Registration Nos. 2-85454
811-3815
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF l933 X
POST-EFFECTIVE AMENDMENT NO. 15 X
and
REGISTRATION STATEMENT
under
THE INVESTMENT COMPANY ACT OF l940 X
AMENDMENT NO. 16 X
MANULIFE SERIES FUND, INC.
(Exact Name of Registrant as Specified in Charter)
200 Bloor Street East
Toronto, Ontario, Canada M4W lE5
(Address of Principal Executive Offices)
Sheri L. Kocen
Secretary and General Counsel Copy to:
Manulife Series Fund, Inc. J. Sumner Jones, Esq.
200 Bloor Street East Jones & Blouch
Toronto, Ontario, Canada M4W lE5 2100 Pennsylvania Ave.,
N.W.
(Name and Address of Agent for Service) Washington, D.C. 20037
It is proposed that this filing will become effective:
immediately upon filing pursuant to paragraph (b) of Rule
485
on February 14, 1996 pursuant to paragraph (b) of Rule 485
60 days after filing pursuant to paragraph (a)(1) of Rule
485
X on February 14, 1996 pursuant to paragraph (a)(2) of Rule
485
75 days after filing pursuant to paragraph (a)(2) of Rule
485
Election Pursuant to Rule 24f-2
Registrant has registered, pursuant to Rule 24f-2 under the
Investment Company Act of 1940, an indefinite number of its
shares of Common Stock for sale under the Securities Act of
1933 and filed a Rule 24f-2 Notice on February 28, 1995 for
its fiscal year ended December 31, 1994.
<PAGE>
PART A.
PROSPECTUS
<PAGE>
Prospectus
Manulife Series Fund, Inc.
with Executive Offices at
200 Bloor Street East
Toronto, Ontario, Canada M4W 1E5
(416) 926-6100
Manulife Series Fund, Inc. (the "Company"), a Maryland
corporation, is a diversified open-end management investment
company, commonly known as a mutual fund. Shares of the
Company are not offered directly to the public but are sold
only to The Manufacturers Life Insurance Company of America
("Manufacturers Life of America") in connection with variable
contracts issued by Manufacturers Life of America. Such
variable contracts are described in their respective
prospectuses. The Company offers the following separate
investment portfolios, referred to herein as "Funds," which
have the following investment objectives:
Emerging Growth Equity Fund -- To achieve growth of capital by
investing primarily in equity securities of companies believed
to offer growth potential over both the intermediate and the
long term;
Balanced Assets Fund -- To achieve intermediate and long-term
growth through capital appreciation and income by investing in
both debt and equity securities;
Capital Growth Bond Fund -- To achieve growth of capital by
investing in medium-grade or better debt securities, with
income as a secondary consideration;
Money-Market Fund -- To provide maximum current income
consistent with capital preservation and liquidity by
investing in high-quality money-market instruments;
Common Stock Fund -- To achieve intermediate and long-term
growth through capital appreciation and current income by
investing in common stocks and other equity securities of well
established companies with promising prospects for providing
an above-average rate of return;
Real Estate Securities Fund -- To achieve a combination of
long-term capital appreciation and satisfactory current income
by investing in real estate related equity and debt
securities;
<REDLINE>
International Fund -- to achieve long-term growth of capital
by investing in a diversified portfolio comprised primarily of
common stocks and equity-related securities of corporations
domiciled in countries other than the U.S. and Canada;
<PAGE>
Pacific Rim Emerging Markets Fund -- To achieve long-term
growth of capital by investing in a diversified portfolio
comprised primarily of common stocks and equity-related
securities of the countries of the Pacific Rim region; and
Subject to regulatory approval, the Company will also offer:
Equity Index Fund -- To achieve investment results which
approximate the total return of publicly traded common stocks
in the aggregate, as represented by the Standard & Poor s 500
Composite Stock Price Index.
</REDLINE>
This Prospectus sets forth concisely the information about the
Company that a prospective purchaser of a variable contract
from The Manufacturers Life Insurance Company of America
should know before purchasing such a contract. Please read
this Prospectus and retain it for future reference.
Additional information about the Company has been filed with
the Securities and Exchange Commission and is available upon
request and without charge by writing to the address or
calling the number listed above and requesting the "Statement
of Additional Information for Manulife Series Fund, Inc."
(hereinafter "Statement of Additional Information"). The
Statement of Additional Information is incorporated by
reference into this Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
AN INVESTMENT IN THE MONEY-MARKET FUND IS NEITHER INSURED NOR
GUARANTEED BY THE U.S. GOVERNMENT.
Manufacturers Adviser Corporation
Investment Manager
<REDLINE>
The date of this Prospectus and Statement of Additional
Information is February 14, 1996.
</REDLINE>
(ss#1816)
<PAGE>
Manulife Series Fund, Inc.
Table Of Contents
Page
The Company
Shareholder Transaction Expenses
Condensed Financial Information
Investment Objectives, Policies And Risks
Emerging Growth Equity Fund
Balanced Assets Fund
Capital Growth Bond Fund
Money-Market Fund
Common Stock Fund
Real Estate Securities Fund
International Fund And Pacific Rim Emerging Markets Fund
<REDLINE>
Equity Index Fund
Investment Techniques Of The International Fund And Pacific
Rim Emerging Markets Fund
Investment Techniques Of The Equity Index Fund
</REDLINE>
Foreign Securities
Lending Securities
Management Of The Funds
Investment Management Arrangements
Expenses
Fees
Capital Stock
Taxes, Dividends And Distributions
Purchases And Redemptions Of Shares
Determination Of Net Asset Value
Custodian
Performance Data
No dealer, salesman, or other person has been authorized to
give any information or to make any representations, other
than those contained in this Prospectus, in connection with
the offer contained in this Prospectus, and, if given or made,
such other information or representations must not be relied
upon as having been authorized by the Company or the
Investment Manager. This Prospectus does not constitute an
offering in any state in which such offering may not lawfully
be made.
1
<PAGE>
The Company
Manulife Series Fund, Inc. (the "Company") is a diversified,
open-end management investment company incorporated under
Maryland law on July 22, 1983. The Company was established to
serve as the underlying investment medium for variable life
insurance and variable annuity products issued by The
Manufacturers Life Insurance Company of America
("Manufacturers Life of America"). Both the Company and
Manufacturers Life of America are indirect wholly-owned
subsidiaries of The Manufacturers Life Insurance Company
("Manufacturers Life"). Manufacturers Life is a mutual life
insurance company based in Toronto, Canada which, together
with its subsidiaries, ranks among the largest such companies
in North America as measured by assets.
<REDLINE>
As the underlying investment medium for Manufacturers Life of
America variable products, the Company provides a range of
investment alternatives. Currently, the Company offers the
following investment portfolios, referred to herein as "Funds"
-- the Emerging Growth Equity Fund, the Balanced Assets Fund,
the Capital Growth Bond Fund, the Money-Market Fund, the
Common Stock Fund, the Real Estate Securities Fund, the
International Fund, the Pacific Rim Emerging Markets Fund,
and, subject to regulatory approval, the Equity Index Fund.
As described in the accompanying Prospectus for such variable
product, policyowners may allocate their net premiums among
the Funds. Because the value of certain benefits under the
Policies will vary with the investment performance of the
Funds and because the type of investment and the level of risk
preferred by policyowners will vary, policyowners should
carefully review the investment objective, policies and risks
of each Fund as described in this Prospectus.
</REDLINE>
While policyowners will direct the investment of their net
premiums, shares of the Company are sold only to Manufacturers
Life of America. Consequently, the terms "shareholder" and
"shareholders" in this Prospectus refer only to Manufacturers
Life of America. However, Manufacturers Life of America will
vote shares of the Company in accordance with instructions
received from policyowners. Shares for which no timely
instructions from policyowners are received, including shares
not attributable to variable products, will be voted by
Manufacturers Life of America in the same proportion within
those class of shares for which instructions are received.
Subject to the supervision of the Company's Board of
Directors, Manufacturers Adviser Corporation (the "Manager")
will serve as the Company's investment manager. As such, the
Manager will administer the Funds and direct the investment
2
<PAGE>
and reinvestment of Fund assets.
<REDLINE>
Shareholder Transaction Expenses
Annual Fund Operating Expenses
(as a percentage of average net assets)
Management Fees
International Fund 0.85%*
Pacific Rim Emerging Markets Fund 0.85%*
Equity Index Fund 0.25%
All Other Funds 0.50%
Other Expenses
International Fund 0.50%
Pacific Rim Emerging Markets Fund 0.65%
Equity Index Fund 0.15%
Total Fund Operating Expenses
International Fund 1.35%
Pacific Rim Emerging Markets Fund 1.50%
Equity Index Fund 0.40%
All Other Funds 0.50%
* Management fee would drop to 0.70% on assets over $100
million.
</REDLINE>
3
<PAGE>
<REDLINE>
Example
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end of
each time period.
<TABLE>
<CAPTION>
1 year 3 years 5 years 10 years
<S> <C> <C> <C> <C>
International Fund $14 $43 $74 $162
Pacific Rim Emerging Markets Fund $15 $47 $82 $179
Equity Index Fund $4 $13
All Other Funds $5 $16 $28 $63
The purpose of this table is to assist investors in
understanding the expenses an investor in the Company will
bear. Variable contracts issued by Manufacturers Life of
America provide for charges not reflected in the above table.
</TABLE>
</REDLILNE>
4
<PAGE>
Condensed Financial Information
<REDLINE>
The following condensed financial information for the years
and periods, other than 1/1/95-6/30/95, mentioned below has
been derived from financial statements audited by Ernst &
Young LLP, independent auditors, whose report with respect
thereto appears in the Statement of Additional Information.
Further information about the performance of the Company is
contained in the Company's annual report, which may be
obtained without charge by calling or writing to the Company.
Performance information shown in this section does not reflect
expenses that apply to the separate account or the related
insurance policies. Inclusion of these charges would reduce
the performance figures for all periods shown. The
information for the period 1/1/95-6/30/95 is based upon
unaudited financial records of the Company.
</REDLINE>
Selected data for a share of capital stock outstanding for the
periods indicated.
Emerging Growth Equity Fund
<TABLE>
<CAPTION>
Period Year Year Year
1/1/95- Ended Ended Ended
6/30/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C>
Net asset value beginning of period $18.55 $19.42 $17.76 $16.18
Income From Investment Operations:
Net investment income (loss) 0.02 0.01 (0.01) (0.02)
Net realized and unrealized gain (loss)
on investments 2.03 (0.81) 4.16 3.51
Total from investment operations 2.05 (0.80) 4.15 3.49
Dividends:
Net investment income 0.00 -- -- --
Net realized gain 0.00 (0.07) (2.49) (1.91)
0.00 (0.07) (2.49) (1.91)
Net asset value end of period $ 20.60 $ 18.55 $ 19.42 $ 17.76
Net assets end of period ('000s) $124,362 $97,379 $55,767 $18,504
Aggregate return on share outstanding
during entire period 11.04% (4.10)% 23.89% 21.82%
Significant Ratios:
Portfolio turnover 102.10%* 69.40% 92.95% 126.62%
Ratio of expenses to average net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 0.24%* 0.07% (0.04)% (0.14)%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 20.17* (3.02) 23.61% 23.82%
</TABLE>
* Annualized.
5
<PAGE>
Emerging Growth Equity Fund (continued)
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/91 12/31/90 12/31/89 12/31/88
<S> <C> <C> <C> <C>
Net asset value beginning of period $9.95 $12.20 $8.75 $7.61
Income From Investment Operations:
Net investment income (loss) -- 0.17 0.20 0.14
Net realized and unrealized gain (loss)
on investments 7.08 (1.98) 3.46 1.16
Total from investment operations 7.08 (1.81) 3.66 1.30
Dividends:
Net investment income -- (0.17) (0.21) (0.12)
Net realized gain (0.85) (0.27) -- (0.04)
(0.85) (0.44) (0.21) (0.16)
Net asset value end of period $16.18 $ 9.95 $12.20 $ 8.75
Net assets end of period ('000s) $9,822 $4,137 $3,859 $2,682
Aggregate return on share outstanding
during entire period 71.34% (14.90)% 42.19% 16.94%
Significant Ratios:
Portfolio turnover 87.63 100.86% 116.14% 190.06%
Ratio of expenses to average net assets 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 0.02% 1.55% 1.95% 1.54%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 50.44% (16.10)% 34.63% 14.77%
</TABLE>
* Annualized.
6
<PAGE>
Emerging Growth Equity Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/87 12/31/86 12/31/85
<S> <C> <C> <C>
Net asset value beginning of period $10.45 $12.58 $10.67
Income From Investment Operations:
Net investment income (loss) 0.01 0.03 0.10
Net realized and unrealized gain (loss)
on investments 0.18 (0.78) 2.32
Total from investment operations 0.19 (0.75) 2.42
Dividends:
Net investment income (0.01) (0.03) (0.40)
Net realized gain (3.02) (1.35) (0.11)
(3.03) (1.38) (0.51)
Net asset value end of period $7.61 $10.45 $12.58
Net assets end of period ('000s) $2,012 $1,377 $1,403
Aggregate return on share outstanding
during entire period (4.88)% (6.59)% 23.38%
Significant Ratios:
Portfolio turnover 196.48% 247.88% 64.52%
Ratio of expenses to average net assets 0.50% 0.20% 0.20%
Ratio of net investment income to
average net assets 0.06% 0.26% 0.81%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (16.68)% (6.68)% 20.63%
</TABLE>
* Annualized.
7
<PAGE>
Common Stock Fund
<TABLE>
<CAPTION>
Period Year Year
1/1/95- Ended Ended
6/30/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value
beginning of period $13.36 $ 14.68 $ 13.73
Income From Investment Operations:
Net investment income (loss) 0.12 0.20 0.19
Net realized and unrealized gain
(loss) on investments 1.44 (0.81) 1.64
Total from investment operations 1.56 (0.61) 1.83
Dividends:
Net investment income 0.00 (0.20) (0.19)
Net realized gain 0.00 (0.51) (0.69)
00.0 (0.71) (0.88)
Net asset value:
end of period $ 14.92 $ 13.36 $ 14.68
Net assets
end of period ('000s) $46,065 $34,829 $21,651
Aggregate return on share
outstanding during entire period 11.63% (4.19)% 13.39%
Significant Ratios:
Portfolio turnover 126.16%* 84.78% 88.23%
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50%
Ratio of net investment income
to average net assets 1.78%* 1.53% 1.39%
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 21.72* (4.49)% 11.50%
</TABLE>
+ Effective Date of Registration Statement under the Securities Act of 1933.
*Annualized.
8
<PAGE>
Common Stock Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/92 12/31/91 12/31/90
<S> <C> <C> <C>
Net asset value
beginning of period $13.33 $10.48 $ 11.25
Income From Investment Operations:
Net investment income (loss) 0.18 0.21 0.32
Net realized and unrealized gain
(loss) on investments 0.61 2.94 (0.77)
Total from investment operations 0.79 3.15 (0.45)
Dividends:
Net investment income (0.18) (0.21) (0.32)
Net realized gain (0.21) (0.09) --
(0.39) (0.30) (.032)
Net asset value:
end of period $13.73 $13.33 $ 10.48
Net assets
end of period ('000s) $9,708 $5,480 $ 2,873
Aggregate return on share
outstanding during entire period 6.07% 30.18% (4.06)%
Significant Ratios:
Portfolio turnover 47.60% 53.01% 120.84%
Ratio of expenses to average
net assets 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets 1.51% 1.78% 3.06%
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 7.94% 25.41% (3.40)%
</TABLE>
+ Effective Date of Registration Statement under the Securities Act of 1933.
*Annualized.
9
<PAGE>
Common Stock Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/89 12/31/88 12/31/87+
<S> <C> <C> <C>
Net asset value
beginning of period $ 8.91 $8.36 $9.97
Income From Investment Operations:
Net investment income (loss) 0.36 0.28 0.15
Net realized and unrealized gain
(loss) on investments 2.34 0.56 (1.63)
Total from investment operations 2.70 0.84 (1.48)
Dividends:
Net investment income (0.36) (0.29) (0.13)
Net realized gain -- -- --
(0.36) (0.29) (0.13)
Net asset value:
end of period $ 11.25 $ 8.91 $ 8.36
Net assets
end of period ('000s) $ 2,140 $ 1,173 $ 942
Aggregate return on share
outstanding during entire period 30.66% 9.86% (14.98)%
Significant Ratios:
Portfolio turnover 120.92% 172.13% 54.87%
Ratio of expenses to average
net assets 0.50% 0.50% 0.50%*
Ratio of net investment income
to average net assets 3.48% 3.16% 2.28%*
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 23.77% 9.13% (24.73)%
</TABLE>
+ Effective Date of Registration Statement under the Securities Act of 1933.
*Annualized
10
<PAGE>
Real Estate Securities Fund
<TABLE>
<CAPTION>
Period Year Year
1/1/95- Ended Ended
6/30/95 12/31/94 12/31/93
<S> <C> <C> <C>
Net asset value
beginning of period $13.34 $14.07 $12.75
Income From Investment Operations:
Net investment income (loss) 0.32 0.55 0.47
Net realized and unrealized gain
(loss) on investments 0.46 (0.93) 2.38
Total from investment operations 0.78 (0.38) 2.85
Dividends:
Net investment income 0.00 (0.27) (0.47)
Net realized gain 0.00 (0.08) (1.06)
0.00 (0.35) (1.53)
Net asset value end of period $14.12 $ 13.34 $ 14.07
Net assets end of period ('000s) $44,613 $42,571 $24,106
Aggregate return on share
outstanding during entire period 5.85% (2.76)% 22.61%
Significant Ratios:
Portfolio turnover 30.20%* 35.60% 143.00%
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50%
Ratio of net investment income
to average net assets 4.99%* 4.26% 3.93%
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 11.88%* (4.48)% 15.23%
</TABLE>
+ Effective Date of Registration under the Securities Act of 1933.
* Annualized.
11
<PAGE>
Real Estate Securities Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/92 12/31/91 12/31/90
<S> <C> <C> <C>
Net asset value
beginning of period $10.92 $ 8.16 $ 9.24
Income From Investment Operations:
Net investment income (loss) 0.45 0.53 0.67
Net realized and unrealized gain
(loss) on investments 1.83 2.76 (1.09)
Total from investment operations 2.28 3.29 (0.42)
Dividends:
Net investment income (0.45) (0.53) (0.66)
Net realized gain -- -- --
(0.45) (0.53) (0.66)
Net asset value end of period $12.75 $10.92 $ 8.16
Net assets end of period ('000s) $7,273 $4,120 $2,771
Aggregate return on share
outstanding during entire period 21.29% 41.10% (4.53)%
Significant Ratios:
Portfolio turnover 70.71% 40.29% 24.37%
Ratio of expenses to average
net assets 0.50% 0.50% 0.50%
Ratio of net investment income
to average net assets 4.13% 5.40% 7.74%
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 20.29% 33.48% (4.73)%
</TABLE>
+ Effective Date of Registration under the Securities Act of 1933.
* Annualized.
12
<PAGE>
Real Estate Securities Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/89 12/31/88 12/31/87+
<S> <C> <C> <C>
Net asset value
beginning of period $ 9.12 $ 8.76 $10.02
Income From Investment Operations:
Net investment income (loss) 0.68 0.70 0.48
Net realized and unrealized gain
(loss) on investments 0.15 0.37 (1.30)
Total from investment operations 0.83 1.07 (0.82)
Dividends:
Net investment income (0.71) (0.71) (0.44)
Net realized gain -- -- --
(0.71) (0.71) (0.44)
Net asset value end of period $ 9.24 $ 9.12 $ 8.76
Net assets end of period ('000s) $2,875 $2,488 $2,007
Aggregate return on share
outstanding during entire period 9.23% 11.72% (8.42)%
Significant Ratios:
Portfolio turnover 15.09% 23.15% 10.27%
Ratio of expenses to average
net assets 0.50% 0.50% 0.50%*
Ratio of net investment income
to average net assets 7.29% 7.18% 7.34%*
Ratio of net investment income
and realized and unrealized
gain (loss) to average net assets 8.53% 10.52% (13.19)%
</TABLE>
+ Effective Date of Registration under the Securities Act of 1933.
* Annualized.
13
<PAGE>
Balanced Assets Fund
<TABLE>
<CAPTION>
Period Year Year Year
1/1/95- Ended Ended Ended
6/30/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 13.77 $ 15.18 $ 14.52 $ 14.51
Income From Investment Operations:
Net investment income (loss) 0.26 0.48 0.44 0.51
Net realized and unrealized gain (loss)
on investments 1.39 (1.11) 1.29 0.37
Total from investment operations 1.65 (0.63) 1.73 0.88
Dividends:
Net investment income 0.00 (0.48) (0.44) (0.51)
Net realized gain 0.00 (0.30) (0.63) (0.36)
Total dividends 0.00 (0.78) (1.07) (0.87)
Net asset value end of period $15.42 $ 13.77 $ 15.18 $ 14.52
Net assets end of period ('000s) $90,975 $74,737 $58,156 $27,733
Aggregate return on share outstanding
during entire period 11.92% (4.15)% 11.99% 6.21%
Significant Ratios:
Portfolio turnover 112.04%* 86.42% 96.62% 75.83%
Ratio of expenses to average net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 3.65%* 3.37% 3.08% 3.75%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 22.21%* (4.11)% 10.09% 6.99%
</TABLE>
* Annualized.
14
<PAGE>
Balanced Assets Fund (continued)
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/91 12/31/90 12/31/89 12/31/88
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 12.35 $ 12.87 $ 11.22 $11.09
Income From Investment Operations:
Net investment income (loss) 0.60 0.69 0.75 0.61
Net realized and unrealized gain (loss)
on investments 2.22 (0.50) (1.61) 0.22
Total from investment operations 2.82 0.19 2.36 0.83
Dividends:
Net investment income (0.60) (0.71) (0.71) (0.67)
Net realized gain (0.06) -- -- (0.03)
Total dividends (0.66) (0.71) (0.71) (0.70)
Net asset value end of period $ 14.51 $ 12.35 $ 12.87 $11.22
Net assets end of period ('000s) $18,515 $12,733 $10,412 $8,004
Aggregate return on share outstanding
during entire period 23.36% 1.62% 21.33% 7.61%
Significant Ratios:
Portfolio turnover 41.95% 116.03% 131.31% 132.32%
Ratio of expenses to average net assets 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 4.52% 5.71% 6.06% 5.42%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 20.84% 2.04% 18.69% 7.40%
</TABLE>
* Annualized.
15
<PAGE>
Balanced Assets Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/87 12/31/86 12/31/85
<S> <C> <C> <C>
Net asset value beginning of period $14.11 $12.85 $11.57
Income From Investment Operations:
Net investment income (loss) 0.56 0.68 0.79
Net realized and unrealized gain (loss)
on investments (0.28) 1.49 1.95
Total from investment operations 0.28 2.17 2.74
Dividends:
Net investment income (0.67) (0.66) (1.13)
Net realized gain (2.63) (0.25) (0.33)
Total dividends (3.30) (0.91) (1.46)
Net asset value end of period $11.09 $14.11 $12.85
Net assets end of period ('000s) $7,872 $5,285 $4,435
Aggregate return on share outstanding
during entire period (1.77)% 17.35% 27.30%
Significant Ratios:
Portfolio turnover 127.46% 81.42% 36.46%
Ratio of expenses to average net assets 0.50% 0.20% 0.20%
Ratio of net investment income to
average net assets 3.60% 4.83% 6.73%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (5.59)% 15.18% 24.70%
</TABLE>
* Annualized.
16
<PAGE>
Capital Growth Bond Fund
<TABLE>
<CAPTION>
Period Year Year Year
1/1/95- Ended Ended Ended
6/30/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 10.10 $ 11.33 $ 11.12 $11.47
Income From Investment Operations:
Net investment income (loss) 0.35 0.72 0.65 0.77
Net realized and unrealized gain (loss)
on investments 0.91 (1.22) 0.51 (0.11)
Total from investment operations 1.26 (0.50) 1.16 0.66
Dividends:
Net investment income 0.00 (0.72) (0.65) (0.78)
Net realized gain 0.00 (0.01) (0.30) (0.23)
Total dividends (0.00) (0.73) (0.95) (1.01)
Net asset value end of period $ 11.36 $ 10.10 $ 11.33 $11.12
Net assets end of period ('000s) $40,226 $33,618 $41,183 $30,695
Aggregate return on share outstanding
during entire period 12.50% (4.49)% 10.56% 5.89%
Significant Ratios:
Portfolio turnover 86.30%* 79.04% 94.75% 153.05%
Ratio of expenses to average net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 6.48%* 6.29% 5.69% 6.76%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 23.30%* (5.23)% 9.28% 5.78%
</TABLE>
* Annualized.
17
<PAGE>
Capital Growth Bond Fund (continued)
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/91 12/31/90 12/31/89 12/31/88
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 10.62 $ 10.82 $ 10.32 $10.53
Income From Investment Operations:
Net investment income (loss) 0.83 0.88 0.90 0.92
Net realized and unrealized gain (loss)
on investments 0.85 (0.21) 0.50 (0.17)
Total from investment operations 1.68 (0.67) 1.40 0.75
Dividends:
Net investment income (0.83) (0.87) (0.90) (0.93)
Net realized gain -- -- -- (0.03)
Total dividends (0.83) (0.87) (0.90) (0.96)
Net asset value end of period $ 11.47 $ 10.62 $ 10.82 $10.32
Net assets end of period ('000s) $29,326 $24,818 $22,768 $19,722
Aggregate return on share outstanding
during entire period 16.38% 6.58% 13.88% 7.14%
Significant Ratios:
Portfolio turnover 19.60% 40.73% 68.61% 29.36%
Ratio of expenses to average net assets 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 7.54% 8.25% 8.34% 8.48%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 15.35% 6.51% 12.83% 6.88%
</TABLE>
* Annualized.
18
<PAGE>
Capital Growth Bond Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/87 12/31/86 12/31/85
<S> <C> <C> <C>
Net asset value beginning of period $13.09 $12.62 $11.53
Income From Investment Operations:
Net investment income (loss) 0.99 1.04 1.15
Net realized and unrealized gain (loss)
on investments (1.12) 1.46 1.48
Total from investment operations (0.13) 2.50 2.63
Dividends:
Net investment income (1.20) (1.03) (1.53)
Net realized gain (1.23) (1.00) (0.01)
Total dividends (2.43) (2.03) (1.54)
Net asset value end of period $10.53 $13.09 $12.62
Net assets end of period ('000s) $18,095 $17,674 $14,481
Aggregate return on share outstanding
during entire period (1.69)% 22.37% 26.13%
Significant Ratios:
Portfolio turnover 55.80% 42.57% 286.36%
Ratio of expenses to average net assets 0.50% 0.20% 0.20%
Ratio of net investment income to
average net assets 8.13% 8.10% 9.96%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (1.68)% 19.72% 23.91%
</TABLE>
* Annualized.
19
<PAGE>
Money-Market Fund
<TABLE>
<CAPTION>
Period Year Year Year
1/1/95- Ended Ended Ended
6/30/95 12/31/94 12/31/93 12/31/92
<S> <C> <C> <C> <C>
Net asset value beginning of period $10.26 $ 10.23 $ 10.22 $ 10.21
Income From Investment Operations:
Net investment income (loss) 0.29 0.39 0.27 0.34
Net realized and unrealized gain
(loss) on investments -- -- -- --
Total from investment operations 0.29 0.39 0.27 0.34
Dividends:
Net investment income 0.00 (0.36) (0.26) (0.33)
Net realized gain 0.00 -- -- --
Total dividends 0.00 (0.36) (0.26) (0.33)
Net asset value end of period $ 10.55 $ 10.26 $ 10.23 $ 10.22
Net assets end of period ('000s) $33,330 $24,384 $13,860 $10,825
Aggregate return on share outstanding
during entire period 2.84%* 3.89% 2.73% 3.40%
Significant Ratios:
Portfolio turnover None None None None
Ratio of expenses to average net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 5.44%* 3.84% 2.67% 3.25%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 5.44%* 3.84% 2.67% 3.25%
</TABLE>
* Annualized.
20
<PAGE>
Money-Market Fund (continued)
<TABLE>
<CAPTION>
Year Year Year Year
Ended Ended Ended Ended
12/31/91 12/31/90 12/31/89 12/31/88
<S> <C> <C> <C> <C>
Net asset value beginning of period $ 10.21 $10.16 $10.15 $10.02
Income From Investment Operations:
Net investment income (loss) 0.57 0.78 0.88 0.89
Net realized and unrealized gain
(loss) on investments -- -- -- --
Total from investment operations 0.57 0.78 0.88 0.89
Dividends:
Net investment income (0.57) (0.73) (0.87) (0.76)
Net realized gain -- -- -- --
Total dividends (0.57) (0.73) (0.87) (0.76)
Net asset value end of period $10.21 $10.21 $10.16 $10.15
Net assets end of period ('000s) $8,615 $8,606 $6,037 $5,259
Aggregate return on share outstanding
during entire period 5.60% 7.82% 8.88% 7.06%
Significant Ratios:
Portfolio turnover None None None None
Ratio of expenses to average net assets 0.50% 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 5.45% 7.41% 8.43% 6.94%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 5.45% 7.41% 8.43% 6.94%
</TABLE>
* Annualized
21
<PAGE>
Money-Market Fund (continued)
<TABLE>
<CAPTION>
Year Year Year
Ended Ended Ended
12/31/87 12/31/86 12/31/85
<S> <C> <C> <C>
Net asset value beginning of period $10.14 $10.19 $10.62
Income From Investment Operations:
Net investment income (loss) 0.58 0.60 0.71
Net realized and unrealized gain
(loss) on investments -- -- --
Total from investment operations 0.58 0.60 0.71
Dividends:
Net investment income (0.70) (0.65) (1.14)
Net realized gain -- -- --
Total dividends (0.70) (0.65) (1.14)
Net asset value end of period $10.02 $10.14 $10.19
Net assets end of period ('000s) $1,545 $1,198 $1,134
Aggregate return on share outstanding
during entire period 5.67% 6.07% 7.13%
Significant Ratios:
Portfolio turnover None None None
Ratio of expenses to average net assets 0.50% 0.20% 0.20%
Ratio of net investment income to
average net assets 5.50% 5.89% 6.89%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 5.50% 5.89% 6.89%
</TABLE>
* Annualized.
22
<PAGE>
International Fund
<TABLE>
<CAPTION>
<S> <C> <C>
Period 1/1/95- Period 10/04/94-
6/30/95 12/31/94+
Net asset value beginning of period $ 9.82 $ 10.00
Income From Investment Operations:
Net investment income (loss) 0.08 0.02
Net realized and unrealized gain
(loss) on investments 0.21 (0.18)
Total from investment operations 0.29 (0.16)
Dividends:
Net investment income 0.00 (0.02)
Net realized gain 0.00 0.00
0.00 (0.02)
Net asset value end of period $ 10.11 $ 9.28
Net assets end of period ('000s) $15,139 $11,290
Aggregate return on share outstanding
during entire period 2.96% (1.54%)
Significant Ratios:
Portfolio turnover 41.88%* 0.00%*
Ratio of expenses to average net assets 1.35%* 1.35%*
Ratio of net investment income to average net assets 1.76%* 1.31%*
Ratio of net investment income and realized
and unrealized gain (loss) to average net assets 6.40%* (6.28)%*
</TABLE>
+Inception date October 4, 1994.
*Annualized
23
<PAGE>
Pacific Rim
Emerging Markets Fund
<TABLE>
<CAPTION>
<S> <C> <C>
Period 1/1/95- Period 10/04/94-
6/30/95 12/31/94+
Net asset value beginning of period $ 9.41 $10.00
Income From Investment Operations:
Net investment income (loss) 0.06 0.04
Net realized and unrealized gain
(loss) on investments 0.22 (0.59)
Total from investment operations 0.28 (0.55)
Dividends:
Net investment income 0.00 (0.04)
Net realized gain 0.00 0.00
0.00 (0.04)
Net asset value end of period $ 9.69 $ 9.41
Net assets end of period ('000s) $10,259 $7,657
Aggregate return on share outstanding
during entire period 3.03%* (5.63)%
Significant Ratios:
Portfolio turnover 34.90%* 0.00%*
Ratio of expenses to average net assets 1.50%* 1.50%*
Ratio of net investment income to average net assets 1.48%* 1.84%*
Ratio of net investment income and realized
and unrealized gain (loss) to average net assets 7.31%* (23.41)%*
</TABLE>
+ Inception date October 4, 1994.
* Annualized.
24
<PAGE>
Investment Objectives, Policies And Risks
Each Fund has a different investment objective which it
pursues through separate investment policies as described
below. The differences in objectives and policies among the
Funds can be expected to affect the return of each Fund and
the degree of market and financial risk to which each Fund is
subject.
The investment objective of each Fund discussed below is a
fundamental policy of that Fund and may not be changed without
the approval of the holders of a majority of the outstanding
shares of such Fund. The policies by which a Fund seeks to
achieve its investment objective, however, are not fundamental
and may be changed by the Board of Directors of the Company
without the approval of the shareholders. There can be no
assurance that the investment objective of any Fund will be
achieved. The Funds are subject to varying degrees of
financial and market risk. Financial risk refers to the
ability of an issuer of a debt security to pay principal and
interest on such security and to the earnings stability and
overall financial soundness of an issuer of an equity
security; market risk refers to the volatility of the reaction
of the price of a security to changes in conditions in the
securities markets in general and, with particular reference
to debt securities, changes in the overall level of interest
rates.
Emerging Growth Equity Fund
The investment objective of the Emerging Growth Equity Fund is
to achieve growth of capital by investing primarily in equity
securities of companies believed to offer growth potential
over both the intermediate and the long term. Current income
is not a significant consideration.
In pursuit of its objective, the Emerging Growth Equity Fund
will invest primarily in common stocks or in securities
convertible into or carrying rights or warrants to purchase
common stock or to participate in earnings. The Fund will not
purchase independent warrants if they are not publicly traded
and if any such purchase would cause more than 2% of the value
of its total assets to be invested in such warrants. In
selecting investments, emphasis will be placed on securities
of progressive companies with aggressive and competent
managements. A substantial portion of the Fund's assets may
be invested in emerging growth companies, which at the time of
the Fund's investment may be paying no dividends to their
shareholders. Emerging growth companies are companies
believed by management to have above-average prospects for
25
<PAGE>
growth as a result of their providing products or services in
emerging industries or sub-industries.
Investments will be made primarily in securities listed on
national securities exchanges, but the Fund may purchase
securities traded in the U.S. over-the-counter market. When,
in the opinion of management, market or economic conditions
warrant a defensive posture, the Fund may place all or a
portion of its assets in fixed-income securities. The Fund
may also maintain a portion of its assets in cash or
short-term debt securities pending selection of particular
long-term investments. The Fund may purchase securities on a
forward-commitment, when-issued or delayed-delivery basis.
For a discussion of these securities, please see the Statement
of Additional Information.
Emerging growth companies may have limited product lines,
market or financial resources, or they may be dependent upon a
small management group. An investment in the Emerging Growth
Equity Fund may therefore involve greater financial risk than
is customarily associated with less aggressive companies. In
addition, the Fund may be subject to relatively high levels of
market risk. The securities of aggressive growth companies
may be subject to more abrupt or erratic market movements than
other companies or the market averages in general. Because
shares of the Emerging Growth Equity Fund may experience
above-average fluctuations in net asset value, they should be
considered as long-term investments.
Balanced Assets Fund
The investment objective of the Balanced Assets Fund is to
achieve intermediate and long-term growth through capital
appreciation and income by investing in both debt and equity
securities.
In pursuit of its objective, the Balanced Assets Fund will
invest in common stocks, preferred stocks or bonds (which may
or may not be convertible into or carry rights to purchase
common stock or to participate in earnings) and other
long-term and short-term debt securities. Common stocks will
be held for possible growth of capital as well as for income,
while preferred stocks and debt securities will be held for
income and possible capital appreciation as a result of a
decline in the level of prevailing interest rates. The Fund
will maintain at all times a balance between debt securities
or preferred stocks, on the one hand, and common stocks, on
the other. At least 25% of the Fund's assets will be invested
in each of the two basic categories. Investments will be made
primarily in securities listed on national securities
exchanges, but the Fund may purchase securities traded in the
26
<PAGE>
U.S. over-the-counter market. The Fund may also maintain a
portion of its assets in cash or short-term debt securities
pending selection of particular long-term investments. The
Fund may purchase securities on a forward-commitment,
when-issued or delayed-delivery basis. For a discussion of
these securities, please see the Statement of Additional
Information. See the Capital Growth Bond Fund, below, for a
description of the type of debt securities in which the Fund
may invest.
Investment in shares of the Balanced Assets Fund should
involve less financial and market risk than an investment in
the Emerging Growth Equity Fund.
Capital Growth Bond Fund
The investment objective of the Capital Growth Bond Fund is to
achieve growth of capital by investing in medium-grade or
better debt securities, with income as a secondary
consideration.
The Capital Growth Bond Fund differs from most "bond" funds in
that its primary objective is capital appreciation, not
income. Opportunities for capital appreciation will usually
exist only when the levels of prevailing interest rates are
falling. During periods when the Manager expects interest
rates to decline, the Fund will invest primarily in
intermediate-term and long-term corporate and government debt
securities. However, during periods when the Manager expects
interest rates to rise or believes that market or economic
conditions otherwise warrant such action, the Fund may invest
substantially all of its assets in short-term debt securities
to preserve capital and maintain income. The Fund may also
maintain a portion of its assets temporarily in cash or
short-term debt securities pending selection of particular
long-term investments.
The Capital Growth Bond Fund will be carefully positioned in
relation to the term of debt obligations and the anticipated
movement of interest rates. It is contemplated that at least
75% of the value of the Fund's total investment in corporate
debt securities, excluding commercial paper, will be
represented by debt securities 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 or
Baa), Standard & Poor's Corporation (AAA, AA, A or BBB), or
Fitch's Investors Service (AAA, AA, A or BBB) and debt
securities of banks and other issuers which, although not
rated as a matter of policy by either Moody's Investors
Service, Inc. ("Moody's"), Standard & Poor's Corporation
("Standard & Poor's"), or Fitch's Investors Service
27
<PAGE>
("Fitch's"), are considered by the Manager to have investment
quality comparable to securities receiving ratings within such
four highest grades. Although the Fund does not intend to
acquire or hold debt securities of below investment-grade
quality, policyowners should note that even bonds of the
lowest categories of investment-grade quality may have
speculative characteristics, and changes in economic
conditions or other circumstances are more likely to lead to a
weakened capacity to make principal and interest payments than
is the case with higher-grade bonds. It should be further
noted that should an obligation in the Fund's portfolio drop
below investment grade, the Fund will make every effort to
dispose of it promptly so long as to do so would not be
detrimental to the Fund. Government obligations in which the
Capital Growth Bond Fund may invest will be limited to those
issued or guaranteed as to principal or interest by the United
States Government or its agencies or instrumentalities or by
the Government of Canada or any Canadian Crown agency. Any
Canadian obligation acquired by the Fund will be payable in
U.S. dollars. The Fund may purchase securities on a
forward-commitment, when-issued or delayed-delivery basis.
For a discussion of these securities, please see the Statement
of Additional Information.
The Capital Growth Bond Fund may purchase corporate debt
securities which carry certain equity features, such as
conversion or exchange rights or warrants for the acquisition
of stock of the same or a different issuer or participations
based on revenues, sales, or profits. The Fund will not
exercise any such conversion, exchange or purchase rights if,
at the time, the value of all equity interests so owned would
exceed 10% of the value of the Fund's total assets.
Because of the Fund's emphasis on medium-grade or better
instruments, an investment in the Capital Growth Bond Fund
should result in less financial risk than an investment in the
Emerging Growth Equity Fund or Balanced Assets Fund. However,
the Capital Growth Bond Fund will be subject to substantial
market risk arising from changes in the level of prevailing
interest rates and the Fund's active management in
anticipation of such changes.
Money-Market Fund
The investment objective of the Money-Market Fund is to
provide maximum current income consistent with capital
preservation and liquidity by investing in a portfolio of
high-quality money market instruments.
In pursuit of its objective, the Money-Market Fund may invest
in:
28
<PAGE>
(1) obligations issued or guaranteed as to principal or
interest by the United States Government, or any agency or
authority controlled or supervised by and acting as an
instrumentality of the U.S. Government pursuant to authority
granted by Congress, or issued or guaranteed as to principal
or interest by the Government of Canada or any Canadian Crown
agency (any Canadian obligation acquired by the Fund will be
payable in U.S. dollars);
(2) obligations (including negotiable certificates of
deposit) of U.S. banks and savings and loan associations which
at the date of the investment have capital, surplus and
undivided profits (as of the date of their most recently
published financial statements) in excess of $100,000,000 and
foreign branches of U.S. banks if such banks meet the stated
qualifications;
(3) commercial paper which at the date of the investment is
rated (or guaranteed by a company whose commercial paper is
rated) A-1 by Standard & Poor's, P-1 by Moody's, or F-1 by
Fitch's, or, if not rated, is issued by a company which at the
date of the investment has an outstanding short-term debt
issue that is so rated or which is determined by management,
pursuant to guidelines adopted and reviewed by the Fund's
Board of Directors, to be of comparable quality to securities
that are so rated;
(4) corporate obligations maturing in one year or less which
at the date of investment are rated AA or higher by Standard &
Poor's, Fitch's or Moody's or either (a) are issued by a
company with outstanding short- term debt securities rated A-1
by Standard & Poor's, P-1 by Moody's, or F-1 by Fitch's or
(b) are determined by management, pursuant to guidelines
established and reviewed by the Fund's Board of Directors, to
be of comparable quality to securities that are so rated; and
(5) repurchase agreements with respect to any of the
foregoing obligations.
