MAXIM SERIES FUND, INC.
8515 EAST ORCHARD ROAD
ENGLEWOOD, COLORADO 80111
Dear Shareholder:
We are pleased to present this annual report for the Maxim Vista Growth & Income
Portfolio for the year ended October 31, 2000.
While the U.S. economy remained healthy throughout the period, large-cap U.S.
equities posted their lowest return for several years. The S&P 500 Index rose
6.08%, which compares with average returns of more than 20% in each of the
previous five years. In the closing months of 1999, it appeared that this would
be a period of strong returns. Technology stocks staged a magnificent rally, as
New Economy euphoria gripped the stock market. The Internet appeared about to
revolutionize commerce, and the large U.S. networking and semiconductor
companies soared to new highs.
The rally continued through the early months of 2000, only to falter in the
spring when dot-com businesses began to experience cash flow difficulties. In
the months that followed, one technology stock after another came crashing to
earth. The final setback came in the fall, when a number of companies warned
that third-quarter profits would not meet expectations. The technology
correction happened against a background of uncertainty regarding U.S. rates.
During the summer there were concerns regarding whether Federal Reserve Board
rates rises had succeeded in dampening runaway economic growth. Once it became
clear during the late summer that growth was slowing, worries began to emerge
regarding the effect on corporate profits.
But mid- and small-caps bucked the trend and quietly marched to new highs. The
S&P MidCap 400 Index climbed 31.65% in the year, while the S&P SmallCap 600
Index gained 25.26%. Both groups were driven by buoyant earnings growth. Indeed,
their earnings growth rates exceeded those of large caps for the first time in
many years.
U.S. Treasury bonds, too, had a strong year. Following the three Fed rate rises
in the 12 months - in February, March and May - evidence that the U.S. economy
was indeed slowing fuelled a rally, particularly in longer dated maturities.
Weak spots were corporate and mortgage bonds, where credit concerns undermined
prices.
Against a background of stock price volatility, there are now a number of large
companies with promising growth rates trading at attractive valuations.
Additionally, mid- and small-caps are expected to continue to report strong
earnings. Subdued inflation should remove the need for further Fed rate rises,
underpinning both equity and bond markets.
This report and the financial statements contained herein are submitted for the
general information of shareholders of the Maxim Vista Growth & Income
Portfolio. This report is not authorized for distribution to prospective
investors unless preceded or accompanies by an effective prospectus. For more
information, including fees and expenses, please contact your registered
representative to obtain a prospectus. Read it carefully before investing.
<PAGE>
The Maxim Vista Growth and Income Fund (the Fund), which seeks capital
appreciation and current income by investing all of its assets in the Chase
Vista Select Growth and Income Fund (the Vista Fund), provided a total return
of 9.31% for the year ended October 31, 2000. This compares to 6.94% for the
Lipper Growth & Income Fund Index and 9.68% for the S&P 500 Index, the Funds
benchmark.
How the Fund Was Managed As technology stocks fell from grace in the latter half
of the 12-month period, value stocks returned to favor. Companies in sectors
like financials and pharmaceuticals were re-rated generating strong fund
performance at precisely the time of greatest carnage in the technology sector.
While some financial companies began the year trading on price-to-book values (a
measurement of net asset value) as low as two to three times, some of the more
favored stocks finished the period on multiples as high as seven times. The
dismantling in late 1999 of the Depression era Glass-Steagall Act sparked much
of the revaluation. It had kept securities brokerage and commercial banking
businesses separate. The move unleashed a wave of mergers and acquisitions
activity as many financial institutions found it more effective to buy scale
than to build it. This allowed many financial stocks to be priced at close to
true value.
Financial services companies with high exposure to corporate and investment
banking activities performed well. In healthcare, valuations rose from a less
depressed level. These companies prospered as the threat of government
intervention to reduce drug prices appeared to dissipate.
Though the technology correction held back performance, some tech arenas, such
as information technology, made significant contributions. The semiconductor
weighting was reduced throughout the year, gains were captured from the late
1999/early 2000 rally, and losses minimized when technology sentiment turned.
Looking Ahead The manager is currently seeking undervalued names from across the
market. Many stocks with solid financial fundamentals are currently trading on
reasonable valuations. If stocks continue to be volatile, the Fund will benefit
from its conservative value mandate.
The following graph, prepared in accordance with SEC regulations, compares a
$10,000 investment in the Maxim Vista Growth & Income Portfolio, made at its
inception, with the performance of the Lipper Growth and Income Fund Index and
the S&P 500 Index. Results include the reinvestment of all dividends and capital
gains distributions. Performance is historical and does not represent future
results. Investment return and principal value will fluctuate so that an
investors shares, when redeemed, may be worth more or less than their original
cost.
