Rule 497(e)
File No. 002-75503
MAXIM SERIES FUND, INC.
August 12, 1999 Supplement to
the May 1, 1999 Prospectus
On page 1of the prospectus and throughout the prospectus, wherever the Maxim
Founders Blue Chip Portfolio is referenced, please delete this disclosure and
replace with the following: Maxim Founders Growth & Income Portfolio (formerly
the Maxim Founders Blue Chip Portfolio).
On pages 7-8 of the prospectus, please delete the disclosure of regarding the
Maxim Investment Grade Corporate Bond Portfolio and replace with the following:
Maxim Bond Index Portfolio (formerly, the Maxim Investment Grade Corporate Bond
Portfolio)
The investment objective for this Portfolio is to:
o Seek investment results that track the total return of the debt securities
that comprise the Lehman Aggregate Bond Index ("Lehman Index").
Principal Investment Strategies. The Portfolio will:
o Invest primarily in debt securities of the Lehman Index.
o Invest in a portfolio of securities using sampling techniques designed to
give the Portfolio the relevant comparable attributes of the Lehman Index.
The principal investment risks for the Portfolio include:
Index Risk
o It is possible the Lehman Index may perform unfavorably and/or underperform
the market as a whole. As a result, the Portfolio would have poor
investment results if it is tracking the return of the Lehman Index.
Tracking Error Risk
o Several factors will affect the Portfolio's ability to precisely track the
performance of the Lehman Index. For example, the Portfolio has operating
expenses and those expenses will reduce the Portfolio's total return. In
addition, the Portfolio will own less than all the securities of the Lehman
Index, which also may cause a variance between the performance of the
Portfolio and the Lehman Index.
Interest Rate Risk
o The market value of a debt security is affected significantly by changes in
interest rates. When interest rates rise, the security's market value
declines and when interest rates decline, market values rises. The longer a
bond's maturity, the greater the risk and the higher its yield.
Credit Risk
o A bond's value can also be affected by changes in its credit quality rating
or its issuer's financial conditions.
o An issuer may default on its obligations to pay principal and/or interest.
Derivative Risk
o The Portfolio may invest some assets in derivative securities, such as
options and futures. This practice is used primarily to hedge the Portfolio
but may be used to increase returns; however, such practices sometimes may
reduce returns or increase volatility.
o In addition, derivatives can be illiquid and highly sensitive to changes in
their underlying security, interest rate or index, and as a result can be
highly volatile. A small investment in certain derivatives could have a
potentially large impact on the Portfolio's performance.
Possible Loss of Money
When you sell your shares of the Portfolio, they could be worth less than the
amount paid for them.
Portfolio Performance Data
The bar chart and table below provide an indication of the risk of investment in
the Portfolio. The bar chart shows the Portfolio's performance in each calendar
year since inception. The table shows how the Portfolio's average annual total
return for the one year, five year and since inception periods compared to a
broad-based bond market index. The returns shown below are historical and are
not an indication of future performance.+ With regard to variable insurance
contracts, performance returns do not reflect charges associated with the
contract.
Year-by-Year
[object omitted]
During the periods shown in the chart of the Bond Index Portfolio, the highest
return for a quarter was 6.31% (quarter ending June, 1995) and the lowest return
for a quarter was -2.54% (quarter ending March, 1994).
The average annual return for one year, five years and since inception of the
Portfolio for the period ended December 31, 1998:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Year Since Inception
Bond Index Portfolio 7.08% 5.93% 6.56%
Lehman Aggregate Bond Index 8.69% 7.50% 7.85%
</TABLE>
+ The inception date for the Portfolio was December 1, 1992. On July 26, 1999,
pursuant to a vote of the majority of shareholders, the Portfolio changed its
name and investment objective so that it now seeks investment results that track
the total return of the debt securities that comprise the Lehman Aggregate Bond
Index. Prior to the changes, the Portfolio's name was the Maxim Investment Grade
Corporate Bond Portfolio and it compared its performance to that of the Lehman
Intermediate Government/Corporate Index and Lehman Intermediate Corporate Index.
Consistent with its change in investment objective, the Portfolio now compares
its performance to that of the Lehman Aggregate Bond Index, the Portfolio's new
benchmark index
On page 21of the prospectus, please delete the disclosures regarding the
benchmark index for Maxim Value Index Portfolio and Maxim Growth Index Portfolio
and replace with the following:
Portfolio
o Maxim Value Index Portfolio S&P/BARRA Value Index.1
o Maxim Growth Index Portfolio S&P/BARRA Growth Index.1
- --------
1 Standard & Poor's and BARRA are not sponsors of, or in any other way
affiliated with, the Maxim Growth Index and Maxim Value Index Portfolios or
Maxim Series Fund.