More complete descriptions of the money market instruments in
which the Fund may invest and the debt security ratings used
by the Fund are set forth in the Statement of Additional
Information.
All of the Money-Market Fund's investments will mature in
13 months or less and the portfolio will maintain a
dollar-weighted average portfolio maturity of less than
90 days. By limiting the maturity of its investments, the
Fund seeks to lessen the changes in the value of its assets
caused by fluctuations in short-term interest rates. All of
the Money-Market Fund's investments will be ones whose issuers
are determined to present minimal credit risks. The Fund may
29
<PAGE>
purchase securities on a forward-commitment, when-issued or
delayed-delivery basis. For a discussion of these securities,
please see the Statement of Additional Information.
Investment in shares of the Money-Market Fund should involve
less market or financial risk than an investment in any other
Fund. However, the Fund's performance will vary with changes
in short-term interest rates.
Common Stock Fund
The investment objective of the Common Stock Fund is to
achieve intermediate and long-term growth through capital
appreciation and current income by investing in common stocks
and other equity securities of well established companies with
promising prospects for providing an above average rate of
return.
In pursuit of its objective, the Common Stock Fund will invest
principally in common stocks or in securities convertible into
common stocks or carrying rights or warrants to purchase
common stock or to participate in earnings. In selecting
investments, emphasis will be placed on companies with good
financial resources, strong balance sheet, satisfactory rate
of return on capital, good industry position, superior
management skills, and earnings that tend to grow
consistently. The Fund's investments are not limited to any
particular type or size of company, but high-quality growth
stocks are emphasized.
Investments will be made primarily in securities listed on
national securities exchanges, but the Fund may purchase
securities traded in the United States over-the-counter
market. When, in the opinion of management, market or
economic conditions warrant a defensive posture, the Fund may
place all or a portion of its assets in fixed-income
securities. The Fund may also maintain a portion of its
assets in cash or short-term debt securities pending selection
of particular long-term investments. The Fund may purchase
securities on a forward-commitment, when-issued or
delayed-delivery basis. For a discussion of these securities,
please see the Statement of Additional Information.
Investment in shares of the Common Stock Fund should involve
less financial and market risk than the Emerging Growth Equity
Fund, but the Fund may occasionally experience above-average
fluctuations in net asset value, and therefore should be
considered as a long-term investment.
30
<PAGE>
Real Estate Securities Fund
The investment objective of the Real Estate Securities Fund is
to achieve a combination of long-term capital appreciation and
satisfactory current income by investing in real estate
related equity and debt securities.
In pursuit of its objective, the Real Estate Securities Fund
will invest principally in real estate investment trust equity
and debt securities and other securities issued by companies
which invest in real estate or interests therein.
The Fund may also purchase the common stocks, preferred
stocks, convertible securities and bonds of companies
operating in industry groups relating to the real estate
industry. This would include companies engaged in the
development of real estate, building and construction, and
other market segments related to real estate. The Fund will
not invest directly in real property nor will it purchase
mortgage notes directly.
Under normal circumstances, at least 65% of the value of the
Fund's total assets will be invested in real estate related
equity and debt securities. When, in the opinion of
management, market or economic conditions warrant a defensive
posture, the Fund may place all or a portion of its assets in
fixed-income securities which may or may not be real estate
debt related securities. The Fund may also maintain a portion
of its assets in cash or short-term debt securities pending
selection of particular long-term investments. The Fund may
purchase securities on a forward-commitment, when-issued or
delayed-delivery basis. For a discussion of these securities,
please see the Statement of Additional Information.
Because the Fund considers current income in its investment
objectives, an investment in the Real Estate Securities Fund
should involve less financial and market risk than the
Emerging Growth Equity Fund. However, the Fund's share value
may experience above-average fluctuation in periods of
changing interest rates and therefore the shares should be
considered as long-term investments.
International Fund And
Pacific Rim Emerging Markets Fund
The investment objective of both the International Fund and
the Pacific Rim Emerging Markets Fund is to achieve long-term
growth of capital. The Funds will attempt to achieve their
respective investment objectives by investing in a diversified
portfolio that is comprised primarily of common stocks and
equity-related securities of corporations domiciled in
31
<PAGE>
countries other than the United States and Canada. Current
income from dividends and interest will not be an important
consideration in the selection of portfolio securities.
Investment Policy. In pursuit of their respective investment
objectives, the International Fund and the Pacific Rim
Emerging Markets Fund will vary the geographical distribution
of their investments based upon the continuous evaluation of
political, economic and market trends throughout the world.
Investments will be shifted among the world's capital markets
in accordance with the ongoing analyses of trends and
developments affecting such markets and securities. Although
the International Fund has no limits on geographical
distribution other than the United States and Canada, it is
expected to invest primarily in companies domiciled in western
European countries, Australia, the Far East, Mexico and South
America. The Pacific Rim Emerging Markets Fund will invest
primarily in companies domiciled in potentially all countries
of the Pacific Rim region. For purposes of this Fund, the
countries of the Pacific Rim region are India, Pakistan,
Japan, Hong Kong, Singapore, Malaysia, Thailand, Indonesia,
Australia, South Korea, Taiwan, Philippines, New Zealand and
China.
Investment in foreign countries often requires approval by the
specific country involved. As a result, although the
International Fund and Pacific Rim Emerging Markets Fund
intend to invest as above, not all countries may be available
initially.
The International Fund and the Pacific Rim Emerging Markets
Fund will, under normal conditions, invest at least 65% of
their net assets in common stocks and equity-related
securities of established larger-capitalization
non-U.S. companies that have attractive long-term prospects
for growth of capital. Equity-related securities in which the
Funds may invest include: preferred stocks, warrants and
securities convertible into or exchangeable into common
stocks.
A Fund will invest in the securities of issuers domiciled or
primarily traded in at least five foreign countries if the
Fund has invested at least 80% of its net assets in foreign
issuers. If the Fund has less than 20% of its net assets in
foreign issuers, then all of such investment may be in issuers
domiciled or primarily traded in one country. If the Fund has
at least 20% but less than 40% of its net assets in foreign
issuers, then such investment must be allocated to issuers
domiciled or primarily traded in at least two foreign
countries. Similarly, if the Fund has at least 40% but less
than 60% of its net assets invested in foreign issuers, such
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<PAGE>
investment must be allocated to at least three foreign
countries. Foreign investments must be allocated to at least
four foreign countries if such investments comprise at least
60% but less than 80% of the Fund's net assets. A Fund will
not invest more than 20% of its net assets in securities of
issuers domiciled or primarily traded in any one country,
except that a Fund may invest up to 35% of its net assets in
issuers domiciled or primarily traded in any one of the
following countries: Australia, France, Japan, the United
Kingdom, or Germany.
The Funds may, for defensive purposes, invest all or a portion
of their assets in non-convertible fixed income securities
denominated in U.S. and non-U.S. dollars. These
non-convertible fixed income securities will include debt of
corporations, foreign governments and supranational
organizations. The Funds may also maintain a portion of their
assets in cash or short term debt securities pending the
selection of certain long-term investments.
The International Fund and the Pacific Rim Emerging Markets
Fund may also purchase and sell the following equity-related
financial instruments:
-- exchange-listed call and put options on equity indices.
-- over-the-counter ("OTC") and exchange-listed equity index
futures.
In order to assist in the foreign currency risk management of
the International Fund and the Pacific Rim Emerging Markets
Fund, the following foreign currency related financial
instruments may also be purchased and sold:
-- OTC and exchange-listed call and put options on various
currencies in the portfolio.
-- OTC foreign currency futures contracts on various
currencies in the portfolio.
Please see Investment Techniques Of The International Fund And
Pacific Rim Emerging Markets Fund--"Options," "Futures," and
"Risk Factors In Options And Futures."
Subject to regulatory approval, the Company will offer an
Equity Index Fund. The investment objectives, policies and
risks of the Equity Index Fund are set forth below.
33
<PAGE>
<REDLINE>
Equity Index Fund
The investment objective of the Equity Index Fund is to
achieve investment results which approximate the total return
of publicly traded common stocks in the aggregate, as
represented by the Standard & Poor s 500 Composite Stock Price
Index (the Index ).
Investment Policy. The Equity Index Fund will seek to achieve
its objective by attempting to replicate the aggregate total
return of the Index. The Fund is designed to provide an
economical and convenient means of maintaining a widely
diversified investment in the United States equity market as
part of an overall investment strategy. The Fund uses the
Index as its standard performance comparison because it
represents more than 70 % of the total market value of all
publicly traded common stocks in the United States and is
widely viewed among investors as representative of the
performance of publicly traded common stocks in the United
States.
The Index is composed of 500 selected common stocks, over 95 %
of which are listed on the New York Stock Exchange. The Index
is an unmanaged index of common stock prices. The performance
of the Index is based on changes in the prices of stocks
comprising the Index and assumes the reinvestment of all
dividends paid on such stocks. Taxes, brokerage, commissions
and other fees are disregarded in computing the level of the
Index. Standard & Poor s selects the stocks to be included in
the Index on a proprietary basis but does incorporate such
factors as the market capitalization and trading activity of
each stock and its adequacy as representative of stocks in a
particular industry group. Stocks in the Index are weighted
according to their market capitalization (i.e., the number of
shares outstanding multiplied by the stock s current price).
Inclusion of a stock in the Index does not imply an opinion by
Standard & Poor s as to its attractiveness as an investment,
nor is Standard & Poor s a sponsor or in any way affiliated
with the Fund. Standard & Poor s (R) , S&P 500 (R) , S&P
(R) , Standard & Poor s 500 (R) and 500 are trademarks of
McGraw-Hill, Inc.
The Index fluctuates in value with changes in the market value
of the 500 stocks included in the Index at any point in time.
An investment in the Fund involves risks similar to the risks
of investing directly in the stocks included in the Index.
The Adviser will not attempt to manage the Fund in the
traditional portfolio management sense which generally
involves the buying and selling of securities based upon
investment analysis of economic, financial and market factors.
34
<PAGE>
Instead, the Fund, utilizing a passive or indexing
investment approach attempts to duplicate the performance of
the Index. The adverse financial situation of a company will
not directly result in its elimination from the Fund s
portfolio unless, of course, the company in question is
removed from the Index. Conversely, the projected superior
financial performance of a company would not normally lead to
an increase in the Fund s holdings of the company.
Under normal circumstances, the net assets of the Fund will be
invested in any combination of the following investments: 1)
representative common stocks, and 2) Standard & Poor s 500
Futures Contracts (see Investment Techniques of The Equity
Index Fund - S&P 500 Futures Contracts ).
With regard to the portion of the Fund that can be invested in
common stocks, the method used to select investments for the
Fund involves investing in common stocks in approximately the
order of their respective market value weightings in the
Index, beginning with those having the highest weightings. For
diversification purposes, the Fund can purchase stocks with
smaller weightings in order to represent other sectors of the
Index. The Fund will invest only in those stocks, and in such
amounts, as its Adviser deems necessary and appropriate in
order for the Fund to approximate the performance of the
Index. There is no minimum or maximum number of stocks
included in the Index which the Fund must hold. Under normal
circumstances, it is expected that the portion of the Fund
invested in the stock market would hold between 300 and 500
different stocks included in the Index. The Fund may
compensate for the omission of a stock that is included in the
Index, or for purchasing stocks in other than the same
proportion that they are represented in the Index, by
purchasing stocks that are believed to have characteristics
that correspond to those of the omitted stocks. The Fund may
invest in short-term debt securities to maintain liquidity or
pending investment in stocks or Standard & Poor s Stock Index
Futures Contracts (S&P 500 Futures Contracts).
Tracking error is measured by the difference between the total
return for the Index and the total return for the Fund after
deductions of fees and expenses. All tracking error deviations
are reviewed to determine the effectiveness of investment
policies and techniques. Tracking error is reviewed at least
weekly and more frequently if such a review is indicated by
significant cash balance changes, market conditions or changes
in the composition of the Index. If deviation accuracy is not
maintained, the Fund will rebalance its composition by
selecting securities which, in the opinion of the Adviser,
will provide a more representative sampling of the
capitalization of the securities in the Index as a whole or a
more representative sampling of the sector diversification in
35
<PAGE>
the Index.
</REDLINE>
Investment Techniques Of The International Fund
And Pacific Rim Emerging Markets Fund
Options. The Funds will not write uncovered OTC or
exchange-listed put or call options on specific equities,
equity or market indices, or foreign currency. The Funds will
also not enter into interest rate or foreign currency swaps,
caps, collars or floors.
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase put and call options on various equity
indices and sell put or call options they have previously
purchased. An option is a contract that gives the holder the
right to purchase (in the case of a call) or the right to sell
(in the case of a put) a specified amount of an underlying
security at a fixed price upon the exercise of the option. In
the case of equity index options, exercises are settled
through the payment of cash rather than the delivery of a
security.
The purchase of put and call options on various equity indices
is done in order to hedge against changes in stock prices
which may adversely affect the prices of securities that the
portfolio wants to purchase at a later date, to hedge its
existing investments against a decline in value, or to attempt
to reduce the risk of missing a market or industry segment
advance.
An equity index is a method of reflecting in a single number
the market value of an agreed-upon basket of different stocks.
The index may be designed to be representative of the stock
market as a whole or of a particular broad market sector or
industry. The most common equity indices are value-weighted
indices that reflect the aggregate market value of many
different companies by taking into account prices of the
component stocks and the number of shares outstanding for each
respective company included in the index.
The premium paid for a put or call option, plus any
transaction costs, will reduce the benefit, if any, realized
by the Fund upon exercise or liquidation of the option. The
option may expire without value to the Fund unless the price
of the underlying equity index changes in an amount in excess
of the premium paid to purchase the option.
Equity index options acquired by the Fund will be traded on
locally recognized exchanges. Options traded in the OTC
market may not be as actively traded as those on an exchange
and may be considered as illiquid securities. It may also be
36
<PAGE>
more difficult to value such options.
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase and sell put and call options on foreign
currencies for the purpose of protecting against declines in
the dollar value of portfolio securities and against increases
in the dollar cost of securities to be acquired. Such
investment strategies will be used as a hedge and not for
speculation. The purchase of put or call options on foreign
currencies may constitute an effective hedge against
fluctuations in exchange rates although in the case of foreign
exchange rate movements adverse to the Fund's position, it may
forfeit the entire amount of premium paid plus related
transaction costs. Foreign currency options acquired by the
Funds may be traded on either locally recognized exchanges or
the OTC market. As in the case of equity index options,
foreign currency options traded in the OTC market may not be
as actively traded as those on an exchange and may be
considered as illiquid securities.
Futures. The International Fund and the Pacific Rim Emerging
Markets Fund may purchase and sell equity index futures
contracts in order to hedge the equity portion of their assets
or equity assets they intend to acquire, with regard to market
risk as distinguished from stock-specific risk. The equity
index futures contracts purchased by the Funds will be both
OTC and locally-recognized-exchange-traded. As in the case of
OTC-traded options, OTC-traded futures may not be as actively
traded as those on an exchange and may be considered as
illiquid. It may also be more difficult to value such
futures.
Foreign Currency Futures Contracts. The International Fund
and the Pacific Rim Emerging Markets Fund may enter into
contracts for the purchase or sale of a specific currency at
an agreed-upon future date and price set at the time of the
contract.
The Funds will enter into foreign currency futures contracts
for hedging purposes, only with the purpose of protecting the
U.S. dollar equivalent of securities in the Fund that are
denominated in non-U.S. dollars.
Proper use of foreign currency futures contracts will protect
the Funds against a loss arising from an adverse change in the
relationship between the U.S. dollar and the particular
foreign currency for the period of time from when the foreign
currency futures contract is purchased or sold and the date on
which payment is made or received on the underlying foreign
currency.
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<PAGE>
Foreign currency futures contracts are traded in the
inter-bank market and carry much the same risks as noted above
for OTC-traded futures and options.
Risk Factors In Futures And Options. The purchase and sale of
futures and options expose the International Fund and the
Pacific Rim Emerging Markets Fund to risks that are not
present in the other Funds.
To the extent that hedging is effective, it will protect the
value of the securities or currencies which are hedged but
will accordingly diminish the potential for gain should the
unhedged currency or security position move in a favorable
direction. There is the potential for a hedging transaction
using futures and options to create a loss as a result of
imperfect correlation of price movements between the hedging
vehicle and the hedged item(s). The risks of option trading
include possible loss of the entire premium paid for the
option or the inability to effect closing transactions at
favorable prices. The risks of trading futures contracts also
include the risks of inability to effect closing transactions
or to do so at favorable prices; consequently, losses from
investing in futures contracts are potentially unlimited.
Risk Factors
Investors should recognize that investing in foreign
securities involves special risk considerations, including
those that are listed below, which are not typically
associated with investing in U.S. securities.
Investment in the International Fund and the Pacific Rim
Emerging Markets Fund will involve foreign currency risk
because the offering price of their shares will be stated in
U.S. dollars while it is anticipated that the overwhelming
majority of their assets will be priced and quoted in other
currencies. The value of the Funds' securities denominated in
foreign currencies will be affected favorably or unfavorably
by changes in currency exchange rates and the Funds' values
will be affected by the costs incurred in connection with the
conversions between various currencies.
The securities of non-U.S. issuers held by the Funds generally
will not be registered under, nor will the issuers thereof be
subject to, the reporting requirements of the U.S. Securities
and Exchange Commission. As a consequence, there may be less
publicly available information about the foreign issuer than
is available about a U.S. company or government entity.
Foreign issuers are also not subject to the same accounting,
auditing and financial reporting standards, requirements, and
practices applicable to U.S. companies.
38
<PAGE>
Stock markets outside the U.S. are generally not as developed
or as efficient as those in the U.S. As a result, the extent
and effectiveness of government regulation of those stock
markets and brokers may not be identical to that in the
U.S. Frequently, liquidity in most foreign bond markets is
less than generally exists in the U.S. bond market and, at
times, price volatility can be greater than in the U.S.
Fixed brokerage commissions on certain non-U.S. stock
exchanges are generally higher than negotiated commissions on
U.S. exchange-listed securities. Similarly, the bid-to-ask
spreads in foreign bond markets are generally larger than
commissions or bid-to-ask spreads in the U.S. bond market.
Custodial costs related to non-U.S. securities generally
exceed those on comparable U.S. securities.
With respect to certain foreign countries, there is the
possibility of political or social instability, or diplomatic
events that could result in potential restrictions on the flow
of international capital, including the possibility of
expropriation or confiscatory taxation.
The Funds' adviser will consider these and other pertinent
factors before investing in foreign securities. Investments
in foreign securities will not occur unless the Funds' adviser
believes that the potential benefits of the investment
outweigh the risks and that such investments meet the
policies, standards, risk profile and objectives of a
particular portfolio.
Accordingly, investment in the shares of the International
Fund and the Pacific Rim Emerging Markets Fund should involve
more financial and market risk than any of the domestic Funds.
Because the shares of the International Fund and the Pacific
Rim Emerging Markets Fund may experience above-average
fluctuations in net asset value, they should be considered as
long-term investments.
<REDLINE>
Investment Techniques Of The Equity Index Fund
S&P 500 Futures Contracts. The Equity Index Fund may (i)
invest any portion of its net assets in S&P 500 Futures
Contracts until the Fund reaches $25 million in net assets and
(ii) once the Fund reaches $25 million in net assets, invest
no more than 20% of its net assets in S&P 500 Futures
Contracts. Investments in S&P 500 Futures Contracts can be
held by the Fund for any length of time. The Fund may purchase
S&P 500 Futures Contracts only for the purpose of hedging,
including protecting against an increase in the price of
39
<PAGE>
securities it intends to purchase, or sell S&P 500 Futures
Contracts for the purpose of hedging, including protecting
against a decline in value of securities the Fund already
owns, and not for speculation or to leverage the Fund.
The S&P 500 Futures Contract obligates the seller to deliver
and the purchaser to take an amount of cash equal to a
specific dollar amount times the difference between the value
of the Index at the close of the day of the contract and the
price at which the agreement is made. No physical delivery of
the underlying stocks which constitute the Index is made.
No consideration will be paid or received by the Fund upon the
purchase or sale of an S&P 500 Futures Contract. Prior to the
purchase or sale of an S&P 500 Futures Contract, the Fund will
be required to deposit with the broker an amount of cash or
cash equivalents equal to 5% to 10% of the underlying S&P 500
Futures Contract amount. This deposit is known as the initial
margin and serves as the performance bond or good faith
deposit on the S&P 500 Futures Contract. The initial margin is
returned to the Fund upon termination of the S&P 500 Futures
Contract, assuming that all contractual obligations have been
satisfied. The initial margin amount is subject to change by
the exchange board of trade on which the S&P 500 Futures
Contract is traded and members of such exchange board of trade
may charge a higher amount. Subsequent payments to and from
the broker, known as variation margin, will be made daily as
the price of the S&P 500 Futures Index fluctuates, making the
long and short positions in the S&P 500 Futures Contracts more
or less valuable. The Fund may elect to close its S&P 500
Futures Contract position at any time prior to the expiration
date of the S&P 500 Futures Contract, by taking the opposite
position.
Risk Factors in Standard & Poor s 500 Stock Index Futures
Contracts. Although the Fund intends to purchase or sell S&P
500 Futures Contracts only if market conditions for this
particular investment are favorable, there is no assurance
that a liquid market will exist for the S&P 500 Futures
Contract at any particular time. It is common practice for
most futures exchanges and boards of trade to limit the amount
of price fluctuation permitted in futures contracts during a
single trading day. Once the predetermined daily price limit
has been reached for a particular futures contract, no trades
are permitted to be made that day at a price beyond the daily
price limit. Futures contract prices could move to the
predetermined daily price limit for several consecutive
trading days with little or no trading, thereby preventing
prompt liquidation of futures contract positions and
subjecting some owners of futures contracts positions to
substantial losses. In the event of adverse price movements of
40
<PAGE>
the S&P 500 Futures Index, the Fund would be required to make
daily cash payments of variation margin. In such
circumstances, an increase in the value of the portion of the
Fund being hedged, if any, may offset partially or completely
losses on the S&P 500 Futures Contract. However, no assurance
can be given that the price of the securities being hedged
will correlate with the price movements in the S&P 500 Futures
Contract and thus provide an offset to losses on the futures
contract.
There can be no assurance of the Fund s success at using the
S&P 500 Futures Contract as a hedging vehicle. There is a risk
of imperfect correlation between movements in the price of the
securities which are the subject of the hedge and the price of
the S&P 500 Futures Contract. The risk of imperfect
correlation increases as the composition of the Fund s
securities diverges from the securities included in the Index.
If the price of the S&P 500 Futures Contract moves less than
the price of the securities which are the subject of the
hedge, the hedge will not be fully effective but, if the price
of the securities being hedged has moved in a favorable
direction, the Fund would be in a better position than if it
had not hedged at all. If the price of the securities being
hedged has moved in a favorable direction, this advantage will
be partially offset by changes in the value of the S&P 500
Futures Contract. If the price of the S&P 500 Futures Contract
moves more than the price of the stock, the Fund will
experience either a loss or a gain on the S&P 500 Futures
Contract which will not be completely offset by movements in
the price of the securities which are the subject of the
hedge.
The Fund s ability to approximate the performance of the Index
will depend to some extent on the size of cash flows into and
out of the Fund. Investment changes to accommodate these cash
flows will be made to maintain the similarity of the Fund to
the Index, to the maximum practicable extent. When S&P 500
Futures Contracts are purchased to hedge against a possible
increase in the price of stocks before the Fund is able to
invest its cash in stocks in an orderly manner, it is possible
that the stock market may decline in value instead: if the
Fund then decides not to purchase hedged stocks because of
concern as to possible further stock market decline or for
other reasons, the Fund will realize a loss on the S&P 500
Futures Contract that is not offset by a reduction in the
price of the securities purchased. </REDLINE>
Investment Restrictions
In pursuing their investment objectives and policies, the
Funds are subject to a number of investment restrictions. The
following is a brief summary of certain restrictions that the
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<PAGE>
Company believes to be of interest to variable contract
purchasers. Some of these restrictions are subject to
exceptions not stated here. Such exceptions and a complete
list of the investment restrictions applicable to the Funds
and to the Company are set forth in the Statement of
Additional Information under the heading "Investment
Restrictions."
Except for the restrictions specifically identified as
fundamental, all investment restrictions described in this
Prospectus and in the Statement of Additional Information are
not fundamental, so that the Board of Directors may change
them without shareholder approval. Fundamental restrictions
may not be changed without the affirmative vote of a majority
of the outstanding voting securities of each Fund affected by
the change.
Restrictions that are fundamental and applicable to all Funds
include prohibitions on (i) investing more than 25% of the
total assets of any Fund in the securities of issuers having
their principal activities in any particular industry (except
in the case of the Real Estate Securities Fund and with
exceptions for U.S. Government and Government agency
securities and certain money-market instruments),
(ii) borrowing money, except for temporary or emergency
purposes and then not in excess of 10% of the total assets of
any Fund, and (iii) purchasing securities of any issuer if the
purchase would cause more than 5% of a Fund's total assets to
be invested in the securities of any one issuer (excluding
U.S. Government and Government agency securities and bank
obligations) or cause more than 10% of the voting securities
of the issuer to be held by a Fund, except that up to 25% of
each Fund's total assets may be invested without regard to the
restrictions of this clause (iii).
Restrictions that apply to all Funds and that are not
fundamental include prohibitions on pledging, hypothecating,
mortgaging or transferring more than 10% of the total assets
of any Fund as security for indebtedness. The Money-Market
Fund will not purchase securities of an issuer if it would
cause more than 5% of the Money-Market Fund's total assets to
be invested in the securities of that issuer (excluding
U.S. Government and Government agency securities). The
Money-Market Fund will not purchase securities that have not
received the highest short-term debt rating by a nationally
recognized statistical rating organization and are not of
comparable quality to securities so rated if it would cause
more than the greater of 1% of its total assets or $1,000,000
to be invested in the securities of such issuer or if it would
cause more than 5% of its total assets to be invested in
securities that were not so rated or comparable to securities
so rated.
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<PAGE>
If a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in the investment's
percentage of a Fund's total assets resulting from a change in
the value of such assets will not constitute a violation of
the percentage restriction.
The following is a description of certain investment policies
that are subject to restrictions and that the Company's
management believes to be of interest to variable contract
purchasers.
Foreign Securities
<REDLINE>
Each of the Funds may invest in foreign securities, but, with
respect to all Funds except the International and Pacific Rim
Emerging Markets Funds, such investment is restricted as a
matter of non-fundamental policy to securities of the
following types: (i) U.S. dollar denominated obligations of
foreign branches of U.S. banks, (ii) securities represented by
American Depository Receipts listed on a national securities
exchange or traded in the U.S. over-the-counter market,
(iii) securities of a corporation organized in a jurisdiction
other than the U.S. and listed on the New York Stock Exchange
or NASDAQ ("Interlisted Securities") or (iv) securities
denominated in U.S. dollars but issued by non U.S. issuers and
issued under U.S. federal securities regulations (for example,
U.S. dollar denominated obligations issued or guaranteed as to
principal or interest by the Government of Canada or any
Canadian Crown agency); provided, however, this restriction
shall not apply to the International Fund or the Pacific Rim
Emerging Markets Fund. The Equity Index Fund presently does
not invest in foreign securities because none are included in
the Index.</REDLINE>
Foreign securities may be subject to foreign government taxes
which reduce their attractiveness. In addition, investing in
the securities of foreign issuers, particularly
non-governmental issuers, involves risks which are not
ordinarily associated with investing in domestic issuers.
These risks include political or economic instability in the
country involved and the possibility of imposition of currency
controls. In addition, there may be less publicly available
information about a foreign issuer than about a domestic
issuer. Foreign issuers, including foreign branches of
U.S. banks, are subject to different accounting and reporting
requirements, which are generally less extensive than the
requirements applicable to domestic issuers. With respect to
certain foreign countries, there is a possibility of
expropriation, confiscatory taxation or diplomatic
developments which could affect investment in those countries.
Foreign securities also involve currency risks. The value of
43
<PAGE>
a foreign security denominated in foreign currency changes
with variations in the exchange rates. Fluctuations in
exchange rates may also affect the earning power and asset
value of the foreign entity issuing a security, even one
denominated in U.S. dollars. Dividend and interest payments
will be repatriated based on the exchange rate at the time of
disbursement, and restrictions on capital flows may be
imposed. Finally, in the event of a default on any foreign
obligation, it may be difficult for the Company to obtain or
to enforce a judgment against the issuer. The Manager will
consider these and other factors before investing in foreign
securities and will not make such investments unless, in its
opinion, such investments will meet the standards and
objectives of a particular Fund.
Lending Securities
Each Fund may lend its securities so long as such loans do not
represent in excess of 20% of a Fund's total assets. This is
a fundamental policy. The procedure for lending securities is
for the borrower to give the Fund collateral consisting of
cash or cash equivalents. The Fund may invest the cash
collateral and earn additional income or receive an
agreed-upon fee from a borrower which has delivered
cash-equivalent collateral. The Company anticipates that its
securities will be lent only under the following conditions:
(1) the borrower must furnish collateral equal at all times to
the market value of the securities lent and the borrower must
agree to increase the collateral on a daily basis if the
securities increase in value; (2) the loan will be made in
accordance with New York Stock Exchange rules, which currently
require the borrower, after notice, to redeliver the
securities within five business days; (3) any cash collateral
invested by a Fund will be in short-term investments which
give maximum liquidity so that the collateral may be paid back
to the borrower when the securities are returned; (4) the Fund
may pay reasonable service, placement, custodian or other fees
in connection with loans of securities and share a portion of
the interest from these investments with the borrower of the
securities; and (5) the Company will limit the amount of
lending of securities so that the aggregate amount of interest
received attributed to securities lent, if considered "other
income" for Federal tax purposes, will not cause the Company
to lose its status as a regulated investment company.
Management Of The Funds
Under Maryland law and the Company's Articles of Incorporation
and By-laws, the business and affairs of the Company are
managed under the direction of the Company's Board of
Directors. The Board of Directors is elected by the holders
of the Company's securities. While all of the Company's
44
<PAGE>
outstanding securities are owned by Manufacturers Life of
America, shares will be voted as directed by variable contract
policyowners.
The By-laws of the Company provide that the Company need not
hold an annual meeting of shareholders in any year in which
none of the following is required to be acted on by
shareholders under the Investment Company Act of 1940:
election of directors; approval of investment advisory
agreement; ratification of selection of independent public
accountants; and approval of distribution agreement. The
Company intends to hold shareholder meetings only when
required by law and at other times as may be deemed
appropriate by the Board of Directors.
Investment Management Arrangements
The Fund's investment manager is Manufacturers Adviser
Corporation (the "Manager"), a Colorado corporation whose
principal business at the present time is to provide
investment management services to the Company. The Manager
was organized in 1970 and became operational in 1984. The
Manager is an indirect wholly-owned subsidiary of
Manufacturers Life. The address of the Manager is 200 Bloor
Street East, Toronto, Ontario, Canada M4W 1E5.
The Company has entered into an Investment Advisory Agreement
with the Manager pursuant to which the Manager agrees to
manage the investment and reinvestment of the assets of each
Fund and to administer the affairs of the Company subject to
the supervision of the Company's Board of Directors. The
Manager provides the Company with an investment program and
with investment research, supervision and advice necessary for
the proper supervision of each Fund. Subject to review of the
Company's Board of Directors and to the investment objective,
policies and restrictions of each Fund, the Manager determines
which securities will be purchased or sold for each Fund. The
Manager also serves as the Company's transfer agent and
dividend disbursing agent.
Under a Service Agreement among the Manager, the Company and
Manufacturers Life, Manufacturers Life has agreed to furnish
to the Manager personnel, office space, supplies and equipment
required by it and to make available to the Manager certain
statistical and economic data, investment research reports and
other research materials of Manufacturers Life's Investment
Department. The Manager has agreed to reimburse Manufacturers
Life for its costs in this regard.
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<PAGE>
Management of the Funds
The Manager of the Funds consists of a team of investment
professionals each of whom plays an important role in the
management process of each Fund. Team members work together
to develop investment strategies and select securities for a
Fund s portfolio. They are supported by research analysts,
traders and other investment specialists who work alongside
the investment professionals in an effort to utilize all
available resources to benefit the shareholders.
46
<PAGE>
<REDLINE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Manager(s) Fund Business Experience During
Past Five Years
Mark A. Schmeer Emerging Growth Equity Fund Investment Management, U.S.
(since 1995) Balanced Assets Fund Equitities, The
Common Stock Fund Manufacturers Life Insurance
Real Estate Securities Fund Company - 1995 - present;
Vice President, Sun Life
Investment Management -
1993-1995; Manager, U.S.
Investments, Ontario Hydro
Corporation - 1986-1993
Robert Lutzko Emerging Growth Equity Fund Investment Management, U.S.
(since 1995) Equities, the Manufacturers
Life Insurance Company -
1995-present; U.S.
Investment Manager, Workers
Compensation Board, Toronto
- 1989-1995
Catherine Addison Balanced Assets Fund Investment Manager, U.S.
(since 1988) Capital Growth Bond Fund Fixed Income, The
Manufacturers Life Insurance
Company, 1985-present
Emily Shum Money-Market Fund Investment Management,
(since 1992) Money-Market, The
Manufacturers Life Insurnace
Company, 1992-present; Money
Market Manager, Manu Vest
Investment Management
Corporation, 1985-1991
Stephen Hill International Fund Investment Management, The
(since 1995) Pacific Rim Emerging Manufacturers Life Insurance
Markets Fund Company, 1995-present;
Director, Invesco Asset
Management, 1993-1994;
Consultant, 1993; Director,
Yasuda Trust Europe, 1989-
1992
Mark Andrew Hirst International Fund Investment Management, The
(since 1994) Manufacturers Life Insurance
Company, 1986-present
</TABLE>
</REDLINE>
47
<PAGE>
<REDLINE>
<TABLE>
<CAPTION>
<S> <C> <C>
Fund Manager(s) Fund Business Experience During
Past Five Years
Richard James International Fund Investment Management, The
Crook Pacific Rim Emerging Manufacturers Life Insurance
(since 1994) Markets Fund Company, 1975-present
Emilia Panadero International Fund Investment Management, The
Perez Pacific Rim Emerging Manufacturers Life Insurance
(since 1995) Markets Fund Company, 1989-present
Leslie Grober Real Estate Securities Fund Investment Management, U.S.
(since 1995) Equities, The Manufacturers
Life Insurance Company -
1994-present; Investment
Representative, Toronto-
Dominion Bank - 1991-1003;
Banking, Bank of Montreal-
1990-1991
Rhonda Chang Common Stock Fund Investment Management, The
(since 1995) Manufacturers Life Insurance
Company - 1994-present;
Investment Analyst, American
International Group - 1990-
1994
</TABLE>
</REDLINE>
48
<PAGE>
Expenses
With respect to the Emerging Growth Equity Fund, Balanced
Assets Fund, Capital Growth Bond Fund, Money-Market Fund,
Common Stock Fund and Real Estate Securities Fund, the Manager
has agreed to pay all of the expenses of the Company except
for the following, which are borne by the Company: the
investment management fee, brokerage commissions on portfolio
transactions (including any other direct costs related to the
acquisition, disposition, lending or borrowing of portfolio
investments), taxes payable by the Company, interest and any
other costs related to borrowings by the Company, and any
extraordinary or non-recurring expenses (such as legal claims
and liabilities and litigation costs and any indemnification
related thereto).
<REDLINE>
With respect to the International Fund, the Pacific Rim
Emerging Market Fund, and the Equity Index Fund, the Company
shall pay all of the foregoing expenses plus up to .50%, .65%,
and .15%, respectively, of any additional expenses in
connection with the operation of these Funds.
</REDLINE>
Fees
As compensation for its services, the Manager receives a fee
from the Company each day on which the Company's net asset
value is determined. With respect to the Emerging Growth
Equity Fund, Balanced Assets Fund, Capital Growth Bond Fund,
Capital Growth Bond Fund, Money-Market Fund, Common Stock Fund
and Real Estate Securities Fund, the fee is equivalent to an
annual rate of 0.50% of the average daily value of the
aggregate net assets of the Funds. Prior to January 1, 1987,
the Manager's fee was equivalent to an annual rate of 0.20% of
such value. The amount of the daily charge for the fee is
divided among the Funds in proportion to their daily net asset
values.
<REDLINE>
With respect to the International Fund and the Pacific Rim
Emerging Markets Fund, the fee will be equivalent to an annual
rate of (I) 0.85% of the average daily value of the net assets
of the first $100 million of each Fund and (ii) 0.70% of the
average daily value of the net assets of each Fund in excess
of $100 million. With respect to the Equity Index Fund, the
fee will be .25%.
</REDLINE>
For the years ended December 31, 1992, 1993 and 1994 the
Manager received $437,758, $743,241, and $1,429,270
respectively, under the Investment Advisory Agreement.
49
<PAGE>
Capital Stock
The Company has nine classes of stock, one for each Fund. The
shares of each Fund have equal rights with respect to voting,
redemptions, dividends, distributions and liquidations with
regard to that Fund. The shares of each Fund, when issued and
paid for, will be fully paid and non-assessable, will have no
preference, pre-emptive, conversion, exchange or similar
rights, and will be freely transferable. Holders of shares of
any Fund are entitled to redeem their shares as set forth
under "Purchases And Redemptions Of Shares."
Taxes, Dividends And Distributions
The Company intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code (the
"Code"). Under such provisions, the Company will not be
subject to federal income tax on such part of its net ordinary
income and net realized capital gains that it distributes to
shareholders.
The Company intends to distribute as dividends substantially
all of the net investment income, if any, of each Fund. For
dividend purposes, net investment income of each Fund will
consist of all payments of dividends (other than stock
dividends) or interest received by such Fund less the
estimated expenses of such Fund (including fees payable to the
Manager). Dividends from the net investment income of a Fund
will be declared at least annually and reinvested in
additional full and fractional shares of that Fund.
The Funds of the Company also presently intend to declare and
distribute annually after the close of their fiscal year all
of their net realized capital gains, if any.
Purchases And Redemptions Of Shares
Shares of the Company are currently offered continuously,
without sales charge, at prices equal to the respective net
asset values of the Funds, only to Manufacturers Life of
America. The Company sells its shares to Manufacturers Life
of America directly without the use of any underwriter.
Manufacturers Life of America uses shares of the Company to
fund benefits under both variable annuity contracts and
variable life insurance policies. The Company's Board of
Directors will monitor the Funds for the existence of any
material irreconcilable conflict between the interests of
variable annuity policyowners investing in the Company and
interests of holders of variable life insurance policies
investing in the Company. Manufacturers Life of America will
report any potential or existing conflicts to the directors of
the Company. If a material irreconcilable conflict arises,
Manufacturers Life of America will, at its own cost, remedy
50
<PAGE>
such conflict up to and including establishing a new
registered management investment company and segregating the
assets underlying the variable annuity contracts and the
variable life insurance policies. The Company reserves the
right to offer its shares in the future to other persons or
entities.
Shares of the Company are sold and redeemed at their net asset
value next computed after a purchase or redemption order is
received by the Company. Depending upon the net asset values
at that time, the amount paid upon redemption may be more or
less than the cost of the shares redeemed. Payment for shares
redeemed will be made as soon as possible, but in any event
within seven days after receipt of a request for redemption.
Determination Of Net Asset Value
The net asset value of the shares of each Fund is determined
once daily by the Manager at 4:00 p.m., Eastern time on each
day during which the New York Stock Exchange ("Exchange") is
open for trading. The Exchange is open daily Monday through
Friday except on the following business holidays: New Year's
Day, Presidents Day, Good Friday, Memorial Day, Independence
Day, Labor Day, Thanksgiving Day, and Christmas Day. The net
asset value per share of each Fund is computed by adding the
sum of the value of the securities held by that Fund plus any
cash or other assets it holds, subtracting all its
liabilities, and dividing the result by the total number of
shares outstanding of that Fund at such time. The values of
all assets and liabilities initially expressed in foreign
currencies are translated into U.S. dollars at the exchange
rates provided by an approved pricing service as of 12:00 p.m.
Eastern time.
Trading in securities on European and Far Eastern securities
exchanges and over-the-counter markets is normally completed
well before 4:00 p.m. Eastern time on each business day in
New York (i.e., a day on which the Exchange is open). In
addition, European or Far Eastern securities trading generally
or in a particular country or countries may not take place on
all business days in New York. Furthermore, trading may take
place in certain markets on days which are not business days
in New York and on which a Fund's net asset value is not
calculated. Since the Fund does not price on these days, the
portfolio will trade and the net asset value of the Fund's
redeemable securities may be significantly affected on days
when shareholders have no access to the Fund. A Fund
calculates net asset value per share, and therefore effects
sales, redemptions and repurchases of its shares, as of the
close of the Exchange once on each day on which the Exchange
is open. As a result, such calculation may not take place
contemporaneously with the determination of the prices of the
majority of the portfolio securities used in such calculation.
51
<PAGE>
If events materially affecting the value of such securities
occur between the time when their price is determined and the
time when the Fund's net asset value is calculated, such
securities will be valued at fair value as determined in good
faith by, or under the direction of, the Board of Directors.
Except with respect to debt instruments having a remaining
maturity of 60 days or less, securities held by a Fund will be
valued as follows: Securities listed on a securities exchange
will be valued at the last sale price or, if there has been no
sale that day, at the last bid price reported as of the close
of trading on the Exchange; provided, however, with respect to
the International Fund and the Pacific Rim Emerging Markets
Fund, if a particular country has adopted conventions with
respect to valuations, these will be utilized instead.