Maxim Vista Growth & Income Portfolio
Inception (12/21/94) - $10,000
10/31/95 - $12,315
10/31/96 - $14,779
10/31/97 - $19,114
10/31/98 - $20,907
10/31/99 - $23,692
10/31/00 - $25,898
Lipper Growth and Income Fund Index
Inception (12/21/94) - $10,000
10/31/95 - $11,940
10/31/96 - $14,533
10/31/97 - $18,607
10/31/98 - $20,429
10/31/99 - $23,704
10/31/00 - $25,349
S&P 500 Index
Inception (12/31/94) - $10,000
10/31/95 - $12,935
10/31/96 - $16,052
10/31/97 - $21,206
10/31/98 - $25,869
10/31/99 - $32,510
10/31/00 - $34,490
Average Annual Total Returns, for the period ending 10/31/99
1 year 5 year Since Inception
Maxim Vista Growth & Income Portfolio 9.31% 16.02% 17.44%
Lipper Growth and Income Fund Index 6.94% 16.25% 24.17%
S&P 500 Index 6.09% 21.67% 23.02%
This report and the financial statements contained herein are submitted for the
general information of the shareholders of Maxim Series Fund, Inc. This report
is not authorized for distribution to prospective investors unless preceded or
accompanied by an effective prospectus.
For more information on Maxim Series Fund, Inc., including charges and expenses,
please contact your registered representative to obtain a prospectus. Read it
carefully before investing.
MAXIM SERIES FUND, INC.
INDEPENDENT AUDITORS REPORT
To the Shareholders and Board of Trustees of
Maxim Series Fund, Inc.:
We have audited the accompanying statements of assets and liabilities, including
the schedules of investments, of the Maxim Vista Growth and Income Fund as of
October 31, 2000, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods indicated. These
financial statements and financial highlights are the responsibility of fund
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our procedures
included confirmation of securities owned as of October 31, 2000, by
correspondence with the custodian and brokers; where replies were not received
from brokers, we performed other auditing procedures. 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the Maxim Vista Growth and Income Fund as of October 31, 2000, the results of
its operations for the year then ended, the changes in its net assets for each
of the two years in the period then ended, and the financial highlights for the
periods indicated, in conformity with generally accepted accounting principles.
/s/ Deloitte & Touche LLP
December 15, 2000
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MAXIM SERIES FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 2000
MAXIM VISTA
GROWTH &
INCOME
PORTFOLIO
ASSETS:
Investment in Hub - Growth and Income Portfolio, at value (1) $ 113,724,478
Subscriptions receivable 35,011
Total assets 113,759,489
LIABILITIES:
Due to investment adviser 46,773
Redemptions payable 82,244
Total liabilities 129,017
NET ASSETS $ 113,630,472
--------------------------------------------------------------------------------------================----------
--------------------------------------------------------------------------------------================----------
NET ASSETS REPRESENTED BY:
Capital stock, $.10 par value $ 7,893,828
Additional paid-in capital 80,143,541
Net unrealized appreciation on investments 9,738,077
Undistributed net investment income 88,223
Accumulated net realized gain on investments 15,766,803
NET ASSETS $ 113,630,472
--------------------------------------------------------------------------------------================----------
--------------------------------------------------------------------------------------================----------
NET ASSET VALUE PER OUTSTANDING SHARE $ 1.4395
--------------------------------------------------------------------------------------================----------
--------------------------------------------------------------------------------------================----------
(Offering and Redemption Price)
SHARES OF CAPITAL STOCK:
Authorized 200,000,000
Outstanding 78,938,279
(1) Cost of investments in securities: $ 103,986,401
See notes to financial statements.
MAXIM SERIES FUND, INC.
STATEMENT OF OPERATIONS
YEAR ENDED OCTOBER 31, 2000
MAXIM VISTA
GROWTH &
INCOME
PORTFOLIO
INVESTMENT INCOME:
Investment income allocated from Hub portfolio $ 1,775,651
Expenses allocated from Hub portfolio (550,461)
Total income 1,225,190
EXPENSES:
Advisory fees 620,041
NET INVESTMENT INCOME 605,149
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments allocated from Hub portfolio 15,725,736
Change in net unrealized appreciation on investments allocated from Hub portfolio (6,112,914)
Net realized and unrealized gain on investments 9,612,822
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 10,217,971
--------------------------------------------------------------------------------------================----------------
--------------------------------------------------------------------------------------================----------------
See notes to financial statements.