On page 24 of the prospectus, please delete the disclosures regarding the
average annual return for one year, five years and since inception for the
period ending December 31, 1998, for the Maxim Growth Index and Maxim Value
Index, respectively, and replace with the following:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Year Since Inception
Growth Index Portfolio 37.28% 24.47% 24.22%
S&P/BARRA Growth Index 42.09% 27.75% 27.22%
</TABLE>
+ The inception date for the Portfolio was December 1, 1993. On July 26, 1999,
pursuant to a vote of the majority of shareholders, the Portfolio changed its
investment objective so that it now seeks investment results that track the
total return of the common stocks that comprise the S&P/BARRA Growth Index.
Prior to the change in objective, the Portfolio compared its performance to that
of the Russell 1000 Growth Index. Consistent with its change in investment
objective, the Portfolio now compares its performance to that of the S&P/BARRA
Growth Index, the Portfolio's new benchmark index.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
One Year Five Year Since Inception
Value Index Portfolio 14.48% 19.82% 19.78%
S&P/BARRA Value Index 14.67% 19.66% 19.44%
</TABLE>
+ The inception date for the Portfolio was December 1, 1993. On July 26, 1999,
pursuant to a vote of the majority of shareholders, the Portfolio changed its
investment objective so that it now seeks investment results that track the
total return of the common stocks that comprise the S&P/BARRA Value Index. Prior
to the change in objective, the Portfolio compared its performance to that of
the Russell 1000 Value Index. Consistent with its change in investment
objective, the Portfolio now compares its performance to that of the S&P/BARRA
Value Index, the Portfolio's new benchmark index.
On page 27 of the prospectus, please delete the disclosures regarding the
Russell 1000 Value Index and Russell 1000 Growth Index and replace with the
following:
The S&P/BARRA Growth Index (the "Growth Index") is a widely recognized,
unmanaged index that contains half of the market value of the S&P 500 stock
index. The Growth Index is comprised of the stocks representing half of the
total market value of the S&P 500 stock index with the highest price-to-book
value ratios.
The S&P/BARRA Value Index (the "Value Index") is a widely recognized, unmanaged
index that contains the other half of the market value of the S&P 500 stock
index. The Value Index is comprised of the stocks representing half of the total
market value of the S&P 500 stock index with the lowest price-to-book value
ratios.
The Lehman Aggregate Bond Index covers the U.S. investment grade fixed rate bond
market, including government and corporate securities, agency mortgage
pass-through securities, and asset-backed securities having a final maturity of
greater than one year that are traded on U.S. financial markets.
On page 31 of the prospectus, please delete the disclosure regarding the
percentage of average net assets regarding the Maxim Investment Grade Corporate
Bond Portfolio and replace with the following:
Maxim Bond Index Portfolio 0.50%
On pages 37, 47 and 48 of the prospectus, please delete the disclosure regarding
the Maxim Investment Grade Corporate Bond Portfolio, Maxim Value Index Portfolio
and Maxim Growth Index Portfolio, respectively, and replace with the following:
MAXIM SERIES FUND, INC.
MAXIM BOND INDEX PORTFOLIO(formerly, the Maxim
Investment Grade Corporate Bond Portfolio)
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock of the portfolio for the years ended
December 31, 1998, 1997, 1996, 1995, and 1994 are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
<C>
Year Ended December 31,
1998 1997 1996 1995 1994
Net Asset Value, Beginning of Period $ 1.2856 $ 1.2774 $ 1.3161 $ 1.2019 $ 1.3090
Income From Investment Operations
Net investment income 0.0737 0.0769 0.0777 0.0794 0.0665
Net realized and unrealized gain (loss) 0.0154 0.0081 (0.0387) 0.1164 (0.1071)
Total Income (Loss) From Investment
Operations 0.0891 0.0850 0.0390 0.1958 (0.0406)
Less Distributions
From net investment income (0.0737) (0.0768) (0.0777) (0.0816) (0.0665)
From net realized gains
Total Distributions (0.0737) (0.0768) (0.0777) (0.0816) (0.0665)
Net Asset Value, End of Period $ 1.3010 $ 1.2856 $ 1.2774 $ 1.3161 $ 1.2019
Total Return 7.08% 6.85% 3.14% 16.71% (3.15)%
Ratios/Supplemental Data
Net Assets, End of Period $ 130,436,898 $ 114,875,960 $ 100,722,152 $ 95,210,404 $ 71,276,294
Ratio of Expenses to Average Net Assets: 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of Net Investment Income to
Average Net Assets 5.69% 6.02% 6.08% 6.30% 5.37%
Portfolio Turnover Rate 59.84% 140.35% 118.50% 159.21% 51.66%
</TABLE>
Portfolio turnover is calculated using the lesser of long-term purchases or
sales of portfolio securities for a period, divided by the monthly average of
the market value of the securities (excluding short-term securities) owned
during the period. Purchases and sales of investment securities for the year
ended December 31, 1998 were $83,493,849 and $69,181,240, respectively. Prior to
July 26, 1999, the Portfolio was named the Maxim Investment Grade Corporate Bond
Portfolio and its investment objective was to seek the highest level of income
consistent with the primary goal of ensuring the protection of capital by
investing primarily investment grade corporate debt securities and in debt
securities issued by the U.S. government and its agencies.