Securities traded in the over-the-counter market for which
closing prices are readily available will be valued at the
last bid price or yield equivalent as of the close of trading
on the Exchange. However, if closing prices are not readily
available for these securities, quotations will be obtained
from more than one source and the securities will be valued at
a mean of the bid prices so obtained. Securities which are
traded both in the over-the-counter market and on a stock
exchange will be valued according to the broadest and most
representative market, and it is expected that for debt
securities this ordinarily will be the over-the-counter
market. If market quotations for assets are or become
unavailable, such assets will be valued at their fair value as
determined in good faith by, or under the direction of, the
Company's Board of Directors.
Where appropriate, debt instruments with maturities greater
than 60 days are valued on the basis of a valuation believed
to reflect the fair value of the security, as provided by an
approved pricing service. Debt instruments with remaining
maturities of 60 days or less are valued on an amortized cost
basis. Under this method of valuation, a security is
initially valued at cost on the date of purchase (or in the
case of securities purchased with more than 60 days remaining
to maturity, the market value on the 61st day prior to
maturity); and thereafter a constant proportionate
amortization in value is assumed until maturity of any
discount or premium, regardless of the impact of fluctuating
interest rates on the market value of the security. For
purposes of this method of valuation, the maturity of a
variable rate instrument is deemed to be the next date on
which the interest rate is to be adjusted.
Custodian
State Street Bank and Trust Company ("State Street") acts as
custodian of the securities held by each Fund. State Street
is authorized to use the facilities of the Depository Trust
52
<PAGE>
Company and the book-entry system of the Federal Reserve
Banks.
Custodian For Foreign Funds. Securities purchased for the
International Fund and Pacific Rim Emerging Markets Fund are
maintained in the custody of foreign banks and trust companies
which are members of State Street's Global Custody Network and
foreign depositories (foreign sub-custodians). State Street
and each of the foreign custodial institutions holding
securities of the Funds has been approved by the Board in
accordance with regulations under the Investment Company Act
of 1940.
The Board reviews, at least annually, whether it is in the
best interest of the International Fund and the Pacific Rim
Emerging Markets Fund and its shareholders to maintain Fund
assets in each custodial institution. However, with respect
to foreign sub-custodians, there can be no assurance that the
Fund and the values of its shares will not be adversely
affected by acts of foreign governments, financial or
operational difficulties of the foreign sub-custodians,
difficulties and costs of obtaining jurisdiction over, or
enforcing judgments against, the foreign sub-custodians, or
application of foreign law to a Fund's foreign sub-custodial
arrangements. Thus the non-investment risks involved in
holding assets abroad may be greater than those associated
with investing in the U.S.
Performance Data
From time to time Manufacturers Life of America may publish
advertisements or distribute sales literature containing
performance data relating to the Funds. All such performance
data are based on the actual historical performance of the
Funds for specified periods, and the figures are not intended
to indicate future performance. Performance data will include
average annual total return quotations for one-year, five-year
and (when applicable) 10-year periods. Quotations for the
period since inception of a Fund will replace such periods for
a Fund that has not been in existence for a full five-year or
10-year period. Performance data may also include average
annual total return for other time periods than those listed,
and aggregate total return for various periods of time. More
detailed information on the computations is set forth in the
Statement of Additional Information.
Performance data of the Funds will not reflect charges made
pursuant to the terms of the variable life insurance and
variable annuity policies funded by separate accounts that
invest in the Company's shares. However, sales literature
containing performance data for the Funds that is part of an
advertisement for variable annuity contracts whose assets may
be invested in the Fund will also contain corresponding
53
<PAGE>
performance data for the separate account funding those
contracts. Similarly, sales literature containing performance
data for the Funds that is part of an advertisement for
variable life insurance policies whose assets may be invested
in the Fund will also contain illustrations of the cash
surrender and death benefit values for the same time periods.
54
<PAGE>
PART B.
STATEMENT OF
ADDITIONAL INFORMATION
<PAGE>
Statement of Additional Information
Manulife Series Fund, Inc.
(the "Company")
<REDLINE>
This Statement of Additional Information is not a prospectus
but should be read in conjunction with the Company's
Prospectus dated February 14, 1996 which may be obtained from
Manulife Series Fund, Inc., 200 Bloor Street East, Toronto,
Ontario, Canada M4W 1E5.
The date of this Statement of Additional Information is
February 14, 1996.</REDLINE>
The
Manufacturers
Life Insurance Company [ARTWORK]of
America
ManEquity, Inc.
(ss#1920)
<PAGE>
Table of Contents
Page
The Company . . . . . . . . . . . . . . . . . . . . . .
Investment Objectives And Policies . . . . . . . . . .
Investment Restrictions . . . . . . . . . . . . . .
Portfolio Turnover . . . . . . . . . . . . . . . . .
Management Of The Company . . . . . . . . . . . . . . .
Investment Management Services . . . . . . . . . . . .
Portfolio Brokerage . . . . . . . . . . . . . . . . . .
Capital Stock . . . . . . . . . . . . . . . . . . . . .
Principal Holders Of Securities . . . . . . . . . . . .
Purchases And Redemptions Of Shares . . . . . . . . . .
Taxes, Dividends And Distributions . . . . . . . . . .
Performance Information . . . . . . . . . . . . . . . .
General Information . . . . . . . . . . . . . . . . . .
Reports To Shareholders . . . . . . . . . . . . . .
Name . . . . . . . . . . . . . . . . . . . . . . . .
Experts . . . . . . . . . . . . . . . . . . . . . .
Legal Counsel . . . . . . . . . . . . . . . . . . .
Appendix A: Money-Market Instruments In Which
The Money-Market Fund May Invest . . . . . . . . . . .
Appendix B: Debt Security Ratings . . . . . . . . . . .
Appendix C: Investment Techniques Of The
International Fund And Pacific Rim Emerging
Markets Fund . . . . . . . . . . . . . . . . . . . . .
<REDLINE>
Appendix D: Certain Investment Techniques . . . . . . .
</REDLINE>
Financial Statements . . . . . . . . . . . . . . . . .
1
<PAGE>
The Company
<REDLINE>
Manulife Series Fund, Inc. (the "Company") is a diversified
open-end management investment company incorporated under
Maryland law on July 22, 1983. The Company is a series
company, which means that it has several different investment
portfolios. Currently, the following investment portfolios
are offered, each of which is referred to herein as a Fund
the Emerging Growth Equity Fund, the Balanced Assets Fund, the
Capital Growth Bond Fund, the Money-Market Fund, the Common
Stock Fund, the Real Estate Securities Fund, the International
Fund, the Pacific Rim Emerging Markets Fund, and subject to
regulatory approval, the Equity Index Fund.
</REDLINE>
A separate class of the Company's common stock, par value
$0.01 per share, is issued for each Fund. Each class
represents an undivided interest in the assets of the Fund
attributable to that class, and a shareholder is entitled to a
pro rata share of all dividends and distributions arising from
the net income and capital gains on the investments of the
Fund or Funds in which shares are held.
Shares of the Company are currently sold only to The
Manufacturers Life Insurance Company of America
("Manufacturers Life of America"), which is an indirect
wholly-owned subsidiary of The Manufacturers Life Insurance
Company ("Manufacturers Life"). Manufacturers Life, together
with its subsidiaries, constitutes one of the largest life
insurance companies in North America as measured by assets.
Shares will be purchased by Manufacturers Life of America to
fund certain benefits under variable contracts issued by it
and also for general investment purposes.
The Funds' assets will be invested and reinvested by the
Company's investment manager, Manufacturers Adviser
Corporation (the "Manager").
Investment Objectives And Policies
The following information supplements the discussions entitled
"Investment Objectives, Policies and Risks" and "Investment
Restrictions" in the Prospectus and should be read in
conjunction therewith.
The Prospectus describes the investment objective, policies
and restrictions relating to each of the Funds. Unless
otherwise specified, the investment policies and restrictions
of the Funds are not fundamental policies and are subject to
change by the Company's Board of Directors without shareholder
approval. The investment objectives of the Funds and certain
restrictions are fundamental policies and may be changed only
by a vote of the lesser of (i) 67% of the shares represented
2
<PAGE>
at a meeting at which more than 50% of the outstanding shares
are represented or (ii) more than 50% of the outstanding
shares. With respect to the submission of a change in an
investment objective or restriction to the holders of the
Company s outstanding voting securities, such matter shall be
deemed to have been effectively acted upon with respect to a
particular Fund if a majority of the outstanding voting
securities of such Fund vote for the approval of such matter,
notwithstanding (1) that such matter has not been approved by
the holders of a majority of the outstanding voting securities
of any other Fund affected by such matter, and (2) that such
matter has not been approved by the vote of a majority of the
outstanding voting securities of the Company.
A detailed description of the Money-Market Fund's investment
policies appears in Appendix A hereto: "Money-Market
Instruments In Which the Money-Market Fund May Invest." The
debt security ratings mentioned in the Prospectus and Appendix
A are defined in Appendix B to this Statement of Additional
Information. Particular investment techniques followed by the
International Fund and the Pacific Rim Emerging Markets Fund
are discussed in Appendix C hereto. In Appendix D certain
investment techniques common to all the Funds, namely forward
commitments, when-issued and delayed delivery securities, are
discussed. The following is a complete list of all investment
restrictions to which the Funds are subject and a discussion
of the Funds' expected rates of portfolio turnover.
Investment Restrictions
All of the restrictions through restriction 8 are fundamental
policies. Restrictions 9 through 15 are not fundamental
policies.
The Company may not issue senior securities except to the
extent that the borrowing of money in accordance with
restriction 3 may constitute the issuance of a senior
security, and each Fund will not:
(1) Invest more than 25% of the value of its total assets in
securities of issuers having their principal activities
in any particular industry, except in the case of the
Real Estate Securities Fund, and excluding United States
Government and Government agency securities and
obligations of domestic branches of U.S. banks and
savings and loan associations. For purposes of this
restriction, neither finance companies as a group nor
utility companies as a group are considered to be a
single industry. Such companies will be grouped instead
according to their services; for example, gas, electric
and telephone utilities will each be considered a
separate industry.
3
<PAGE>
(2) Purchase the securities of any issuer if the purchase
would cause more than 5% of the value of the Fund's total
assets to be invested in the securities of any one issuer
(excluding U.S. Government and Government agency
securities and bank obligations 1) or cause more than 10%
of the voting securities of the issuer to be held by the
Fund, except that up to 25% of the value of each Fund's
total assets may be invested without regard to these
restrictions.
(3) Borrow money, except from banks for temporary or
emergency purposes, including the meeting of redemption
requests which might otherwise require the untimely
disposition of securities. Borrowing in the aggregate by
any particular Fund may not exceed 10% of the value of
the Fund's total assets at the time the borrowing is
made, and a Fund may not make additional investments
during any period that its borrowings exceed 5% of the
value of the Fund's total assets; provided, however,
effective May 1, 1995, the restriction on making
additional investments during any period that its
borrowings exceed 5% of the value of the Fund's total
assets shall not apply to the International Fund or the
Pacific Rim Emerging Markets Fund.
(4) Underwrite securities of other issuers except insofar as
the Company may be considered an underwriter under the
Securities Act of 1933 in selling portfolio securities.
(5) Purchase or sell real estate, except that the Balanced
Assets Fund may invest in mortgage notes and other
securities secured by real estate or interests therein
and each Fund may invest in securities issued by
1The 5% limitation set forth in restriction 2 is based on a
diversification test contained in the Investment Company Act of
1940. The staff of the Securities and Exchange Commission has
stated in the past that it is concerned as to whether certain
bank obligations should be subject to the statutory 5%
limitation, although the staff has yet to reach a determination
on the issue. Further action by the Commission may make it
necessary, or it may be otherwise advisable, for the Company to
revise restriction 2 so that a Fund's investment in certain
obligations of any one bank will not exceed the 5% limitation
(not applicable as to 25% of the value of each Fund's total
assets). Any such revision will be made without submitting the
matter to the vote of the holders of the Company's or the
affected Fund's shares.
4
<PAGE>
companies which invest in real estate or interests
therein.2
<REDLINE>
(6) Purchase or sell commodities or commodity contracts;
provided, however, the International Fund and the Pacific
Rim Emerging Markets Fund may purchase and sell futures
contracts on financial instruments, indices and foreign
currencies, and options on such futures contracts, and
the Equity Index Fund may purchase and sell S&P 500 Stock
Index Futures Contracts ("S&P 500 Futures
Contracts").</REDLINE>
(7) Lend money to other persons except by the purchase of
obligations in which the Fund is authorized to invest and
by entering into repurchase agreements.
(8) Lend securities in excess of 20% of the value of its
total assets.
(9) Knowingly invest in securities or other investments,
including repurchase agreements maturing in more than
seven days, that are subject to legal or contractual
restrictions upon resale or are otherwise not readily
marketable; provided, however, this restriction shall not
apply to the International Fund or the Pacific Rim
Emerging Markets Fund.
(10) Sell securities short or purchase securities on margin
except that it may obtain such short-term credits as may
be required to clear transactions.
(11) Write or acquire put or call options; provided, however,
this restriction shall not apply to the International
Fund or the Pacific Rim Emerging Markets Fund.
(12) Purchase securities for the purpose of exercising control
or management.
(13) Purchase securities of other investment companies, except
in connection with a merger, consolidation or
reorganization.
(14) Pledge, hypothecate, mortgage or transfer (except as
provided in restriction 8 as security for indebtedness
any securities held by the Fund, except in an amount of
2In order to meet the requirements of certain state
insurance laws and regulations pertaining to variable life
operations, the Balanced Assets Fund will refrain from investing
in mortgage notes and other securities secured by real estate or
interests therein until such time as such investments are
permitted by state insurance regulatory authorities.
5
<PAGE>
not more than 10% of the value of the Fund's total assets
and then only to secure borrowings permitted by
restrictions 3 and 10.
(15) Purchase securities of foreign issuers other than (i)
U.S. dollar denominated obligations of foreign branches
of U.S. banks, (ii) securities represented by American
Depository Receipts listed on a national securities
exchange or traded in the U.S. over-the-counter market,
(iii) securities of a corporation organized in a
jurisdiction other than the U.S. and listed on the New
York Stock Exchange or NASDAQ ("Interlisted Securities")
or (iv) securities issued by non U.S. issuers but
denominated in U.S. dollars and issued pursuant to U.S.
federal securities regulations (for example, U.S. dollar
denominated obligations issued or guaranteed as to
principal or interest by the Government of Canada or any
Canadian Crown agency); provided, however, this
restriction shall not apply to the International Fund or
the Pacific Rim Emerging Markets Fund.
If a percentage restriction is adhered to at the time of an
investment, a later increase or decrease in the investment's
percentage of a Fund's total assets resulting from a change in
its value will not constitute a violation of the percentage
restriction.
Portfolio Turnover
Each Fund has a different expected rate of portfolio turnover.
The Emerging Growth Equity Fund's portfolio will be actively
managed with a degree of short-term trading made without
regard to resulting brokerage costs. Consequently, it is
anticipated that the annual portfolio turnover rate of such
Fund will generally be between 50% and 150%.
<REDLINE>
By contrast, the Balanced Assets Fund, the Common Stock Fund,
and the Real Estate Securities Fund will not make a practice
of short-term trading. However, purchases and sales of
securities will be made whenever necessary to achieve each of
the Fund's objectives without regard to resulting brokerage
costs. It is expected that annual portfolio turnover rates
for the Balanced Assets Fund, the Common Stock Fund, and the
Real Estate Securities Fund will be between 25% and 100%. The
Capital Growth Bond Fund intends to engage in short-term
trading as a means of achieving its investment objective.
Therefore, it is anticipated that the annual portfolio
turnover rate of such Fund will generally range from 100% to
200%. Turnover rates for the International and Pacific Rim
Emerging Markets Funds are expected to be approximately 120%
and 142%, respectively. Thus, a range of 100% to 200% would
not be out of line. The anticipated turnover rate for the
6
<PAGE>
Equity Index Fund is expected to be approximately 10-15%.
There can be no assurance that the foregoing rates of
portfolio turnover will be maintained. In any particular year,
market conditions could result in portfolio activity at a
greater or lesser rate than anticipated. Thus, for the year
ended December 31, 1994, the Emerging Growth Equity, Balanced
Assets, Capital Growth Bond, Common Stock, Real Estate
Securities, International, and Pacific Rim Emerging Markets
Funds had turnover rates of 69.40%, 86.42%, 79.04%, 84.78%,
35.60%, 0% and 0%, respectively. For the year ended December
31, 1993, the Emerging Growth Equity, Balanced Assets, Capital
Growth Bond, Common Stock and Real Estate Securities Funds had
turnover rates of 92.95%, 96.62%, 94.75%, 88.23%, and 143.00%,
respectively, and for the year ended December 31, 1992, the
Emerging Growth Equity, Balanced Assets, Capital Growth Bond,
Common Stock and Real Estate Securities Funds had turnover
rates of 126.62%, 75.83%, 153.05%, 47.60%, and 70.71%,
respectively.</REDLINE>
The Money-Market Fund, consistent with its investment
objective, will attempt to maximize yield through portfolio
trading. This may involve selling portfolio instruments and
purchasing different instruments to take advantage of
disparities of yields in different segments of the high-grade
money market or among particular instruments within the same
segment of the market. As a result, the Fund may realize
short-term gains and losses. This practice, as well as the
relatively short maturity of the obligations to be purchased
by the Fund, may result in frequent replacement of the Fund's
portfolio securities.
The rate of portfolio turnover will not be a limiting factor
when it is deemed appropriate to purchase or sell securities
for a Fund. The higher portfolio turnover rates anticipated
for the Emerging Growth Equity Fund and Capital Growth Bond
Fund should result in higher brokerage costs for such Funds.
The Company intends to comply with the various requirements of
the Internal Revenue Code so as to qualify as a "regulated
investment company" thereunder. Among such requirements is a
limitation of less than 30% of the amount of gross income
which any of the Funds may derive from gains on the sale or
other disposition of securities held for less than three
months. Accordingly, the ability of a particular Fund to
effect certain portfolio transactions may be limited.
Management Of The Company
The directors and executive officers of The Company, together
with their principal occupations during the past five years,
are listed below:
<TABLE>
7
<PAGE>
<CAPTION>
<REDLINE>
Principal Occupation
Position with During Past Five
Name and Address The Company Years
<S> <C> <C>
Edward C. Balzarotti Director Jettron Products
56 Route 10 East Hanover, (56) Inc. (electronics
NJ 07936 components
manufacturer) East
Hanover, NJ
Donald A. Guloien* Director and Senior Vice
200 Bloor St. East President President, Business
Toronto, Ontario Canada (38) Development 1994-
M4W 1E5 present, The
Manufacturers Life
Insurance Company;
Vice President, U.S.
Individual Business
1990-1994, The
Manufacturers Life
Insurance Company
Francis J. Knott Director President 1992-
P.O. Box 314 Riderwood, (49) present, VITAL
Maryland 21139-0314 Resources,
Riderwood, MD.;
President
1985-1992,
Videoconferencing
Systems, Inc.
(Manufacturers of
Videoconferencing
Equipment) Norcross,
GA
8
<PAGE>
<REDLINE>
Principal Occupation
Position with During Past Five
Name and Address The Company Years
<S> <C> <C>
John D. Richardson* Director Senior Vice
200 Bloor Street East (57) President, and
Toronto, Ontario Canada General Manager,
M4W 1E5 U.S. Operations
1995-present, The
Manufacturers Life
Insurance Company;
Senior Vice
President and
General Manager,
Canadian Operations
1992-1994, The
Manufacturers Life
Insurance Company;
Senior Vice
President, Financial
Services 1992, The
Manufacturers Life
Insurance Company;
Executive Vice
Chairman and CFO
1989-1991, Canada
Trust
F. David Rolwing Director President,
17810 Meeting House Road (61) Montgomery Mutual
Sandy Spring, MD 20860 Insurance Co., Sandy
Spring, MD
Douglas H. Myers Vice President, Assistant Vice
200 Bloor Street East Finance and President and
Toronto, Ontario Canada Compliance, Controller, U.S.
M4W 1E5 Treasurer Operations 1988-
(41) present, The
Manufacturers Life
Insurance Company
Sheri L. Kocen Secretary and Senior Counsel
200 Bloor Street East General Counsel 1990-present, The
Toronto, Ontario Canada (41) Manufacturers Life
M4W 1E5 Insurance Company
9
<PAGE>
*Director who is an "interested person," as defined in the
Investment Company Act of 1940.
10
<PAGE>
Donald A. Guloien, John D. Richardson, Douglas H. Myers and
Sheri L. Kocen also hold positions with companies affiliated
with the Company as follows:
Name Affiliated Company Position
Donald A. Guloien The Manufacturers Life Director
Insurance Company of
Michigan
The Manufacturers Life Director,
Insurance Company of President
America
Manulife Service President
Corporation
ManEquity, Inc. Director
John D. Richardson Manulife Financial Director,
Holdings Limited President &
Chief Executive
Officer
165351 Canada Limited Director
FirstLine Trust Company Director
Manulife Bank of Canada Director
Manulife Investment Director,
Management Corporation Chairman
159139 Canada Inc. Director
Manulife Data Services Director,
Limited Chairman
The Manufacturers Life Director,
Insurance Company of President
Michigan
Manulife Holding Director
Corporation
The Manufacturers Life Director,
Insurance Company of Chairman
America
The Manufacturers Life Director,
Insurance Company Chairman &
(U.S.A.) President
11
<PAGE>
Name Affiliated Company Position
Douglas H. Myers ManuLife Services Vice President
Corporation
The Manufacturers Life Vice President
Insurance Company of
Michigan
The Manufacturers Life Vice President &
Insurance Company Treasurer
of America
Manufacturers Advisers Vice President,
Corporation Compliance and
Finance,
Treasurer
ManEquity, Inc. Director,
President
Sheri L. Kocen The Manufacturers Life Assistant
Insurance Company of Secretary and
America Senior Counsel
Manufacturers Adviser Secretary and
Corporation General Counsel
</REDLINE>
The Company does not pay any remuneration to its directors who
are officers or employees of the Manager or Manufacturers
Life. Directors not so affiliated with the Manager or
Manufacturers Life receive $1,250 for each meeting of the
Board they attend, a retainer of $4,000 per year, and are
reimbursed for travel and other out-of-pocket expenses. Such
Directors were paid fees in the aggregate of $61,250 by the
Company for attendance at regular meetings of the Company for
the fiscal year ended December 31, 1994. The officers listed
above are furnished to the Company by the Manager in
accordance with the Investment Advisory Agreement and receive
no compensation from the Company. These officers spend only a
portion of their time on the affairs of the Company.
12
<PAGE>
<REDLINE>
Compensation Table
</TABLE>
<TABLE>
<CAPTION>
Pension or
Retirement
Aggregate Benefits Accrued
Compensation as part of
from Registrant Fund Expenses
<S> <C> <C>
Edward C. Balzarotti $8,750.00 N/A
Director
Donald A. Guloien N/A N/A
Director and
President
Francis J. Knott $8,750.00 N/A
Director
John D. Richardson N/A N/A
Director
F. David Rolwing $8,750.00 N/A
Director
Douglas H. Myers N/A N/A
Vice President,
Finance & Compliance,
Treasurer
Sheri L. Kocen N/A N/A
Secretary and
General Counsel
</TABLE>
13
<PAGE>
Compensation Table
<TABLE>
<CAPTION>
Estimated Total
Annual Compensation
Benefits from Registrant
Upon and Fund Complex
Retirement Paid to Directors
<S> <C> <C>
Edward C. Balzarotti N/A $8,750.00
Director
Donald A. Guloien N/A N/A
Director and
President
Francis J. Knott N/A $8,750.00
Director
John D. Richardson N/A N/A
Director
F. David Rolwing N/A $8,750.00
Director
Douglas H. Myers N/A N/A
Vice President,
Finance & Compliance,
Treasurer
Sheri L. Kocen N/A N/A
Secretary and
General Counsel
</REDLINE>
</TABLE>
14
<PAGE>
Investment Management Services
The Manager, Manufacturers Adviser Corporation, supervises and
directs the investments of the Funds pursuant to an Investment
Advisory Agreement with the Company. The Manager is a wholly-
owned subsidiary of ManuLife Holding Corporation, a Delaware
corporation, which in turn is a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of Michigan. The
Manufacturers Life Insurance Company of Michigan is a life
insurance holding company organized in 1983 under Michigan law
and a wholly-owned subsidiary of Manufacturers Life.
Manufacturers Life also indirectly controls the Company.
In addition to directing the Fund's investment activities, the
Manager performs various administrative services for the
Company pursuant to the Investment Advisory Agreement. These
services include supervising all aspects of the Company's
operation and providing to the Company, at the Manager's
expense, executive and other personnel required to manage the
affairs of the Company and to perform all necessary clerical
and administrative functions other than those functions
performed by other persons retained by the Company such as the
Company's custodian. The Manager also provides to the Company
at its own expense office space and all office facilities
necessary for the Company's operations, and it acts as the
Company's transfer agent and dividend disbursing agent.
The Investment Advisory Agreement provides that the Manager
may provide investment management services to other persons,
including affiliates of the Manager, so long as its doing so
does not adversely affect the service it provides to the
Company. The Company has agreed with the Manager that, when
investment opportunities arise that may be appropriate for
more than one client of the Manager, it may allocate
investments among them in an impartial manner believed to be
equitable to each client involved and will not favor one
client over another.
At a Special Meeting of the Company's shareholders held on
December 29, 1986, the Investment Advisory Agreement was
approved by the affirmative vote of a majority of the
outstanding voting securities of the class (as defined in
paragraph (h) of Rule 18f-2 under the Investment Company Act
of 1940) of capital stock of each Fund of the Company then
existing, namely, the Emerging Growth Equity Fund, Balanced
Assets Fund, Capital Growth Bond Fund, and Money-Market Fund.
The votes cast by each such Fund included shares attributable
to policies participating in the sole shareholder's Separate
Accounts.
At the Funds Annual Meeting of Shareholders held on April 15,
1988, the Investment Advisory Agreement was approved by the
15
<PAGE>
affirmative vote of a majority of the outstanding securities
of the class (as defined in paragraph (h) of Rule 18f-2 under
the Investment Company Act of 1940) of the capital stock of
subsequently established Funds, namely, the Real Estate
Securities Fund and Common Stock Fund. Again, the votes cast
by both Funds included shares attributable to Policies
participating in the sole shareholder's Separate Accounts.
Under a Service Agreement among the Manager, the Company and
Manufacturers Life dated May 3, 1984, Manufacturers Life
provides the Manager with personnel, office space, supplies
and equipment required by the Manager and makes available to
the Manager certain statistical and economic data, investment
research reports and other research materials of Manufacturers
Life's Investment Department. Under the Service Agreement,
Manufacturers Life is not entitled to any compensation beyond
reimbursement from the Manager for Manufacturers Life's cost
in providing services, supplies, equipment and office space.
The Company's Board of Directors and its sole shareholder
unanimously approved the agreement originally on May 3, 1984,
and at the Company's Annual Meeting of Shareholders held on
April 15, 1988, the Service Agreement was continued to May 3,
1989 by the affirmative vote of a majority of the outstanding
voting securities of the class (as defined in paragraph (h) of
Rule 18f-2 under the Investment Company Act of 1940) of the
capital stock of each Fund of the Company. The votes cast by
each Fund included shares attributable to Policies
participating in the sole shareholder's Separate Accounts.
At the meeting of February 15, 1994, the Board of Directors,
including a majority of Directors who are not "interested
persons" of any party to the Service Agreement or Investment
Advisory Agreement approved (i) an amendment to the Investment
Advisory Agreement with respect solely to the International
Fund and the Pacific Rim Emerging Markets Fund and (ii) a
resolution extending the terms of the Service Agreement to the
International Fund and the Pacific Rim Emerging Markets Fund.
The Amendment to the Investment Advisory Agreement and a form
of Service Agreement containing all major terms of the May 3,
1984 Service Agreement were presented at a Special Meeting of
the Funds' initial shareholders held on October 4, 1994 and
approved thereby.
At the Meeting of November 16, 1994, the Board of Directors,
including a majority of Directors who are not "interested
persons" of any party to the Service Agreement or the
Investment Advisory Agreement, voted to continue both the
Service Agreements and the Investment Advisory Agreement until
January 1, 1996.
<REDLINE>
At the Meeting of November 14, 1995, the Board of Directors,
including a majority of Directors who are not "interested
16
<PAGE>
persons" of any party to the Service Agreement or Investment
Advisory Agreement approved (i) an amendment to the Investment
Advisory Agreement with respect solely to the Equity Index
Fund and (ii) a resolution extending the terms of the Service
Agreement to cover the Equity Index Fund. At that meeting the
Board also voted to continue the Service Agreements and the
Investment Advisory Agreement, as amended, until January 1,
1997. Both the amendment to the Investment Advisory Agreement
and the Service Agreement were approved by the International
Fund's and Pacific Rim Emerging Markets Fund's initial
shareholders at a meeting held for that purpose on October 4,
1994.
The Investment Advisory Agreement and the Service Agreements
will continue past January 1, 1997 from year to year so long
as the continuance of each is specifically approved at least
annually either (i) by the Board of Directors of the Company
or (ii) by a vote of a majority of the outstanding voting
securities of the Company, provided that in either event the
continuance is also approved by the vote of a majority of the
Directors who are not "interested persons" of any party to the
agreements, cast in person at a meeting called for the purpose
of voting on such approval. The required shareholder approval
of any continuance of either agreement shall be effective with
respect to any Fund of the Company if a majority of the
outstanding voting securities of the class of capital stock of
that Fund vote to approve such continuance, notwithstanding
that such continuance may not have been approved by a majority
of the outstanding voting securities of the Company. The
Investment Advisory Agreement and the Service Agreement may be
terminated at any time, without payment of any penalty, by the
Board of Directors of the Company or by the vote of a majority
of the outstanding voting securities of the Company, with
respect to any Fund of the Company by the vote of a majority
of outstanding voting securities of the class of capital stock
of such Fund, by the Manager or, in the case of the Service
Agreement, by Manufacturers Life, on 60 days' written notice
to the other party or parties to the agreements. Both
agreements will automatically terminate in the event of their
assignment.
</REDLINE>
The Investment Advisory Agreement may be amended by the
Company and the Manager provided such amendment is
specifically approved by the vote of a majority of the
outstanding voting securities of the Company and by the vote
of a majority of the directors of the Company who are not
interested persons of the Manager or the Company cast in
person at a meeting called for the purpose of voting on such
approval. The required shareholder approval of any amendment
shall be effective with respect to any Fund if a majority of
the outstanding voting securities of the class of capital
17
<PAGE>
stock of that Fund vote to approve the amendment,
notwithstanding that the amendment may not have been approved
by a majority of the outstanding voting securities of the
Company.
Portfolio Brokerage
Pursuant to the Investment Advisory Agreement, the Manager is
responsible for placing all orders for the purchase and sale
of portfolio securities of the Funds. The Manager has no
formula for the distribution of the Company's brokerage
business, its intention being to place orders for the purchase
and sale of securities with the primary objective of obtaining
the most favorable net results for the Company. The cost of
securities transactions for each Fund will consist primarily
of brokerage commissions or dealer or underwriter spreads.
Bonds and money market instruments are generally traded on a
net basis and do not normally involve either direct brokerage
commissions or transfer taxes.
Occasionally, securities may be purchased directly from the
issuer. For securities traded primarily in the over-the-
counter market, the Manager will, where possible, deal
directly with dealers who make a market in the securities
unless better prices and execution are available elsewhere.
Such dealers usually act as principals for their own account.
In selecting brokers or dealers through whom to effect
transactions, the Manager will consider a number of factors,
including price, dealer spread or commission, if any, size of
the transaction, difficulty of execution and the value and
quality of any research, statistical, quotation or valuation
services provided by the broker or dealer. Research services
provided by brokers and dealers include advice, either
directly or through publications or writings, as to the value
of securities, the advisability of purchasing or selling
securities, the availability of securities or purchasers or
sellers of securities, and analyses and reports concerning
issuers, industries, securities, economic factors and trends
and portfolio strategy. In placing a purchase or sale order,
the Manager may use a broker whose commission in effecting the
transaction is higher than that of some other broker or dealer
if the Manager determines in good faith that the amount of the
higher commission is reasonable in relation to the value of
the brokerage and research services provided by such broker,
viewed in terms of either the particular transaction or the
Manager's overall responsibilities with respect to the Company
and any other accounts managed by the Manager.
To the extent research services are used by the Manager in
rendering investment advice to the Company, such services
would tend to reduce the Manager's expenses. However, the
18
<PAGE>
Manager does not believe that an exact dollar value can be
assigned to these services. Research services received by the
Manager from brokers or dealers executing transactions for the
Company will be available also for the benefit of other
portfolios managed by the Manager or Manufacturers Life, and
conversely, research services received by the Manager or
Manufacturers Life in respect of transactions for such other
portfolios will be available for the benefit of the Company.
Manufacturers Life manages a number of portfolios, including
the portfolios of its general account and several separate
accounts, and the Manager currently manages one other
portfolio and intends to manage others. Although investment
recommendations or determinations for the Company will be made
by the Manager independently from the investment
recommendations or determinations made by it for any other
portfolios or by Manufacturers Life for the portfolios it
manages, investments deemed appropriate for the Company by the
Manager may also be deemed appropriate by it or Manufacturers
Life for other portfolios, so that the same security may be
purchased or sold at or about the same time for both the
Company and such other portfolios. In such circumstances, the
Manager may determine or agree with Manufacturers Life that
orders for the purchase or sale of the same security for the
Company and one or more other portfolios should be combined,
in which event the transactions will be averaged as to price
and normally allocated as nearly as practicable in proportion
to the amounts desired to be purchased or sold for each
portfolio. While in some instances combined orders could
adversely affect the price or volume of a security, the
Company believes that its participation in such transactions
on balance will produce better overall results for the
Company.
Capital Stock
The Company was incorporated under the laws of the state of
Maryland on July 22, 1983. The authorized capital stock of
the Company consists of 1,000,000,000 shares of common stock,
par value $0.01 per share. The shares of common stock are
currently divided into the following classes (or series):
Emerging Growth Equity Fund common stock, Balanced Assets Fund
common stock, Capital Growth Bond Fund common stock, Money-
Market Fund common stock, Common Stock Fund common stock, Real
Estate Securities Fund common stock, International Fund common
stock, Pacific Rim Emerging Markets Fund and Equity Index Fund
common stock. Each class currently consists of 100,000,000
shares. The Company reserves the right to later issue
additional classes of shares without the consent of
outstanding shareholders, and may allocate its 100,000,000
unclassified shares either to such new classes or to one or
more of the existing class. The shares of each Fund, when
issued and paid for, will be fully paid and non-assessable,
19
<PAGE>
will have no preference, pre-emptive, conversion, exchange or
similar rights, and will be freely transferable. Holders of
shares of any Fund are entitled to redeem their shares as set
forth under "Purchases And Redemptions Of Shares."
All shares of common stock, of whatever class, are entitled to
one vote and all votes are on an aggregate basis, except that
only shares of a particular Fund are entitled to vote on
matters determined by the Board of Directors to affect only
the interests of that Fund. Pursuant to the Investment
Company Act of 1940 and the rules and regulations thereunder,
certain matters approved by a vote of all shareholders of the
Company may not be binding on a Fund whose shareholders have
not approved such matter. Shares of the Company do not have
cumulative voting rights, which means that the holders of more
than half of the Company's shares voting for the election of
directors can elect all of the directors if they so choose.
In such event, the holders of the remaining shares would not
be able to elect any directors.
Each issued and outstanding share is entitled to participate
equally in dividends and distributions declared by the
respective Funds and, upon liquidation or dissolution, in the
net assets of such Fund remaining after satisfaction of
outstanding liabilities. For these purposes and for purposes
of determining the sale and redemption prices of shares, any
assets which are not clearly allocable to a particular Fund or
Funds will be allocated in the manner determined by the Board
of Directors. Accrued liabilities which are not clearly
allocable to one or more Funds will also be allocated among
the Funds in the manner determined by the Board of Directors.
Generally, any assets and accrued liabilities not clearly
allocable to one or more Funds will be allocated to all of the
Funds in proportion to their relative net asset values at the
time the allocation is made, unless an allocation on such
basis would be, in the opinion of the Board of Directors,
inappropriate. In the unlikely event that any Fund incurred
liabilities in excess of its assets, the other Funds could be
held liable for such excess.
Principal Holders Of Securities
<REDLINE>
As of November 1, 1995, Manufacturers Life of America owned
15.7%, 60.1%, and 59.2% of the shares attributable to the
Capital Growth Bond, International and Pacific Rim Emerging
Markets Funds, respectively.
As of November 1, 1995 11.5% of the Capital Growth Bond Fund's
shares were attributable to a variable universal life policy
owned by IFDA Services, Inc., of Springfield, Illinois and
20
<PAGE>
9.15% of the Money-Market Fund shares were attributable to a
variable annuity policy owned by Ali R. Ghahramani of Boca
Raton, Florida.
</REDLINE>
Purchases And Redemptions Of Shares
Shares of the Company are currently offered continuously,
without sales charge, at prices equal to the respective net
asset values of the Funds, only to Manufacturers Life of
America. The Company sells its shares to such company
directly without the use of any underwriter.
Shares of the Company are sold and redeemed at their net asset
value next computed after a purchase or redemption order is
received by the Company. Depending upon the net asset values
at that time, the amount paid upon redemption may be more or
less than the cost of the shares redeemed. Payment for shares
redeemed will be made as soon as possible, but in any event
within seven days after receipt of a request for redemption.
However, the Company may suspend the right of redemption or
postpone the date of payment beyond seven days during any
period when (a) trading on the New York Stock Exchange is
restricted, as determined by the Securities and Exchange
Commission, or such Exchange is closed for other than weekends
and holidays; (b) an emergency exists, as determined by the
Commission, as a result of which disposal by the Company of
securities owned by it is not reasonably practicable or it is
not reasonably practicable for the Company fairly to determine
the value of its net assets; or (c) the Commission by order so
permits for the protection of security holders of the Company.
21
<PAGE>
Taxes, Dividends And Distributions
The Company intends to qualify as a regulated investment
company under Subchapter M of the Internal Revenue Code (the
"Code"). Under such provisions, the Company will not be
subject to federal income tax on such part of its net ordinary
income and net realized capital gains that it distributes to
shareholders. Each Fund of the Company will be treated as a
separate corporation for federal income tax purposes and,
therefore, the investment results of each Fund will determine
whether a particular Fund qualifies as a regulated investment
company and for the purposes of determining the Fund's net
ordinary income (or loss) and net realized capital gains (or
losses). To qualify for treatment as a regulated investment
company, a Fund must, among other things, derive in each
taxable year at least 90% of its gross income from dividends,
interest and gains from the sale or other disposition of
securities, and must derive less than 30% of its gross income
in each taxable year from gains (without deduction for losses)
from the sale or other disposition of securities held for less
than three months.
The Funds of the Company intend to distribute as dividends
substantially all of their net investment income, if any. For
dividend purposes, net investment income of each Fund will
consist of all payments of dividends (other than stock
dividends) or interest received by such Fund less the
estimated expenses of such Fund (including fees payable to the
Manager). Dividends from the net investment income of a Fund
will be declared at least annually and reinvested in
additional full and fractional shares of that Fund. The Funds
of the Company presently intend to declare and distribute at
least annually all of their net realized capital gains, if
any. Section 4982 of the Code imposes an excise tax on mutual
funds which fail to distribute net investment income and
capital gains by the end of the calendar year in accordance
with the provisions of the Act. The Company intends to comply
with the Act s requirements and to avoid or minimize this
excise tax.
The foregoing is a general and abbreviated summary of the
applicable provisions of the Code and Treasury Regulations
currently in effect. For the complete provisions, reference
should be made to the pertinent Code sections and the Treasury
Regulations promulgated thereunder. The Code and these
Regulations are subject to change by legislative or
administrative action.
Performance Information
As noted in the Prospectus, Manufacturers Life of America may,
from time to time, publish advertisements or distribute sales
literature showing the average annual total return for one-
22
<PAGE>
year, five-year and (when applicable) 10-year periods. The
five-year or 10-year figures are replaced by a figure for the
period since inception of younger Funds; the one-year figure
would be replaced by aggregate total return since inception
for Funds less than one year old.
Total return quotations for any of the Funds will include the
average annual compounded rates of return required for an
account with an initial investment of $1,000 to equal the
redemption value of the account at the end of the period,
which period will end on the last day of the most recently
completed quarter. This calculation reflects all Fund charges
and expenses and assumes reinvestment of all dividends and
distributions. Average annual total returns may also be shown
from time to time for other time periods, including three-year
periods, one-year periods ending on the last day of the most
recently completed month, and since inception. In addition,
aggregate total return as of the end of each year since
inception may be shown for each of the Funds, including year-
to-date figures for the current year. Aggregate total return
may be expressed as either a percentage change during the
period or the end-of-period dollar value of an initial
hypothetical investment. Performance data may be shown in the
form of graphs, charts, tables and examples. Total returns
for the period ending December 31, 1994, were as follows:
<TABLE>
<CAPTION>
Avg. Annual Avg. Annual
Total Return Total Return
Fund One Year Three Year
<S> <C> <C>
Emerging Growth . . . . . . . . (4.10)% 13.11%
Balanced Assets . . . . . . . . (4.15)% 4.47%
Capital Growth Bond . . . . . . (4.49)% 3.79%
Common Stock . . . . . . . . . (4.19)% 4.84%
Real Estate Securities . . . . (2.76)% 13.08%
Money-Market . . . . . . . . . 3.89% 3.34%
International . . . . . . . . . N/A N/A
Pacific Rim Emerging Markets . N/A N/A
</TABLE>
* June 26, 1984 for the Emerging Growth Equity, Balanced
Assets, Capital Growth Bond and Money-Market Funds; April
30, 1987 for the Common Stock and Real Estate Securities
23
<PAGE>
Funds; October 4, 1994 for the International and Pacific
Rim Emerging Markets Funds.