MAXIM SERIES FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEARS ENDED OCTOBER 31, 2000 AND 1999
MAXIM VISTA GROWTH & INCOME
PORTFOLIO
2000 1999
INCREASE (DECREASE) IN NET ASSETS:
OPERATIONS:
Net investment income $ 605,149 $ 1,054,930
Net realized gain on investments allocated from Hub portfolio 15,725,736 26,598,681
Change in net unrealized appreciation on investments allocated
from Hub portfolio (6,112,914) (3,923,658)
Net increase in net assets resulting from operations 10,217,971 23,729,953
DISTRIBUTIONS TO SHAREHOLDERS:
From net investment income (569,882) (1,109,306)
From net realized gains (26,557,614) (10,331,134)
Total distributions (27,127,496) (11,440,440)
SHARE TRANSACTIONS:
Net proceeds from sales of shares 39,954,734 73,351,123
Reinvestment of distributions 27,127,496 11,440,440
Redemptions of shares (62,520,334) (132,269,592)
Net increase (decrease) in net assets resulting from share transactio4,561,896 (47,478,029)
Total decrease in net assets (12,347,629) (35,188,516)
NET ASSETS:
Beginning of period 125,978,101 161,166,617
End of period (1) $ 113,630,472 $ 125,978,101
---------------------------------------------------------------------===============----================--
---------------------------------------------------------------------===============----================--
OTHER INFORMATION:
SHARES:
Sold 28,022,224 43,963,560
Issued in reinvestment of distributions 20,054,693 7,003,745
Redeemed (43,804,981) (77,295,243)
Net increase (decrease) 4,271,936 (26,327,938)
---------------------------------------------------------------------===============----================--
---------------------------------------------------------------------===============----================--
(1) Including undistributed net investment income $ 88,223 $ 52,956
See notes to financial statements.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
MAXIM SERIES FUND, INC.
MAXIM VISTA GROWTH & INCOME PORTFOLIO
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock of the portfolio for the years ended October 31,
2000, 1999, 1998, 1997 and 1996 are as
follows:
Period Ended October 31,
2000 1999 1998 1997 1996
Net Asset Value, Beginning of Period $ 1.6872 $ 1.5958 $ 1.6590 $ 1.3957 $ 1.2133
Income from Investment Operations
Net investment income 0.0072 0.0114 0.0113 0.0158 0.0219
Net realized and unrealized gain 0.1219 0.1938 0.1351 0.3677 0.2147
Total Income From Investment Operations 0.1291 0.2052 0.1464 0.3835 0.2366
Less Distributions
From net investment income (0.0068) (0.0118) (0.0103) (0.0162) (0.0215)
From net realized gains (0.3700) (0.1020) (0.1993) (0.1040) (0.0327)
Total Distributions (0.3768) (0.1138) (0.2096) (0.1202) (0.0542)
Net Asset Value, End of Period $ 1.4395 $ 1.6872 $ 1.5958 $ 1.6590 $ 1.3957
---------------------------------------============--============--===========---===========---===========---------
---------------------------------------============--============--===========---===========---===========---------
Total Return 9.31% 13.13% 9.38% 29.33% 20.01%
Net Assets, End of Period $ 113,630,472 $ 125,978,101 $ 161,166,617 $ 135,053,616 $86,430,279
Ratio of Expenses to Average Net Assets 1.00% 1.00% 1.00% 1.00% 1.00%
Ratio of Net Investment Income to
Average Net Assets 0.52% 0.66% 0.69% 1.08% 1.75%
</TABLE>
GROWTH AND INCOME PORTFOLIO
Portfolio of Investments
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- 93.7%
--------------------------------------------------------------------------------
COMMON STOCK -- 92.8%
Aerospace -- 1.2%
387 Boeing Co. $ 26,243
Automotive -- 2.7%
1,601 Ford Motor Co. 41,826
282 General Motors Corp. 17,538
----------
59,364
Banking -- 5.7%
1,035 Bank of New York Co., Inc. 59,577
1,410 Wells Fargo Co. 65,301
----------
124,878
Chemicals -- 2.2%
346 Dow Chemical Co. 10,593
859 E.I. DuPont de Nemours Co. 38,991
----------
49,584
Computers/Computer Hardware -- 0.9%
200 Hewlett-Packard Co. 9,288
106 International Business Machines Corp. 10,441
----------
19,729
Consumer Products -- 0.7%
428 Philip Morris Companies, Inc. 15,686
Diversified -- 3.1%
800 General Electric Co. 43,866
416 Tyco International LTD (Bermuda) 23,582
----------
67,448
Financial Services -- 17.3%
1,257 American Express Co. 75,402
2,345 Citigroup, Inc. 123,419
313 Fannie Mae 24,124
288 J.P. Morgan & Co. 47,664
696 Merrill Lynch & Co., Inc. 48,720
671 Morgan Stanley Dean Witter & Co. 53,858
94 State Street Corp. 11,775
----------
384,962
Food/Beverage Products -- 2.4%
500 Anheuser-Busch Companies, Inc. 22,875
270 PepsiCo, Inc. 13,078
339 Sysco Corp. 17,692
----------
53,645
Insurance -- 7.8%
1,399 American International Group, Inc. 137,097
264 Marsh & McLennan Companies, Inc. 34,479
----------
171,576
Machinery & Engineering Equipment -- 1.7%
600 Caterpillar, Inc. 21,038
375 Dover Corp. 15,914
----------
36,952
Manufacturing -- 0.9%
353 Honeywell International, Inc. 18,996
See notes to financial statements.
