Form N-1A (File No.
333-22633), as filed electronically on February 2, 1998.
Item 25 Persons Controlled by or under Common Control with Registrant
There are no persons who are controlled by or under common control with the
Registrant.
Item 26 Number of Holders of Securities
Louis G. Navellier, as the initial shareholder of the Growth Portfolio of
the Fund, holds all of the outstanding shares of the Fund.
Item 27 Indemnification
The Articles of Incorporation of the Registrant include the following:
ARTICLE VII
(4) Each Director and each officer of the Corporation shall be indemnified
by the Corporation to the full extent permitted by the Maryland General
Corporation Law and the By-Laws of the Corporation, as such law and By-Laws may
now or in the future be in effect, subject only to such limitations as may be
required by the Investment Company Act of 1940, as amended.
The By-Laws of the Registrant include the following:
ARTICLE VI
Indemnification
"The Corporation shall indemnify (a) its Directors and officers, whether
serving the Corporation or at its request any other entity, to the full extent
required or permitted by (i) Maryland law now or hereafter in force, including
the advance of expenses under the procedures and to the full extent permitted by
law, and (ii) the Investment Company Act of 1940, as amended, and (b) other
employees and agents to such extent as shall be authorized by the Board of
Directors and be permitted by law. The foregoing rights of indemnification shall
not be exclusive of any other rights to which those seeking indemnification may
be entitled. The Board of Directors may take such action as is necessary to
carry out these indemnification provisions and is expressly empowered to adopt,
approve and amend from time to time such resolutions or contracts implementing
such provisions nor such further indemnification arrangement as may be permitted
by law."
Insofar as indemnification for liability arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suite or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
To the extent that the Articles of Incorporation, By-Laws or any other
instrument pursuant to which the Registrant is organized or administered
indemnify any director or officer of the Registrant, or that any contract or
agreement indemnifies any person who undertakes to act as investment adviser or
principal underwriter to the Registrant, any such provision protecting or
purporting to protect such persons against any liability to the Registrant or
its security holders to which he would otherwise by subject by reason of willful
misfeasance, bad faith, or gross negligence, in the performance of his duties,
or by reason of his contract or agreement, will be interpreted and enforced in a
manner consistent with the provisions of Sections 17(h) and (i) of the
Investment Company Act of 1940, as amended, and Release No. IC-11330 issued
thereunder.
Item 28 Business and Other Connections of Investment Adviser
Set forth below is a description of any other business, profession, vocation, or
employment of a substantial nature in which each investment adviser of the Fund
and each director, officer, or partner of any such investment adviser, is or has
been at any time during the past two fiscal years, engaged for his own account
or in the capacity of director, officer, employee, partner, or trustee:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions Held with Principal Occupations
Business Address Registrant and Its Affiliates During Past Two Years
- ---------------- ----------------------------- ---------------------
Louis G. Navellier Mr. Navellier is the CEO, Mr. Navellier is and has been
One East Liberty President, Treasurer, and the CEO and President of
Third Floor Secretary of Navellier Navellier & Associates Inc.,
Reno, NV 89501 & Associates, Inc., a Delaware an investment management
Corporation which is the company since 1988; is and has
Investment Adviser to the been CEO and President of
Fund. Mr. Navellier is also Navellier Management, Inc.;
CEO, President, Secretary, one of the Portfolio Managers
and Treasurer of Navellier for the Investment Adviser to
Management Inc., Navellier this Fund, The Navellier
Publications, Inc., MPT Series Fund and The Navellier
Review Inc., and Navellier Performance Funds; President
International Management, Inc. and CEO of Navellier
Securities Corp., the
principal Underwriter to The
Navellier Performance Funds
and The Navellier Series
Fund; CEO and President of
Navellier Fund Management,
Inc. and investment advisory
company, since November 30,
1995; and has been publisher
and editor of MPT Review from
August 1987 to the present,
and was publisher and editor
of the predecessor investment
advisory newsletter OTC
Insight, which he began in
1980 and wrote through July
1987.