24
<PAGE>
<TABLE>
<CAPTION>
Avg. Annual Avg. Annual
Total Return Total Return
Fund Five Year 10 Year
<S> <C> <C>
Emerging Growth . . . . . . . . 16.11% 14.42%
Balanced Assets . . . . . . . . 7.40% 10.60%
Capital Growth Bond . . . . . . 6.76% 9.89%
Common Stock . . . . . . . . . 7.55% N/A
Real Estate Securities . . . . 14.27% N\A
Money-Market . . . . . . . . . 4.67% 5.81%
International . . . . . . . . . N/A N/A
Pacific Rim Emerging Markets . N/A N/A
</TABLE>
* June 26, 1984 for the Emerging Growth Equity, Balanced
Assets, Capital Growth Bond and Money-Market Funds; April
30, 1987 for the Common Stock and Real Estate Securities
Funds; October 4, 1994 for the International and Pacific
Rim Emerging Markets Funds.
25
<PAGE>
<TABLE>
<CAPTION>
Avg. Annual Aggregate
Total Return Total Return
Since Since
Fund Inception* Inception*
<S> <C> <C>
Emerging Growth . . . . . . . . 14.24% 305.51%
Balanced Assets . . . . . . . . 11.41% 211.50%
Capital Growth Bond . . . . . . 10.73% 192.02%
Common Stock . . . . . . . . . 7.62% 75.61%
Real Estate Securities . . . . 10.68% 117.70%
Money-Market . . . . . . . . . 5.98% 84.26%
International . . . . . . . . . N/A (1.54)%
Pacific Rim Emerging Markets . N/A (5.63)%
</TABLE>
* June 26, 1984 for the Emerging Growth Equity, Balanced
Assets, Capital Growth Bond and Money-Market Funds; April
30, 1987 for the Common Stock and Real Estate Securities
Funds; October 4, 1994 for the International and Pacific
Rim Emerging Markets Funds.
26
<PAGE>
Aggregate total returns as of the end of each year since
inception are as follows:
<TABLE>
<CAPTION>
Fund 1994 1993
<S> <C> <C>
Emerging Growth . . . . . . . . (4.10)% 23.89%
Balanced Assets . . . . . . . . (4.15)% 11.99%
Capital Growth Bond . . . . . . (4.49)% 10.56%
Common Stock . . . . . . . . . (4.19)% 13.39%
Real Estate Securities . . . . (2.76)% 22.61%
Money-Market . . . . . . . . . 3.89% 2.73%
International . . . . . . . . . (1.54)% N/A
Pacific Rim Emerging Markets . (5.63)% N/A
</TABLE>
27
<PAGE>
Aggregate total returns as of the end of each year since
inception are as follows:
<TABLE>
<CAPTION>
Fund 1992 1991 1990
<S> <C> <C> <C>
Emerging Growth . . . . . . . 21.82% 71.34% (14.90)%
Balanced Assets . . . . . . . 6.21% 23.36% 1.62%
Capital Growth Bond . . . . . 5.89% 16.38% 6.58%
Common Stock . . . . . . . . 6.07% 30.18% (4.06)%
Real Estate Securities . . . 21.29% 41.10% (4.53)%
Money-Market . . . . . . . . 3.40% 5.60% 7.82%
International . . . . . . . . N/A N/A N/A
Pacific Rim Emerging Markets N/A N/A N/A
</TABLE>
28
<PAGE>
Aggregate total returns as of the end of each year since
inception are as follows:
<TABLE>
<CAPTION>
Fund 1989 1988 1987
<S> <C> <C> <C>
Emerging Growth . . . . . . . 42.19% 16.94% (4.88)%
Balanced Assets . . . . . . . 21.33% 7.61% (1.77)%
Capital Growth Bond . . . . . 13.88% 7.14% (1.69)%
Common Stock . . . . . . . . 30.66% 9.86% (14.98)%
Real Estate Securities . . . 9.23% 11.72% (8.42)%
Money-Market . . . . . . . . 8.88% 7.06% 5.67%
International . . . . . . . . N/A N/A N/A
Pacific Rim Emerging Markets N/A N/A N/A
</TABLE>
29
<PAGE>
Aggregate total returns as of the end of each year since
inception are as follows:
<TABLE>
<CAPTION>
Fund 1986 1985 1984
<S> <C> <C> <C>
Emerging Growth . . . . . . . (6.59)% 23.38% 5.41%
Balanced Assets . . . . . . . 17.35% 27.30% 13.76%
Capital Growth Bond . . . . . 22.37% 26.13% 13.73%
Common Stock . . . . . . . . N/A N/A N/A
Real Estate Securities . . . N/A N/A N/A
Money-Market . . . . . . . . 6.07% 7.13% 4.78%
International . . . . . . . . N/A N/A N/A
Pacific Rim Emerging Markets N/A N/A N/A
</TABLE>
30
<PAGE>
All of the above performance data are based on the actual
historical performance of the Funds for specified periods, and
the figures are not intended to indicate future performance.
Further, the above performance data do not reflect charges
made pursuant to the terms of the variable life insurance and
variable annuity policies funded by separate accounts that
invest in the Company's shares. If such charges were
reflected, returns would be lower.
From time to time, in advertisements or in reports to
policyowners, the Company may quote various independent
quotation services for the purpose of comparing a Fund's
performance ranking with that of other mutual funds with
similar investment objectives. These rankings are not to be
considered indicative of the future performance of the Funds.
The quotation services which are currently followed by the
Company include Lipper Analytical Services, Inc., Morningstar
Inc., Variable Annuity Research and Data Service, and Money
Magazine; however, other nationally recognized rating services
may be quoted in the future. The performance of certain
unmanaged indices may also be quoted in advertisements or in
reports to policyowners. These indices include Standard &
Poor's 500 Index, National Association of Real Estate A11
REIT's Index, Salomon Brothers (broad corporate index), Dow
Jones Industrial Average, Donoghue Prime Money Fund Index,
three-month Treasury bills, the National Association of
Securities Dealers Automated Quotation System, and the
Financial Times Actuaries World Index. These comparisons may
include graphs, charts, tables or examples.
General Information
Reports To Shareholders
Annual and semi-annual reports containing financial statements
of the Company will be sent to shareholders.
Name
Manufacturers Life claims ownership of the tradename
"Manulife." Under a separate agreement, Manufacturers Life has
granted to the Company the right to use the "Manulife"
tradename and has reserved the right to withdraw its consent
to the use of such name by the Company at any time and to
grant the use of such name to any other users.
Experts
31
<PAGE>
The financial statements of the Company included in this
Statement of Additional Information have been audited by Ernst
& Young LLP, independent auditors, as indicated in their
report in this Statement of Additional Information and are
included herein in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
Legal Counsel
Messrs. Jones & Blouch, 2100 Pennsylvania Ave., N.W.,
Washington, D.C. 20037, will pass upon legal matters for the
Company in connection with the shares offered pursuant to the
Prospectus.
32
<PAGE>
Appendix A
Money-Market Instruments In Which The Money-Market Fund May
Invest
The Prospectus describes briefly the investment policies of
the Money-Market Fund in terms of the types of instruments in
which the Money-Market Fund may invest. A more complete
description of such instruments follows:
1. U.S. Government and Government Agency Obligations U.S.
Government obligations are debt securities issued or
guaranteed as to principal or interest by the U.S. Treasury.
These securities include Treasury bills, notes and bonds.
U.S. Government agency obligations are debt securities issued
or guaranteed as to principal or interest by an agency or
instrumentality of the U.S. Government pursuant to authority
granted by Congress. U.S. Government agency obligations
include, but are not limited to, the Student Loan Marketing
Association, Federal Home Loan Banks, Federal Intermediate
Credit Banks, and the Federal National Mortgage Association.
U.S. instrumentality obligations include, but are not limited
to, the Export-Import Bank and Farmers Home Administration.
Some obligations issued or guaranteed by U.S. Government
agencies or instrumentalities are supported by the right of
the issuer to borrow from the U.S. Treasury, such as those
issued by Federal Intermediate Credit Banks; others, such as
those issued by the Federal National Mortgage Association, by
discretionary authority of the U.S. Government to purchase
certain obligations of the agency or instrumentality; and
others, such as those issued by the Student Loan Marketing
Association, only by the credit of the agency or
instrumentality. No assurance can be given that the U.S.
Government will provide financial support to such U.S.
Government sponsored agencies or instrumentalities in the
future, since it is not obligated to do so by law.
2. Canadian Government and Crown Agency Obligations Canadian
Government obligations are debt securities issued or
guaranteed as to principal or interest by the Government of
Canada pursuant to authority granted by the Parliament of
Canada and approved by the Governor in Council, where
necessary. These securities include Treasury bills, notes,
bonds, debentures and marketable Government of Canada loans.
Canadian Crown agency obligations are debt securities issued
or guaranteed by a Crown corporation, company or agency
("Crown agencies") pursuant to authority granted by the
Parliament of Canada and approved by the Governor in Council,
where necessary. Certain Crown agencies are by statute agents
of Her Majesty in right of Canada, and their obligations, when
33
<PAGE>
properly authorized, constitute direct obligations of the
Government of Canada. Such obligations include, but are not
limited to, those issued or guaranteed by the Export
Development Corporation, Farm Credit Corporation, Federal
Business Development Bank and Canada Post Corporation.
In addition, certain Crown agencies which are not by law
agents of Her Majesty may issue obligations which by statute
the Governor in Council may authorize the Minister of Finance
to guarantee on behalf of the Government of Canada. Other
Crown agencies which are not by law agents of Her Majesty may
issue or guarantee obligations not entitled to be guaranteed
by the Government of Canada. No assurance can be given that
the Government of Canada will support the obligations of Crown
agencies which are not agents of Her Majesty, which it has not
guaranteed, since it is not obligated to do so by law.
Any Canadian obligation acquired by the Money-Market Fund will
be payable in U.S. dollars.
3. Bank Obligations Bank obligations include negotiable
certificates of deposit. Certificates of deposit are
certificates issued against funds deposited in a bank. They
are for a definite period of time and earn a specified rate of
return. The Fund may acquire obligations of foreign branches
of U.S. banks. These obligations are not insured by the
Federal Deposit Insurance Corporation.
4. Commercial Paper Commercial paper consists of unsecured
promissory notes issued by corporations to finance short-term
credit needs. Commercial paper is issued in bearer form with
maturities generally not exceeding nine months.
5. Corporate Obligations Corporate obligations include bonds
and notes issued by corporations to finance long-term credit
needs.
6. Repurchase Agreements Repurchase agreements are
arrangements involving the purchase of obligations by the Fund
and the simultaneous agreement to resell the same obligations
on demand or at a specified future date and at an agreed upon
price. A repurchase agreement can be viewed as a loan made by
the Fund to the seller of the obligation with such obligation
serving as collateral for the seller's agreement to repay the
amount borrowed with interest. Such transactions afford an
opportunity for the Fund to earn a return on cash which is
only temporarily available. Repurchase agreements entered into
by the Fund will be with banks, brokers or dealers. Although
repurchase agreements involve certain risks not associated
with direct investments in debt securities, the Fund follows
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<PAGE>
procedures established by its Board of Directors which are
designed to minimize such risks. Accordingly, repurchase
agreements will be limited to transactions with financial
institutions believed by the Manager to present minimum credit
risks. Should an issuer of a repurchase agreement fail to
repurchase the underlying security, the loss to the fund, if
any, would be the difference between the repurchase price and
the security's market value. The Fund might also incur
certain costs in liquidating the underlying security.
Moreover, if bankruptcy proceedings should be commenced with
respect to the seller, realization upon the security by the
Fund might be delayed or limited. Generally, repurchase
agreements are of a short duration, often less than one week
but on occasion for longer periods.
35
<PAGE>
Appendix B
Debt Security Ratings
The Balanced Assets Fund, Capital Growth Bond Fund and Money-
Market Fund will invest in certain instruments that are rated
by investment services. Definitions of such ratings used by
the Funds appear below:
STANDARD & POOR'S CORPORATION
("S&P")
Commercial Paper:
A-1 The rating A-1 is the highest rating assigned by S&P to
commercial paper which is considered by S&P to have the
following characteristics: Liquidity ratios of the
issuer are adequate to meet cash requirements. Long-term
senior debt is rated "A" or better. The issuer has
access to at least two additional channels of borrowing.
Basic earnings and cash flow have an upward trend with
allowance made for unusual circumstances. Typically, the
issuer's industry is well established and the issuer has
a strong position within the industry. The reliability
and quality of management are unquestioned.
Bonds:
AAA This is the highest rating assigned by S&P to a debt
obligation and indicates an extremely strong capacity to
pay principal and interest.
AA Bonds rated AA also qualify as high-quality debt
obligations. Capacity to pay principal and interest is
very strong, and in the majority of instances they differ
from AAA issues only in small degree.
A Bonds rated A have a strong capacity to pay principal and
interest, although they are somewhat more susceptible to
the adverse effects of changes in circumstances and
economic conditions.
BBB Bonds rated BBB are regarded as having an adequate
capacity to pay principal and interest. Whereas they
normally exhibit protection parameters, adverse economic
conditions or changing circumstances are more likely to
lead to a weakened capacity to pay principal and interest
for bonds in this category than for bonds in the A
category.
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<PAGE>
MOODY'S INVESTORS SERVICE, INC. ("Moody's")
Commercial Paper:
P-1 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 10 years; (7) financial
strength of a parent company and the relationships which
exist 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.
Bonds:
Aaa Bonds which are rated Aaa by Moody's are judged to be of
the best quality. They carry the smallest degree of
investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by
an exceptionally stable margin and principal is secure.
While the various protective elements are likely to
change, such changes as can be visualized are most
unlikely to impair the fundamentally strong position of
such issues.
Aa Bonds which are rated Aa by Moody's are judged to be of
high quality by all standards. Together with the Aaa
group, they comprise what are generally known as high-
grade bonds. They are rated lower than the best bonds
because margins of protection may not be as large as in
Aaa securities or fluctuation of protective elements may
be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat
larger than in Aaa securities.
A Bonds which are rated A by Moody's possess many favorable
investment attributes and are to be considered as upper
medium-grade obligations. Factors giving security to
principal and interest are considered adequate but elements
may be present which suggest a susceptibility to impairment
sometime in the future.
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<PAGE>
Baa Bonds which are rated Baa by Moody's are considered as
medium-grade obligations, that is, they are neither
highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present
but certain protective elements may be lacking or may be
characteristically unreliable over any great length of
time. Such bonds lack outstanding investment
characteristics as well.
FITCH'S INVESTORS SERVICE ("Fitch's")
Commercial Paper:
F-1 The rating F-1 is the highest rating assigned by Fitch's
to commercial paper. Paper assigned this rating is
regarded as having the strongest degree of assurance for
timely repayment.
Bonds:
AAA Bonds rated AAA by Fitch's are of investment grade of the
highest quality. Issuers of such bonds have an
extraordinary ability to pay interest and repay principal
which is unlikely to be affected by reasonably
foreseeable events.
AA Bonds rated AA by Fitch's are of high-quality investment
grade. The ability to pay interest and repay principal,
while very strong, is somewhat less than for AAA rated
bonds, and is more subject to possible changes than the
higher-rated instruments over the life of the issue.
A Bonds rated A by Fitch's are of good-quality investment
grade. The ability of A-rated bonds to pay interest and
repay principal is considered to be strong, but may be more
vulnerable to adverse changes in economic conditions and
other circumstances than bonds with higher ratings.
BBB Bonds rated BBB by Fitch's are of investment grade and of
satisfactory quality whose ability to pay interest and
repay principal is considered adequate. Adverse changes
in economic conditions and circumstances, however, are
more likely to weaken their financial strength than for
bonds of higher ratings.
38
<PAGE>
Appendix C
Investment Techniques Of The
International Fund And
Pacific Rim Emerging Markets Fund
Forward Commitments And When-Issued And Delayed Delivery
Securities
The International Fund and the Pacific Rim Emerging Markets
Fund may enter into forward commitments for the purchase or
sale of securities and may purchase or sell securities on a
"when-issued" or "delayed-delivery" basis. Forward
commitments and when-issued or delayed-delivery transactions
arise when securities are purchased by a Fund with payment and
delivery taking place in the future in order to secure what is
considered to be an advantageous price or yield to the Fund at
the time of entering into the transaction. However, the price
of or yield on a comparable security available when delivery
takes place may vary from the price of or yield on the
security at the time that the forward commitment or when-
issued or delayed-delivery transaction was entered into.
Agreements for such purchases might be entered into, for
example, when a Fund anticipates a decline in interest rates
and is able to obtain a more advantageous price or yield by
committing currently to purchase securities to be issued
later. When a Fund purchases securities on a forward-
commitment, when-issued or delayed-delivery basis, it does not
pay for the securities until they are received, and the Fund
is required to create a segregated account with the Fund's
custodian and to maintain in that account cash, U.S.
Government securities or other liquid high-grade debt
obligations in an amount equal to or greater than, on a daily
basis, the amount of the Fund's forward commitments, when-
issued or delayed-delivery commitments.
A Fund will enter into forward commitments and make
commitments to purchase securities on a when-issued or
delayed-delivery basis only with the intention of actually
acquiring the securities. However, the Fund may sell these
securities before the settlement date if it is deemed
advisable as a matter of investment strategy. Forward
commitments and when-issued and delayed-delivery transactions
are generally expected to settle within three months from the
date the transactions are entered into, although the Fund may
close out its position prior to the settlement date by
entering into a matching sale transaction.
Although none of the Funds intends to make such purchases for
speculative purposes and each Fund intends to adhere to the
39
<PAGE>
policies of the SEC, purchases of securities on such bases may
involve more risk than other types of purchases. For example,
by committing to purchase securities in the future, a Fund
subjects itself to a risk of loss on such commitments as well
as on its Fund securities. Also, a Fund may have to sell
assets which have been set aside in order to meet redemptions.
In addition, if a Fund determines it is advisable as a matter
of investment strategy to sell the forward commitment or when-
issued or delayed-delivery securities before delivery, that
Fund may incur a gain or loss because of market fluctuations
since the time the commitment to purchase such securities was
made. Any such gain or loss would be treated as a capital
gain or loss and would be treated for tax purposes as such.
When the time comes to pay for the securities to be purchased
under a forward commitment or on a when-issued or delayed-
delivery basis, a Fund will meet its obligations from the then
available cash flow or the sale of securities, or, although it
would not normally expect to do so, from the sale of the
forward commitment or when-issued or delayed- delivery
securities themselves (which may have a value greater or less
than a Fund's payment obligation).
Warrants
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase warrants and similar rights, which are
rights to purchase securities at specific prices valid for a
specific period of time. Their prices do not necessarily move
parallel to the prices of the underlying securities, and
warrant holders receive no dividends and have no voting rights
or rights with respect to the assets of an issuer. Warrants
cease to have value if not exercised prior to the expiration
date.
Foreign Securities
No maximum percentage limitation applies to investments in
foreign securities by the International Fund and the Pacific
Rim Emerging Markets Fund.
Foreign securities involve currency risks. The value of a
foreign security denominated in foreign currency changes with
variations in the exchange rates. Fluctuations in exchange
rates may also affect the earning power and asset value of the
foreign entity issuing a security, even one denominated in
U.S. dollars. Dividend and interest payments will be
repatriated based on the exchange rate at the time of
disbursement, and restrictions on capital flows may be
imposed.
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<PAGE>
Foreign securities may be subject to foreign government taxes
which reduce their attractiveness. Other risks of investing
in such securities include political or economic instability
in the country involved, the difficulty of predicting
international trade patterns and the possibility of imposition
of exchange controls. The prices of such securities may be
more volatile than those of domestic securities. In addition,
there may be less publicly available information about a
foreign issuer than about a domestic issuer. Foreign issuers
generally are not subject to uniform accounting, auditing and
financial reporting standards comparable to those applicable
to domestic issuers. There is generally less regulation of
stock exchanges, brokers, banks and listed companies abroad
than in the United States, and settlements may be slower and
may be subject to failure. With respect to certain foreign
countries, there is a possibility of expropriation of assets
or nationalization, imposition of withholding taxes on
dividend or interest payments, possible difficulty in
obtaining and enforcing judgments against foreign entities or
diplomatic developments which could affect investment in these
countries. Losses and other expenses may be incurred in
converting between various currencies in connection with
purchases and sales of foreign securities.
Eurodollar Securities
Negotiable certificates of deposit and time deposits of
foreign branches of American or foreign banks payable in
United States dollars are known as Eurodollar deposits.
Eurodollar securities also include bonds underwritten by an
international syndicate and sold "at issue" to non-U.S.
investors. Such securities are not registered with the SEC or
issued domestically and are primarily traded in foreign
markets. Certain risks applicable to foreign securities apply
to Eurodollar instruments. Investment risks from these
securities include political and economic developments,
possible foreign withholding taxes on interest, possible
seizure of foreign deposits, or the possible establishment of
exchange controls affecting payment on these securities. See
"Foreign Securities," above, for additional information about
foreign securities. In addition to those risks, foreign
branches of American and foreign banks have extensive
government regulations which may limit both the amount and
type of loans and interest rates. In addition, the banking
industry's profitability is closely linked to prevailing money
market conditions for financing lending operations. Both
general economic conditions and credit risks play an important
part in the operations of the industry. American banks are
required to maintain reserves, are limited in how much they
can lend a single borrower and are subject to other
41
<PAGE>
regulations to promote financial soundness. Not all of these
laws and regulations apply to foreign branches of American and
foreign banks. In addition, foreign countries have accounting
and reporting principles that differ from those in the United
States.
Transactions In Options, Futures And Forward Contracts
To the extent provided below, the International Fund and the
Pacific Rim Emerging Markets Fund may enter into transactions
in options, futures and forward contracts on a variety of
instruments and indices, in order to protect against declines
in the value of Fund securities and increases in the cost of
securities to be acquired. In general, these two Funds will
limit their use of futures contracts and options on futures
contracts so that the contracts or options thereon are for
"bona fide hedging" purposes as defined under regulations of
the Commodity Futures Trading Commission (CFTC). These
instruments will be used for hedging purposes and not for
speculation or to leverage the Funds.
Options On Securities
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase put options and call options. The Funds may
purchase put options on securities to protect their holdings
against a substantial decline in market value. The purchase
of put options on securities will enable a Fund to preserve,
at least partially, unrealized gains in an appreciated
security in its Fund without actually selling the security.
In addition, the Fund will continue to receive interest or
dividend income on the security. The Funds may also purchase
call options on securities to protect against substantial
increases in prices of securities the Funds intend to purchase
pending their ability to invest in an orderly manner in those
securities. The Funds may sell put or call options they have
previously purchased, which could result in a net gain or loss
depending on whether the amount received on the sale is more
or less than the premium and other transaction costs paid on
the put or call option which was bought.
There is no assurance that a liquid secondary market on an
exchange will exist for any particular option, or at any
particular time, and for some options, such as over-the-
counter options, no secondary market on an exchange may exist.
If a Fund is unable to effect a closing purchase transaction,
the Fund will not sell the underlying security until the
option expires or the Fund delivers the underlying security
upon exercise.
42
<PAGE>
Securities Index Options
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase call and put options on securities indexes
for the purpose of hedging against the risk of unfavorable
price movements adversely affecting the value of a Fund's
securities or securities it intends to purchase. Unlike a
stock option, which gives the holder the right to purchase or
sell a specified stock at a specified price, an option on a
securities index gives the holder the right to receive a cash
"exercise settlement amount" equal to (i) the difference
between the exercise price of the option and the value of the
underlying stock index on the exercise date, multiplied by
(ii) a fixed "index multiplier."
The effectiveness of hedging through the purchase of
securities index options will depend upon the extent to which
price movements in the portion of the securities Fund being
hedged correlate with price movements in the selected
securities index. Perfect correlation is not possible because
the securities held or to be acquired by a Fund will not
exactly match the composition of the securities indexes on
which options are written. In the purchase of securities
index options, the principal risk is that the premium and
transaction costs paid by a Fund in purchasing an option will
be lost if the changes (increase in the case of a call,
decrease in the case of a put) in the level of the index do
not exceed the cost of the option.
Over-The-Counter Options
Options traded in the over-the-counter market may not be as
actively traded as those on an exchange. Accordingly, it may
be more difficult to value such options. In addition, it may
be difficult to enter into closing transactions with respect
to options traded over-the-counter. The International Fund
and the Pacific Rim Emerging Markets Fund will engage in such
transactions only with firms of sufficient credit so as to
minimize these risks. Such options may be considered illiquid
securities.
Futures Transactions
The International Fund and the Pacific Rim Emerging Markets
Fund may trade in certain futures contracts. A futures
contract is a bilateral agreement to buy or sell a security
(or deliver a cash settlement price, in the case of a contract
relating to an index or otherwise not calling for physical
delivery at the end of trading in the contracts) for a set
price in the future. No purchase price is paid or received
43
<PAGE>
when the contract is entered into. Instead, a good faith
deposit known as initial margin is made with the broker and
subsequent daily payments known as variation margin are made
to and by the broker reflecting changes in the value of the
security or level of the index. Futures contracts are
designated by boards of trade which have been designated
"contracts markets" by the CFTC. By using futures contracts
as a risk management technique, given the greater liquidity in
the futures market than in the cash market, it might be
possible to accomplish certain results more quickly and with
lower transactions costs.
Purchases or sales of securities index futures contracts may
be used to attempt to protect a Fund's current or intended
investments from broad fluctuations in securities prices, and
interest rate and foreign currency futures contracts are
purchased or sold to attempt to hedge against the effects of
interest or exchange rate changes on a Fund's current or
intended investments in fixed income or foreign securities.
The International Fund and the Pacific Rim Emerging Markets
Fund may trade in foreign currency futures contracts. In the
event that an anticipated decrease in the value of Fund
securities occurs as a result of a general stock market
decline, a general increase in interest rates or a decline in
the dollar value of foreign currencies in which Fund
securities are denominated, the adverse effects of such
changes may be offset, in whole or part, by gains on the sale
of futures contracts. In addition, the increased cost of Fund
securities to be acquired, caused by a general rise in the
dollar value of foreign currencies or by a rise in stock
prices or a decline in interest rates, may be offset, in whole
or part, by gains on futures contracts purchased by a Fund. A
Fund will incur brokerage fees when it purchases and sells
futures contracts, and it will be required to maintain margin
deposits. (See "Risks Of Transactions In Options, Futures
Contracts And Forward Currency Contracts," below.) Positions
taken in the futures markets are not normally held until
delivery or cash settlement is required, but are instead
liquidated through offsetting transactions which may result in
a gain or a loss. While futures positions taken by a Fund
will usually be liquidated in this manner, the Fund may
instead make or take delivery of underlying securities
whenever it appears economically advantageous to the Fund to
do so. A clearing organization associated with the exchange
on which futures are traded assumes responsibility for closing
out transactions and guarantees that, as between the clearing
members of an exchange, the sale and purchase obligations will
be performed with regard to all positions that remain open at
the termination of the contract.
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<PAGE>
Securities Index Futures Contracts
A securities index futures contract does not require the
physical delivery of securities, but merely provides for
profits and losses resulting from changes in the market value
of the contract to be credited or debited at the close of each
trading day to the respective accounts of the parties to the
contract. On the contract s expiration date a final cash
settlement occurs and the futures positions are simply closed
out. Changes in the market value of a particular index
futures contract reflect changes in the specified index of
securities on which the future is based.
By establishing an appropriate "short" position in index
futures, a Fund may seek to protect the value of its Fund
against an overall decline in the market for such securities.
Alternatively, in anticipation of a generally rising market, a
Fund can seek to avoid losing the benefit of apparently low
current prices by establishing a "long" position in securities
index futures and later liquidating that position as
particular securities are in fact acquired. To the extent
that these hedging strategies are successful, the Fund will be
affected to a lesser degree by adverse overall market price
movements than would otherwise be the case.
Options On Futures Contracts
The International Fund and the Pacific Rim Emerging Markets
Fund may also purchase and sell exchange-traded call and put
options on futures contracts of the type which the particular
Fund is authorized to enter into. A call option on a futures
contract gives the purchaser the right, in return for the
premium paid, to purchase a futures contract (assume a "long"
position), at a specified exercise price at any time before
the option expires. A put option gives the purchaser the
right, in return for the premium paid, to sell a futures
contract (assume a "short" position), for a specified exercise
price, at any time before the option expires.
Upon the exercise of a call, the writer of the option is
obligated to sell the futures contract (to deliver a "long"
position to the option holder) at the option exercise price,
which will presumably be lower than the current market price
of the contract in the futures market. Upon exercise of a
put, the writer of the option is obligated to purchase the
futures contract (deliver a "short" position to the option
holder) at the option exercise price which will presumably be
higher than the current market price of the contract in the
futures market. When the holder of an option exercises it and
assumes a long futures position, in the case of a call, or a
45
<PAGE>
short futures position, in the case of a put, its gain will be
credited to its futures margin account, while the loss
suffered by the writer of the option will be debited to its
account and must be immediately paid by the writer. However,
as with the trading of futures, most participants in the
options markets do not seek to realize their gains or losses
by exercise of their option rights. Instead, the holder of an
option will usually realize a gain or loss by buying or
selling an offsetting option at a market price that will
reflect an increase or a decrease from the premium originally
paid.
Options on futures contracts can be used by a Fund to hedge
substantially the same risks as might be addressed by the
direct purchase or sale of the underlying futures contracts.
If the Fund purchases an option on a futures contract, it may
obtain benefits similar to those that would result if it held
the futures position itself. Purchases of options on futures
contracts may present less risk in hedging than the purchase
and sale of the underlying futures contracts since the
potential loss is limited to the amount of the premium plus
related transaction costs.
The purchase of put options on futures contracts is a means of
hedging a Fund of securities against a general decline in
market prices. The purchase of a call option on a futures
contract represents a means of hedging against a market
advance when a Fund is not fully invested. Unlike a futures
contract, the Fund's risk in purchasing an option is limited
to the premium paid for the option, but the cost of the
premium paid will offset any gain in the option.
While the holder of an option on a futures contract may
normally terminate its position by selling or purchasing an
offsetting option of the same series, a Fund's ability to
establish and close out options positions at fairly
established prices will be subject to the existence of a
liquid market. The Funds will not purchase options on futures
contracts unless, in the Investment Manager's opinion, the
market for such options has sufficient liquidity that the
risks associated with such options transactions are not at
unacceptable levels.
Limitations On Purchase And Sale Of Futures Contracts And
Options On Futures Contracts
The International Fund and the Pacific Rim Emerging Markets
Fund will not engage in transactions in futures contracts and
related options for speculation. These two Funds may enter
into futures contracts and buy and sell related options as
46
<PAGE>
described above. The Funds will not purchase or sell futures
contracts or related options unless the futures contracts or
options thereon are purchased for "bona fide hedging" purposes
(as that term is defined under the CFTC regulations). In
instances involving the purchase of futures contracts by a
Fund, an amount of cash and cash equivalents, equal to the
cost of such futures contracts (less any related margin
deposits), will be deposited in a segregated account with its
custodian, thereby insuring that the use of such futures
contracts and options is unleveraged. In instances involving
the sale of futures contracts by a Fund, the securities
underlying such futures contracts or options will at all times
be maintained by the Fund.
Positions in futures contracts may be closed out only on an
exchange or a board of trade which provides the market for
such futures. Although the Funds intend to purchase or sell
futures only on exchanges or boards of trade where there
appears to be an active market, there is no guarantee that
such will exist for any particular contract or at any
particular time. If there is not a liquid market at a
particular time, it may not be possible to close a futures
position at such time, and, in the event of adverse price
movements, a Fund would continue to be required to make daily
cash payments of maintenance margin. However, in the event
futures positions are used to hedge Fund securities, the
securities will not be sold until the futures positions can be
liquidated. In such circumstances, an increase in the price
of securities, if any, may partially or completely offset
losses on the futures contracts.
Foreign Currency Options, Foreign Currency Futures Contracts
And Options On Futures
The International Fund and the Pacific Rim Emerging Markets
Fund may purchase or sell exchange-traded or over-the-counter
foreign currency options, foreign currency futures contracts
and related options on foreign currency futures contracts as a
hedge against possible variations in foreign exchange rates.
The purchase of an option on foreign currency may constitute
an effective hedge against fluctuations in exchange rates
although, in the event of rate movements adverse to the Fund's
position, it may forfeit the entire amount of the premium plus
related transaction costs.
Certain differences exist among foreign currency hedging
instruments. Foreign currency options provide the holder the
right to buy or to sell a currency at a fixed price on or
before a future date. Listed options are third-party
contracts (performance is guaranteed by an exchange or
47
<PAGE>
clearing corporation) which are issued by a clearing
corporation, traded on an exchange and have standardized
prices and expiration dates. Over-the-counter options are
two-party contracts and have negotiated prices and expiration
dates. See "Over-The-Counter Options," above. A futures
contract on a foreign currency is an agreement between two
parties to buy and sell a specified amount of a currency for a
set price on a future date. Futures contracts and listed
options on futures contracts are traded on boards of trade or
futures exchanges. Options traded in the over-the-counter
market may not be as actively traded as those on an exchange,
so it may be more difficult to value such options. In
addition, it may be difficult to enter into closing
transactions with respect to options traded over-the-counter.
A Fund will not speculate in foreign currency options, futures
or related options. Accordingly, a Fund will not hedge a
currency substantially in excess of the market value of the
securities denominated in that currency which it owns or the
expected acquisition price of securities which it anticipates
purchasing.
Hedging against a decline in the value of a currency does not
eliminate fluctuations in the prices of Fund securities or
prevent losses if the prices of such securities decline.
These hedging transactions also preclude the opportunity for
gain if the value of the hedged currency should rise.
Forward Foreign Currency Exchange Contracts
When a Fund invests in foreign securities, the securities are
usually denominated in foreign currency, and the Fund may
temporarily hold foreign currency in connection with such
investments. As a result, the value of the Fund's assets will
be subject to fluctuations based on changes in the relative
value of the foreign currency and the United States dollar.
To control the effects of this exchange risk, the
International Fund and the Pacific Rim Emerging Markets Fund
may enter into forward foreign currency exchange contracts
(forward currency contracts), which are agreements to purchase
or sell foreign currencies at a specified future date and
price. Forward currency contracts are usually used to fix the
United States dollar value of securities a Fund has agreed to
buy or sell (transaction hedging). The Funds may also use
forward currency contracts to hedge the United States dollar
value of securities it already owns (position hedging).
In general, forward currency contracts are not regulated by
any governmental authority, or guaranteed by a third party or
traded on an exchange. Accordingly, each party to a forward
48
<PAGE>
currency contract is dependent upon the creditworthiness and
good faith of the other. Creditworthiness is evaluated by the
Manager.
Risks Of Transactions In Options, Futures Contracts And
Forward Currency Contracts
Although the International Fund and the Pacific Rim Emerging
Markets Fund will enter into transactions in futures
contracts, options on securities and securities indexes,
options on futures contracts, forward currency contracts and
certain currency options as described above for hedging
purposes, their use does involve the following risks. A lack
of correlation between the index or instrument underlying an
option or futures contract and the assets being hedged, or
unexpected adverse price movements, could render a Fund's
hedging strategy unsuccessful and could result in losses.
Over-the-counter transactions in options on foreign currencies
and options on securities also involve a lack of an organized
exchange trading environment, making them less liquid, and
making it more difficult to value them than if they were
exchange-traded.
In addition, there can be no assurance that a liquid secondary
market will exist for any futures contract purchased, and a
Fund may be required to maintain a position until exercise or
expiration, which could result in losses. If a futures market
were to become unavailable, in the event of an adverse
movement, the Fund would be required to continue to make daily
cash payments of variation margin if it could not close a
futures position. If an options market were to become
unavailable and a closing transaction could not be entered
into, an option holder would be able to realize profits or
limit losses only by exercising an option. Finally, if a
broker or clearing member of an options or futures clearing
corporation were to become insolvent, the Funds could
experience delays and might not be able to trade or exercise
options or futures purchased through that broker. In
addition, the Funds could have some or all of their positions
closed out without their consent. If substantial and
widespread, these insolvencies could ultimately impair the
ability of the clearing corporations themselves. While the
principal purpose of hedging is to limit the effects of
adverse market movements, the attendant expense may cause the
Fund's returns to be less than if hedging had not taken place.
The overall effectiveness of hedging therefore depends on the
Manager's accuracy in predicting future changes in interest
rate levels or securities price movements, as well as on the
expense of hedging.
49
<PAGE>
Appendix D
CERTAIN INVESTMENT TECHNIQUES
Forward Commitments and When-Issued and Delayed-Delivery
Securities
The Funds may enter into forward commitments for the purchase
or sale of securities and may purchase or sell securities on a
"when-issued" or "delayed-delivery" basis. Forward
commitments and when-issued or delayed-delivery transactions
arise when securities are purchased by a Fund with payment and
delivery taking place in the future in order to secure what is
considered to be an advantageous price or yield to the Fund at
the time of entering into the transaction. However, the price
of or yield on a comparable security available when delivery
takes place may vary from the price of or yield on the
security at the time that the forward commitment or when-
issued or delayed-delivery transaction was entered into.
Agreements for such purchases might be entered into, for
example, when a Fund anticipates a decline in interest rates
and is able to obtain a more advantageous price or yield by
committing currently to purchase securities to be issued
later. When a Fund purchases securities on a forward-
commitment, when-issued or delayed-delivery basis, it does not
pay for the securities until they are received, and the Fund
is required to create a segregated account with the Fund's
custodian and to maintain in that account cash, U.S.
Government securities or other liquid high-grade debt
obligations in an amount equal to or greater than, on a daily
basis, the amount of the Fund's forward commitments, when-
issued or delayed-delivery commitments.
A Fund will only enter into forward commitments and make
commitments to purchase securities on a when-issued or
delayed-delivery basis with the intention of actually
acquiring the securities. However, the Fund may sell these
securities before the settlement date if it is deemed
advisable as a matter of investment strategy. Forward
commitments and when-issued and delayed-delivery transactions
are generally expected to settle within three months from the
date the transactions are entered into, although the Fund may
close out its position prior to the settlement date by
entering into a matching sale transaction.
<REDLINE>
Although none of the Funds intends to make such purchases for
speculative purposes and each Fund intends to adhere to the
policies of the SEC, purchases of securities on such bases may
50
<PAGE>
involve more risk than other types of purchases. For example,
by committing to purchase securities in the future, a Fund
subjects itself to a risk of loss on such commitments as well
as on its portfolio securities. Also, a Fund may have to sell
assets which have been set aside in order to meet redemptions.
In addition, if a Fund determines it is advisable as a matter
of investment strategy to sell the forward commitment or when-
issued or delayed-delivery securities before delivery, that
Fund may incur a gain or loss because of market fluctuations
since the time the commitment to purchase such securities was
made. Any such gain or loss would be treated as a capital
gain or loss and would be treated for tax purposes as such.
When the time comes to pay for the securities to be purchased
under a forward commitment or on a when-issued or delayed-
delivery basis, a Fund will meet its obligations from the then
available cash flow or the sale of securities, or, although it
would not normally expect to do so, from the sale of the
forward commitment or when-issued or delayed delivery
securities themselves (which may have a value greater or less
than a Fund's payment obligation).
<REDLINE>
S&P 500 Futures Contracts
The Equity Index Fund intends to purchase S&P 500 Futures
Contracts. When the Fund purchases S&P Futures Contracts, it
will be required to deposit with the broker an amount of cash
or cash equivalents equal to 5% to 10% of the underlying S&P
500 Futures Contracts amount. The balance of the S&P 500
Futures Contracts amount will be placed in a segregated
account with the Fund's custodian. That segregated account
shall consist of cash, U.S. Government Securities or other
liquid high-grade debt obligations and will be marked daily to
market.
</REDLINE>
51
<PAGE>
Report of Independent Auditors
To the Board of Directors
Manulife Series Fund, Inc.
We have audited the accompanying statement of assets and
liabilities, including schedules of investments, of Manulife
Series Fund, Inc. (comprised of the Emerging Growth Equity
Fund, Common Stock Fund, Real Estate Securities Fund, Balanced
Assets Fund, Capital Growth Bond Fund, Money Market Fund,
International Fund, and Pacific Rim Emerging Markets Fund) as
of December 31, 1994 and the related statement of operations,
the statements of changes in net assets and the highlights for
each of the periods presented therein. These financial
statements and financial highlights are the responsibility of
the Fund s 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 generally accepted
auditing standards. Those standards 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. Our procedures included confirmation of
investments owned as of December 31, 1994, by correspondence
with the custodian and brokers. An audit also includes
assessing the accounting principles used and significant
estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our
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 respective
portfolios constituting the Manulife Series Fund, Inc. at
December 31, 1994, and the results of their operations, the
changes in their net assets, and the financial highlights for
each of the periods presented therein, in conformity with
generally accepted accounting principles.
Ernst & Young LLP
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
February 6, 1995
52
<PAGE>
The following financial statements of
Manulife Series Fund, Inc.
For the 6-month period ended June 30, 1995
are unaudited. They are followed
by the 1994 audited statements.