95
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Metals/Mining -- 0.5%
419 Alcoa, Inc. $ 12,026
Multi-Media -- 4.1%
1,013 The Walt Disney Co. 36,278
146 Time Warner, Inc. 11,083
771 Viacom, Inc., Class B* 43,861
----------
91,222
Office/Business Equipment -- 0.6%
1,450 Xerox Corp. 12,234
Oil & Gas -- 12.6%
213 BP Amoco PLC, ADR (United Kingdom) 10,860
603 Chevron Corp. 49,511
1,283 Exxon Mobil Corp. 114,457
450 Halliburton Co. 16,678
1,077 Royal Dutch Petroleum Co., N.Y. Registered Shares
(Netherlands) 63,971
303 Schlumberger LTD 23,066
----------
278,543
Paper/Forest Products -- 2.0%
470 International Paper Co. 17,230
308 Weyerhaeuser Co. 14,457
335 Willamette Industries 12,165
----------
43,852
Pharmaceuticals -- 7.8%
836 Abbott Laboratories 44,151
564 American Home Products Corp. 35,814
214 Eli Lilly & Co. 19,126
333 Pfizer, Inc. 14,381
1,065 Pharmacia Corp. 58,577
----------
172,049
Retailing -- 1.2%
40 Kohls Corp.* 2,168
868 Target Corp. 23,978
----------
26,146
Semi-Conductors -- 2.8%
394 Altera Corp.* 16,129
350 Intel Corp. 15,750
591 Texas Instruments, Inc. 28,996
----------
60,875
Telecommunications -- 8.7%
719 AT&T Corp. 16,675
1,109 BellSouth Corp. 53,579
627 SBC Communications, Inc. 36,170
1,291 Verizon Communications 74,659
433 WorldCom, Inc.* 10,272
----------
191,355
Telecommunications Equipment -- 1.8%
1,054 Motorola, Inc. 26,284
297 Nortel Networks Corp. (Canada) 13,514
----------
39,798
See notes to financial statements.
96
GROWTH AND INCOME PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Utilities -- 4.1%
202 Dominion Resources, Inc. $ 12,032
400 DQE, Inc. 13,975
284 Duke Energy Corp. 24,548
491 Enron Corp. 40,293
------------
90,848
--------------------------------------------------------------------------------
Total Common Stock 2,048,011
(Cost $1,637,799)
------------------------------------------------------------------
CONVERTIBLE PREFERRED STOCK -- 0.9%
Telecommunications -- 0.9%
250 Qwest Trends Trust, 5.75%, 11/17/03 20,219
(Cost $10,438)
--------------------------------------------------------------------------------
Total Long-Term Investments 2,068,230
(Cost $1,648,237)
--------------------------------------------------------------------------------
Short-Term Investment -- 6.2%
--------------------------------------------------------------------------------
Principal
Amount
REPURCHASE AGREEMENT -- 6.2%
$137,574 Greenwich Capital Markets, Inc., Tri Party, 6.55%,
due 11/01/00, (Dated 10/31/00, Proceeds
$137,599, Secured by GNMA, $140,079, 6.00%
through 11.50%, due 04/15/13 through 10/15/30;
Market Value $140,328) 137,574
(Cost $137,574)
--------------------------------------------------------------------------------
Total Investments -- 99.9% $2,205,804
(Cost $1,785,811)
--------------------------------------------------------------------------------
See notes to financial statements.
97
CAPITAL GROWTH PORTFOLIO
Portfolio of Investments
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- 96.4%
--------------------------------------------------------------------------------
COMMON STOCK -- 96.4%
Advertising -- 1.5%
335 True North Communications, Inc. $12,625
Apparel -- 1.1%
350 Jones Apparel Group, Inc.* 9,734
Banking -- 3.8%
290 Cullen/Frost Bankers, Inc. 9,661
210 TCF Financial Corp. 8,492
250 Zions Bancorp. 14,359
--------
32,512
Biotechnology -- 1.2%
240 Chiron Corp.* 10,395
Broadcasting/Cable -- 1.1%
200 AT&T Corp. -- Liberty Media Group, Class A* 3,600
145 Univision Communications, Inc., Class A* 5,546
--------
9,146
Business Services -- 8.1%
390 ACNielsen Corp.* 9,336
256 Acxiom Corp.* 10,292
225 Affiliated Computer Services, Inc., Class A* 12,530
450 Concord EFS, Inc.* 18,590
250 Manpower, Inc. 8,703
200 Sungard Data Systems, Inc.* 10,225
--------
69,676
Chemicals -- 2.3%
265 Cytec Industries, Inc.* 9,176
135 FMC Corp.* 10,260
--------
19,436
Computer Software -- 2.3%
340 Rational Software Corp.* 20,294
Construction -- 2.3%
190 American Standard Companies, Inc.* 8,716
346 Lennar Corp. 11,099
--------
19,815
Electronics/Electrical Equipment -- 11.2%
225 Amphenol Corp., Class A* 14,456
350 APW LTD.* 16,166
126 Coherent, Inc.* 4,386
200 PerkinElmer, Inc. 23,899
80 Sanmina Corp.* 9,145
475 Sensormatic Electronics Corp.* 8,550
150 Symbol Technologies, Inc. 6,816
450 Vishay Intertechnology, Inc.* 13,500
--------
96,918
Entertainment/Leisure -- 2.3%
350 Harrah's Entertainment, Inc.* 10,019
800 Park Place Entertainment Corp.* 10,200
--------
20,219
See notes to financial statements.