<PAGE>
MAXIM SERIES FUND, INC.
MAXIM VALUE INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock of the portfolio for the years ended
December 31, 1998, 1997, 1996, 1995 and 1994 is as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31,
1998 1997 1996 1995 1994
Net Asset Value, Beginning of Year $ 1.8136 1.4538 $ 1.2623 $ 0.9614 $ 1.0118
Income From Investment Operations
Net investment income 0.0279 0.0278 0.0298 0.0305 0.0253
Net realized and unrealized gain (loss) 0.2301 0.4631 0.2287 0.3198 (0.0504)
Total Income (Loss) From Investment
Operations 0.2580 0.4909 0.2585 0.3503 (0.0251)
Less Distributions
From net investment income (0.0278) (0.0278) (0.0298) (0.0359) (0.0253)
From net realized gains (0.1485) (0.1033) (0.0372) (0.0135)
Total Distributions (0.1763) (0.1311) (0.0670) (0.0494) (0.0253)
Net Asset Value, End of Year $ 1.8953 $ 1.8136 $ 1.4538 $ 1.2623 $ 0.9614
Total Return 14.48% 34.08% 20.63% 36.80% (2.49)%
Ratios/Supplemental Data
Net Assets, End of Year $ 326,339,498 $ 237,421,804 $ 122,283,026 $ 65,183,898 $ 25,610,474
Ratio of Expenses to Average Net Assets 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of Net Investment Income
to Average Net Assets 1.54% 1.83% 2.38% 2.87% 3.18%
Portfolio Turnover Rate 39.67% 26.03% 16.31% 18.11% 16.88%
</TABLE>
Portfolio turnover is calculated using the lesser of long-term purchases or
sales of portfolio securities for a period, divided by the monthly average of
the market value of the securities (excluding short-term securities) owned
during the period. Purchases and sales of investment securities for the year
ended December 31, 1998 were $177,712,342 and $111,264,436, respectively.Prior
to July 26, 1999, the Portfolio's investment objective was to seek investment
results that tracked the total return of the common stocks that comprised the
Russell 1000 Value Index.
<PAGE>
MAXIM SERIES FUND, INC.
MAXIM GROWTH INDEX PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock of the portfolio for the years ended
December 31, 1998, 1997, 1996, 1995, and 1994 are as follows:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Year Ended December 31,
1998 1997 1996 1995 1994
Net Asset Value, Beginning of Year $ 1.8507 $ 1.4852 $ 1.3459 $ 1.0120 $ 1.0064
Income From Investment Operations
Net investment income 0.0070 0.0085 0.0114 0.0127 0.0133
Net realized and unrealized gain 0.6769 0.4241 0.2851 0.3432 0.0056
Total Income From Investment Operations 0.6839 0.4326 0.2965 0.3559 0.0189
Less Distributions
From net investment income (0.0070) (0.0085) (0.0114) (0.0165) (0.0133)
From net realized gains (0.1000) (0.0586) (0.1458) (0.0055)
Total Distributions (0.1070) (0.0671) (0.1572) (0.0220) (0.0133)
Net Asset Value, End of Year $ 2.4276 $ 1.8507 $ 1.4852 $ 1.3459 $ 1.0120
Total Return 37.28% 29.26% 22.10% 35.29% 1.93%
Ratios/Supplemental Data
Net Assets, End of Year $ 297,170,229 $ 162,975,760 $ 83,743,210 $ 43,515,299 $ 14,171,307
Ratio of Expenses to Average Net Assets 0.60% 0.60% 0.60% 0.60% 0.60%
Ratio of Net Investment Income
to Average Net Assets 0.36% 0.54% 0.83% 1.15% 1.57%
Portfolio Turnover Rate 26.48% 21.52% 41.55% 17.90% 18.50%
</TABLE>
Portfolio turnover is calculated using the lesser of long-term purchases or
sales of portfolio securities for a period, divided by the monthly average of
the market value of the securities (excluding short-term securities) owned
during the period. Purchases and sales of investment securities for the year
ended December 31, 1998 were $117,491,258 and $56,327,645, respectively.Prior to
July 26, 1999, the Portfolio's investment objective was to seek investment
results that tracked the total return of the common stocks that comprised the
Russell 1000 Growth Index.