53
<PAGE>
Emerging Growth Equity Fund
Statement of investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Auto Parts 2.1%
Exide Corp. 61,700 $2,653,100
Biotechnology 10.2%
* Alliance Pharmaceutical Corp. 168,300 1,388,475
* Cellpro Inc. 248,900 3,329,037
* Cytotherapeutics 396,300 2,724,563
* Liposome Inc. 289,000 3,142,875
* Neorx Corp. 372,100 2,023,294
12,608,244
Broadcasters 7.6%
* ACS Enterprises Inc. 181,800 3,317,850
* CAI Wireless Systems Inc. 73,600 846,400
* Heartland Wireless Commun. Inc. 146,300 3,474,625
* Peoples Choice TV Corp. 38,700 972,338
* Preferred Entertainment Inc. 54,300 889,162
9,500,375
Communications 11.4%
Equipment
* A Plus Communications Inc. 140,000 1,855,000
* Arch Communications Group Inc. 138,400 3,079,400
* ITI Technologies Inc. 120,600 2,864,250
* Mobilemedia Corp. 46,800 959,400
* Network Peripherals Inc. 114,400 2,495,350
* Pairgain Technologies Inc. 153,100 2,928,037
14,181,437
Drugs 0.7%
* CIMA Labs Inc. 193,700 823,225
Electric Utilities 1.4%
* Kenetech Corp. 145,300 1,707,275
Electronics 2.1%
* S3 Inc. 71,800 2,584,800
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
54
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Entertainment 1.9%
* Cobra Golf Inc. 8,900 $281,463
* Lodgenet Entertainment Corp. 234,900 2,114,100
2,395,563
Finance: Healthcare 2.6%
* Coventry Corp. 89,400 1,262,775
* Health Mgmt. Systems Inc 67,750 1,981,688
3,244,463
Finance: Insurance 2.2%
* Philadelphia Consolidated
Holding Corp. 158,000 2,310,750
* Physician Corp. America 29,500 401,937
2,712,687
Hospital Management 15.2%
* American Medical Response 111,700 3,127,600
* Arbor Health Care Company 113,900 2,192,575
* Coram Healthcare Corp. 106,600 1,505,725
* Inphynet Medical Mgmt. Inc. 165,500 3,103,125
Integrated Health Services Inc. 67,700 2,031,000
* Mariner Health Group Inc. 186,100 2,093,625
* Quantum Health Residence Inc. 130,400 2,151,600
* Renal Treatment Centers Inc. 108,000 2,659,500
18,864,750
Hospital Supplies 9.0%
* Heart Technology Inc. 133,300 2,582,688
* Instent Inc. 214,000 3,049,500
* Steris Corp. 35,900 1,741,150
* Target Therapeutics Inc. 66,000 2,904,000
* Ventritex Inc. 56,200 948,375
11,225,713
Household Products 0.6%
* Quaker Fabric Corp. 100,000 775,000
</TABLE>
55
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Lodging & Restaurants 1.1%
* Rock Bottom Restaurants Inc. 47,400 $1,386,450
Office Equipment 1.0%
* Metrologic Instruments Inc. 143,000 1,215,500
Pollution Control 3.8%
* Newpark Residence Inc. 88,100 1,850,100
* US Filter Corp. 153,400 2,914,600
4,764,700
Retail 8.6%
* Borders Group Inc. 180,600 2,596,125
* Gymboree Corp. 94,900 2,758,031
* Petsmart Inc. 88,650 2,548,687
* Williams Sonoma Inc. 125,500 2,761,000
10,663,843
Software 5.9%
* Learning Co. 24,100 866,094
* Network Equipment Technologies 144,000 3,420,000
* Spectrum Holobyte Inc. 212,200 3,037,112
7,323,206
Telephone 2.2%
* International Cabletel Inc. 86,200 2,801,500
Total Common Stock 89.6% 111,431,831
</TABLE>
56
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 8.5%
Federal Home Loan Bank 5.870%
due 07/05/1995 850,000 $849,446
Federal Home Loan Mortgage 5.890%
due 07/05/1995 1,420,000 1,419,071
Federal Home Loan Mortgage 5.890%
due 08/07/1995 3,315,000 3,294,932
Federal Home Loan Mortgage 5.900%
due 08/10/1995 1,100,000 1,092,789
Federal Home Loan Mortgage 5.780%
due 09/12/1995 190,000 187,773
Federal National Mortgage Assoc. 5.840%
due 08/10/1995 1,900,000 1,887,671
Federal National Mortgage Assoc. 5.870%
due 08/11/1995 230,000 228,462
Federal National Mortgage Assoc. 5.860%
due 09/13/1995 750,000 740,966
Federal National Mortgage Assoc. 5.800%
due 09/14/1995 850,000 839,729
10,540,839
U.S. Government 1.1%
United States Treasury Bills 5.335%
due 09/28/1995 1,400,000 1,381,535
Canadian Government 2.1%
Agencies
Export Development Corp. 5.900%
due 08/08/1995 1,700,000 1,689,413
Canadian Wheat Board 5.700%
due 10/24/1995 1,000,000 981,792
2,671,205
Business Credit Institutions 0.2%
American Express Credit Corp. 6.040%
due 07/10/1995 250,000 249,622
Total Short Term Investments 11.9% 14,843,201
Total Investments 101.5% 126,275,032
Other Assets Less
Liabilities (1.5%) (1,912,955)
Net Assets - Equivalent to $20.60 Per Share
Based on 6,037,580 Shares of Capital
Stock Outstanding. 100.0% $124,362,077
</TABLE>
57
<PAGE>
Common Stock Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Aerospace 2.1%
Lockheed Martin Corp. 15,000 $946,875
Auto/Auto Related 1.8%
Goodyear Tire & Rubber Co, 20,200 833,250
Beverages 3.9%
Coca Cola Co. 12,700 809,625
Pepsico Inc. 21,600 985,500
1,795,125
Biotechnology 1.2%
*Centocor Inc. 39,800 569,637
Broadcasters 1.7%
*Tele-Communications Inc. 33,600 787,500
Chemicals & Fertilizers 2.0%
Engelhard Corp. 22,000 943,250
Communications 4.0%
*General Instrument Corp. 27,400 1,051,475
*Paging Network Inc. 23,400 801,450
1,852,925
Conglomerate 2.1%
ITT Corp. 8,400 987,000
Containers 2.1%
*Crown Cork & Seal Inc. 19,400 972,425
Drugs 3.8%
Johnson & Johnson 10,800 730,350
Pfizer Inc. 5,400 498,825
*Scherer R P Corp. 12,800 540,800
1,769,975
Electric Utilities 2.9%
Duke Power Co. 10,000 415,000
FPL Group Inc. 12,000 463,500
Southern Co. 19,600 438,550
1,317,050
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
58
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Electrical Equipment 1.9%
General Electric Co. 15,300 $862,537
Electronics 2.1%
* 3COM Corp. 14,100 944,700
Energy 10.9%
Anadarko Pete Corp. 4,000 172,500
Atlantic Richfield Co. 7,200 790,200
Chevron Corp. 15,300 713,362
Exxon Corp. 12,800 904,000
Mobil Corp. 8,600 825,600
Schlumberger Ltd. 13,100 813,838
Unocal Corp. 29,400 812,175
5,031,675
Engineering & Construction 1.3%
Fluor Corp. 11,800 613,600
Entertainment 6.0%
Brunswick Corp 24,300 413,100
Carnival Corp. 35,600 832,150
* Promus Companies Inc. 16,400 639,600
* Viacom Inc. Class'B' 19,400 899,675
2,784,525
Finance: Banks 2.2%
Citicorp 17,300 1,001,238
Finance: Consumer & Other 2.8%
First USA Inc. 8,100 359,437
PMI Group Inc. 21,100 915,213
1,274,650
Finance: Insurance 1.7%
American International Group Inc. 6,700 763,800
Foods 2.1%
Nabisco Holdings Corp. 35,200 950,400
Hospital Management 3.9%
Columbia/HCA Healthcare Corp. 19,600 847,700
United Healthcare Corp. 22,700 939,213
1,786,913
</TABLE>
59
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Metals & Minerals 1.2%
Freeport McMoran Copper & Gold 27,400 $565,125
Natural Gas Pipelines 1.5%
Coastal Corp. 23,000 698,625
Office Equipment 1.9%
Xerox Corp. 7,600 891,100
Personal Care 1.6%
Gillette Co. 16,800 749,700
Retail 5.7%
Albertsons Inc. 30,100 895,475
Sears Roebuck & Co. 30,000 975,000
Wal Mart Stores Inc. 28,500 762,375
2,632,850
Software 2.9%
* Cisco Systems Inc. 5,300 267,981
General Motors Corp. Class'E' 9,500 413,250
* Informix Corp. 25,800 654,675
1,335,906
Telephone 7.9%
* Airtouch Communications Inc. 32,100 914,850
MCI Communications Corp. 42,000 924,000
NYNEX Corp. 20,500 825,125
SBC Communications Inc. 20,000 952,500
3,616,475
Tobacco 4.7%
Philip Morris Companies Inc. 16,900 1,256,938
RJR Nabisco Holdings Corp. 32,160 896,460
2,153,398
Total Common Stock 89.9% 41,432,229
</TABLE>
60
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 4.9%
Federal Home Loan Bank 5.810%
due 08/03/1995 540,000 $537,124
Federal Home Loan Mortgage 5.900%
due 07/17/1995 750,000 748,033
Federal Home Loan Mortgage 5.900%
due 08/10/1995 428,000 425,194
Federal Nati. Mortgage Assoc. 6.050%
due 08/09/1995 150,000 149,017
Federal Natl. Mortgage Assoc. 5.840%
due 08/10/1995 300,000 298,053
Federal Nati. Mortgage Assoc. 5.870%
due 08/11/1995 100,000 99,332
2,256,753
U.S. Government 1.5%
United States Treasury Bills 5.335%
due 09/28/1995 700,000 690,768
Canadian Government 1.3%
Agencies
Export Developement Corp. 5.900%
due 08/08/1995 600,000 596,263
Business & Credit 2.2%
Institutions
American Express Credit Corp. 6.040%
due 07/10/1995 1,000,000 998,490
Energy 0.4%
Chevron Oil Finance Co. 5.920%
due 08/11/1995 200,000 198,652
Personal Credit Institutions 1.7%
Ford Motors Credit Co. 6.020%
due 07/12/1995 780,000 778,565
Total Short Term Investment 12.0% 5,519,491
Total Investments 101.9% 46,951,720
Other Assets Less
Liabilities (1.9%) (886,372)
61
<PAGE>
Net Assets - Equivalent to $14.92 Per Share
Based on 3,088,301 Shares of Capital Stock
Outstanding. 100.0% $46,065,348
</TABLE>
62
<PAGE>
Real Estate Securities Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Building 12.7%
Coachmen Industries Inc. 113,700 $1,733,925
Del Webb Corp. 49,000 1,139,250
Engle Homes Inc. 132,000 1,204,500
Schottenstein Homes Inc. 133,500 1,168,125
Weitzer Home Builders Inc. 100,000 675,000
5,920,800
Finance - Building 10.2%
Continental Homes Holding Corp. 135,000 2,345,625
* Sundance Homes Inc. 54,500 143,062
* US Home Corp. 99,000 2,277,000
4,765,687
Finance - Healthcare 7.9%
Health Care Property Investment Inc. 57,300 1,833,600
Nationwide Health Properties Inc. 47,600 1,856,400
3,690,000
Finance - Real Estate 55.1%
Avalon Properties Inc. 91,000 1,808,625
Bay Apartment Community Inc. 92,400 1,801,800
Beacon Properties 87,000 1,729,125
* Catellus Development Corp. 229,000 1,459,875
Columbus Realty Trust 85,000 1,593,750
Developers Diversified Realty 63,500 1,825,625
Equity Inns Inc. 155,000 1,666,250
Equity Residential Properties Trust 63,000 1,756,125
Federal Realty Investment Trust 83,800 1,812,175
Home Properties N Y Inc. 98,000 1,727,250
Horizon Outlet Centers Inc. 71,500 1,662,375
Oasis Residential Inc. 79,000 1,718,250
RFS Hotel Investments Inc. 92,000 1,403,000
Sovran Self Storage Inc. 75,000 1,725,000
Sun Communities Inc. 80,000 2,000,000
25,689,225
Lodging & Restaurants 3.9%
* Host Marriott Corporation 169,900 1,805,188
Total Common Stock 89.8% 41,870,900
63
<PAGE>
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
64
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 5.7%
Federal Home Loan Bank 5.870%
due 07/05/1995 240,000 $239,843
Federal Home Loan Bank 5.870%
due 08/18/1995 540,000 535,774
Federal Home Loan Mortgage 5.890%
due 07/05/1995 500,000 499,673
Federal Home Loan Mortgage 5.860%
due 08/18/1995 900,000 892,968
Federal National Mortgage Assoc. 5.840%
due 08/10/1995 200,000 198,702
Federal National Mortgage Assoc. 5.860%
due 09/13/1995 300,000 296,386
2,663,346
U.S. Government Obligations 1.9%
United States Treasuty Bills 5.335%
due 09/28/1995 900,000 888,130
Business/Credit Institutions 1.3%
American Express Credit Corp. 6.040%
due 07/10/1995 600,000 599,094
Energy 1.3%
Chevron Oil Finance Co. 5.920%
due 08/11/1995
600,000 595,955
Total Short Term 10.2% 4,746,525
Total Investments 100.0% 46,617,425
Other Assets Less
Liabilities (0.0%) (4,374)
Net Assets - Equivalent to $14.12 Per Share
Based on 3,300,107 Shares of Capital
Stock Outstanding. 100.0% $46,613,051
</TABLE>
65
<PAGE>
Balanced Assets Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S Government Obligations 12.7%
United States Treasury Bonds 7.500%
due 11/15/2024 120,000 $132,769
United States Treasury Notes 4.375%
due 11/15/1996 745,000 731,151
United States Treasury Notes 6.500%
due 05/15/1997 260,000 262,967
United States Treasury Notes 6.000%
due 10/15/1999 1,215,000 1,215,948
United States Treasury Notes 5.500%
due 04/15/2000 670,000 657,015
United States Treasury Notes 6.750%
due 04/30/2000 575,000 592,428
United States Treasury Notes 8.000%
due 05/15/2001 2,270,000 2,487,784
United States Treasury Notes 7.500%
due 11/15/2001 540,000 579,658
United States Treasury Notes 7.500%
due 05/15/2002 690,000 742,826
United States Treasury Notes 6.375%
due 08/15/2002 880,000 890,446
United States Treasury Notes 6.250%
due 02/15/2003 1,790,000 1,794,761
United States Treasury Notes 7.250%
due 05/15/2004 855,000 912,849
United States Treasury Notes 7.500%
due 02/15/2005 520,000 566,233
Total Government 11,566,835
U.S. Government Agencies 1.1%
Federal National Mortgage Assoc. 5.330%
due 06/26/1998 1,000,000 981,180
Total U.S. Government 13.8% 12,548,015
Italian Government 1.1%
Republic of Italy 6.000%
due 09/27/2003 1,000,000 941,360
Banks 8.0%
Bank of Nova Scotia Halifax 9.000%
due 10/01/1999 1,000,000 1,084,510
Bank New York Inc. 6.625%
due 06/15/2003 500,000 491,125
Chemical Bank New York 6.625%
due 08/15/2005 500,000 484,585
66
<PAGE>
Citicorp 7.125%
due 06/01/2003 500,000 505,050
See Accompanying Notes
</TABLE>
67
<PAGE>
<TABLE>
<CAPTION>Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Banks (continued)
Fleet Financial Group Inc. 5.625%
due 07/01/1995 500,000 $499,970
Kansallis Osake Pankki N Y 10.000%
due 05/01/2002 1,000,000 1,159,370
MBNA Corp. 7.490%
due 09/14/1999 1,000,000 1,037,620 Mellon Financial Co. 6.125%
due 11/15/1995 500,000 499,920
Nationsbank Corp. 4.750%
due 08/15/1996 500,000 492,225
Norwest Corp. 6.650%
due 10/15/2023 500,000 450,140
Republic New York Corp. 9.500%
due 04/15/2014 500,000 610,410
7,314,925
Beverages 1.2% Coca Cola Enterprises Inc. 8.500%
due 02/01/2022 1,000,000 1,125,910
Business Credit Institutions 1.7%
Avco Financial Services Inc. 7.500%
due 11/15/1996 500,000 508,050
Chrysler Financial Corp. 7.200%
due 05/26/1998 500,000 509,670
CIT Group Holdings Inc. 8.750%
due 04/15/1998 500,000 529,650
1,547,370Communications
Equipment 1.3%
GTE Corp. 8.750%
due 11/01/2021 1,000,000 1,133,830
Electric Utilities 6.9%
Baltimore Gas & Electric Co. 6.125%
due 07/01/2003 1,000,000 953,750
Carolina Power & Light Co. 6.875%
due 10/01/1998 500,000 498,515
Commonwealth Edison Co. 8.125% due 06/01/2007725,000 745,510
Hydro Quebec 8.400%
due 01/15/2022 1,000,000 1,068,660
Kansas Gas & Electric Co. 7.600%
due 12/15/2003 500,000 521,890
Northern States Power Co. 7.875%
due 10/01/2001 1,000,000 1,063,050
Pacific Gas & Electric Co. 6.250%
due 08/01/2003 1,000,000 963,380
Philadelphia Electric Co. 6.500%due 05/01/2003 500,000 486,195
6,300,950
68
<PAGE>
</TABLE>
69
<PAGE>
Balanced Assets Fund Cont'd
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Household Products 1.3%
Procter & Gamble ESOP 9.360%
due 01/01/2021 1,000,000 $1,218,550
Personal Credit Institutions 4.0%
Associates Corp. North America 6.125%
due 02/01/1998 500,000 496,670
Commercial Credit Group Inc. 7.375%
due 04/15/2005 1,000,000 1,036,070
Ford Motor Credit Corp. 6.375%
due 04/15/2000 1,000,000 990,170
General Electric Capital Corp. 8.850%
due 04/01/2005 500,000 575,520
Household Finance Corp. 7.750%
due 06/01/1999 500,000 520,195
3,618,625
Petroleum 1.2%
Ultramar Corp. Medium Term Note 8.000%
due 03/15/2005 1,000,000 1,066,640
Telephone 3.0%
MCI Communications Corp. 7.750%
due 03/23/2025 1,000,000 994,970
New Jersey Bell Telephone Co. 5.875%
due 12/01/2006 500,000 465,190
New York Telephone Co. 7.000%
due 12/01/2033 500,000 463,785
Pacific Bell 6.625%
due 10/15/2034 900,000 802,386
2,726,331
Total Corporate 28.6% 26,053,131
Total Bonds 43.5% 39,542,506
Common Stock Shares Value
(Note 2)
Aerospace 1.1%
Lockheed Martin Corp. 16,500 1,041,562
Autos/Auto Related 1.0%
Goodyear Tire And Rubber Co. 23,200 957,000
Beverages 2.3%
Coca Cola Co. 14,800 943,500
Pepsico Inc. 25,800 1,177,125
2,120,625
70
<PAGE>
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
71
<PAGE>
Capital Growth Bond Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Obligations 11.1%
United States Treasury Notes 7.500%
due 10/31/1999 1,490,000 $1,573,574
United States Treasury Notes 6.750%
due 04/30/2000 280,000 288,487
United States Treasury Notes 6.375%
due 08/15/2002 1,305,000 1,320,490
United States Treasury Notes 7.500%
due 02/15/2005 250,000 271,680
United States Treasury Notes 6.500%
due 05/15/2005 1,000,000 1,021,250
Total U.S. Government 4,475,481
Italian Government 2.4%
Republic of Italy 6.000%
due 09/27/2003 1,000,000 941,360
Banks 18.2%
Bank Nova Scotia Halifax 9.000%
due 10/01/1999 1,000,000 1,084,510
Bank New York Inc. 6.625%
due 06/15/2003 1,000,000 982,250
Chemical Bank New York 6.625%
due 08/15/2005 1,000,000 969,170
Citicorp 7.125%
due 06/01/2003 1,000,000 1,010,100
Kansallis Osake Pankki N Y 10.000%
due 05/01/2002 1,000,000 1,159,370
Norwest Corp. 6.650%
due 10/15/2023 1,000,000 900,280
Republic New York Corp. 9.500%
due 04/15/2014 1,000,000 1,220,820
7,326,500
Beverages 2.8%
Coca Cola Enterprises Inc. 8.500%
due 02/01/2022 1,000,000 1,125,910
Business Credit Institutions 7.7%
Avco Financial Services Inc. 7.500%
due 11/15/1996 1,000,000 1,016,100
Chrysler Financial Corp. 7.200%
due 05/26/1998 1,000,000 1,019,340
72
<PAGE>
CIT Group Holdings Inc. 8.750%
due 04/15/1998 1,000,000 1,059,300
3,094,740
See Accompanying Notes
</TABLE>
73
<PAGE>
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Communications Equipment 2.8%
GTE Corp. 8.750%
due 11/01/2021 1,000,000 $1,133,830
Electric Utilities 17.5%
Baltimore Gas & Electric Co. 6.125%
due 07/01/2003 1,000,000 953,750
Gulf States Utilities Co. 7.350%
due 11/01/1998 1,000,000 1,012,990
Hydro Quebec 8.400%
due 01/15/2022 1,000,000 1,068,660
Kansas Gas & Electric Co. 7.600%
due 12/15/2003 1,000,000 1,043,780
Northern States Power Co. 6.375%
due 04/01/2003 1,000,000 982,630
Pacific Gas & Electric Co. 6.250%
due 08/01/2003 1,000,000 963,380
Pennsylvania Power & Light Co. 7.625%
due 02/01/2002 1,000,000 1,018,180
7,043,370
Household Products 3.0%
Procter & Gamble ESOP 9.360%
due 01/01/2021 1,000,000 1,218,550
Personal Credit Institutions 10.1%
Associates Corp. North America 6.125%
due 02/01/1998 1,000,000 993,340
Commercial Credit Group Inc. 7.375%
due 04/15/2005 1,000,000 1,036,070
Ford Motor Credit Corp. 6.375%
due 04/15/2000 1,000,000 990,170
Household Finance Corp. 7.750%
due 06/01/1999 1,000,000 1,040,390
4,059,970
Petroleum 2.7%
Ultramar Corp. Medium Term Note 8.000%
due 03/15/2005 1,000,000 1,066,640
</TABLE>
74
<PAGE>
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Telephone 17.2%
AT & T Corp. 5.125%
due 04/01/2001 1,000,000 $923,230
Bellsouth Savings ESOP 9.190%
due 07/01/2003 808,236 896,164
Cincinnati Bell Telephone Co. 7.300%
due 04/30/1996 1,000,000 1,000,810
MCI Communications Corp. 7.750%
due 03/23/2025 1,000,000 994,970
New York Telephone Co. 7.000%
due 12/01/2033 1,000,000 927,570
Pacific Telephone & Telegraph Co. 7.625%
due 06/01/2009 1,000,000 1,022,470
Rochester Telephone Corp. 9.300%
due 06/01/2004 1,000,000 1,166,440
6,931,654
Total Corporate 82.0% 33,001,164
Total Bonds 95.5% 38,418,005
</TABLE>
75
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Biotechnology 0.7%
* Centocor Inc. 43,000 $615,437
Broadcasters 1.0%
* Tele-Communications Inc. 37,700 883,594
Chemicals & Fertilizers 1.1%
Engelhard Corp. 23,000 986,125
Communications 2.3%
* General Instrument Corp. 30,800 1,181,950
* Paging Network Inc. 26,700 914,475
2,096,425
Conglomerate 1.2%
ITT Corp 9,000 1,057,500
Containers 1.2%
* Crown Cork & Seal Inc. 21,400 1,072,675
Drugs 2.2%
Johnson & Johnson 12,600 852,075
Pfizer Inc. 5,700 526,538
* Scherer R P Corp. 14,200 599,950
1,978,563
Electric Utilities 1.6%
Duke Power Co. 11,000 456,500
FPL Group Inc. 14,500 560,062
Southern Co. 19,600 438,550
1,455,112
Electrical Equipment 1.0%
General Electric Co. 16,900 952,737
Electronics 1.2%
* 3COM Corp. 15,700 1,051,900
Energy 6.1%
Anadarko Pete Corp. 4,300 185,438
Atlantic Richfield Co. 8,400 921,900
Chevron Corp. 14,200 662,075
Exxon Corp. 14,800 1,045,250
Mobil Corp. 10,400 998,400
Schlumberger Ltd. 14,600 907,025
Unocal Corp. 31,700 875,712
5,595,800
76
<PAGE>
Engineering & Construction 0.6%
Fluor Corp. 10,700 556,400
</TABLE>
77
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Entertainment 3.4%
Brunswick Corp. 28,500 $484,500
Carnival Corp. 39,400 920,975
* Promus Companies Inc. 18,000 702,000
* Viacom Inc. Class'B' 21,600 1,001,700
3,109,175
Finance: Banks 1.2%
Citicorp 19,500 1,128,563
Finance: Consumer & Other 1.6%
First USA Inc. 9,200 408,250
PMI Group Inc. 23,500 1,019,313
1,427,563
Finance: Insurance 1.0%
American International Group Inc. 7,700 877,800
Foods 1.2%
Nabisco Holdings Corp. 39,000 1,053,000
Hospital Management 2.2%
Columbia / HCA Healthcare Corp. 21,900 947,175
United Healthcare Corp, 25,200 1,042,650
1,989,825
Metals & Minerals 0.6%
Freeport McMoran Copper & Gold 27,600 569,250
Natural Gas Pipelines 0.8%
Coastal Corp. 25,600 777,600
Office Equipment 1.0%
Xerox Corp. 7,800 914,550
Personal Care 0.9%
Gillette Co. 19,200 856,800
Retail 3.1%
Albertsons Inc. 32,500 966,875
Sears Roebuck & Co. 33,000 1,072,500
Wal-Mart Stores Inc 27,900 746,325
2,785,700
Software 1.6%
* Cisco Systems Inc. 5,900 298,319
General Motors Corp. Class'E' 10,000 435,000
* Informix Corp. 27,800 705,425
1,438,744
Telephone 4.4%
Airtouch Communications Inc. 35,000 997,500
78
<PAGE>
MCI Communications Corp. 45,100 992,200
NYNEX Corp. 23,600 949,900
SBC Communications Inc. 22,000 1,047,750
3,987,350
</TABLE>
79
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Tobacco 2.2%
Philip Morris Companies Inc. 13,500 $1,004,063
RJR Nabisco Holdings Corp. 34,800 970,050
1,974,113
Total Common Stock 49.8% 45,311,488
Short Term Investments Face Amount Value
(Note 2)
U.S. Government Agencies 2.2%
Federal Home Loan Bank 5.870%
due 07/05/1995 185,000 184,879
Federal Home Loan Mortgage 5.900%
due 08/10/1995 400,000 397,378
Federal National Mortgage Assoc. 5.900%
due 07/07/1995 380,000 379,626
Federal National Mortgage Assoc. 5.800%
due 09/11/1995 1,050,000 1,037,820
1,999,703
Canadian Government 2.7%
Agencies
Canadian Wheat Board 5.700%
due 10/24/1995 1,500,000 1,472,688
Export Development Corp. 5.900%
due 08/08/1995 1,000,000 993,772
2,466,460
Energy 1.2%
Chevron Oil Finance Co. 5.920%
due 08/11/1995 1,100,000 1,092,584
Personal Credit Institutions 0.4%
Ford Motor Credit Co. 6.020%
due 07/12/1995 400,000 399,264
Total Short Term 6.5% 5,958,011
Total Investments 99.8% 90,812,005
Other Assets Less
Liabilities 0.2% 162,717
Net Assets - Equivalent to $15.42 Per Share
Based on 5,901,502 Shares of Capital Stock
Outstanding. 100.0% $90,974,722
80
<PAGE>
</TABLE>
81
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 3.3%
Federal Home Loan Mortgage 5.890%
due 07/05/1995 250,000 $249,836
Federal Home Loan Mortgage 5.850%
due 08/07/1995 165,000 164,008
Federal National Mortgage Assoc. 5.900%
due 07/07/1995 250,000 249,754
Federal National Mortgage Assoc. 5.800%
due 09/14/1995 650,000 642,146
1,305,744
Business Credit Institutions 0.2%
American Express Credit Corp. 6.000%
due 07/19/1995 100,000 99,700
Total Short Term
Investments 3.5% 1,405,444
Total Investments 99.0% 39,823,449
Other Assets Less
Liabilities 1.0% 402,111
Net Assets - Equivalent to $11.36 Per
Share Based on 3,540,496 Shares of Capital
Stock Outstanding 100.0% $40,225,560
</TABLE>
82
<PAGE>
Money - Market Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 49.9%
Federal Home Loan Bank 5.810%
due 08/03/1995 1,810,000 $1,800,360
Federal Home Loan Mortgage 5.870%
due 07/05/1995 95,000 94,938
Federal Home Loan Mortgage 5.910%
due 07/12/1995 200,000 199,639
Federal Home Loan Mortgage 5.890%
due 08/07/1995 2,000,000 1,987,893
Federal Home Loan Mortgage 5.860%
due 08/18/1995 1,100,000 1,091,405
Federal National Mortgage Assoc. 5.900%
due 07/07/1995 240,000 239,764
Federal National Mortgage Assoc. 5.870%
due 08/17/1995 1,570,000 1,557,968
Federal National Mortgage Assoc. 5.840%
due 08/29/1995 985,000 975,572
Federal National Mortgage Assoc. 5.800%
due 09/11/1995 2,000,000 1,976,800
Federal National Mortgage Assoc. 5.860%
due 09/13/1995 1,050,000 1,037,352
Federal National Mortgage Assoc. 5.800%
due 09/14/1995 950,000 938,521
Federal National Mortgage Assoc. 5.770%
due 09/20/1995 2,270,000 2,240,530
Federal National Mortgage Assoc. 5.750%
due 09/21/1995 580,000 572,404
Federal National Mortgage Assoc. 5.780%
due 10/23/1995 2,000,000 1,963,393
16,676,539
U.S. Government Obligations 3.0%
United States Treasury Bills 5.335%
due 09/28/1995 1,000,000 986,811
Beverages 8.1%
Coca Cola Co. 6.000%
due 07/06/1995 1,200,000 1,199,000
Pepsico Inc. 5.930%
due 08/04/1995 1,500,000 1,491,599
2,690,599
See Accompanying Notes
83
<PAGE>
</TABLE>
84
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
Business Credit Institutions 7.5%
American Express Credit Corp. 6.040%
due 07/10/1995 300,000 $299,547
American Express Credit Corp. 6.080%
due 08/11/1995 1,000,000 993,076
CIT Group Holdings Inc. 6.000%
due 07/17/1995 1,200,000 1,196,800
2,489,423
Energy 3.0%
Chevron Oil Finance Co. 5.920%
due 08/11/1995 1,000,000 993,258
Investment Banker 3.6%
Merrill Lynch & Co. Inc. 5.950%
due 08/03/1995 1,200,000 1,193,455
Personal Credit Institutions 8.0%
Ford Motor Credit Corp. 5.940%
due 08/07/1995 1,200,000 1,192,674
General Electric Capital Corp. 5.880%
due 09/08/1995 1,500,000 1,483,095
2,675,769
Telephone 3.9%
AT & T Corp. 5.930%
due 08/24/1995 1,300,000 1,288,436
Canadian Government 13.0%
Agencies
Canadian Wheat Board 6.000%
due 07/19/1995 200,000 199,400
Canadian Wheat Board 5.900%
due 10/02/1995 1,000,000 984,758
Canadian Wheat Board 5.700%
due 10/24/1995 300,000 294,538
Export Development Corp. 5.800%
due 09/27/1995 1,500,000 1,478,733
Government Of Canada 5.880%
due 09/13/1995 1,400,000 1,383,079
4,340,508
Total Investments 100.0% 33,334,798
Other Assets Less Liabilities 0.0% (5,247)
85
<PAGE>
Net Assets - Equivalent to $10.55 Per Share
Based on 3,158.060 Shares of Capital Stock
Outstanding. 100.0% $33,329,551
</TABLE>
86
<PAGE>
CastorarnaInternational Fund
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australia 6.7%
Brambles Industries Limited 5,500 $52,146
Broken Hill Property 10,700 131,716
BTR Nylex Limited 100,000 191,187
Delta Gold Ni 22,000 40,967
Gio Australia Holding 33,000 61,450
Newcrest Mining 12,000 50,917
News Corp. 7,000 39,104
North Limited 45,451 109,832
Novus Petroleum 14,000 15,920
Pasminco Limited 47,000 45,430
Poseidon Gold Limited 19,000 38,351
Santos Limited 35,510 85,305
Western Mining Corp. 13,500 74,360
Westpac Bank Corp. 20,000 72,353
1,009,038
Belgium 0.8%
Soc Gen De Belgique 1,700 121,318
Finland 0.7%
Kesko 3,000 30,063
Nokia (AB) OY 1,260 74,933
104,996
France 5.4%
Banque National Paris 2,000 96,469
* Casino Guich Perr 3,500 102,086
Castorama Dubois 500 82,864
Cie De Suez 2,000 111,269
CPR Cie Par Reesco 2,000 151,712
* CSF(Thomson) 3,000 67,219
Lafarge 1,500 116,629
Rhone Poulenc SA 4,000 90,120
818,368
Germany 2.6%
Dresdner Bank AG 4,750 137,393
Man AG 450 116,006
Veba AG 350 137,555
390,954
Hong Kong 8.1%
Cheung Kong(Holdings) 6,000 29,698
China Light & Power 18,000 92,585
Grand Hotel Holdings 78,000 25,705
87
<PAGE>
Hang Seng Bank 14,000 106,749
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
88
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Hong Kong (continued)
Hong Kong Electric 15,000 $50,983
Hong Kong Land Holding (American $) 10,000 18,200
Hong Kong Telecommunications 72,800 143,948
Hongkong & China Gas 52,800 84,272
Hopewell Holdings 60,000 50,790
HSBC Holdings 16,000 205,226
Hutchison Whampoa 25,000 120,835
New World Development Co.. 17,000 56,573
Sun Hung Kai Properties 4,000 29,595
Swire Pacific 14,000 106,749
Tai Cheung Holdings 72,000 63,274
Wharf(Holdings) 16,000 52,211
1,237,393
Indonesia 1.9%
Astra International 45,000 79,816
Matahari Putra ldr 1000 22,500 21,722
Matabari Putra Pri 45,000 71,733
Bank International Indonesia 37,000 114,223
287,494
Italy 1.7%
Credito Italiano 15,900 18,405
Rinascente(La) 14,500 82,370
Stet 19,300 53,374
Stet (Non Conv.) 1,500 3,332
Telecom Italia 32,600 88,361
Telecom Italia (Non Conv.) 2,000 4,229
250,071
Japan 18.0%
Arabian Oil Co. 1,500 63,536
Casio Computer Co. 7,000 63,182
Daiichi Clinical 1,000 31,621
Daiwa Securities 6,000 63,288
Dowa Mining Co. 12,000 47,148
Fuji Oil Co. 6,000 45,024
Isetan Co. 2,000 27,137
Ishihara Sangyo 12,000 35,679
Itochu Corp. 32,000 186,892
Kawasaki Heavy Industries 20,000 73,860
* Kawasaki Steel Corp. 30,000 98,401
Kyushu Electric Power 5,000 135,095
89
<PAGE>
Marubeni Corp. 9,000 45,767
Marui Co. 2,000 31,414
Matsushita Electric Works 6,000 64,704
</TABLE>
90
<PAGE>
International Fund (continued)
Statement of Investments as of June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Japan (continued)
Mitsubishi Heavy Industries 15,000 $101,941
Mitsubishi Paper Mills 12,000 63,147
Mitsubishi Rayon 10,000 38,700
Mitsui Fudosan Co. 3,000 34,370
Mitsubishi Motor 5,000 41,237
Mori Seiki Co. 3,000 53,448
NEC Corp. 8,000 87,688
Nichiei Construction 4,000 32,942
Nippon Express Co. 4,000 36,812
Nippon Fire & Marine 10,000 63,005
Nippon Sanso Corp. 20,000 90,142
Nippon Sheet Glass 18,000 80,491
Nippon Zeon Company 20,000 87,074
Nomura Securities 6,000 104,773
Onward Kashiyama 6,000 81,411
Osaka Gas Co. 8,000 29,544
Royal Co. 5,000 69,612
Seiren Co. 3,000 20,494
Shimizu Corp. 4,000 38,700
Sony Corp. 4,000 192,083
Sumitomo Trust & Banking 10,000 121,527
TDK Corp. 2,000 91,086
Toyo Engineering 14,000 79,783
Yamato Kogyo Co. 10,000 78,461
2,731,219
Malaysia 5.6%
DCB Holdings Berhad 33,000 96,780
* DCB Holdings Berhad (Warrants) 5,000 5,742
IJM Corp. Berhad 6,000 23,872
* I0I Corp. 64,000 84,003
I0I Properties 10,000 34,865
Leader Universal Holdings 14,666 52,336
Malayan Bank Berhad 7,000 55,414
Malaysian International Shipping 9,000 26,395
MBF Capital Berhad 17,000 19,803
North Borneo Timber 12,000 40,361
Resorts World Berhad 14,000 82,117
Sime Darby Berhad 24,000 66,940
* Tech Res Industries Berhad 30,000 86,136
Telekom Malaysia 8,000 60,706
UMW Holdings Berhad 23,000 66,509
91
<PAGE>
UTD Merchant Group 28,000 46,169
848,148
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
92
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Netherlands 2.6%
ABN AMRO Holdings NV 2,950 $113,850
Philips Electronic 3,100 131,242
Royal Dutch Petrol 600 73,262
Unilever NV 550 71,559
389,913
Norway 0.4%
Den Norske Bank 20,000 54,208
Singapore 3.7%
Amtek Engineering 31,000 45,252
Centrepoint Properties 14,000 26,748
City Developments 5,000 30,590
Development Bank Singapore 6,000 68,265
Fraser & Neave 4,000 46,082
Jurong Shipyard 6,000 42,934
Overseas Chinese Bank 10,000 110,912
Robinson & Co. 8,000 32,916
Singapore Airlines 8,000 73,846
Singapore Land 8,000 52,379
Singapore Press Holdings 2,400 35,893
565,817
Spain 1.4%
Argentaria 500 18,473
BCO Bilbao Vizcaya 500 14,427
BCO Central Hispan 500 10,588
* BCO Esp De Credito 1,500 10,328
BCO Intercont ESPA 400 35,996
BCO Santander SA 500 19,711
Gas Natural SDG SA 425 50,737
lberdrola SA 2,500 18,823
Repsol SA 500 15,728
Telefonica De Esp 1,500 19,319
214,130
Sweden 2.4%
Incentive AB 1,610 65,320
Volvo AB (Series A) 4,800 91,430
Volvo AB (Series B) 10,700 203,814
360,564
Switzerland 2.4%
Ciba Geigy AG 110 80,625
Holderbank Financial Glarus 95 77,963
Holderbank Financial Glarus (Warrants) 475 639
Nestle SA 110 114,538
Roche Holdings AG 15 96,657
93
<PAGE>
370,422
</TABLE>
94
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Thailand 2.8%
Advanced Info Serv 6,000 $85,558
Dhana Siam Financial & Sec. 4,000 23,658
Krung Thai Bank Place 14,300 57,930
Land & House 2,000 42,131
Matichon Public Company Ltd. 20,000 97,225
Shinawatra C. & Commissions 1,000 23,901
Telecomasia 25,000 88,110
418,513
United Kingdom 14.4%
Abbey National 5,000 37,220
Airtours 20,000 128,519
Allied Domecq PLC 2,000 17,401
BAA 7,000 54,947
Barclays Bank 3,000 32,233
Bass 2,000 19,135
Bat Industries 4,000 30,666
Blue Circle Industries 2,000 8,971
BOC Group 1,000 12,772
Boots Company 2,000 16,192
British Aerospace 1,000 8,955
British Aero Plc/Cap 40 452
British Airways 3,000 19,660
British Gas 13,000 59,862
British Petroleum 9,000 64,490
British Telecom 14,000 87,291
BTR 9,000 45,737
Cable & Wireless 5,000 34,198
Cadbury Schweppes 4,571 33,372
Forte 6,000 21,711
General Electric 3,000 14,649
Glaxo Wellcome 5,470 67,124
Grand Metropolitan 3,000 18,395
Great Universal Stores 13,000 121,481
Guinness 3,000 22,570
Hanson 6,000 20,948
HSBC Holdings 5,000 64,538
Imperial Chemical Industries 2,000 24,511
Lloyds Bank 2,000 19,835
Marks & Spencer 4,000 25,704
National Westminster 4,000 34,770
P&O 2,000 18,403
Pearson 1,000 9,464
95
<PAGE>
</TABLE>
96
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
United Kingdom (continued)
Prudential Corp. 5,000 $26,563
Redland 1,000 6,545
Reed International 2,000 28,090
Reuters Holdings 3,000 24,980
Rothmans International/NV 32,000 313,536
RTZ Corp. 1,000 13,035
Shell Transport & Trading 9,000 107,579
Smithkline Beecham 3,000 27,151
Smithkline Beecham/BEC 2,000 17,751
Standard Chartered 21,000 111,564
Tesco 6,000 27,676
Tomkins 24,000 85,701
TSB Group 28,000 107,555
Unilever 2,000 40,480
U.S. Industries Inc. (U.S. dollars) 60 832
Vodafone Group 5,000 18,570
Whitbread 3,000 28,631
2,182,415
Total Common Stock 81.6% 12,354,981
Repurchase Agreement Face Amount Value
(Note 2)
U.S. Dollar 18.5%
State Street Bank and Trust Co. 5.600%
due 07/03/1995-Collateralized by
2,861,138 U.S. Treasury Note 4.750%
due 09/30/1998 2,804,000 2,804,000
Total Investments 100.1% 15,158,981
Other Assets Less Liabilities (0.1%) (19,720)
Net Assets - Equivalent to $10.11 Per Share
Based on 1,497,235 shares of Capital Stock
Outstanding. 100.0% $15,139,261
</TABLE>
Pacific Rim Emerging Markets Fund
Statement of Investments as of June 30, 1995 (Unaudited)
97
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australia 25.7%
Brambles Industries Ltd. 15,000 $142,218
Broken Hill Property 30,300 372,989
BTR Nylex Limited 12,000 22,943
* Delta Gold NI 70,000 130,348
Gio Australia Holding 110,000 204,833
* Newcrest Mining 45,000 190,938
News Corp. 24,000 134,073
North Limited 127,692 308,566
* Novus Petroleum 52,500 59,701
* Pasminco Limited 148,000 143,056
Poseidon Gold Limited 73,000 147,349
Santos Limited 104,921 252,049
Western Mining Corp. 47,000 258,884
Westpac Bank Corp. 75,000 271,322
2,639,269
Hong Kong 16.2%
Cheung Kong(Holdings) 10,000 49,497
China Light & Power 25,000 128,590
Grand Hotel Holdings 98,000 32,296
Hang Seng Bank 18,000 137,248
Hong Kong Electric 20,000 67,978
Hong Kong Land Holding (American $) 20,000 36,400
Hong Kong Telecommunications 94,000 185,867
Hongkong & China Gas 70,000 111,724
Hopewell Holdings 70,000 59,255
HSBC Holdings 21,800 279,621
Hutchison Whampoa 34,000 164,336
New World Development Co. 27,000 89,851
Sun Hung Kai Properties 6,000 44,392
Swire Pacific 18,000 137,248
Tai Cheung Holdings 88,000 77,335
Wharf (Holdings) 20,000 65,264
1,666,902
Indonesia 5.5%
Astra International 95,000 168,500
Bank International Indonesia 60,000 185,227
Matahari Putra Pri 100,000 159,407
Matahari Putra ldrIO00 (Alien) 50,000 48,271
561,405
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
98
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Japan 10.9%
Arabian Oil Co. 1,000 $42,357
Casio Computer Co. 2,000 18,052
Daiwa House Industries 2,000 30,677
Daiwa Securities 2,000 21,096
Dowa Mining Co. 6,000 23,574
Fuji Oil Co. 4,000 30,016
Isetan Co. 1,000 13,569
* Ishihara Sangyo 4,000 11,893
Itochu Corp. 15,000 87,605
Kamigumi Co. 2,000 20,058
Kawasaki Heavy Industries 6,000 22,158
Kawasaki Steel Corp. 5,000 16,400
Kyushu Electric Power 2,000 54,038
Marubeni Corp. 3,000 15,256
Marui Co. 1,000 15,707
Mitsubishi Heavy Industries 5,000 33,980
Mitsubishi Motor 3,000 24,742
Mitsubishi Paper 4,000 21,049
Mitsubishi Rayon 4,000 15,480
Mitsui Fudosan Co. 2,000 22,913
Mori Seiki Co. 1,000 17,816
NEC Corp. 2,000 21,922
Nippon Express Co. 2,000 18,406
Nippon Fire & Marine Insurance 5,000 31,503
Nippon Sanso Corp. 6,000 27,043
Nippon Sheet Glass 6,000 26,830
* Nippon Telegraph & Telephone Corp. 3 25,131
Nippon Zeon Co. 7,000 30,476
Nomura Securities 3,000 52,386
Onward Kashiyama 2,000 27,137
Osaka Gas Co. 4,000 14,772
Shimizu Corp. 2,000 19,350
Sony Corp. 2,000 96,042
Sumitomo Trust & Banking 4,000 48,611
TDK Corp. 1,000 45,543
Toyo Engineering 11,000 62,687
Yamato Kogyo Co. 2,000 15,692
1,121,967
Malaysia 13.5%
DCB Holdings Berhad 66,000 193,560
* DCB Holdings Berhad (warrants) 11,250 12,921
IJM Corp. Berhad 11,000 43,765
</TABLE>
99
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Malaysia (continued)
* IOI Corp. 95,000 $124,692
IOI Properties 20,000 69,729
Leader Universal Holdings 35,333 126,086
Malayan Bank Berhad 11,000 87,080
Malaysian International Shipping 18,000 52,789
North Borneo Timber 22,000 73,995
Resorts World Berhad 23,000 134,906
Sime Darby Berhad 42,000 117,145
Telekom Malaysia 16,000 121,411
UMW Berhad 48,000 138,802
UTD Merchant Group 53,000 87,391
1,384,272
Singapore 9.6%
Amtek Engineering 50,000 72,987
Centrepoint Properties 24,000 45,853
City Developments 8,000 48,945
Development Bank Singapore 12,000 136,530
Fraser& Neave 7,000 80,644
Jurong Shipyard 9,000 64,401
Overseas Chinese Bank 16,000 177,460
Robinson & Co. 14,000 57,603
Singapore Airlines 15,000 138,462
Singapore Land 13,000 85,116
Singapore Press Holdings 4,800 71,785
979,786
Thailand 7.1%
Advanced Information Services 10,000 142,597
Dhana Siam Financial & Securities 12,000 70,974
Krung Thai Bank Place 25,300 102,491
Land & House 4,000 84,262
Matichon Public Company Ltd. 30,000 145,838
Shinawatra C. & Commissions 2,000 47,802
Telecomasia 38,000 133,928
727,892
Total Common Stock 88.5% 9,081,493
</TABLE>
100
<PAGE>
<TABLE>
<CAPTION>
Repurchase Agreement Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Dollar 12.8%
State Street Bank and Trust Co. 5.600% 1,310,000 $1,310,000
due 07/03/1995-Collateralized by
$1,339,869 U.S. Treasury Bond 11.25%
due 02/15/2015
Total Investments 101.3% 10,391,493
Other Assets Less Liabilities (1.3%) (132,586)
Net Assets - Equivalent to $9.69 Per Share
Based on 1,058,954 Shares of Capital Stock
Outstanding. 100.0% $10,258,907
</TABLE>
101
<PAGE>
Statement Of Assets and Liabilities as of June 30, 1995
Unaudited
<TABLE>
<CAPTION>
Emerging Growth Common Stock Real Estate
Equity Fund Fund Securities
Fund
<S> <C> <C> < C>
ASSETS:
Investments, at market value
(cost-Emerging Growth Equity Fund:
$119,116,268, Common Stock Fund:
$42,767,140, Real Estate Securities
Fund: $46,355,886, Balanced Assets
Fund:$84,884,240, Capital Growth
Bond Fund: $38,683,496, Money Market
Fund: $33,334,798, International Fund:
$15,079,713, Pacific Rim Emerging
Markets Fund: $10,638,518)
(Note 2) $126,275,032 $46,951,720 $46,617,425
Cash 46,716 9,320 27,477
Cash - foreign currencies (cost
International Fund: $27,544
Pacific Rim Emerging Markets Fund:
$38,455)* --- --- ---
Receivable for undelivered sales 3,911,201 421,935 255,969
Investment income receivable --- 82,553 ---
Tax reclaims receivable --- --- ---
Total assets 130,232,949 47,465,528 46,900,871
LIABILITIES:
Payable for investment advisory
fees (Note 8) 50,191 18,385 19,070
Payable for undelivered purchases 5,820,681 1,381,795 268,750
Withholding taxes payable --- --- ---
Total liabilities 5,870,872 1,400,180 287,820
NET ASSETS $124,362,077 $46,065,348 $46,613,051
Represented By:
Paid In Capital (Note 5) $109,289,521 $42,755,911 $45,138,086
Net unrealized depreciation of
investments 7,158,764 4,184,580 261,539
Net unrealized depreciation on
translation of assets and liabilities
in foreign currencies*. --- --- ---
Undistributed net realized gain
(loss) on investments 7,742,414 (1,239,049) (731,755)
Undistributed net realized gain (loss)
on transactions
in foreign currencies* --- --- ---
Undistributed net investment income 171,378 363,906 1,945,181
102
<PAGE>
NET ASSETS $124,362,077 $46,065,348 $46,613,051
Capital stock outstanding (Note 5) 6,037,580 3,088,301 3,300,107
Net asset value, offering and redemption
prices per share $20.60 $14.92 $14.12
* International & Pacific Rim Emerging Markets Funds only.