98
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Financial Services -- 2.7%
230 A.G. Edwards, Inc. $11,673
180 Lehman Brothers Holdings, Inc. 11,610
--------
23,283
Food/Beverage Products -- 1.2%
300 Pepsi Bottling Group, Inc. 10,388
Health Care/Health Care Services -- 6.8%
200 Cytyc Corp.* 11,875
250 Dentsply International, Inc. 8,672
900 Health Management Associates, Inc., Class A* 17,831
350 Oxford Health Plans, Inc.* 11,813
185 Stryker Corp. 8,718
--------
58,909
Insurance -- 5.2%
450 Ace LTD (Bermuda) 17,662
200 AXA Financial, Inc. 10,813
230 Radian Group, Inc. 16,301
--------
44,776
Machinery & Engineering Equipment -- 1.7%
210 Dover Corp. 8,912
140 Zebra Technologies Corp., Class A* 6,134
--------
15,046
Oil & Gas -- 8.6%
470 Anadarko Petroleum Corp. 30,103
65 BJ Services Co.* 3,408
240 Cooper Cameron Corp.* 13,080
475 Global Marine, Inc.* 12,588
130 Nicor, Inc. 4,591
375 Tosco Corp. 10,734
--------
74,504
Paper/Forest Products -- 1.1%
250 Willamette Industries 9,078
Pharmaceuticals -- 8.7%
100 Alza Corp.* 8,094
520 Biovail Corp. International (Canada)* 21,872
140 Forest Laboratories Inc., Class A* 18,550
160 Medimmune, Inc.* 10,460
85 Sepracor, Inc.* 5,791
160 Watson Pharmaceuticals, Inc.* 10,010
--------
74,777
Pipelines -- 3.3%
125 Columbia Energy Group 8,992
220 El Paso Energy Corp. 13,791
100 National Fuel Gas Co. 5,363
--------
28,146
Printing & Publishing -- 0.9%
400 A.H. Belo Corp., Class A 7,675
Real Estate Investment Trust -- 1.2%
130 Equity Residential Properties Trust 6,118
206 ProLogis Trust 4,326
--------
10,444
See notes to financial statements.
99
CAPITAL GROWTH PORTFOLIO
PORTFOLIO OF INVESTMENTS (CONTINUED)
As of October 31, 2000
(Amounts in Thousands)
Shares Issuer Value
--------------------------------------------------------------------------------
Long-Term Investments -- Continued
--------------------------------------------------------------------------------
Restaurants/Food Services -- 1.9%
415 Brinker International, Inc.* $ 16,289
Retailing -- 1.6%
425 BJ's Wholesale Club, Inc.* 13,998
Semi-Conductors -- 6.0%
305 Altera Corp.* 12,486
350 Atmel Corp.* 5,228
413 Microchip Technology, Inc.* 13,045
110 Veeco Instruments, Inc.* 7,277
200 Vitesse Semiconductor Corp.* 13,988
---------
52,024
Shipping/Transportation -- 0.9%
150 C.H. Robinson Worldwide, Inc. 8,203
Telecommunications -- 2.0%
145 U.S. Cellular Corp.* 9,280
170 Western Wireless Corp., Class A* 8,075
---------
17,355
Telecommunications Equipment -- 1.6%
125 Comverse Technology, Inc.* 13,969
Utilities -- 3.8%
265 AGL Resources, Inc. 5,399
300 Alliant Energy Corp. 9,094
200 American Water Works, Inc. 4,875
200 Energy East Corp. 4,038
350 Scana Corp. 9,275
---------
32,681
--------------------------------------------------------------------------------
Total Long-Term Investments 832,315
(Cost $612,053)
--------------------------------------------------------------------------------
Short-Term Investment -- 5.0%
--------------------------------------------------------------------------------
Principal
Amount
REPURCHASE AGREEMENT -- 5.0%
$43,338 Greenwich Capital Markets, Inc., Tri Party, 6.55%,
due 11/01/00, (Dated 10/31/00, Proceeds $43,346,
Secured by U.S. Government Agency Obligations,
$44,715, 6.50% through 6.75%, due 06/18/21
through 09/15/23; Market Value $44,205) 43,338
(Cost $43,338)
--------------------------------------------------------------------------------
Total Investments -- 101.4% $875,653
(Cost $655,391)
--------------------------------------------------------------------------------
INDEX:
* -- Non-income producing security.