</TABLE>
Item 29 Principal Underwriters
(a) The Distributor does not currently act as principal underwriter, depositor,
or investment adviser for any investment company other than the Fund, The
Navellier Performance Fund and the Navellier Series Fund.
(b) The following information is provided, as of the date hereof, with respect
to each director, officer, or partner of each principal underwriter named in
response to Item 21:
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions and Offices Positions and Offices
Business Address With Underwriter With Registrant
- ------------------ ---------------------- ----------------------
Louis Navellier CEO, President, Director, Trustee, President,
920 Incline Way Treasurer, and Secretary CEO, Treasurer
Incline Village, NV 89450
</TABLE>
(c) Not Applicable.
Item 30 Location of Accounts and Records
All accounts, records, and other documents required to be maintained under
Section 31(a) of the 1940 Act and the rules promulgated thereunder are
maintained at the office of the Navellier Variable Insurance Series Fund, Inc.
located at One East Liberty, Third Floor, Reno, Nevada 89501, and the offices of
the Fund's Custodian and Transfer Agent at 4922 Fairmont Avenue, Bethesda, MD
20814.
Item 31 Management Services
Other than as set forth in Part A and Part B of this Registration Statement, the
Fund is not a party to any management-related service contract.
Item 32 Undertakings
Registrant hereby undertakes that whenever shareholders meeting the requirements
of Section 16(c) of the Investment Company Act of 1940 inform the Board of
Directors of their desire to communicate with Shareholders of the Fund, the
Directors will inform such Shareholders as to the approximate number of
Shareholders of record and the approximate costs of mailing or afford said
Shareholders access to a list of Shareholders.
Registrant undertakes to call a meeting of Shareholders for the purpose of
voting upon the question of removal of a Director(s) when requested in writing
to do so by the holders of at least 10% of Registrant's outstanding shares and
in connection with such meetings to comply with the provisions of Section 16(c)
of the Investment Company Act of 1940 relating to Shareholder communications.
Registrant undertakes to furnish each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual report to Shareholders, upon
request and without charge.
Registrant hereby undertakes to file a post-effective amendment, including
financial statements which need not be audited, within 4-6 months from the later
of the commencement of operations of the Registrant or the effective date of the
Registrant's 1933 Act Registration Statement.
SIGNATURES
Pursuant to the Securities Act of 1933 and the Investment Company Act of 1940,
the Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned thereto duly authorized, in the City of Reno, and
State of Nevada, on the 12th day of February, 1998.
NAVELLIER VARIABLE INSURANCE SERIES FUND, INC.
______________________________________________
Registrant
By: /s/LOUIS G. NAVELLIER
__________________________________________
Louis G. Navellier
President
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
Signature and Title
/s/LOUIS G. NAVELLIER President 2-12-98
_________________________________ ____________
Louis G. Navellier Date
/s/DENNIS A. HOLTORF* Treasurer 2-12-98
_________________________________ ____________
Dennis A. Holtorf Date
/s/DEAN H. HAMILTON* Director 2-12-98
_________________________________ ____________
Dean H. Hamilton Date
/s/ROBERT S. HARDY* Director 2-12-98
_________________________________ ____________
Robert S. Hardy Date
/s/ROBERT G. SHARP* Director 2-12-98
_________________________________ ____________
Robert G. Sharp Date
/s/LOUIS G. NAVELLIER
*By____________________________________
Louis G. Navellier, Attorney-in-Fact
EXHIBIT LIST
Exhibit Number Description
EX-99.B11 Consent of Independent Accountants
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the references to our firm in Pre-Effective Amendment No. 2 to the
Registration Statement on Form N-1A of the Navellier Variable Insurance Series
Fund, Inc. and to the use of our report dated January 15, 1998 on the financial
statement of the Navellier Growth Portfolio, a series of shares of the Navellier
Variable Insurance Series Fund, Inc. Such financial statement is incorporated by
reference in the Registration Statement and Prospectus.
TAIT, WELLER & BAKER
Philadelphia, Pennsylvania
February 12, 1998