See Accompanying Notes
</TABLE>
103
<PAGE>
<TABLE>
<CAPTION>
Pacific Rim
Balanced Capital Growth Money-Market International Emerging
Assets Fund Bond Fund Fund Fund Markets Fund
<S> <C> <C> <C> <C>
$90,812,005 $39,823,449 $33,334,798 $15,158,981 $10,391,493
20,576 6,814 7,869 110 863
--- --- --- 27,426 38,166
445,706 --- --- 517,255 429,998
756,097 690,878 --- 52,010 29,603
--- --- --- 10,109 ---
92,034,384 40,521,141 33,342,667 15,765,891 10,890,123
36,884 16,754 13,116 16,765 12,594
1,022,778 278,827 --- 601,730 614,473
--- --- --- 8,135 4,149
1,059,662 295,581 13,116 626,630 631,216
$90,974,722 $40,225,560 $33,329,551 $15,139,261 $10,258,907
$85,309,727 $39,093,714 $32,557,323 $14,897,281 $10,373,175
5,927,765 1,139,953 --- 79,268 (247,025)
--- --- --- 322 (838)
(1,803,841) (1,249,676) --- 54,546 72,567
--- --- --- (16,491) (11,403)
1,541,071 1,241,569 772,228 124,335 72,431
$90,974,722 $40,225,560 $33,329,551 $15,139,261 $10,258,907
5,901,502 3,540,496 3,158,060 1,497,235 1,058,954
$15.42 $11.36 $10.55 $10.11 $9.69
104
<PAGE>
Statement Of Operations for the Period January 1, 1995 through
June 30, 1995 (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Emerging Growth Common Stock Real Estate
Equity Fund FundSecurities Fund
<S> <C> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest $411,177 $141,175 $146,220
Dividends** 2,715 322,188 1,054,176
Total investment income 413,892 463,363 1,200,396
EXPENSES:
Investment advisory fees (Note 8) 278,125 99,457 108,184
General expenses (Note 8) --- --- ---
Total Expenses 278,125 99,457 108,184
Net investment income (Note 2) 135,767 363,906 1,092,212
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investment transactions (excluding
short term investments) 4,124,720 (653,854) (329,334)
Foreign currency transactions* --- --- ---
Net realized gain (loss) 4,124,720 (653,854) (329,334)
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding
short term investments) 7,242,730 4,740,203 1,837,620
Translation of assets and liabilites
in foreign currencies* --- --- ---
Net unrealized appreciation 7,242,730 4,740,203 1,837,620
Net realized and unrealized gain 11,367,450 4,086,349 1,508,286
INCREASE IN NET ASSETS DERIVED
FROM OPERATIONS $11,503,217 $4,450,255 $2,600,498
</TABLE>
** Net of withholding taxes of $21,474 & $10,154 for
International & Pacific Rim Emerging Markets funds,
respectively.
* International and Pacific Rim Emerging Markets Funds only.
See Accompanying Notes
105
<PAGE>
<TABLE>
<CAPTION>
INTER- PACIFIC RIM
BALANCED CAPITAL GROWTH MONEY-MARKET NATIONAL EMERGING
ASSETS FUND BOND FUND FUND FUND MARKETS FUND
<S> <C> <C> <C> <C>
$1,374,498 $1,328,662 $839,149 $66,037 $99,541
366,075 --- --- 142,346 33,124
1,740,573 1,328,662 839,149 208,383 132,665
205,047 93,187 68,325 55,937 37,215
--- --- --- 32,904 28,458
205,047 93,187 68,325 88,841 65,673
1,535,526 1,235,475 770,824 119,542 66,992
(744,615) 62,587 --- 54,546 72,567
--- --- --- (9,618) (11,914)
(744,615) 62,587 --- 44,928 60,653
8,547,664 3,143,662 --- 267,329 203,550
--- --- --- 2,458 (831)
8,547,664 3,143,662 --- 269,787 202,719
7,803,049 3,206,249 --- 314,715 263,372
$9,338,575 $4,441,724 $770,824 $434,257 $330,364
</TABLE>
106
<PAGE>
Statements of Changes in Net Assets
Unaudited
<TABLE>
<CAPTION>
EMERGING GROWTH
EQUITY FUND
Six Months Ended Year Ended
June 30/95 Dec. 31/94
(Unaudited)
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $135,767 $55,087
Net realized gain (loss) from
investment and foreign currency transactions 4,124,720 3,929,965
Net unrealized appreciation (depreciation)
of investments and translation of assets and
liabilities in foreign currencies 7,242,730 (6,390,916)
Increase (decrease) in net assets
derived from operations 11,503,217 (2,405,864)
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income --- (19,476)
Net realized gain --- (331,996)
Total distributions to shareholders 0 (351,472)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 21,587,219 49,160,218
Net asset value of shares issued to
shareholder for reinvestment of dividends --- 351,472
21,587,219 49,511,690
Cost of capital stock reacquired (6,107,775) (5,141,457)
Increase in net assets derived from
capital stock transactions 15,479,444 44,370,233
Net increase in net assets 26,982,661 41,612,897
NET ASSETS:
Beginning of period 97,379,416 55,766,519
End of period 1995 and 1994 including undistributed
net investment income of $171,378 and $35,611
respectively in the Emerging Growth Equity Fund,
$363,906 and NIL respectively in the Common Stock Fund,
$1,945,181 and $852,969 respectively in the Real Estate
Securities Fund, $1,541,071 and $5,545 respectively in
the Balanced Assets Fund, $1,241,569 and $6,094
respectively in the Capital Growth Bond Fund, $772,228
and $1,404 respectively in the Money Market Fund,
$124,335 and $4,793 respectively in the International
Fund, and $72,431 and $5,439 respectively in the
Pacific Rim Emerging Markets Fund.
(Note 2) $124,362,077 $97,379,416
See Accompanying Notes
</TABLE>
107
<PAGE>
Statements of Changes in Net Assets (continued)
Unaudited
<TABLE>
<CAPTION>
COMMON STOCK
Six Months Ended Year Ended
June 30/95 Dec. 31/94
(Unaudited)
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $363,906 $453,596
Net realized gain (loss) from investment
and foreign currency transactions (653,854) 429,006
Net unrealized appreciation
(depreciation) of investments and
translation of assets and liabilities
in foreign currencies 4,740,203 (2,211,994)
Increase (decrease) in net assets
derived from operations 4,450,255 (1,329,392)
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income --- (453,596)
Net realized gain --- (1,246,124)
Total distributions to shareholders 0 (1,699,720)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 8,641,006 18,029,178
Net asset value of shares issued to
shareholder for reinvestment of dividends --- 1,699,720
8,641,006 19,728,898
Cost of capital stock reacquired (1,854,433) (3,522,116)
Increase in net assets derived from
capital stock transactions 6,786,573 16,206,782
Net increase in net assets 11,236,828 13,177,670
NET ASSETS:
Beginning of period 34,828,520 21,650,850
End of period 1995 and 1994 including undistributed
net investment income of $171,378 and $35,611
respectively in the Emerging Growth Equity Fund,
$363,906 and NIL respectively in the Common Stock
Fund, $1,945,181 and $852,969 respectively in the Real
Estate Securities Fund, $1,541,071 and $5,545
respectively in the Balanced Assets Fund, $1,241,569
and $6,094 respectively in the Capital Growth Bond
Fund, $772,228 and $1,404 respectively in the Money
Market Fund, $124,335 and $4,793 respectively in the
International Fund, and $72,431 and $5,439 respectively
in the Pacific Rim Emerging Markets Fund.
(Note 2) $46,065,348 $34,828,520
See Accompanying Notes
</TABLE>
108
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE BALANCED ASSETS
SECURITIES FUND FUND
<S> <C> <C> <C>
Six Months Ended Year Ended Six Months Ended Year Ended
June 30/95 Dec. 31/94 June 30/95 Dec. 31/94
(Unaudited) (Unaudited)
$1,092,212 $1,547,952 $1,535,526 $2,500,365
(329,334) (342,136) (744,615) 228,164
1,837,620 (2,832,671) 8,547,664 (5,783,362)
2,600,498 (1,626,855) 9,338,575 (3,054,833)
--- (697,202) --- (2,499,752)
--- (230,087) --- (1,581,823)
0 (927,289) 0 (4,081,575)
5,521,960 22,118,718 12,949,921 32,214,527
--- 927,289 --- 4,081,575
5,521,960 23,046,007 12,949,921 36,296,102
(4,080,550) (2,026,894) (6,050,517) (12,578,846)
1,441,410 21,019,113 6,899,404 23,717,256
4,041,908 18,464,969 16,237,979 16,580,848
42,571,143 24,106,174 74,736,743 58,155,895
$46,613,051 $42,571,143 $90,974,722 $74,736,743
</TABLE>
109
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY - MARKET
BOND FUND FUND
<S> <C> <C> <C>
Six Months Ended Year Ended Six Months Ended Year Ended
June 30/95 Dec. 31/94 June 30/95 Dec. 31/94
(Unaudited) (Unaudited)
$1,235,475 $2,497,883 $770,824 $776,905
62,587 (1,307,483) --- ---
3,143,662 (3,268,785) --- ---
4,441,724 (2,078,385) 770,824 776,905
--- (2,500,018) --- (779,386)
--- (24,868) --- ---
0 (2,524,886) 0 (779,386)
5,692,517 11,243,241 17,154,800 27,553,996
--- 2,524,886 --- 779,386
5,692,517 13,768,127 17,154,800 28,333,382
(3,526,594) (16,730,043) (8,980,559) (17,806,853)
2,165,923 (2,961,916) 8,174,241 10,526,529
6,607,647 (7,565,187) 8,945,065 10,524,048
33,617,913 41,183,100 24,384,486 13,860,438
$40,225,560 $33,617,913 $33,329,551 $24,384,486
</TABLE>
110
<PAGE>
Statements of Changes in Net Assets (continued)
Unaudited
<TABLE>
<CAPTION>
INTERNATIONAL FUND
Six Months Ended *Period Ended
June 30/95 Dec. 31/94
(Unaudited)
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $119,542 $34,077
Net realized gain (loss) from
investment and foreign currency transactions 44,928 (6,873)
Net unrealized appreciation (depreciation)
of investments and translation of assets and
liabilities in foreign currencies 269,787 (190,197)
Increase (decrease) in net assets
derived from operations 434,257 (162,993)
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income --- (29,284)
Net realized gain --- ----
Total distributions to shareholders 0 (29,284)
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital stock 3,580,503 11,463,599
Net asset value of shares issued to
shareholder for reinvestment of dividends --- 29,284
3,580,503 11,492,883
Cost of capital stock reacquired (165,906) (10,199)
Increase in net assets derived from
capital stock transactions 3,414,597 11,482,684
Net increase in net assets 3,848,854 11,290,407
NET ASSETS:
Beginning of period 11,290,407 ---
End of period 1995 and 1994 including undistributed
net investment income of $171,378 and 35,611
respectively in the Emerging Growth Equity Fund, 363,906
and NIL respectively in the Common Stock Fund, $1,945,181
and $852,969 respectively in the Real Estate Securities
Fund, $1,541,071 and $5,545 respectively in the Balanced
Assets Fund, $1,241,569 and $6,094 respectively in the
Capital Growth Bond Fund, $772,228 and $1,404 respectively
in the Money Market Fund, $124,335 and 4,793 respectively
in the International Fund, and $72,431 and 5,439 respectively
in the Pacific Rim Emerging Markets Fund.
(Note 2) $15,139,261 $11,290,407
*Inception date October 4, 1994
See Accompanying Notes
</TABLE>
111
<PAGE>
Statements of Changes in Net Assets (continued)
Unaudited
<TABLE>
<CAPTION>
PACIFIC RIM EMERGING
MARKETS FUND
Six Months Ended *Period Ended
June 30/95 Dec. 31/94
(Unaudited)
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $66,992 $32,721
Net realized gain (loss) from
investment and foreign currency transactions 60,653 511
Net unrealized appreciation (depreciation)
of investments and translation of assets and
liabilities in foreign currencies 202,719 (450,582)
Increase (decrease) in net assets
derived from operations 330,364 (417,350)
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income --- (27,282)
Net realized gain --- ---
Total distributions to shareholders 0 (27,282)
FROM CAPITAL STOCK TRANSACTIONS:
Net proceeds from sale of capital stock 2,536,120 8,107,883
Net asset value of shares issued to
shareholder for reinvestment of dividends --- 27,282
2,536,120 8,135,165
Cost of capital stock reacquired (264,794) (33,316)
Increase in net assets derived from
capital stock transactions 2,271,326 8,101,849
Net increase in net assets 2,601,690 7,657,217
NET ASSETS:
Beginning of period 7,657,217 ---
End of period 1995 and 1994 including undistributed
net investment income of $171,378 and $35,611
respectively in the Emerging Growth Equity Fund, $363,906
and NIL respectively in the Common Stock Fund, $1,945,181
and $852,969 respectively in the Real Estate Securities
Fund, $1,541,071 and $5,545 respectively in the Balanced
Assets Fund, $1,241,569 and $6,094 respectively in the
Capital Growth Bond Fund, $772,228 and $1,404 respectively
in the Money Market Fund, $124,335 and $4,793 respectively
in the International Fund, and $72,431 and $5,439 respectively
in the Pacific Rim Emerging Markets Fund.
(Note 2) $10,258,907 $7,657,217
*Inception date October 4, 1994
See Accompanying Notes
112
<PAGE>
</TABLE>
113
<PAGE>
Notes to Financial Statements, June 30, 1995
Unaudited
1. ORGANIZATION
Manulife Series Fund, Inc. ("MSFI"), incorporated on July 22,
1983, and domiciled in the State of Maryland, is a no-load,
diversified open-end management investment company. MSFI was
incorporated for the purpose of investing premiums from
variable contracts issued by The Manufacturers Life Insurance
Company of America. MSFI is registered with the Securities
and Exchange Commission under the Investment Company Act of
1940 and its shares are registered under the Securities Act of
1933. The effective date of the initial registration was June
26, 1984. Separate Accounts One, Two, Three and Four of The
Manufacturers Life Insurance Company of America (the "Separate
Accounts") have purchased their shares of the common stock of
MSFI as an investment and not with a view towards resale,
distribution or redemption. On October 4, 1994, MSFI launched
the International Fund and Pacific Rim Emerging Markets Fund
with initial Seed money from The Manufacturers Life Insurance
Company of America of $10,000,000 and $7,000,000,
respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
followed by MSFI in preparation of its financial statements.
a) SECURITY VALUATION.
Except with respect to debt instruments having a remaining
maturity of 60 days or less, securities held by MSFI are
valued as follows: Securities listed on a securities exchange
are valued at the last sale price or, if there has been no
sale that day, at the last bid price reported as of the close
of trading on the New York Stock Exchange. Securities traded
in the over-the-counter market are valued at the last bid
price or yield equivalent as of the close of trading on the
New York Stock Exchange. Securities which are traded both in
the over the-counter market and on a stock exchange are valued
according to the broadest and most representative market, and
for debt securities this ordinarily will be the over-the-
counter market. Although the practice of each fund is to
purchase only assets having a readily ascertainable market
value, if market quotations for such assets are unavailable,
such assets are valued at their fair value as determined in
good faith by MSFI's Board of Directors. There were no such
securities held at June 30, 1995.
Debt instruments held with a remaining maturity of 60 days or
less are valued on an amortized cost basis. Under this method
of valuation, the security is initially valued at cost on the
date of purchase (or in the case of securities purchased with
more than 60 days remaining to maturity, the market value on
114
<PAGE>
Notes to Financial Statements, June 30, 1995
Unaudited
the 61st day prior to maturity); and thereafter a constant
proportionate amortization in value is assumed until maturity
of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the
security. For purposes of this method of valuation, the
maturity of a variable rate instrument is deemed to be the
next date on which the interest rate is to be adjusted.
b) INTERNATIONAL AND PACIFIC RIM EMERGING MARKETS FUNDS.
Apart from the accounting policies mentioned above there are
other significant accounting policies followed by MSFI in
preparation of financial statements for the International and
Pacific Rim Emerging Markets Funds.
Generally securities will be valued as described above on the
exchanges which they are traded, however, where a country has
adopted other conventions with respect to valuations, these
will be utilized instead. Trading in securities on European
and Far Eastern exchanges and over-the counter markets is
normally completed well before 4:00 P.M. eastern time. As a
result, if events materially affecting the value of such
securities occur between the time when their price is
determined and the time the Funds net asset value is
calculated, such securities will be valued at fair value as
determined in good faith by MSFI's Board of Directors.
The values of all assets and liabilities initially expressed
in foreign currencies are translated into US dollars at the
exchange rate of such currencies against the US dollar as
provided by the pricing service as of 12:00 P.M. New York
time.
The Funds may utilize futures contracts to a limited extent,
and may enter into forward foreign currency contracts to
protect the securities and related receivable and payable
against changes in future foreign exchange rates. The primary
risks associated with the use of futures contracts are
imperfect correlation between the change in market value of
the securities held by the Fund and the prices of futures
contracts, and the possibility of an illiquid market. Risks
associated with forward currency contracts include movement in
the value of the foreign currency relative to the US dollar
and the ability of the counterpart to perform. Futures and
forward currency contracts are valued based upon their quoted
daily settlement prices. Fluctuations in the value of such
contracts are recorded as unrealized appreciation
(depreciation) until terminated, at which time realized gains
(losses) are recognized. Unrealized appreciation
(depreciation) related to open futures and forward currency
115
<PAGE>
Notes to Financial Statements, June 30, 1995
Unaudited
contracts may be required to be treated as realized gain
(loss) for tax purposes.
Foreign dividends are recorded on the ex-date or as soon after
the ex-date that the Fund is aware of such dividends, net of
all non-rebatable tax withholdings.
c) FEDERAL INCOME TAXES.
It is MSFI's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its
shareholder. Therefore, no Federal income tax provision is
required.
d) DIVIDENDS TO SHAREHOLDER.
Dividends to shareholder are recorded on the ex-dividend date.
e) OTHER.
Security transactions are recorded on the dates the
transactions are entered into (the trade dates). Interest
income is recorded as earned. Dividend income is recorded on
the ex-dividend date.
116
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
Unaudited
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term securities for the
year ended June 30, 1995
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK REAL ESTATE
EQUITY FUND FUND SECURITIES FUND
<S> <C> <C> <C>
PURCHASES
U.S. Government
Obligations $ --- $ --- $ ---
Corporate Bonds --- --- ---
Common Stocks 68,184,788 29,062,032 8,015,357
$68,184,788 $29,062,032 $8,015,357
SALES
U.S. Government
Obligations $ --- $ --- $ ---
Corporate Bonds --- --- ---
Common Stocks 55,864,920 22,991,728 5,982,568
$55,864,920 $22,991,728 $5,982,568
</TABLE>
With the exception of the International Fund and Pacific Rim Emerging Markets
Fund realized and unrealized gains and losses on investments are determined on
the average cost basis for financial statement purposes, and on the first-in,
first-out, (FIFO) cost basis for federal income tax purposes. The
International Fund and Pacific Rim Emerging Markets Fund use the FIFO cost
method for both financial statements and federal income tax purposes.
4. TAX BASIS OF INVESTMENTS
Investment information based on the cost for Federal income tax purposes of
the securities (excluding short-term investments) held at June 30, 1995 is as
follows:
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK REAL ESTATE
EQUITY FUND FUND SECURITIES FUND
<S> <C> <C> <C>
Aggregate gross
unrealized
appreciation $16,931,739 $4,460,923 $2,498,512
Aggregate gross
unrealized
depreciation (9,557,870) (331,987) (2,237,377)
Net unrealized
appreciation
(depreciation) $7,373,869 $4,128,936 $261,135
Aggregate cost of
securities for
federal income
tax purposes $104,057,962 $37,303,293 $41,609,765
117
<PAGE>
</TABLE>
118
<PAGE>
<TABLE>
<CAPTION>
BALANCED ASSETS CAPITAL GROWTH INTERNATIONAL PACIFIC RIM EMERGING
FUND BOND FUND FUND MARKETS
<S> <C> <C> <C>
$9,161,545 $7,604,752 $ --- $ ---
11,406,168 11,069,150 --- ---
30,182,314 --- 6,311,557 4,899,256
$50,750,027 $18,673,902 6,311,557 $4,899,256
$13,367,460 $9,090,899 $ --- $ ---
2,435,745 5,905,916 --- ---
26,635,222 --- 2,261,271 1,322,581
$42,438,427 $14,996,815 $2,261,271 $1,322,581
</TABLE>
<TABLE>
<CAPTION>
BALANCED ASSETS CAPITAL GROWTH INTERNATIONAL PACIFIC RIM EMERGING
FUND BOND FUND FUND MARKETS FUND
<S> <C> <C> <C>
$6,459,587 $1,389,730 $811,937 $424,488
(561,025) (256,086) (732,669) (671,513)
$5,898,562 $1,133,644 $79,268 ($247,025)
$78,955,432 $37,284,361 $12,275,713 $9,328,518
</TABLE>
119
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
5. CAPITAL STOCK AND DISTRIBUTIONS
At June 30, 1995 there were 1,000,000,000 shares of $0.01 par value common
stock authorized.
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK
EQUITY FUND FUND
Six Months Ended Year Ended Six Months Ended Year Ended
June. 30/95 Dec. 31/94 June. 30/95 Dec. 31/94
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Shares sold 1,093,575 2,635,224 612,736 1,257,276
Shares issued to
shareholder in
reinvestment of
dividends --- 19,037 --- 124,906
Total issued 1,093,575 2,654,261 612,736 1,382,182
Shares reacquired (305,324) (276,202) (130,776) (250,842)
Net increase 788,251 2,378,059 481,960 1,131,340
</TABLE>
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY-MARKET
BOND FUND FUND
Six Months Ended Year Ended Six Months Ended Year Ended
June. 30/95 Dec. 31/94 June. 30/95 Dec. 31/94
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Shares sold 529,950 1,035,750 1,645,436 2,666,868
Shares issued to
shareholder in
reinvestment of
dividends --- 244,349 --- 75,920
Total issued 529,950 1,280,099 1,645,436 2,742,788
Shares reacquired (318,342) (1,586,192) (863,230) (1,721,462)
Net increase 211,608 (306,093) 782,206 1,021,326
</TABLE>
During 1995, The Manufacturers Life Insurance Company of
America made the withdrawal of $2,000,000 of its investment
and accumulated earnings from Capital Growth Bond Fund. At
June 30, 1995 the total value of The Manufacturers Life
Insurance Company of America's investments and accumulated
earnings were: Capital Growth Bond Fund $8,322,390;
International Fund $10,137,979 and Pacific Rim Emerging
Markets Fund $6,805,829.
120
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE BALANCED ASSETS
SECURITIES FUND FUND
<S> <C> <C> <C> <C>
Six Months Ended Year Ended Six Months Ended Year Ended
June. 30/95 Dec. 31/94 June. 30/95 Dec. 31/94
(Unaudited) (Unaudited)
414,045 1,558,907 890,938 2,170,644
--- 65,711 --- 291,143
414,045 1,624,618 890,938 2,461,787
(304,078) (147,295) (415,133) (866,562)
109,967 1,477,323 475,805 1,595,225
</TABLE>
<TABLE>
<CAPTION>
INTERNATIONAL PACIFIC RIM
FUND EMERGING MARKETS FUND
<S> <C> <C> <C> <C>
Six Months Ended *Year Ended Six Months Ended *Year Ended
June 30/95 Dec. 31/94 June. 30/95 Dec. 31/94
(Unaudited) (Unaudited)
364,195 1,148,011 273,082 814,513
--- 2,981 --- 2,900
364,195 1,150,992 273,082 817,413
(16,913) (1,039) (28,123) (3,418)
347,282 1,149,953 244,959 813,995
</TABLE>
*Inception date October 4, 1994
121
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
Unaudited
6. Industry Disclosure
As June 30, 1995 the International Fund and Pacific Rim
Emerging Markets Fund portfolio diversification was as
follows:
<TABLE>
<CAPTION>
<S> <C> <C>
Industry International Fund Pacific Rim
Emerging
Markets Fund
Basic Industries 12.02% 22.31%
Capital Goods 8.71% 6.24%
Conglomerates 6.24% 7.63%
Consumer goods 17.43% 5.58%
Consumer Services 3.28% 3.59%
Finance 17.83% 19.51%
General Business 3.67% 7.76%
Real Estate 2.44% 5.15%
Repurchase Agreements 18.50% 12.61%
Technology 1.79% 1.50%
Utilities 8.09% 8.12%
Total 100.00% 100.00%
</TABLE>
7. Foreign Exchange Contracts
The International and Pacific Rim Emerging Markets Fund will,
from time to time, enter into foreign currency exchange
contracts. There are costs and risks associated with such
currency transactions. No type of foreign currency
transaction will eliminate fluctuations in the prices of the
Fund's foreign securities nor will prevent loss if the prices
of such securities should decline. No future or forward
foreign exchange contracts were held by the fund at June 30,
1995.
122
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
Unaudited
8. INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
MSFI has an Investment Advisory Agreement with Manufacturers
Adviser Corporation ("the Adviser"), a wholly-owned subsidiary
of Manulife Holding Corporation ("MHC"), a Delaware
corporation, which in turn is a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of Michigan ("MLIM").
MLIM is a life insurance holding company organized in 1983
under Michigan law and a wholly-owned subsidiary of The
Manufacturers Life Insurance Company ("Manulife Financial"), a
mutual life insurance company based in Toronto, Canada.
The Adviser is responsible for the management of MSFI's Funds
and provides the necessary personnel, facilities, equipment
and certain other services necessary to the operation of MSFI.
For such services, the Adviser receives daily compensation at
the annual rate of .50% from the Emerging Growth Equity Fund,
Common Stock Fund, Real Estate Securities Fund, Balanced
Assets Fund, Capital Growth Bond Fund and the Money - Market
Fund.
For the International Fund and Pacific Rim Emerging Markets
Fund, the Adviser receives the following for investment
management: i) .85% of the average daily value of the
aggregate net assets of each Fund on the first $100 million
and ii) .70% of the average daily value of the aggregate net
assets of each Fund in excess of $100 million. In addition,
the Funds will reimburse the Adviser for general expenses
necessary to the operation of the funds at the rate of i) up
to .50% of the daily net assets of the portfolio for the
International Fund and ii) up to .65% of the daily net assets
of the portfolio for the Pacific Rim Emerging Markets Fund.
Certain officers and/or directors of MSFI are officers and/or
directors of the Adviser, MHC, MLIM, and Manulife Financial,
however, there are no common directors of MSFI and the
Adviser.