ADR -- American Depositary Receipt.
GNMA -- Government National Mortgage Association
See notes to financial statements.
100
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Assets and Liabilities As of October 31, 2000
(Amounts in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Growth and
Income Capital Growth
Portfolio Portfolio
---------------------------------------------------------------------------------------
ASSETS:
Investment securities, at value (Note 1) .......... $2,205,804 $875,653
Other assets ...................................... 7 3
Receivables:
Interest and dividends ........................ 2,695 329
---------------------------------------------------------------------------------------
Total Assets ................................ 2,208,506 875,985
---------------------------------------------------------------------------------------
LIABILITIES:
Payables:
Investment securities purchased ............... -- 11,696
Accrued liabilities: (Note 2)
Investment advisory fees ...................... 727 282
Administration fees ........................... 91 35
Custodian fees ................................ 24 11
Other ......................................... 314 230
---------------------------------------------------------------------------------------
Total Liabilities ........................... 1,156 12,254
---------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO INVESTORS'
BENEFICIAL INTERESTS ................................ $2,207,350 $863,731
---------------------------------------------------------------------------------------
Cost of investments ............................... $1,785,811 $655,391
---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
101
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Operations For the year ended October 31, 2000
(Amounts in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Growth and
Income Capital Growth
Portfolio Portfolio
---------------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividend .......................................... $ 32,526 $ 6,696
Interest .......................................... 3,885 2,388
Foreign taxes withheld ............................ (246) --
---------------------------------------------------------------------------------------
Total investment income ..................... 36,165 9,084
---------------------------------------------------------------------------------------
EXPENSES: (Note 2)
Investment advisory fees .......................... 9,573 3,572
Administration fees ............................... 1,197 447
Custodian fees .................................... 136 72
Accounting fees ................................... 39 30
Professional fees ................................. 70 52
Trustees' fees .................................... 55 20
Other ............................................. 125 28
---------------------------------------------------------------------------------------
Total expenses .............................. 11,195 4,221
---------------------------------------------------------------------------------------
Less earnings credits (Note 2B) ................... 55 23
---------------------------------------------------------------------------------------
Net expenses ................................ 11,140 4,198
---------------------------------------------------------------------------------------
Net investment income ................. 25,025 4,886
---------------------------------------------------------------------------------------
REALIZED AND UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Net realized gain on investments .................. 322,821 168,249
Change in net unrealized appreciation/
depreciation of investments ....................... (123,018) 39,433
---------------------------------------------------------------------------------------
Net realized and unrealized gain on investments ... 199,803 207,682
---------------------------------------------------------------------------------------
Net increase in net assets from operations ........ $ 224,828 $212,568
---------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
102
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
Statement of Changes in Net Assets For the year ended October 31,
(Amounts in Thousands)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Growth and
Income Capital Growth
Portfolio Portfolio
-----------------------------------------------------------------------------------------------
2000 1999 2000 1999
-----------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN
NET ASSETS FROM OPERATIONS:
Net investment income ........... $ 25,025 $ 34,082 $ 4,886 $3,754
Net realized gain on
investments ..................... 322,821 426,148 168,249 185,113
Change in net unrealized
appreciation/depreciation of
investments ..................... (123,018) (86,911) 39,433 (28,226)
-----------------------------------------------------------------------------------------------
Increase in net assets
from operations ............... 224,828 373,319 212,568
160,641
-----------------------------------------------------------------------------------------------
TRANSACTIONS IN INVESTORS'
BENEFICIAL INTERESTS:
Contributions ................... 147,832 480,886 469,249
877,944
Withdrawals ..................... (789,064) (982,596) (759,382)
(1,288,947)
-----------------------------------------------------------------------------------------------
Net decrease from
transactions in investors'
beneficial interests .......... (641,232) (501,710) (290,133)
(411,003)
-----------------------------------------------------------------------------------------------
Total decrease in net assets (416,404) (128,391) (77,565)
(250,362)
NET ASSETS:
Beginning of period ............. 2,623,754 2,752,145 941,296
1,191,658
-----------------------------------------------------------------------------------------------
End of period ................... $ 2,207,350 $ 2,623,754 $ 863,731 $
941,296
-----------------------------------------------------------------------------------------------
</TABLE>
See notes to financial statements.
103
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Growth and Income Portfolio ("GIP") and Capital Growth Portfolio ("CGP"), (the
"Portfolios") are separately registered under the Investment Company Act of
1940, as amended, as non-diversified, open end management investment companies
organized as trusts under the laws of the State of New York. Each declaration of
trust permits the Trustees to issue beneficial interests in the respective
Portfolios.
THE FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE
PORTFOLIOS:
The preparation of financial statements in accordance with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts and disclosures in the financial statements. Actual
results could differ from those estimates.
A. VALUATION OF INVESTMENTS -- Equity securities, purchased options and
futures are valued at the last sale price on the exchange on which they are
primarily traded, including the NASDAQ National Market. Securities for
which sale prices are not available and other over-the-counter securities
are valued at the last quoted bid price. Bonds and other fixed income
securities (other than short-term obligations), including listed issues,
are valued on the basis of valuations supplied by pricing services or by
matrix pricing systems of a major dealer in bonds. Short-term debt
securities with 61 days or more to maturity at time of purchase are valued,
through the 61st day prior to maturity, at market value based on quotations
obtained from market makers or other appropriate sources; thereafter, the
value on the 61st day is amortized on a straight-line basis over the
remaining number of days to maturity. Short-term investments with 60 days
or less to maturity at time of purchase are valued at amortized cost, which
approximates market. Portfolio securities for which there are no such
quotations or valuations are valued at fair value as determined in good
faith by or at the direction of the Trustees.
B. REPURCHASE AGREEMENTS -- It is the Portfolios' policy that repurchase
agreements are fully collateralized by U.S. Treasury and Government Agency
securities. All collateral is held by the Portfolios' custodian bank,
subcustodian, or a bank with which the custodian bank has entered into a
subcustodian agreement, or is segregated in the Federal Reserve Book Entry
System. In connection with transactions in repurchase agreements, if the
seller defaults and the value of the collateral declines, or if the seller
enters an insolvency proceeding, realization of the collateral by the
Trusts may be delayed or limited.
C. FUTURES CONTRACTS -- When a Portfolio enters into a futures contract,
it makes an initial margin deposit in a segregated account, either in cash
or liquid securities. Thereafter, the futures contract is marked to market
and the portfolio makes (or receives) additional cash payments daily to the
broker. Changes in the value of the contract are recorded as unrealized
appreciation/depreciation until the contract is closed or settled.
Index futures contracts are used to control the asset mix of the Portfolios
in the most efficient manner. Short index futures contracts are used for
104
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
hedging purposes, i.e. to reduce the exposure to equities. Long index
futures contracts are used to gain exposure to equities, when it is
anticipated that this will be more efficient than buying stocks directly.
Use of long futures contracts subject the Portfolios to risk of loss up to
the nominal value of the contract. Use of short futures contracts subject
the Portfolios to unlimited losses.
The Portfolios may enter into futures contracts only on exchanges or boards
of trade. The exchange or board of trade acts as the counterparty to each
futures transaction, therefore, the Portfolio's credit risk is limited to
failure of the exchange or board of trade. As of October 31, 2000, the
Portfolios had no outstanding futures contracts.
D. SECURITY TRANSACTIONS AND INVESTMENT INCOME -- Investment transactions
are accounted for on the trade date (the date the order to buy or sell is
executed). Securities gains and losses are calculated on the identified
cost basis. Interest income is accrued as earned. Dividend income is
recorded on the ex-dividend date.
E. FEDERAL INCOME TAXES -- The Portfolios intend to continue to qualify
as partnerships and therefore net investment income and net realized gains
are taxed to the partners. Accordingly, no tax provisions are recorded by
the Portfolios. The investors in the Portfolios must take into account
their proportionate share of the Portfolios' income, gains, losses,
deductions, credits and tax preference items in computing their federal
income tax liability, without regard to whether they have received any cash
distributions from the Portfolio. The Portfolios do not intend to
distribute to investors their net investment income or their net realized
gains, if any. It is intended that the Portfolios will be managed in such a
way that investors in the Portfolio will be able to satisfy the
requirements of subchapter M of the Internal Revenue Code to be taxed as
regulated investment companies.
F. EXPENSES -- Expenses directly attributable to a Portfolio are charged
to that Portfolio; other expenses are allocated on another reasonable
basis.
2. FEES AND OTHER TRANSACTIONS WITH AFFILIATES
A. INVESTMENT ADVISORY FEE -- Pursuant to separate Investment Advisory
Agreements, The Chase Manhattan Bank ("Chase" or the "Advisor") acts as the
Investment Advisor to the Portfolios. Chase is a direct wholly-owned
subsidiary of The Chase Manhattan Corporation. As Investment Advisor, Chase
supervises the investments of the Portfolios and for such services is paid
a fee.
The fee is computed daily and paid monthly at an annual rate equal to 0.40%
of each Portfolio's average daily net assets.
Chase Fleming Asset Management (USA) Inc. ("CFAM (USA)"), a registered
investment advisor, is the sub-investment advisor to each of the Portfolios
pursuant to a Sub-Investment Advisory Agreement between CFAM (USA) and
Chase. CFAM (USA), formerly Chase Asset Management Inc., is a wholly owned
subsidiary of Chase and is entitled to receive a fee, payable by Chase from
its advisory fee, at an annual rate equal to 0.20% of each Portfolio's
average daily net assets.