123
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the
periods indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Six Months Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value
beginning of period $18.55 $19.42 $17.76 $16.18
Income from investment operations:
Net investment income 0.02 0.01 (0.01) (0.02)
Net realized and unrealized gain or
(loss) on investments 2.03 (0.81) 4.16 3.51
Total from investment operations 2.05 (0.80) 4.15 3.49
Dividend Distributions:
Net investment income 0.00 0.00 --- ---
Net realized gain 0.00 (0.07) (2.49) (1.91)
Total dividend distributions 0.00 (0.07) (2.49) (1.91)
Net asset value end of period $20.60 $18.55 $19.42 $17.76
Net assets end of period (in 000's) $124,362 $97,379 $55,767 $18,504
Aggregate return on share outstanding
during entire period 11.04% (4.10)% 23.89% 21.82%
Significant ratios:
Portfolio turnover 102.10 %* 69.40% 92.95% 126.62%
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 0.24%* 0.07% (0.04)% (0.14)%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 20.17 %* (3.02)% 23.61% 23.82%
* Annualized
</TABLE>
124
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
EMERGING GROWTH EQUITY FUND (CONTINUED)
<TABLE>
<CAPTION>
Year Ended
Dec. 31/91
<S> <C>
Net asset value
beginning of period $9.95
Income from investment operations:
Net investment income ---
Net realized and unrealized gain or
(loss) on investments 7.08
Total from investment operations 7.08
Dividend Distributions:
Net investment income ---
Net realized gain (0.85)
Total dividend distributions (0.85)
Net asset value end of period $16.18
Net assets end of period (in 000's) $9,822
Aggregate return on share outstanding
during entire period 71.34%
Significant ratios:
Portfolio turnover 87.63%
Ratio of expenses to average
net assets 0.50%
Ratio of net investment income to
average net assets 0.02%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 50.44%
* Annualized
</TABLE>
125
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
COMMON STOCK FUND
Six Months Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value
beginning of period $13.36 $14.68 $13.73 $13.33
Income from investment operations:
Net investment income 0.12 0.20 0.19 0.18
Net realized and unrealized gain or
(loss) on investments 1.44 (0.81) 1.64 0.61
Total from investment operations 1.56 (0.61) 1.83 0.79
Dividend Distributions:
Net investment income 0.00 (0.20) (0.19) (0.18)
Net realized gain 0.00 (0.51) (0.69) (0.21)
Total dividend distributions 0.00 (0.71) (0.88) (0.39)
Net asset value end of period $14.92 $13.36 $14.68 $13.73
Net assets end of period (in 000's) $46,065 $34,829 $21,651 $9,708
Aggregate return on share outstanding
during entire period 11.63% (4.19)% 13.39% 6.07%
Significant ratios :
Portfolio turnover 126.16%* 84.78% 88.23% 47.60%
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 1.78%* 1.53% 1.39% 1.51%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 21.72%* (4.49)% 11.50% 7.94%
* Annualized
</TABLE>
126
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
COMMON STOCK FUND (CONTINUED)
<TABLE>
<CAPTION>
Year Ended
Dec. 31/91
<S> <C>
Net asset value
beginning of period $10.48
Income from investment operations:
Net investment income 0.21
Net realized and unrealized gain or
(loss) on investments 2.94
Total from investment operations 3.15
Dividend Distributions:
Net investment income (0.21)
Net realized gain (0.09)
Total dividend distributions (0.30)
Net asset value end of period $13.33
Net assets end of period (in 000's) $5,480
Aggregate return on share outstanding
during entire period 30.18%
Significant ratios:
Portfolio turnover 53.01%
Ratio of expenses to average
net assets 0.50
Ratio of net investment income to
average net assets 1.78%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 25.41%
* Annualized
</TABLE>
127
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE SECURITIES FUND
Six Months Ended Year Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92 Dec. 31/91
(Unaudited)
<S> <C> <C> <C> <C>
$13.34 $14.07 $12.75 $10.92 $8.16
0.32 0.55 0.47 0.45 0.53
0.46 (0.93) 2.38 1.83 2.76
0.78 (0.38) 2.85 2.28 3.29
0.00 (0.27) (0.47) (0.45) (0.53)
0.00 (0.08) (1.06) --- ---
0.00 (0.35) (1.53) (0.45) (0.53)
$14.12 $13.34 $14.07 $12.75 $10.92
$46,613 $42,571 $24,106 $7,273 $4,120
5.85% (2.76)% 22.61% 21.29% 41.10%
30.20%* 35.60% 143.00% 70.71% 40.29%
0.50%* 0.50% 0.50% 0.50% 0.50%
4.99%* 4.26% 3.93% 4.13% 5.40%
11.88%* (4.48)% 15.23% 20.29% 33.48%
</TABLE>
128
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Six Months Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value
beginning of period $13.77 $15.18 $14.52 $14.51
Income from investment operations:
Net investment income 0.26 0.48 0.44 0.51
Net realized and unrealized gain or
(loss) on investments 1.39 (1.11) 1.29 0.37
Total from investment operations 1.65 (0.63) 1.73 0.88
Dividend Distributions:
Net investment income 0.00 (0.48) (0.44) (0.51)
Net realized gain 0.00 (0.30) (0.63) (0.36)
Total dividend distributions 0.00 (0.78) (1.07) (0.87)
Net asset value end of period $15.42 $13.77 $15.18 $14.52
Net assets end of period (in 000's) $90,975 $74,737 $58,156 $27,733
Aggregate return on share outstanding
during entire period 11.92% (4.15)% 11.99 6.21%
Significant ratios :
Portfolio turnover 112.04%* 86.42% 96.62% 75.83%
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 3.65%* 3.37% 3.08% 3.75%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 22.21%* (4.11)% 10.09% 6.99%
*Annualized
</TABLE>
129
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
BALANCED ASSETS FUND (CONTINUED)
<TABLE>
<CAPTION>
Year Ended
Dec. 31/91
<S> <C>
Net asset value
beginning of period $12.35
Income from investment operations:
Net investment income 0.60
Net realized and unrealized gain or
(loss) on investments 2.22
Total from investment operations 2.82
Dividend Distributions:
Net investment income (0.60)
Net realized gain (0.06)
Total dividend distributions (0.66)
Net asset value end of period $14.51
Net assets end of period (in 000's) $18,515
Aggregate return on share outstanding
during entire period 23.36%
Significant ratios:
Portfolio turnover 41.95%
Ratio of expenses to average
net assets 0.50%
Ratio of net investment income to
average net assets 4.52%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 20.84%
* Annualized
</TABLE>
130
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH BOND FUND
Six Months Ended Year Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92 Dec. 31/91
(Unaudited)
<S> <C> <C> <C> <C>
$10.10 $11.33 $11.12 $11.47 $10.62
0.35 0.72 0.65 0.77 0.83
0.91 (1.22) 0.51 (0.11) 0.85
1.26 (0.50) 1.16 0.66 1.68
0.00 (0.72) (0.65) (0.78) (0.83)
0.00 (0.01) (0.30) (0.23) ---
0.00 (0.73) (0.95) (1.01) (0.83)
$11.36 $10.10 $11.33 $11.12 $11.47
$40,226 $33,618 $41,183 $30,695 $29,326
12.50% (4.49)% 10.56% 5.89% 16.38%
86.30%* 79.04% 94.75% 153.05% 19.60%
0.50%* 0.50% 0.50% 0.50% 0.50%
6.48%* 6.29% 5.69% 6.76% 7.54%
23.30%* (5.23)% 9.28% 5.78% 15.35 %
</TABLE>
131
<PAGE>
Notes to Financial Statements, June 30, 1995 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
MONEY-MARKET FUND
Six Months Ended Year Ended Year Ended Year Ended
June. 30/95 Dec. 31/94 Dec. 31/93 Dec. 31/92
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value
beginning of period $10.26 $10.23 $10.22 $10.21
Income from investment operations:
Net investment income 0.29 0.39 0.27 0.34
Net realized and unrealized loss
on investments and foreign currency
transactions and translation --- --- --- ---
Total from investment operations 0.29 0.39 0.27 0.34
Dividend Distributions:
Net investment income 0.00 (0.36) (0.26) (0.33)
Net realized gain 0.00 --- --- ---
Total dividend distributions 0.00 (0.36) (0.26) (0.33)
Net asset value end of period $10.55 $10.26 $10.23 $10.22
Net assets end of period (in 000's) $33,330 $24,384 $13,860 $10,825
Aggregate return on share outstanding
during entire period 2.84% 3.89% 2.73% 3.40%
Significant ratios :
Portfolio turnover None None None None
Ratio of expenses to average
net assets 0.50%* 0.50% 0.50% 0.50%
Ratio of net investment income to
average net assets 5.44%* 3.84% 2.67% 3.25%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 5.44% * 3.84% 2.67% 3.25%
* Annualized
</TABLE>
132
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
MONEY-MARKET FUND (CONTINUED)
<TABLE>
<CAPTION>
Year Ended
Dec. 31/91
<S> <C>
Net asset value
beginning of period $10.21
Income from investment operations:
Net investment income 0.57
Net realized and unrealized loss on investments
and foreign currency transactions and translation ---
Total from investment operations 0.57
Dividend Distributions:
Net investment income (0.57)
Net realized gain ---
Total dividend distributions (0.57)
Net asset value end of period $10.21
Net assets end of period (in 000's) $8,615
Aggregate return on share outstanding
during entire period 5.60%
Significant ratios :
Portfolio turnover None
Ratio of expenses to average
net assets 0.50%
Ratio of net investment income to
average net assets 5.45%
Ratio of net investment income and
realized and unrealized gain(loss)
to average net assets 5.45%
* Annualized
</TABLE>
133
<PAGE>
<TABLE>
<CAPTION>
INTERNATIONAL FUND PACIFIC RIM EMERGING MARKETS FUND
Six Months Ended +Period Ended Six Months Ended +Period Ended
June. 30/95 Dec. 31/94 June. 30/95 Dec. 31/94
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
$9.82 $10.00 $9.41 $10.00
0.08 0.02 0.06 0.04
0.21 (0.18) 0.22 (0.59)
0.29 (0.16) 0.28 (0.55)
0.00 (0.02) 0.00 (0.04)
0.00 0.00 0.00 0.00
0.00 (0.02) 0.00 (0.04)
$10.11 $9.82 $9.69 $9.41
$15,139 $11,290 $10,259 $7,657
2.96% (1.54)% 3.03% (5.63)%
41.88%* 0.00%* 34.90%* 0.00%*
1.35%* 1.35%* 1.50% 1.50%*
1.76%* 1.31%* 1.48%* 1.84%*
6.40 %* (6.28)%* 7.31%* (23.41)%*
+Inception Date October 04, 1994
</TABLE>
134
<PAGE>
Emerging Growth Equity Fund
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Biotechnology 2.1%
* Alliance Pharmaceutical Corp. 203,500 $1,221,000
* Liposome Inc. 103,000 862,625
2,083,625
Broadcasters 9.8%
* ACS Enterprises Inc. 249,400 2,182,250
* CAI Wireless Systems Inc. 198,400 1,463,200
* Heartland Wireless Commun. Inc. 199,000 2,537,250
* Peoples Choice TV Corp. 95,700 1,507,275
* Preferred Entertainment Inc. 63,700 700,700
* Valuevision International Inc. 243,500 1,156,625
9,547,300
Communications 4.7%
Equipment
* A Plus Communications Inc. 177,000 2,389,500
* Arch Communications Group Inc. 122,000 2,150,250
4,539,750
Computer Hardware 4.9%
* Megahertz Corp. 58,000 819,250
* U.S. Robotics Inc. 48,000 2,076,000
* Xircom Inc. 107,700 1,911,675
4,806,925
Drugs 1.2%
* CIMA Labs Inc. 116,100 1,190,025
Electric Utilities 1.9%
* Kenetech Corp. 129,700 1,864,438
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
135
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Electronics 4.6%
* Adaptec Inc. 97,600 $2,305,800
* S3 Inc. 136,900 2,156,175
4,461,975
Entertainment 5.4%
* Boomtown Inc. 146,000 2,299,500
* Cannondale Corp. 111,200 1,139,800
* Lodgenet Entertainment Corp. 234,900 1,776,431
5,215,731
Finance: Healthcare 6.4%
* Coventry Corp. 94,100 2,305,450
* Health Mgmt. Systems Inc. 48,300 1,605,975
* Wellpoint Health Networks Inc. 80,400 2,341,650
6,253,075
Finance: Insurance 2.1%
* Philadelphia Consolidated
Holding Corp. 164,800 2,018,800
Hospital Management 19.9%
* Arbor Health Care Company 125,200 2,566,600
* Coastal Healthcare Group Inc. 79,200 2,168,100
* Healthsouth Rehabilitation 53,000 1,961,000
* Inphynet Medical Mgmt Inc. 198,300 2,478,750
* Integrated Health Services Inc. 62,200 2,456,900
* Mariner Health Group Inc. 118,800 2,569,050
* Quantum Health Residence Inc 80,600 2,317,250
* Renal Treatment Centers Inc. 132,100 2,873,175
19,390,825
</TABLE>
136
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Hospital Supplies 15.0%
* American Medical Response 95,500 $2,757,562
* Healthdyne Technologies Inc. 136,800 1,385,100
* Heart Technology Inc. 86,600 1,732,000
* Pyxis Corp. 117,700 2,236,300
* Steris Corp. 38,800 1,455,000
* Target Therapeutics Inc. 76,000 2,147,000
* Ventritex Inc. 108,600 2,932,200
14,645,162
Household Products 1.3%
* Quaker Fabric Corp. 100,000 1,275,000
Machinery 1.4%
Huntco Inc. 60,600 1,333,200
Retail 4.0%
* Gymboree Corp. 57,800 1,661,750
* Petsmart Inc. 66,100 2,280,450
3,942,200
Software 1.0%
* Minnesota Educational
Computing Corp. 59,100 930,825
Telephone 4.4%
* Centennial Cellular Corp. 133,400 2,267,800
* International Cabletel Inc. 71,400 1,981,350
4,249,150
Total Common Stock 90.1% 87,748,006
</TABLE>
137
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 7.7%
Federal Home Loan Bank 5.930%
due 01/17/1995 380,000 $378,999
Federal Home Loan Mortgage 5.290%
due 01/03/1995 990,000 989,709
Federal Home Loan Mortgage 5.870%
due 01/09/1995 2,350,000 2,346,934
Federal Home Loan Mortgage 5.920%
due 01/09/1995 400,000 399,474
Federal Home Loan Mortgage 6.110%
due 03/24/1995 800,000 788,866
Federal Home Loan Mortgage 6.100%
due 03/29/1995 600,000 591,155
Federal National Mortgage Assoc. 5.320%
due 01/11/1995 1,000,000 998,522
Federal National Mortgage Assoc. 5.250%
due 02/03/1995 1,000,000 995,187
7,488,846
Canadian Government 2.8%
Agencies
Export Development Corp. 6.000%
due 01/06/1995 1,500,000 1,498,750
Government of Canada 6.000%
due 01/18/1995 1,250,000 1,246,459
2,745,209
Personal Credit Institutions 0.7%
General Electric Capital Corp. 6.050%
due 01/12/1995 700,000 698,706
Total Short Term Investment 11.2% 10,932,761
Total Investments 101.3% 98,680,767
Other Assets Less Liabilities (1.3%) (1,301,351)
Net Assets-Equivalent to $18.55 Per Share
Based on 5,249,329 Shares of Capital
Stock Outstanding. 100.0% $97,379,416
</TABLE>
138
<PAGE>
COMMON STOCK FUND
STATEMENT OF INVESTMENTS AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Aerospace 1.1%
United Technologies Corp. 6,000 $377,250
Auto/Auto Related 2.8%
General Motors Corp. 8,000 308,000
Goodyear Tire & Rubber 20,200 679,225
987,225
Banks 4.3%
Bank Of Boston Corp. 24,700 639,113
BankAmerica Corp. 4,800 189,600
* Citicorp 16,000 662,000
1,490,713
Beverages 2.0%
Coca Cola Co. 12,700 654,050
* Pepsico Inc. 1,000 36,250
690,300
Biotechnology 1.8%
* Biogen Inc. 8,400 350,700
* Centocor Inc. 16,100 260,000
610,700
Broadcasters 3.4%
Grupo Television SA 16,800 533,400
* Tele-Communications Inc. 30,500 663,375
1,196,775
Building 1.7%
* USG Corp. 30,000 585,000
Chemicals & Fertilizers 5.7%
Air Products & Chemicals Inc. 15,300 682,763
Dow Chemical Co. 9,700 652,325
PPG Industries Inc. 17,300 642,262
1,977,350
Communications Equipment 2.1%
* Paging Network Inc. 21,100 717,400
+American Depository Receipts
*Non Income Producing Securities
See Accompanying Notes
139
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Computer Hardware 4.0%
* Compaq Computer Corp. 17,500 $691,250
International Business Machines 9,700 712,950
1,404,200
Drugs 2.7%
Johnson & Johnson 6,300 344,925
* Scherer R P Corp. 12,800 580,800
925,725
Electrical Equipment 1.1%
* General Electric Co. 7,400 377,400
Electronics 1.8%
* 3COM Corp. 12,400 639,375
Energy 8.7%
Amerada Hess Corp. 5,700 260,063
Atlantic Richfield Co. 6,300 641,025
Mobil Corp. 8,100 682,425
Schlumberger Ltd. 13,600 685,100
+ YPF Sociedad Anonima 34,000 743,850
3,012,463
Engineering & Construction 0.9%
* Fluor Corp. 7,300 314,812
Finance: Consumer & Other 4.9%
Federal National Mortgage Assoc. 9,700 706,887
First USA Inc. 20,100 660,787
MBNA Corp. 14,600 341,275
1,708,949
Finance: Insurance 1.9%
American International Group Inc. 6,700 656,600
Foods 0.5%
Kellogg Co. 3,000 174,375
Hospital Management 3.6%
* Beverly Enterprises Inc. 40,400 580,750
Columbia HCA Healthcare Corp. 18,800 686,200
1,266,950
Household Products 1.7%
Proctor & Gamble Co. 9,800 607,600
</TABLE>
140
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Metals & Minerals 5.3%
Aluminum Company of America 6,100 $528,413
Freeport McMoran Copper & Gold 28,400 603,500
Nucor Corp. 12,900 715,950
1,847,863
Natural Gas Pipelines 2.0%
Coastal Corp. 26,900 692,675
Office Equipment 2.1%
* Xerox Corp. 7,500 742,500
Paper and Forest Products 3.7%
Georgia Pacific Corp. 6,400 457,600
International Paper Co. 9,400 708,525
* Kimberly Clark Corp. 2,700 136,350
1,302,475
Retail 7.0%
* Federated Department Stores Inc. 26,600 512,050
Home Depot Inc, 15,300 703,800
Sears Roebuck & Co. 13,200 607,200
Wal Mart Stores Inc. 28,500 605,625
2,428,675
Software 1.9%
* Sybase Inc. 12,600 655,200
Telephone 7.2%
* Airtouch Communications Inc. 23,100 672,788
+ Compania De Telefonos Chile SA 7,300 574,875
MCI Communications Corp. 37,100 681,712
+ Telfonos de Mexico SA 14,300 586,300
2,515,675
Tobacco 1.8%
Philip Morris Companies Inc. 10,900 626,750
Transportation 2.1%
* Southern Pacific Rail Corp. 41,000 743,125
Total Common Stock 89.8% 31,276,100
</TABLE>
141
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 10.0%
Federal Home Loan Mortgage 5.870%
due 01/09/1995 450,000 $449,340
Federal Home Loan Mortgage 5.920%
due 01/09/1995 500,000 499,260
Federal Home Loan Mortgage 5.650%
due 01/23/1995 115,000 114,585
Federal Home Loan Mortgage 5.900%
due 01/23/1995 280,000 278,945
Federal Home Loan Mortgage 5.220%
due 01/27/1995 403,000 401,422
Federal Loan Mortgage 5.650%
due 02/02/1995 360,000 358,135
Federal Natl. Mortgage Assoc 5.900%
due 01/03/1995 595,000 594,707
Federal Natl. Mortgage Assoc. 5.930%
due 01/04/1995 150,000 149,901
FederaL Natl. Mortgage Assoc. 5.320%
due 01/11/1995 630,000 628,976
3,475,271
Personal Credit Institutions 1.3%
General Electric Capital Corp. 6.050%
due 01/12/1995 450,000 449,093
Total Short Term Investment 11.3% 3,924,364
Total Investments 101.1% 35,200,464
Other Assets Less
Liabilities (1.1%) (371,944)
Net Assets - Equivalent to $13.36 Per Share
Based on 2,606,341 Shares of Capital Stock
Outstanding. 100.0% $34,828,520
142
<PAGE>
Real Estate Securities Fund
Statement of Investments as of December 31, 1994
</TABLE>
<TABLE>
<CAPTION>
Common Stock Shares Value
<S> <C> <C> <C>
(Note 2)
Building 24.3%
Coachmen Industries Inc. 113,700 $1,748,137
Continental Homes Holding Corp. 113,000 1,313,625
Engle Homes Inc. 132,000 998,250
Pulte Corp. 81,000 1,863,000
* Schottenstein Homes Inc. 133,500 934,500
* Sundance Home Inc. 54,500 144,766
* U.S. Home Corp. 99,000 1,596,375
Del Webb Corp. 99,000 1,744,875
10,343,528
Finance - Real Estate 62.2%
Avalon Properties Inc. 83,000 1,909,000
Bay Apartment Community Inc. 86,400 1,738,800
* Catellus Development Corp. 229,000 1,345,375
Columbus Realty Trust 85,000 1,572,500
Developers Diversified Realty 57,500 1,796,875
Equity Inns Inc. 130,000 1,430,000
Equity Residential Properties Trust 51,000 1,530,000
Federal Realty Investment Trust 10,800 222,750
Health Care Property Investment Inc. 53,300 1,605,663
Home Properties N Y Inc. 83,000 1,628,875
Horizon Outlet Centers Inc. 71,500 1,867,937
Manufactured Home Community Inc. 84,600 1,681,425
Meditrust 53,600 1,621,400
Nationwide Health Properties Inc. 44,600 1,594,450
Oasis Residential Inc. 74,000 1,813,000
RFS Hotel Investments Inc. 92,000 1,345,500
Sun Communities Inc. 73,000 1,642,500
Winston Hotels Inc. 15,000 150,000
26,496,050
Lodging & Restaurants 3.5%
* Host Marriott Corporation 154,900 1,490,912
Total Common Stock 90.0% 38,330,490
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
143
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 8.4%
Federal Home Loan Bank 5.930%
due 01/17/1995 100,000 $99,736
Federal Home Loan Bank 5.940%
due 01/17/1995 250,000 249,340
Federal Home Loan Mortgage 5.870%
due 01/09/1995 900,000 898,826
Federal Home Loan Mortgage 5.220%
due 01/27/1995 150,000 149,435
Federal Home Loan Mortgage 5.650%
due 02/02/1995 200,000 198,995
Federal Home Loan Mortgage 6.100%
due 03/29/1995 200,000 197,052
Federal National Mortgage Assoc. 5.900%
due 01/03/1995 500,000 499,836
Federal National Mortgage Assoc. 5.320%
due 01/11/1995 790,000 788,833
Federal National Mortgage Assoc. 5.220%
due 01/03/1995 500,000 498,260
3,580,313
Investment Banker 0.4%
Merrill Lynch & Co. Inc. 6.050%
due 01/05/1995 155,000 154,896
Personal Credit Institutions 0.4%
General Electric Capital Corp. 6.050%
due 01/12/1995 150,000 149,723
Total Short Term 9.2% 3,884,932
Investments
Total Investments 99.2% 42,215,422
Other Assets Less
Liabilities 0.8% 355,721
Net Assets - Equivalent to
$13.34 Per Share
Based on 3,190,140 Shares
of Capital Stock Outstanding. 100.0% $42,571,143
</TABLE>
144
<PAGE>
<TABLE>
<CAPTION>
Balanced Assets Fund
Statement of Investments as of December 31, 1994
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S Government Obligations 19.5%
United States Treasury Bonds 7.125%
due 02/15/2023 2,745,000 $2,497,950
United States Treasury Bonds 6.250%
due 08/15/2023 405,000 329,253
United States Treasury Bonds 7.500%
due 11/15/2024 360,000 344,362
United States Treasury Notes 4.375%
due 11/15/1996 745,000 702,624
United States Treasury Notes 6.500%
due 05/15/1997 260,000 252,808
United States Treasury Notes 5.500%
due 04/15/2000 670,000 602,685
United States Treasury Notes 8.000%
due 05/15/2001 2,270,000 2,287,729
United States Treasury Notes 7.500%
due 11/15/2001 540,000 530,129
United States Treasury Notes 7.500%
due 05/15/2002 945,000 927,574
United States Treasury Notes 6.375%
due 08/15/2002 240,000 219,749
United States Treasury Notes 6.250%
due 02/15/2003 1,375,000 1,243,509
United States Treasury Notes 5.875%
due 02/15/2004 1,365,000 1,190,321
United States Treasury Notes 7.250%
due 05/15/2004 3,160,000 3,034,579
United States Treasury Strips
due 11/15/2010 1,500,000 428,535
Total Government 14,591,807
U.S. Government Agencies 1.3%
Federal National Mortgage Assoc.
5.330% due 06/26/1998 1,000,000 994,470
Total Government 20.8% 15,586,277
</TABLE>
145
<PAGE>
<TABLE>
<CAPTION>
Bonds (continued) Face Amount Value
(Note 2)
<S> <C> <C> <C>
Banks 6.3%
Banks New York Inc. 6.625%
due 06/15/2003 500,000 441,175
Chemical Bank New York 6.625%
due 08/15/2005 500,000 428,290
Citicorp 7.125%
due 06/01/2003 500,000 454,675
Fleet Financial Group Inc. 5.625%
due 07/01/1995 500,000 496,200
MBNA Corp. 7.490%
due 09/14/1999 1,000,000 967,870
See Accompanying Notes
</TABLE>
146
<PAGE>
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Banks (continued)
Mellon Financial Co. 6.125%
due 11/15/1995 500,000 $493,905
Nationsbank Corp. 4.750%
due 08/15/1996 500,000 475,700
Norwest Corp. 6.650%
due 10/15/2023 500,000 393,030
Republic New York Corp. 9.500%
due 04/15/2014 500,000 537,700
4,688,545
Beverages 0.5%
Coca Cola Enterprises Inc. 6.750%
due 09/15/2023 500,000 402,930
Business Credit Institutions 2.0%
Avco Financial Services Inc. 7.500%
due 11/15/1996 500,000 494,725
CIT Group Holdings Inc. 8.750%
due 04/15/1998 500,000 505,710
Chrysler Financial Corp. 7.200%
due 05/26/1998 500,000 481,980
1,482,415
Communications
Equipment 0. 7%
GTE Corp. 8.750%
due 11/01/2021 500,000 489,865
Electric Utilities 4.7%
Carolina Power & Light Co. 6.875%
due 10/01/1998 500,000 469,350
Commonwealth Edison Co. 8.125%
due 06/01/2007 725,000 664,513
Kansas Gas & Electric Co. 7.600%
due 12/15/2003 500,000 471,750
Northern Stations Power Co. 7.875%
due 10/01/2001 1,000,000 968,830
Pacific Gas & Electric Co. 8.800%
due 05/01/2024 500,000 503,760
Philadelphia Electric Co. 6.500%
due 05/01/2003 500,000 439,155
3,517,358
Household Products 1.4%
Proctor & Gamble-ESOP 9.360%
due 01/01/2021 1,000,000 1,078,800
Paper & Forest Products 0.6%
Georgia Pacific Corp. 8.125%
147
<PAGE>
due 06/15/2023 500,000 442,960
</TABLE>
148
<PAGE>
Balanced Assets Fund (continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Personal Credit Institutions 3.2%
Associates Corp. North Amer. 6.125%
due 02/01/1998 500,000 $468,945
Ford Motor Credit Corp. 6.375%
due 04/15/2000 1,000,000 911,200
General Electric Capital Corp. 8.850%
due 04/01/2005 500,000 517,050
Household Financial Corp. 7.750%
due 06/01/1999 500,000 488,155
2,385,350
Telephone 2.2%
New Jersey Bell
Telephone Co. 5.875%
due 12/01/2006 500,000 406,815
New York Telephone Co. 7.000%
due 12/01/2033 500,000 402,960
Pacific Bell 6.625%
due 10/15/2034 500,000 383,890
Southwestern Bell Tel. Co. 7.000%
due 07/01/2015 500,000 432,880
1,626,545
Total Corporate 21.6% 16,114,768
Total Bonds 42.4% 31,701,045
</TABLE>
149
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Aerospace 0.6%
United Technologies Corp. 7,100 446,412
Autos/Auto Related 1.6%
General Motors Corp. 10,000 385,000
Goodyear Tire and Rubber 25,200 847,350
1,232,350
Banks 2.4%
Bank of Boston Corp. 27,500 711,563
BankAmerica Corp. 5,600 221,200
* Citicorp 20,000 827,500
1,760,263
Beverage 1.1%
Coca cola Co. 14,800 762,200
Pepsico Inc. 1,300 47,125
809,325
Biotechnology 1.0%
* Biogen Inc. 10,300 430,025
* Centocor Inc. 19,600 318,500
748,525
+American Depository Receipts
*Non Income Producing Securities
See Accompanying Notes
</TABLE>
150
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Broadcasters 1.8%
Grupo Television SA 19,500 619,125
* Tele-Communications Inc. 34,600 752,550
1,371,675
Building 0.9%
* USG Corp.
36,100 703,950
Chemicals & Fertilizers 3.2%
Air Products & Chemicals Inc. 16,500 736,312
Dow Chemical Co. 11,900 800,275
PPG Industries Inc. 22,300 827,888
2,364,475
Communications 1.1%
* Paging Network Inc. 25,000 850,000
Computer Hardware 2.3%
* Compaq Computer Corp. 20,700 817,650
International Business Machines 11,900 874,650
1,692,300
Drugs 1.4%
Johnson & Johnson 7,700 421,575
* Scherer R P Corp. 14,200 644,325
1,065,900
Electrical Equipment 0.6%
* General Electric Co. 9,500 484,500
Electronics 1.1%
* 3COM Corp. 15,500 799,219
Energy 4.7%
Amerada Hess Corp. 6,900 314,813
Atlantic Richfield Co. 8,100 824,175
Mobil Corp. 9,500 800,375
Schlumberger Ltd. 16,100 811,037
+ YPF Sociedad Anonima 35,800 765,225
3,515,625
151
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Engineering & Construction 0.5%
* Fluor Corp. 8,200 $353,625
Finance 1.0%
American International Group Inc. 7,200 705,600
Finance: Consumer & Other 2.8%
First USA Inc. 25,100 825,162
Federal National Mortgage Assoc. 10,700 779,763
MBNA Corp. 20,100 469,837
2,074,762
152
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Foods 0.3%
Kellogg Co 4,000 $232,500
Hospital Management 2.1%
Beverly Enterprises Inc. 49,700 714,438
Columbia/HCA Healthcare Corp. 23,300 850,450
1,564,888
Household Products 1.0%
Proctor & Gamble Co. 12,400 768,800
Metals & Minerals 3.0%
Aluminum Company of America 7,300 632,363
Freeport McMoran Copper & Gold 33,000 701,250
Nucor Corp. 15,700 871,350
2,204,963
Natural Gas Pipelines 1.1%
Coastal Corp. 31,800 818,850
Office Equipment 1.2%
* Xerox Corp. 8,800 871,200
Paper and Forest Products 2.2%
Georgia Pacific Corp. 8,300 593,450
International Paper Co. 12,000 904,500
* Kimberly Clark Corp. 3,300 166,650
1,664,600
Retail 3.6%
* Federated Department Stores Inc. 33,700 648,725
Home Depot Inc. 15,300 703,800
Sears Roebuck & Co. 15,700 722,200
Wal-Mart Stores Inc. 27,900 592,875
2,667,600
Software 1.0%
* Sybase Inc. 14,000 728,000
Telephone 4.0%
* Airtouch Communications Inc. 25,500 742,688
+ Compania De Telefonos Chile SA 9,200 724,500
MCI Communications Corp. 44,900 825,037
+ Telefonos de Mexico SA 17,300 709,300
3,001,525
</TABLE>
153
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Tobacco 1.0%
Philip Morris Companies Inc. 13,500 $776,250
Transportation 1.1%
* Southern Pacific Rail Corp. 46,500 842,812
Total Common Stock 49.7% 37,120,494
Short Term Investments Face Amount Value
(Note 2)
U.S. Government Agencies 6.6%
Federal Home Loan Bank 5.920%
due 01/06/1995 220,000 219,783
Federal Home Loan Bank 5.940%
due 01/17/1995 220,000 219,383
Federal Home Loan Mortgage 5.870%
due 01/09/1995 690,000 688,987
Federal Home Loan Mortgage 5.220%
due 01/27/1995 400,000 398,434
Federal Home Loan Mortgage 5.650%
due 02/02/1995 360,000 358,136
Federal Home Loan Mortgage 6.110%
due 03/24/1995 570,000 561,970
Federal Home Loan Mortgage 6.100%
due 03/29/1995 380,000 374,334
Federal National Mortgage Assoc. 5.900%
due 01/03/1995 920,000 919,548
Federal National Mortgage Assoc. 5.930%
due 01/04/1995 240,000 239,842
Federal National Mortgage Assoc. 5.320%
due 01/11/1995 1,000,000 998,374
4,978,791
Personal Credit Institutions 1.0%
Ford Motor Credit Corp.
due 01/20/1995 740,000 737,574
Total Short Term 7.6% 5,716,365
Total Investments 99.7% 74,537,904
Other Assets Less
Liabilities 0.3% 198,839
Net Assets - Equivalent to $13.77 Per Share
Based on 5,425,697 Shares of Capital Stock
154
<PAGE>
Outstanding. 100.0% $74,736,743
</TABLE>
155
<PAGE>
Capital Growth Bond Fund
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Obligations 16.2%
United States Treasury Bonds 7.500%
due 11/15/2024 390,000 $373,058
United States Treasury Notes 8.000%
due 05/15/2001 220,000 221,718
United States Treasury Notes 7.875%
due 08/15/2001 625,000 626,269
United States Treasury Notes 5.750%
due 08/15/2003 1,150,000 999,419
United States Treasury Notes 7.250%
due 05/15/2004 1,995,000 1,915,819
United States Treasury Strips
due 11/15/2010 4,600,000 1,314,173
Total Government 5,450,456
Banks 16.3%
Bank New York Inc. 6.625%
due 06/15/2003 1,000,000 882,350
Chemical Bank New York 6.625%
due 08/15/2005 1,000,000 856,580
Citicorp 7.125%
due 06/01/2003 1,000,000 909,350
Nationsbank Corp. 4.750%
due 08/15/1996 1,000,000 951,400
Norwest Corp. 6.650%
due 10/15/2023 1,000,000 786,060
Republic New York Corp. 9.500%
due 04/15/2014 1,000,000 1,075,400
5,461,140
Beverages 2.4%
Coca Cola Enterprises Inc. 6.750%
due 09/15/2023 1,000,000 805,860
Business Credit Institutions 8.8%
Avco Financial Services Inc. 7.500%
due 11/15/1996 1,000,000 989,450
CIT Group Holdings Inc. 8.750%
due 04/15/1998 1,000,000 1,011,420
Chrysler Financial Corp. 7.200%
due 05/26/1998 1,000,000 963,960
2,964,830
</TABLE>
See Accompanying Notes
156
<PAGE>
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Communications Equipment 2.9%
GTE Corp. 8.750%
due 11/01/2021 1,000,000 $979,730
Electric Utilities 14.2%
Gulf States Utilities Co. 7.350%
due 11/01/1998 1,000,000 947,310
Kansas Gas & Electric Co. 7.600%
due 12/15/2003 1,000,000 943,500
Pacific Gas & Electric Co. 8.800%
due 05/01/2024 1,000,000 1,007,520
Pennsylvania Power & Light Co. 7.625%
due 02/01/2002 1,000,000 963,130
Philadelphia Electric Co. 7.125%
due 09/01/2002 1,000,000 916,640
4,778,100
Household Products 3.2%
Proctor & Gamble-ESOP 9.360%
due 01/01/2021 1,000,000 1,078,800
Paper & Forest Products 2.6%
Georgia Pacific Corp. 8.125%
due 06/15/2023 1,000,000 885,920
Personal Credit Institutions 8.4%
Associates Corp. North America 6.125%
due 02/01/1998 1,000,000 937,890
Ford Motor Credit Co. 6.375%
due 04/15/2000 1,000,000 911,200
Household Finance Corp. 7.750%
due 06/01/1999 1,000,000 976,310
2,825,400
</TABLE>
157
<PAGE>
<TABLE>
<CAPTION>
Bonds Face Amount Value
(Note 2)
<S> <C> <C> <C>
Telephone 18.8%
AT&T Corp. 5.125%
due 04/01/2001 1,000,000 $840,340
Bellsouth Savings & Employee Stock
Ownership Trust 9.190%
due 07/01/2003 839,403 861,017
Cincinnati Bell Telephone Co. 7.300%
due 04/30/1996 1,000,000 989,710
New York Telephone Co. 7.000%
due 12/01/2033 1,000,000 805,920
Pacific Telephone &
Telegraph Co. 7.625%
due 06/01/2009 1,000,000 908,430
Rochester Telephone Corp. 9.300%
due 06/01/2004 1,000,000 1,051,790
Southwestern Bell Telephone
Co. 7.000%
due 07/01/2015 1,000,000 865,760
6,322,967
Total Corporate 77.6% 26,102,747
Total Bonds 93.8% 31,553,203
</TABLE>
158
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 4.4%
Federal Home Loan Bank 4.920%
due 01/06/1995 225,000 $224,778
Federal Home Loan Mortgage 5.870%
due 01/09/1995 1,100,000 1,098,386
Federal Home Loan Mortgage 5.900%
due 01/23/1995 150,000 149,435
Total Short Term
Investments 4.4% 1,472,599
Total Investments 98.2% 33,025,802
Other Assets Less
Liabilities 1.8% 592,111
Net Assets - Equivalent to $10.10 Per
Share Based on 3,328,888 Shares
of Capital Stock Outstanding 100.0%
$33,617,913
</TABLE>
159
<PAGE>
Money Market Fund
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
U.S. Government Agencies 58.7%
Federal Home Loan Bank 5.930%
due 01/17/1995 340,000 $339,048
Federal Home Loan Bank 5.940%
due 01/17/1995 1,730,000 1,725,147
Federal Home Loan Mortgage 5.870%
due 01/09/1995 1,000,000 998,532
Federal Home Loan Mortgage 5.220%
due 01/27/1995 800,000 796,868
Federal Home Loan Mortgage 5.650%
due 02/02/1995 1,660,000 1,651,403
Federal Home Loan Mortgage 6.110%
due 03/24/1995 2,280,000 2,247,882
Federal Home Loan Mortgage 6.100%
due 03/29/1995 2,100,000 2,068,687
Federal National Mortgage Assoc. 5.320%
due 01/11/1995 1,320,000 1,317,854
Federal National Mortgage Assoc. 5.760%
due 01/11/1995 200,000 199,648
Federal National Mortgage Assoc. 5.220%
due 01/25/1995 1,000,000 996,375
Federal National Mortgage Assoc. 5.250%
due 02/03/1995 2,000,000 1,990,083
14,331,527
Beverages
Pepsico Inc. 6.000% 3.9%
due 01/10/1995 950,000 948,417
Business Credit Institutions 4.1%
CIT Group Holdings Inc 6.000%
due 02/02/1995 1,000,000 994,500
</TABLE>
See Accompanying Notes
160
<PAGE>
<TABLE>
<CAPTION>
Short Term Investments Face Amount Value
(Note 2)
<S> <C> <C> <C>
Energy 4.1%
Chevron Oil Finance Co. 6.000%
due 01/17/1995 1,000,000 $997,167
Investment Banker 4.5%
Merrill Lynch & Company Inc. 6.050%
due 01/05/1995 1,100,000 1,099,076
Personal Credit Institutions 8.2%
Ford Motor Credit Co. 5.570%
due 01/09/1995 1,000,000 998,608
General Electric Capital Corp. 5.570%
due 01/09/1995 1,000,000 998,607
1,997,215
Telephone 4.1%
American Tel & Teleg Co. 6.000%
due 01/10/1995 1,000,000 998,333
Canadian Government 12.4%
Agencies
Canadian Wheat Board 6.000%
due 01/11/1995 1,000,000 998,167
Export Development Corp. 6.000%
due 01/06/1995 1,000,000 999,000
Government of Canada 6.000%
due 01/18/1995 700,000 697,900
Government of Canada 5.800%
due 02/13/1995 330,000 327,660
3,022,727
Total Investments 100.0% 24,388,962
Other Assets Less Liabilities 0.0% (4,476)
Net Assets - Equivalent to $10.26 Per Share
Based on 2,375,854 Shares of Capital Stock
Outstanding. 100.0% $24,384,486
</TABLE>
161
<PAGE>
International Fund
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australian Dollar 3.9%
Poseidon Gold 19,000 $39,780
Westpac Bank Corp. 20,000 67,308
Brambles Industries Ltd. 3,000 28,660
Broken Hill Property 5,000 75,915
Newcrest Mining 8,000 35,670
North Limited 16,451 43,373
Santos Limited 17,510 47,251
News Corporation 10,000 39,159
Western Mining Corp. 10,000 58,002
435,118
Belgian Franc 0.6%
Union Miniere 400 31,059
Cockerill Sambre 6,000 36,970
68,029
German Deutsche Mark 4.3%
Dresdner Bank AG 475 124,750
Man AG 450 123,121
* Fielmann AG 3,400 118,474
Veba AG 350 121,959
488,304
Finnish Markka 0.7%
Kesko 3,000 34,825
Nokia (AB) DY 315 46,538
81,363
French Franc 5.9%
Banque National Paris 2,000 91,930
CPR Cie Par Reesco 2,000 133,570
*CSF (Thomson) 3,000 89,798
Rhone Poulenc SA 4,000 92,792
Saint Louis 500 128,721
Sagem (Applic Gem) 250 124,509
661,320
Hong Kong Dollar 4.2%
Cheung Kong (Holdings) 6,000 24,427
China Light & Power 11,000 46,915
Grand Hotel Holdings 15,000 5,525
Hang Seng Bank 4,000 28,692
Hong Kong Land Holding 10,000 19,515
Hong Kong Telecommunications 34,800 66,339
Hopewell Holdings 30,000 24,814
HSBC Holdings 8,000 86,333
*Non Income Producing Securities
See Accompanying Notes
162
<PAGE>
</TABLE>
163
<PAGE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Hong Kong Dollar (continued)
Hutchison Whampoa 10,000 $40,452
New World Development Co. 10,000 26,688
Swire Pacific 7,000 43,606
Tai Cheung Holdings 40,000 38,772
Wharf (Holdings) 7,000 23,612
475,690
Indonesian Rupiah 1.1%
Astra International 35,000 66,879
Matahari Putra Pri 32,000 59,691
126,570
Italian Lira 1.0%
* Caffaro SPA 31,000 35,565
* Dalmine 170,000 43,411
Danieli & Co. 6,000 38,267
117,243
Japanese Yen 19.6%
Arabian Oil Co. 1,500 65,663
Casio Computer Co. 7,000 88,554
Daiichi 1,000 46,285
Daiwa Securities 6,000 86,747
Fujisawa Pharm Co. 4,000 43,373
Itochu Corp. 12,000 85,542
Onward Kashiyama 6,000 83,133
Kawasaki Heavy Industries 20,000 90,361
* Kawasaki Steel Corp. 16,000 66,988
Kyushu Electric Power 5,000 117,972
Marubeni Corp. 6,000 33,133
Mitsubishi Bank 6,000 147,590
Mitsubishi Paper Mills 12,000 89,398
Mitsubishi Rayon 10,000 42,872
Nichiei Construction 4,000 45,382
NEC Corp. 8,000 91,566
Nippon Sheet Glass 18,000 96,867
Nippon Fire & Marine Insurance 7,000 48,635
* Nippon Zeon Company 15,000 79,518
Osaka Gas Co. 8,000 32,129
Seino Transport 5,000 91,365
Seiren Co. 3,000 32,831
* Showa Denko 20,000 70,080
Sony Corp. 4,000 226,908
Sumitomo Bank 6,000 114,458
Sumitomo Trust & Banking 2,000 28,112
TDK Corp. 2,000 96,988
Toyo Engineering 10,000 72,289
2,214,739
164
<PAGE>
International Fund (Continued)
Statement of Investments as of December 31, 1994
</TABLE>
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Malaysian Ringgit 3.3%
* DCB Holdings 20,000 $44,606
IJM Corp. Berhad 6,000 20,090
Industries Oxygen Inc. 25,000 29,959
Lam Soon Huat Development 10,000 38,379
Leader Universal Holdings 7,000 22,479
* Leader Universal Holdings (New Shares) 4,666 15,806
Malaysian International Shipping 7,000 20,012
Resorts World Berhad 7,000 41,120
Sime Darby Berhad 24,000 54,983
Telekom Malaysia 8,000 54,200
* UTD Merchant Group 15,000 27,609
369,243
Netherlands Guilder 2.6%
ABN AMRO Holdings NV 2,950 102,474
Philips Electronic 3,100 91,791
VER NED Uitgevers 950 98,618
Norwegian Krone 0.5% 292,883
Den Norske Bank 20,000 53,531
Pound Sterling 14.1%
Abbey National 5,000 33,641
Allied Domecq PLC 2,000 16,899
BAA 7,000 51,807
BTR 9,000 41,402
Bat Industries 4,000 26,975
Barclays Bank 3,000 28,681
Bass 2,000 16,101
Blue Circle Industries 2,000 8,856
BOC Group 1,000 11,031
Boots Company 2,000 15,772
British Aerospace 1,000 6,697
British Airways 3,000 16,805
British Gas 13,000 63,668
British Petroleum 9,000 59,920
British Telecom 14,000 82,694
Cable & Wireless 5,000 29,495
Cadbury Schweppes 4,000 27,038
Forte 6,000 22,625
General Eiectric 3,000 12,956
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
165
<PAGE>
International Fund (Continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Pound Sterling (continued)
Glaxo Holdings 5,000 51,948
Grand Metropolitan 3,000 19,152
Great Universal Stores 13,000 110,656
Guinness 3,000 21,123
Hanson 6,000 21,687
HSBC Holdings 5,000 $55,273
Imperial Chemical Industries 2,000 23,423
Lloyds Bank 2,000 17,290
Marks & Spencer 4,000 24,910
National Westminster 4,000 32,108
P&O 2,000 19,089
Pearson 1,000 8,715
Prudential Corp. 5,000 24,800
Redland 1,000 7,229
Reed International 2,000 24,957
Reuters Holdings 3,000 21,968
RTZ Corp. 1,000 12,956
Shell Transport & Trading 9,000 98,154
Smithkline Beecham (Class A Shares) 3,000 21,288
Smithkline Beecham/BEC, (Class B Units) 2,000 13,269
Standard Chartered 21,000 92,333
Tesco 6,000 23,377
Tomkins 24,000 82,053
TSB Group 28,000 102,519
Unilever 2,000 36,223
Vodafone Group 5,000 16,586
Wellcome 1,000 10,922
Whitbread 3,000 26,522
1,593,593
Singapore Dollar 2.7%
Centrepoint Properties 14,000 28,720
City Developments 4,000 22,367
Development Bank Singapore 5,000 51,458
Fraser & Neave 3,000 31,081
Jurong Shipyard 3,000 23,053
Overseas Chinese Bank 6,000 61,750
Robinson & Company 5,000 19,554
Singapore Press Holdings 2,000 36,364
Singapore Airlines 3,000 27,581
301,928
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
166
<PAGE>
International Fund (Continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
* Spanish Peseta 1.2%
Asturiana De Zinc 2,850 $30,963
BCO Intercont ESPA 400 33,094
Gas Natural SDG SA' 425 36,551
Corp. Financial Alba 750 31,795
132,403
Swedish Krona 1.0%
* Avesta Sheffield 5,900 58,360
Incentive AB 1,610 51,893
110,253
Swiss Franc 2.5%
Holderbk FN Glarus 95 71,921
Merkur Holding AG 275 69,538
Nestle SA 75 71,448
Roche Holdings AG 15 72,593
285,500
Thailand Baht 1.4%
* Dhana Siam Financial & Sec 1,000 7,050
Krung Thai Bank Place 13,000 42,980
Land & House 2,000 35,690
Matichon Public Company Ltd. 6,000 31,548
Shinawatra C. & Commissions 1,000 21,828
Dhana Siam Financial & Sec. (Rights) 3,000 18,761
157,857
Total Common Stock 70.6% $7,965,567
</TABLE>
167
<PAGE>
International Fund (Continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Preferred Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australian Dollar 0.1%
News Corporation 5,000 $17,253
Repurchase Agreement Face Amount Value
(Note 2)
American Dollar 17.7%
State Street Bank and Trust Co. 5.150% 2,000,000 2,000,000
due 01/03/1995-Collateralized by
$2,040,295 U.S. Treasury Bonds 9.250%
due 02/15/2010
Total Investments 88.4% 9,982,820
Other Assets Less Liabilities 11.6% 1,307,587
Net Assets - Equivalent to $9.82 Per Share
Based on 1,149,953 Shares of Capital Stock
Outstanding. 100.0% $11,290,407
</TABLE>
168
<PAGE>
Pacific Rim Emerging Markets Fund