105
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
B. CUSTODIAN FEES -- Chase, as Custodian, provides safekeeping services
for the Portfolios' securities. Compensation for such services is presented
in the Statement of Operations as custodian fees. In addition, custodian
fees are subject to reduction by credits earned by each Portfolio, based on
cash balances held by Chase as custodian. Such earnings credits are
presented separately in the Statement of Operations. The Portfolios could
have invested the cash balances utilized in connection with the earnings
credits arrangements in income producing assets if they had not entered
into such arrangements.
C. ADMINISTRATION FEE -- Pursuant to an Administration Agreement, Chase
(the "Administrator") provides certain administration services to the
Trusts. For these services and facilities, the Administrator receives from
each Portfolio a fee computed at the annual rate equal to 0.05% of the
respective Portfolio's average daily net assets.
3. INVESTMENT TRANSACTIONS
For the year ended October 31, 2000, purchases and sales of investments
(excluding short-term investments) were as follows (in thousands):
GIP CGP
-------------------------------------------------------------------------------
Purchases (excluding U.S. Government) ...... $ 690,394 $572,612
Sales (excluding U.S. Government) .......... 1,319,968 818,006
Purchases of U.S. Government ............... - -
Sales of U.S. Government ................... - 585
The portfolio turnover rates of GIP and CGP for the year ended October 31, 2000,
were 30% and 66% respectively.
4. FEDERAL INCOME TAX MATTERS
For Federal income tax purposes, the cost and unrealized appreciation
(depreciation) in value of the investment securities at October 31, 2000, are as
follows (in thousands):
GIP CGP
-------------------------------------------------------------------------------
Aggregate cost ............................. $1,788,611 $655,557
---------- --------
Gross unrealized appreciation .............. $ 505,969 $242,300
Gross unrealized depreciation .............. (88,776) (22,204)
---------- --------
Net unrealized appreciation ................ $ 417,193 $220,096
========== ========
5. CONCENTRATIONS
At October 31, 2000, CGP invested 21.0% of its portfolio in securities issued by
technology sector companies, such as computer hardware and software companies,
internet connectivity providers and telecommunications equipment manufacturers.
Valuations of companies in the technology sector are typically subject to
greater volatility than other sectors.
106
GROWTH AND INCOME AND CAPITAL GROWTH PORTFOLIOS
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. TRUSTEE COMPENSATION
The Portfolios have adopted an unfunded noncontributory defined benefit pension
plan covering all independent trustees of the Portfolios who will have served as
an independent trustee for at least five years at the time of retirement.
Benefits under this plan are based on compensation and years of service. Pension
expenses for the year ended October 31, 2000, included in Trustees Fees in the
Statement of Operations, and accrued pension liability included in other accrued
liabilities, respectively, in the Statement of Assets and Liabilities were as
follows (in thousands):
Accrued
Pension Pension
Expenses Liability
-------------------------------------------------------------------------------
GIP $20 $118
CGP 7 54
7. BANK BORROWINGS
The Portfolios may borrow money for temporary or emergency purposes. Any
borrowings representing more than 5% of a Portfolio's total assets must be
repaid before the Portfolio may make additional investments. The Portfolios have
entered into an agreement, enabling them to participate with other Chase Vista
Funds in an unsecured line of credit with a syndicate of banks, which permits
borrowings up to $350 million, collectively. Interest is charged to each
Portfolio based on its borrowings at an annual rate equal to the sum of the
Federal Funds Rate plus 0.50%. The Portfolios also pay a commitment fee of 0.10%
per annum on the average daily amount of the available commitment, which is
allocated, on a pro-rata basis to the funds. The commitment fee is included in
Other expenses on the Statement of Operations. Borrowings are payable on demand.
The Portfolios had no borrowings outstanding at October 31, 2000, nor at any
point during the year then ended.
107
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees and Beneficial Unit Holders of Growth and Income Portfolio and
Capital Growth Portfolio
In our opinion, the accompanying statements of assets and liabilities, including
the portfolios of investments, and the related statements of operations and of
changes in net assets present fairly, in all material respects, the financial
position of Growth and Income Portfolio and Capital Growth Portfolio (the
"Portfolios") at October 31, 2000, the results of each of their operations for
the year then ended and the changes in each of their net assets for each of the
two years in the period then ended, in conformity with accounting principles
generally accepted in the United States of America. These financial statements
and financial highlights (hereafter referred to as "financial statements") are
the responsibility of the Portfolios' management; our responsibility is to
express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with auditing
standards generally accepted in the United States of America, which require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audits, which included confirmation
of securities at October 31, 2000 by correspondence with the custodian and
brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York 10036
December 11, 2000
108