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australian Dollar 21.2%
Brambles Industries Ltd. 11,000 $105,087
Broken Hill Property 17,000 258,111
Newcrest Mining 30,000 133,762
News Corp. 40,000 156,638
North Limited 61,692 162,650
Poseidon Gold 73,000 148,310
Santos Limited 65,921 177,889
Westem Mining Corp. 40,000 232,010
Westpac Bank Corp. 75,000 252,404
1,626,861
Hong Kong Dollar 12.0%
Cheung Kong (Holdings) 10,000 40,711
China Light & Power 21,000 89,564
Grand Hotel Holdings 35,000 12,892
Hang Seng Bank 8,000 57,383
Hong Kong Land Holding 20,000 39,031
Hong Kong Telecommunications 70,000 133,441
Hopewell Holdings 60,000 49,628
HSBC Holdings 14,800 159,716
Hutchison Whampoa 18,000 72,814
New World Development Co. 20,000 53,376
Swire Pacific 14,000 87,212
Tai Cheung Holdings 80,000 77,544
Wharf (Holdings) 14,000 47,224
920,536
Indonesian Rupiah 3.6%
Astra International 75,000 143,312
Matahari Putra Pri 72,000 134,304
277,616
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
169
<PAGE>
Pacific Rim Emerging Markets Fund (continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Japanese Yen 8.8%
Casio Computer Co. 2,000 25,301
Daiwa Securities 2,000 28,916
ltochu Corp. 4,000 28,514
* Kawasaki Heavy Industries 6,000 27,108
Kawasaki Steel Corp. 5,000 20,934
Kyushu Electric Power 2,000 47,189
Mitsubishi Bank 2,000 49,197
Mitsubishi Paper Mills 4,000 29,799
Mitsubishi Rayon 4,000 17,149
NEC Corp. 2,000 22,891
Nippon Sheet Glass 6,000 32,289
* Nippon Zeon Co. 5,000 26,506
Onward Kashiyama 2,000 27,711
Seino Transport 2,000 36,546
* Showa Denko KK 6,000 21,024
Sony Corp. 2,000 113,454
Sumitomo Bank 2,000 38,153
Sumitomo Trust & Banking 1,000 14,056
TDK Corp. 1,000 48,494
Toyo Engineering 2,000 14,458
669,689
Malaysian Ringgit 9.5%
* DCB Holdings 45,000 100,449
IJM Corp. Berhad 11,000 36,832
Ind. Oxygen Inc. 50,000 59,918
Lam Soon Huat Development 20,000 76,757
Leader Universal Holdings 14,000 44,958
* Leader Universal Holdings A Shares 9,333 31,615
Malaysian International Shipping 13,000 37,165
Resorts World BHD 14,000 82,240
Sime Darby BHD 42,000 96,221
Telekom Malaysia 16,000 108,400
* UTD Merchant Group 30,000 55,218
729,773
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
170
<PAGE>
Pacific Rim Emerging Markets Fund (continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Common Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Singapore Dollar 7.0%
Centrepoint Properties 24,000 $49,235
City Developments 8,000 44,734
Development Bank Singapore 8,000 82,333
Fraser & Neave 5,000 51,801
Jurong Shipyard 5,000 38,422
Overseas Chinese Bank 10,000 102,916
Robinson & Company 9,000 35,197
Singapore Press Holdings 4,000 72,727
Singapore Airlines 6,000 55,163
532,528
Thailand Baht 4.2%
* Dhana Siam Financial & Securities 3,000 21,151
Krung Thai Bank Place 23,000 76,041
Land & House 4,000 71,380
Matichon Public Company Ltd. 10,000 52,579
Shinawatra C. & Commissions 2,000 43,657
Dhana Siam Fin. & Sec. (Rights) 9,000 56,283
321,091
Total Common Stock 66.3% 5,078,094
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
171
<PAGE>
Pacific Rim Emerging Markets Fund (continued)
Statement of Investments as of December 31, 1994
<TABLE>
<CAPTION>
Preferred Stock Shares Value
(Note 2)
<S> <C> <C> <C>
Australian Dollar 0.9%
News Corporation 20,000 $69,014
Repurchase Agreement Face Amount Value
(Note 2)
American Dollar 19.6%
State Street Bank and Trust Co. 5.150% 1,500,000 1,500,000
due 01/03/1995-Collateralized by
$1,533,698 U.S. Treasury Bonds 9.875%
due 11/15/2015
Total Investments 86.8% 6,647,108
Other Assets Less Liabilities 13.2% 1,010,109
Net Assets - Equivalent to $9.41 Per Share
Based on 813,995 Shares of Capital Stock
Outstanding. 100.0% $7,657,217
</TABLE>
*Non Income Producing Securities
See Accompanying Notes
172
<PAGE>
Statement Of Assets and Liabilities as of December 31, 1994
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK
EQUITY FUND FUND
<S> <C> <C>
ASSETS:
Investments, at market value (cost-
Emerging Growth Equity Fund: $98,764,733,
Common Stock Fund: $35,756,087, Real
Estate Securities Fund: $43,791,503,
Balanced Assets Fund: $77,157,803, Capital
Growth Bond Fund: $35,029,511, Money
Market Fund: $24,388,962, International
Fund: $10,170,881, Pacific Rim Emerging
Markets Fund: $7,097,683)
Note (2) $98,680,767 $35,200,464
Cash 1,811 8,017
Cash - foreign currencies (cost
International fund: $8,329)
Pacific Rim Emerging Markets Fund: $5,016) --- ---
Receivable for undelivered sales 478,074 267,047
Investment income receivable 1,244 44,528
Total Assets 99,161,896 35,520,056
LIABILITIES:
Payable for investment advisory fees 39,532 14,522
(Note 8) 1,742,948 677,014
Payable for undelivered purchases 1,782,480 691,536
Total liabilities
NET ASSETS $97,379,416 $34,828,520
Represented by:
Paid In Capital (Note 5) $93,810,077 $35,969,338
Net unrealized depreciation of investments (83,966) (555,623)
Net unrealized depreciation on
translation of assets and liabilities
in foreign currencies --- ---
Undistributed net realized gain
(loss) on investments 3,617,694 (585,195)
Undistributed net realized gain (loss) on
transactions in foreign currencies --- ---
Undistributed net investment income 35,611 ---
NET ASSETS $97,379,416 $34,828,520
Capital Stock outstanding (Note 5) 5,249,329 2,606,341
Net asset value, offering and redemption $18.55 $13.36
prices per share
See Accompanying Notes
173
<PAGE>
</TABLE>
174
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE BALANCED
SECURITIES FUND ASSETS FUND
<S> <C> <C>
ASSETS:
Investments, at market value (cost-
Emerging Growth Equity Fund: $98,764,733,
Common Stock Fund: $35,756,087, Real
Estate Securities Fund: $43,791,503,
Balanced Assets Fund: $77,157,803, Capital
Growth Bond Fund: $35,029,511, Money
Market Fund: $24,388,962, International
Fund: $10,170,881, Pacific Rim Emerging
Markets Fund: $7,097,683)
Note (2) $42,215,422 $74,537,904
Cash 12,509 7,132
Cash - foreign currencies (cost
International fund: $8,329)
Pacific Rim Emerging Markets Fund: $5,016) --- ---
Receivable for undelivered sales 104,572 329,361
Investment income receivable 255,688 583,152
Total Assets 42,588,191 75,457,549
LIABILITIES:
Payable for investment advisory fees
(Note 8) 17,048 31,727
Payable for undelivered purchases --- 689,079
Total liabilities 17,048 720,806
NET ASSETS $42,571,143 $74,736,743
Represented by:
Paid In Capital (Note 5) $43,696,676 $78,410,323
Net unrealized depreciation of
investments (1,576,081) (2,619,899)
Net unrealized depreciation on
translation of assets and liabilities
in foreign currencies --- ---
Undistributed net realized gain
(loss) on investments (402,421) (1,059,226)
Undistributed net realized gain
(loss) on transactions in foreign
currencies --- ---
Undistributed net investment income 852,969 5,545
NET ASSETS $42,571,143 $74,736,743
Capital Stock outstanding (Note 5) 3,190,140 5,425,697
Net asset value, offering and redemption $13.34 $13.77
prices per share
175
<PAGE>
See Accompanying Notes
</TABLE>
176
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY MARKET
BOND FUND FUND
<S> <C> <C>
ASSETS:
Investments, at market value (cost-
Emerging Growth Equity Fund: $98,764,733,
Common Stock Fund: $35,756,087, Real
Estate Securities Fund: $43,791,503,
Balanced Assets Fund: $77,157,803, Capital
Growth Bond Fund: $35,029,511, Money
Market Fund: $24,388,962, International
Fund: $10,170,881, Pacific Rim Emerging
Markets Fund: $7,097,683)
Note (2) $33,025,802 $24,388,962
Cash 48,563 2,600
Cash - foreign currencies (cost
International fund: $8,329)
Pacific Rim Emerging Markets Fund: $5,016) --- ---
Receivable for undelivered sales --- 3,425
Investment income receivable 557,770 ---
Total Assets 33,632,135 24,394,987
LIABILITIES:
Payable for investment advisory fees
(Note 8) 14,222 10,501
Payable for undelivered purchases --- ---
Total liabilities 14,222 10,501
NET ASSETS $33,617,913 $24,384,486
Represented by:
Paid In Capital (Note 5) $36,927,791 $24,383,082
Net unrealized depreciation of
investments (2,003,709) ---
Net unrealized depreciation on
translation of assets and liabilities
in foreign currencies --- ---
Undistributed net realized gain
(loss) on investments (1,312,263) ---
Undistributed net realized gain
(loss) on transactions in foreign
currencies --- ---
Undistributed net investment income 6,094 1,404
NET ASSETS $33,617,913 $24,384,486
Capital Stock outstanding (Note 5) 3,328,888 2,375,854
Net asset value, offering and redemption $10.10 $10.26
prices per share
177
<PAGE>
See Accompanying Notes
</TABLE>
178
<PAGE>
<TABLE>
<CAPTION>
PACIFIC RIM
INTERNATIONAL EMERGING
FUND MARKETS FUND
<S> <C> <C>
ASSETS:
Investments, at market value (cost-
Emerging Growth Equity Fund: $98,764,733,
Common Stock Fund: $35,756,087, Real
Estate Securities Fund: $43,791,503,
Balanced Assets Fund: $77,157,803, Capital
Growth Bond Fund: $35,029,511, Money
Market Fund: $24,388,962, International
Fund: $10,170,881, Pacific Rim Emerging
Markets Fund: $7,097,683)
Note (2) $9,982,820 $6,647,108
Cash 1,491,230 1,000,935
Cash - foreign currencies (cost
International fund: $8,329)
Pacific Rim Emerging Markets Fund: $5,016) 8,329 5,016
Receivable for undelivered sales --- ---
Investment income receivable 13,458 13,616
Total Assets 11,495,837 7,666,675
LIABILITIES:
Payable for investment advisory fees
(Note 8) 12,968 9,458
Payable for undelivered purchases 192,462 ---
Total liabilities 205,430 9,458
NET ASSETS $11,290,407 $7,657,217
Represented by:
Paid In Capital (Note 5) $11,482,684 $8,101,849
Net unrealized depreciation of investments
Net unrealized depreciation on (188,061) (450,575)
translation of assets and liabilities
in foreign currencies
Undistributed net realized gain (2,136) (7)
(loss) on investments
Undistributed net realized gain --- ---
(loss) on transactions in foreign
currencies
Undistributed net investment income (6,873) 511
4,793 5,439
NET ASSETS $11,290,407 $7,657,217
Capital Stock outstanding (Note 5) 1,149,953 813,995
Net asset value, offering and redemption
prices per share $9.82 $9.41
179
<PAGE>
See Accompanying Notes
</TABLE>
180
<PAGE>
Statement of Operations for the Year Ended December 31, 1994
<TABLE>
<CAPTION>
EMERGING GROWTH COMMON STOCK
EQUITY FUND FUND
<S> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest $425,892 $161,969
Dividends 16,975 436,823
Total investment income 442,867 598,792
EXPENSES:
Investment advisory fees (Note 8) 387,780 145,196
General expenses (Note 8) --- ---
Total Expenses 387,780 145,196
Net investment income (Note 2) 55,087 453,596
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized appreciation (depreciation)
on:
Investment transactions (excluding short
term investments) 3,929,965 429,006
Foreign currency transactions --- ---
Net realized gain (loss) 3,929,965 429,006
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding short
term investments) (6,390,916) (2,211,994)
Translation of assets and liabilities in
foreign currencies --- ---
Net unrealized depreciation (6,390,916) (2,211,994)
Net realized and unrealized loss (2,460,951) (1,782,988)
INCREASE (DECREASE) IN NET ASSET DERIVED
FROM OPERATIONS ($2,405,864) ($1,329,392)
</TABLE>
See Accompanying Notes.
181
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE BALANCED
SECURITIES FUND ASSETS FUND
<S> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest $201,404 $2,221,940
Dividends 1,523,816 643,867
Total investment income 1,725,220 2,865,807
EXPENSES:
Investment advisory fees (Note 8) 177,268 365,442
General expenses (Note 8) --- ---
Total Expenses 177,268 365,442
1,547,952 2,500,365
Net investment income (Note 2)
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized appreciation (depreciation)
on:
Investment transactions (excluding short
term investments) (342,136) 228,164
Foreign currency transactions --- ---
Net realized gain (loss) (342,136) 228,164
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding short
term investments) (2,832,671) (5,783,362)
Translation of assets and liabilities in
foreign currencies --- ---
Net unrealized depreciation (2,832,671) (5,783,362)
Net realized and unrealized loss (3,174,807) (5,555,198)
INCREASE (DECREASE) IN NET ASSET DERIVED ($1,626,855) ($3,054,833)
FROM OPERATIONS
</TABLE>
182
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH MONEY MARKET
BOND FUND FUND
<S> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest $2,697,210 $875,581
Dividends --- ---
Total investment income 2,697,210 875,581
EXPENSES:
Investment advisory fees (Note 8) 199,327 98,676
General expenses (Note 8) --- ---
Total Expenses 199,327 98,676
Net investment income (Note 2) 2,497,883 776,905
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized appreciation (depreciation)
on:
Investment transactions (excluding short
term investments) (1,307,483) ---
Foreign currency transactions --- ---
Net realized gain (loss) (1,307,483) ---
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding short
term investments) (3,268,785) ---
Translation of assets and liabilities in
foreign currencies --- ---
Net unrealized depreciation (3,268,785) ---
Net realized and unrealized loss (4,576,268) ---
INCREASE (DECREASE) IN NET ASSET DERIVED
FROM OPERATIONS ($2,078,385) $776,905
</TABLE>
183
<PAGE>
<TABLE>
<CAPTION>
PACIFIC RIM
INTERNATIONAL EMERGING
FUND* MARKETS FUND*
<S> <C> <C>
INVESTMENT INCOME (NOTE 2):
Interest $45,097 $31,489
Dividends 23,233 27,506
Total investment income 68,330 58,995
EXPENSES:
Investment advisory fees (Note 8) 21,567 14,889
General expenses (Note 8) 12,686 11,385
Total Expenses 34,253 26,274
Net investment income (Note 2) 34,077 32,721
REALIZED AND UNREALIZED GAIN (LOSS):
Net realized appreciation (depreciation)
on:
Investment transactions (excluding short
term investments) --- ---
Foreign currency transactions (6,873) 511
Net realized gain (loss) (6,873) 511
Net unrealized appreciation
(depreciation) on:
Investment transactions (excluding short
term investments) (188,061) (450,575)
Translation of assets and liabilities in
foreign currencies (2,136) (7)
Net unrealized depreciation (190,197) (450,582)
Net realized and unrealized loss (197,070) (450,071)
INCREASE (DECREASE) IN NET ASSET DERIVED
FROM OPERATIONS ($162,993) ($417,350)
* Period October 4, 1994 through December 31, 1994.
</TABLE>
184
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
EMERGING GROWTH
EQUITY FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $55,087 ($11,843)
Net realized gain (loss) from investment
and foreign currency transactions 3,929,965 4,233,464
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (6,390,916) 3,742,226
Increase (decrease) in net assets
derived from operations (2,405,864) 7,963,847
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (19,476) ---
Net realized gain (331,996) (5,841,235)
Total distributions to shareholders (351,472) (5,841,235)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 49,160,218 32,377,123
Net asset value of shares issued to
shareholder for reinvestment of dividends
351,472 5,841,235
Cost of capital stock reacquired 49,511,690 38,218,358
Increase in net assets derived from (5,141,457) (3,078,811)
capital stock transactions
Net increase in net assets 44,370,233 35,139,547
41,612,897 37,262,159
NET ASSETS: 18,504,360
Beginning of period 55,766,519
End of period 1994 and 1993 including
undistributed net investment income (loss)
of $35,611 and NIL respectively in the
Emerging Growth Equity Fund, NIL and NIL
respectively in the Common Stock Fund,
$852,969 and $2,219 respectively in the
Real Estate Securities Fund, $5,545 and
$4,932 respectively in the Capital Growth
Bond Fund, $1,404 and $3,885 respectively
in the Money Market Fund, $4,793 and NIL
respectively in the International Fund, and
$5,439 and NIL respectively in the Pacific
Rim Emerging Markets Fund.
(Note 2) $97,379,416 $55,766,519
185
<PAGE>
See Accompanying Notes
</TABLE>
186
<PAGE>
<TABLE>
<CAPTION
COMMON STOCK
FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $453,596 $206,943
Net realized gain (loss) from
investment and foreign currency
transactions 429,006 1,122,962
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (2,211,994) 387,658
Increase (decrease) in net assets
derived from operations (1,329,392) 1,717,563
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (453,596) (206,943)
Net realized gain (1,246,124) (925,523)
Total distributions to shareholders (1,699,720) (1,159,466)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 18,029,178 11,585,182
Net asset value of shares issued to
shareholder for reinvestment of
dividends 1,699,720 1,159,466
19,728,898 12,744,648
Cost of capital stock reacquired (3,522,116) (1,359,568)
Increase in net assets derived from
capital stock transactions 16,206,782 11,385,080
Net increase in net assets 13,177,670 11,943,177
187
<PAGE>
NET ASSETS:
Beginning of period 21,650,850 9,707,673
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $34,828,520 $21,650,850
</TABLE>
188
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE
SECURITIES FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $1,547,952 $542,682
Net realized gain (loss) from
investment and foreign currency
transactions (342,136) 1,293,530
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (2,832,671) 268,012
Increase (decrease) in net assets
derived from operations (1,626,855) 2,104,224
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (697,202) (540,463)
Net realized gain (230,087) (1,509,856)
Total distributions to shareholders (927,289) (2,050,319)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 22,118,718 18,301,921
Net asset value of shares issued to
shareholder for reinvestment of
dividends 927,289 2,050,319
23,046,007 20,352,240
Cost of capital stock reacquired (2,026,894) (3,573,312)
Increase in net assets derived from
capital stock transactions 21,019,113 16,778,928
Net increase in net assets 18,464,969 16,832,833
189
<PAGE>
NET ASSETS:
Beginning of period 24,106,174 7,273,341
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $42,571,143 $24,106,174
</TABLE>
See Accompanying Notes.
190
<PAGE>
<TABLE>
<CAPTION>
BALANCED ASSETS
FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $2,500,365 $1,291,676
Net realized gain (loss) from
investment and foreign currency
transactions 228,164 2,426,878
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (5,783,362) 520,294
Increase (decrease) in net assets
derived from operations (3,054,833) 4,238,848
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (2,499,752) (1,289,702)
Net realized gain (1,581,823) (2,250,620)
Total distributions to shareholders (4,081,575) (3,540,322)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 32,214,527 29,310,656
Net asset value of shares issued to
shareholder for reinvestment of
dividends 4,081,575 3,540,322
36,296,102 32,850,978
Cost of capital stock reacquired (12,578,846) (3,126,885)
Increase in net assets derived from
capital stock transactions 23,717,256 29,724,093
Net increase in net assets 16,580,848 30,422,619
191
<PAGE>
NET ASSETS:
Beginning of period 58,155,895 27,733,276
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $74,736,743 $58,155,895
</TABLE>
192
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH
BOND FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $2,497,883 $2,094,368
Net realized gain (loss) from
investment and foreign currency
transactions (1,307,483) 1,144,472
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (3,268,785) 173,566
Increase (decrease) in net assets
derived from operations (2,078,385) 3,412,406
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (2,500,018) (2,092,445)
Net realized gain (24,868) (1,052,362)
Total distributions to shareholders (2,524,886) (3,144,807)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 11,243,241 11,857,914
Net asset value of shares issued to
shareholder for reinvestment of
dividends 2,524,886 3,144,807
13,768,127 15,002,721
Cost of capital stock reacquired (16,730,043) (4,781,966)
Increase in net assets derived from
capital stock transactions (2,961,916) 10,220,755
Net increase in net assets (7,565,187) 10,488,354
193
<PAGE>
NET ASSETS:
Beginning of period 41,183,100 30,694,746
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $33,617,913 $41,183,100
</TABLE>
194
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET
FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $776,905 $327,714
Net realized gain (loss) from
investment and foreign currency
transactions --- ---
Net unrealized appreciation
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies --- ---
Increase (decrease) in net assets
derived from operations 776,905 327,714
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (779,386) (325,498)
Net realized gain --- ---
Total distributions to shareholders (779,386) (325,498)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 27,553,996 9,794,961
Net asset value of shares issued to
shareholder for reinvestment of
dividends 779,386 325,498
28,333,382 10,120,459
Cost of capital stock reacquired (17,806,853) (7,086,935)
Increase in net assets derived from
capital stock transactions 10,526,529 3,033,524
Net increase in net assets 10,524,048 3,035,740
195
<PAGE>
NET ASSETS:
Beginning of period 13,860,438 10,824,698
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $24,384,486 $13,860,438
</TABLE>
196
<PAGE>
<TABLE>
<CAPTION>
PACIFIC RIM
INTERNATIONAL EMERGING
FUND MARKETS FUND
*Period Ended *Period Ended
Dec. 31/94 Dec. 31/94
<S> <C> <C>
FROM OPERATIONS:
Net investment income (loss) $34,077 $32,721
Net realized gain (loss) from invest-
ment and foreign currency transactions
Net unrealized appreciation (6,873) 511
(depreciation) of investments
and translation of assets and
liabilities in foreign currencies (190,197) (450,582)
Increase (decrease) in net assets
derived from operations (162,993) (417,350)
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (29,284) (27,282)
Net realized gain --- ---
Total distributions to shareholders (29,284) (27,282)
FROM CAPITAL STOCK TRANSACTIONS (NOTE 5):
Net proceeds from sale of capital stock 11,463,599 8,107,883
Net asset value of shares issued to
shareholder for reinvestment of
dividends 29,284 27,282
11,492,883 8,135,165
Cost of capital stock reacquired (10,199) (33,316)
Increase in net assets derived from
capital stock transactions 11,482,684 8,101,849
Net increase in net assets 11,290,407 7,657,217
197
<PAGE>
NET ASSETS:
Beginning of period --- ---
End of period 1994 and 1993 including
undistributed net investment income
(loss) of $35,611 and NIL respectively in
the Emerging Growth Equity Fund, NIL and
NIL respectively in the Common Stock
Fund, $852,969 and $2,219 respectively in
the Real Estate Securities Fund, $5,545
and $4,932 respectively in the Capital
Growth Bond Fund, $1,404 and $3,885
respectively in the Money Market Fund,
$4,793 and NIL respectively in the
International Fund, and $5,439 and NIL
respectively in the Pacific Rim Emerging
Markets Fund.
(Note 2) $11,290,407 $7,657,217
*Inception date October 4, 1994
See Accompanying Notes
</TABLE>
198
<PAGE>
Notes to Financial Statements, December 31, 1994
1. ORGANIZATION
Manulife Series Fund, Inc. ("MSFI"), incorporated on July 22,
1983, and domiciled in the State of Maryland, is a no-load,
diversified open-end management investment company. MSFI was
incorporated for the purpose of investing premiums from
variable contracts issued by The Manufacturers Life Insurance
Company of America. MSFI is registered with the Securities
and Exchange Commission under the Investment Company Act of
1940 and its shares are registered under the Securities Act of
1933. The effective date of the initial registration was June
26, 1984. Separate Accounts One, Two, Three and Four of The
Manufacturers Life Insurance Company of America (the "Separate
Accounts") have purchased their shares of the common stock of
MSFI as an investment and not with a view towards resale,
distribution or redemption. On October 4, 1994, MSFI launched
the International Fund and Pacific Rim Emerging Markets Fund
with initial Seed money from The Manufacturers Life Insurance
Company of America of $10,000,000 and $7,000,000,
respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
followed by MSFI in preparation of its financial statements.
a) SECURITY VALUATION.
Except with respect to debt instruments having a remaining
maturity of 60 days or less, securities held by MSFI are
valued as follows: Securities listed on a securities exchange
are valued at the last sale price or, if there has been no
sale that day, at the last bid price reported as of the close
of trading on the New York Stock Exchange. Securities traded
in the over-the-counter market are valued at the last bid
price or yield equivalent as of the close of trading on the
New York Stock Exchange. Securities which are traded both in
the over-the-counter market and on a stock exchange are valued
according to the broadest and most representative market, and
for debt securities this ordinarily will be the over-the-
counter market. Although the practice of each fund is to
purchase only assets having a readily ascertainable market
value, if market quotations for such assets are unavailable,
such assets are valued at their fair value as determined in
good faith by MSFI's Board of Directors. There were no such
securities held at December 31, 1994.
Debt instruments held with a remaining maturity of 60 days or
less are valued on an amortized cost basis. Under this method
199
<PAGE>
of valuation, the security is initially valued at cost on the
date of purchase (or in the case of securities purchased with
more than 60 days remaining to maturity, the market value on
the 61st day prior to maturity); and thereafter a constant
proportionate amortization in value is assumed until maturity
of any discount or premium, regardless of the impact of
fluctuating interest rates on the market value of the
security. For purposes of this method of valuation, the
maturity of a variable rate instrument is deemed to be the
next date on which the interest rate is to be adjusted.
b) INTERNATIONAL AND PACIFIC RIM EMERGING MARKETS FUNDS.
Apart from the accounting policies mentioned above there are
other significant accounting policies followed by MSFI in
preparation of financial statements for the International and
Pacific Rim Emerging Markets Funds.
Generally securities will be valued as described above on the
exchanges which they are traded, however, where a country has
adopted other conventions with respect to valuations, these
will be utilized instead. Trading in securities on European
and Far Eastern exchanges and over-the counter markets is
normally completed well before 4:00 P.M. eastern time. As a
result, if events materially affecting the value of such
securities occur between the time when their price is
determined and the time the Funds net asset value is
calculated, such securities will be valued at fair value as
determined in good faith by MSFI's Board of Directors.
The values of all assets and liabilities initially expressed
in foreign currencies are translated into US dollars at the
exchange rate of such currencies against the US dollar as
provided by the pricing service as of 12:00 P.M. New York
time.
The Funds may utilize futures contracts to a limited extent,
and may enter into forward foreign currency contracts to
protect the securities and related receivable and payable
against changes in future foreign exchange rates. The primary
risks associated with the use of futures contracts are
imperfect correlation between the change in market value of
the securities held by the Fund and the prices of futures
contracts, and the possibility of an illiquid market. Risks
associated with forward currency contracts include movement in
the value of the foreign currency relative to the US dollar
and the ability of the counterpart to perform. Futures and
forward currency contracts are valued based upon their quoted
daily settlement prices. Fluctuations in the value of such
contracts are recorded as unrealized appreciation
(depreciation) until terminated, at which time realized gains
(losses) are recognized. Unrealized appreciation
200
<PAGE>
(depreciation) related to open futures and forward currency
contracts may be required to be treated as realized gain
(loss) for tax purposes.
Foreign dividends are recorded on the ex-date or as soon after
the ex-date that the Fund is aware of such dividends, net of
all non-rebatable tax withholdings.
c) FEDERAL INCOME TAXES.
It is MSFI's policy to comply with the requirements of the
Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable income to its
shareholder. Therefore, no Federal income tax provision is
required.
d) DIVIDENDS TO SHAREHOLDER.
Dividends to shareholder are recorded on the ex-dividend date.
e) OTHER.
Security transactions are recorded on the dates the
transactions are entered into (the trade dates). Interest
income is recorded as earned. Dividend income is recorded on
the ex-dividend date.
3. PURCHASES AND SALES OF SECURITIES
Purchases and sales of securities, excluding short-term
securities for the year ended December 31, 1994
201
<PAGE>
<TABLE>
<CAPTION>
EMERGING REAL ESTATE
GROWTH COMMON SECURITIES
EQUITY FUND STOCK FUND FUND
<S> <C> <C> <C>
PURCHASES
U.S. Government
Obligations $ --- $ --- $ ---
Corporate Bonds --- --- ---
Common Stocks 87,980,096 35,335,256 31,066,713
$ 87,980,096 $ 35,335,256 $ 31,066,713
SALES
U.S. Government
Obligations $ --- $ --- $ ---
Corporate Bonds --- --- ---
Common Stocks 47,975,377 21,717,332 11,091,653
$ 47,975,377 $ 21,717,332 $ 11,091,653
</TABLE>
With the exception of the International Fund and Pacific Rim
Emerging Markets Fund realized and unrealized gains and losses
on investments are determined on the average cost basis for
financial statement purposes, and on the first-in, first-out,
(FIFO) cost basis for federal income tax purposes. The
International Fund and Pacific Rim Emerging Markets Fund use
the FIFO cost method for both financial statements and federal
income tax purposes.
4. TAX BASIS OF INVESTMENTS
Investment information based on the cost for Federal income
tax purposes of the securities (excluding short-term
investments) held at December 31, 1994 is as follows:
202
<PAGE>
<TABLE>
<CAPTION>
EMERGING REAL ESTATE
GROWTH COMMON SECURITIES
EQUITY FUND STOCK FUND FUND
<S> <C> <C> <C>
Aggregate gross
unrealized
appreciation $8,041,180 $1,643,253 $1,474,403
Aggregate gross
unrealized
depreciation (8,109,455) (2,242,334) (3,076,907)
Net unrealized
appreciation
(depreciation) ($68,275) ($599,081) ($1,602,504)
Aggregate cost of
securities for
federal income
tax purposes $87,816,281 $31,875,181 $39,932,994
</TABLE>
203
<PAGE>
<TABLE>
<CAPTION>
BALANCED CAPITAL INTER- PACIFIC RIM
ASSETS GROWTH NATIONAL EMERGING
FUND BOND FUND FUND MARKETS FUND
<S> <C> <C> <C> <C>
PURCHASES
U.S. Government
Obligations $ 19,114,739 $ 18,992,158 $ --- $ ---
Corporate Bonds 11,059,985 11,088,170 --- ---
Common Stocks 48,566,153 --- 8,170,881 5,597,683
$ 78,740,877 $ 30,080,328 $ 8,170,881 $ 5,597,683
SALES
U.S. Government
Obligations $ 14,901,865 $ 26,733,323 $ --- $ ---
Corporate Bonds 1,494,635 6,197,767 --- ---
Common Stocks 40,503,981 --- --- ---
$ 56,900,481 $ 32,931,090 --- $ ---
</TABLE>
204
<PAGE>
<TABLE>
<CAPTION>
BALANCED CAPITAL INTER- PACIFIC RIM
ASSETS GROWTH NATIONAL EMERGING
<S> FUND BOND FUND FUND MARKETS FUND
<C> <C> <C> <C>
Aggregate gross
unrealized
appreciation $2,220,129 $260,426 $218,233 $203,216
Aggregate gross
unrealized
depreciation (4,621,060) (2,164,076) (406,294) (653,791)
Net unrealized
appreciation
(depreciation) ($2,400,931) ($1,903,650) ($188,061) ($450,575)
Aggregate cost of
securities for
federal income
tax purposes $71,222,470 $33,456,853 $8,170,881 $5,597,683
</TABLE>
205
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
5. CAPITAL STOCK AND DISTRIBUTIONS
At December 31, 1994 there were 1,000,000,000 shares of $0.01
par value common stock authorized.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 2,635,224 1,699,829
Shares issued to
shareholder in
reinvestment of
dividends 19,037 301,529
Total issued 2,654,261 2,001,358
Shares reacquired (276,202) (172,000)
Net increase 2,378,059 1,829,358
COMMON STOCK FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 1,257,276 783,452
Shares issued to
shareholder in
reinvestment of
dividends 124,906 78,621
Total issued 1,382,182 862,073
Shares reacquired (250,842) (94,054)
Net increase 1,131,340 768,019
</TABLE>
206
<PAGE>
<TABLE>
<CAPTION>
CAPITAL GROWTH BOND FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 1,035,750 1,006,979
Shares issued to
shareholder in
reinvestment of
dividends 244,349 273,551
Total issued 1,280,099 1,280,530
Shares reacquired (1,586,192) (405,597)
Net increase (306,093) 874,933
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 2,666,868 953,340
Shares issued to
shareholder in
reinvestment of
dividends 75,920 31,787
Total issued 2,742,788 985,127
Shares reacquired (1,721,462) (690,265)
Net increase 1,021,326 294,862
</TABLE>
During 1994, The Manufacturers Life Insurance Company of
America made the following withdrawals of its investment and
accumulated earnings: Capital Growth Bond Fund $13,652,302;
Money Market Fund $6,037,949; Common Stock Fund $1,723,682;
Balanced Assets Fund $8,597,204. In addition, The
Manufacturers Life Insurance Company deposited $10,000,000 and
$7,000,000 into the International Fund and Pacific Rim
Emerging Markets Fund, respectively. At December 31, 1994 the
total value of The Manufacturers Life Insurance Company of
America's investments and accumulated earnings were: Capital
Growth Bond Fund $9,177,948; International Fund $9,843,631 and
Pacific Rim Emerging Markets Fund $6,608,420.
207
<PAGE>
<TABLE>
<CAPTION>
REAL ESTATE SECURITIES FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 1,558,907 1,265,978
Shares issued to
shareholder in
reinvestment of
dividends 65,711 144,173
Total issued 1,624,618 1,410,151
Shares reacquired (147,295) (267,750)
Net increase 1,477,323 1,142,401
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Shares Sold 2,170,644 1,891,283
Shares issued to
shareholder in
reinvestment of
dividends 291,143 231,405
Total issued 2,461,787 2,122,688
Shares reacquired (866,562) (202,162)
Net increase 1,595,225 1,920,526
PACIFIC RIM
INTERNATIONAL EMERGING
FUND MARKETS FUND
*Period Ended *Period Ended
Dec. 31/94 Dec. 31/94
<S> <C> <C>
Shares Sold 1,148,011 814,513
Shares issued to
shareholder in
reinvestment of
dividends 2,981 2,900
Total issued 1,150,992 817,413
Shares reacquired (1,039) (3,418)
Net increase 1,149,953 813,995
*Inception date October 4, 1994
208
<PAGE>
</TABLE>
209
<PAGE>
Notes to Financial Statement, December 31, 1994 (continued)
6. Industry Disclosure
As December 31, 1994 the International Fund and Pacific Rim
Emerging Markets Fund portfolio diversification was as
follows:
Industry International Fund Pacific Rim
Emerging
Markets Fund
Technology 4.13% 1.60%
Capital Goods 5.16% 1.02%
Consumer goods 16.32% 6.03%
Consumer Services 2.24% 3.66%
Finance 18.85% 16.11%
General Business 5.07% 7.85%
Basic Industries 13.29% 20.06%
Conglomerates 6.56% 14.11%
Utilities 6.40% 5.70%
Real Estate 1.95% 1.29%
Repurchase Agreements 20.03% 22.57%
Total 100.00% 100.00%
7. Foreign Exchange Contracts
The International and Pacific Rim Emerging Markets Fund will,
from time to time, enter into foreign currency exchange
contracts. There are costs and risks associated with such
currency transactions. No type of foreign currency
transaction will eliminate fluctuations in the prices of the
Fund's foreign securities nor will prevent loss if the prices
of such securities should decline. No future or forward
foreign exchange contracts were held by the fund at December
31, 1994.
8. INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES
MSFI has an Investment Advisory Agreement with Manufacturers
Adviser Corporation ("the Adviser"), a wholly-owned subsidiary
of Manulife Holding Corporation ("MHC"), a Delaware
corporation, which in turn is a wholly-owned subsidiary of The
Manufacturers Life Insurance Company of Michigan ("MLIM").
MLIM is a life insurance holding company organized in 1983
under Michigan law and a wholly-owned subsidiary of The
Manufacturers Life Insurance Company ("Manulife Financial"), a
mutual life insurance company based in Toronto, Canada.
210
<PAGE>
The Adviser is responsible for the management of MSFI's Funds
and provides the necessary personnel, facilities, equipment
and certain other services necessary to the operation of MSFI.
For such services, the Adviser receives daily compensation at
the annual rate of .50% from the Emerging Growth Equity Fund,
Common Stock Fund, Real Estate Securities Fund, Balanced
Assets Fund, Capital Growth Bond Fund and the Money Market
Fund.
For the International Fund and Pacific Rim Emerging Markets
Fund, the Adviser receives the following for investment
management: i) .85% of the average daily value of the
aggregate net assets of each Fund on the first $100 million
and ii) .70% of the average daily value of the aggregate net
assets of each Fund in excess of $100 million. In addition,
the Funds will reimburse the Adviser for general expenses
necessary to the operation of the funds at the rate of i) up
to .50% of the daily net assets of the portfolio for the
International Fund and ii) up to .65% of the daily net assets
of the portfolio for the Pacific Rim Emerging Markets Fund.
Certain officers and/or directors of MSFI are officers and/or
directors of the Adviser, MHC, MLIM, and Manulife Financial,
however there are no common directors of MSFI and the Adviser.
211
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Net asset value
beginning of period $19.42 $17.76
Income from investment operations:
Net investment income 0.01 (0.01)
Net realized and unrealized
gain or (loss) on investments (0.81) 4.16
Total from investment operations (0.80) 4.15
Dividend Distributions:
Net investment income 0.00 ---
Net realized gain (0.07) (2.49)
Total dividend distributions (0.07) (2.49)
Net asset value end of period $18.55 $19.42
Net assets end of period (in 000's) $97,379 $55,767
Aggregate return on share outstanding
during entire period (4.10)% 23.89%
Significant ratios:
Portfolio turnover 69.40% 92.95%
Ratio of expenses to average
net assets 0.50 % 0.50 %
Ratio of net investment income to
average net assets 0.07% (0.04)%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (3.02)% 23.61 %
</TABLE>
212
<PAGE>
213
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/92 Dec. 31/91
<S> <C> <C>
Net asset value
beginning of period $16.18 $9.95
Income from investment operations:
Net investment income (0.02) ---
Net realized and unrealized
gain or (loss) on investments 3.51 7.08
Total from investment operations 3.49 7.08
Dividend Distributions:
Net investment income --- ---
Net realized gain (1.91) (0.85)
Total dividend distributions (1.91) (0.85)
Net asset value end of period $17.76 $16.18
Net assets end of period (in 000's) $18,504 $9,822
Aggregate return on share outstanding
during entire period 21.82% 71.34%
Significant ratios:
Portfolio turnover 126.62% 87.63%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets (0.14)% 0.02%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 23.82% 50.44%
</TABLE>
214
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/90 Dec. 31/89
<S> <C> <C>
Net asset value
beginning of period $12.20 $8.75
Income from investment operations:
Net investment income 0.17 0.20
Net realized and unrealized
gain or (loss) on investments (1.98) 3.46
Total from investment operations (1.81) 3.66
Dividend Distributions:
Net investment income (0.17) (0.21)
Net realized gain (0.27) ---
Total dividend distributions (0.44) (0.21)
Net asset value end of period $9.95 $12.20
Net assets end of period (in 000's) $4,137 $3,859
Aggregate return on share outstanding
during entire period (14.90)% 42.19%
Significant ratios:
Portfolio turnover 100.86% 116.14%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 1.55% 1.95%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (16.10)% 34.63%
</TABLE>
215
<PAGE>
216
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/88 Dec. 31/87
<S> <C> <C>
Net asset value
beginning of period $7.61 $10.45
Income from investment operations:
Net investment income 0.14 0.01
Net realized and unrealized
gain or (loss) on investments 1.16 0.18
Total from investment operations 1.30 0.19
Dividend Distributions:
Net investment income (0.12) (0.01)
Net realized gain (0.04) (3.02)
Total dividend distributions (0.16) (3.03)
Net asset value end of period $8.75 $7.61
Net assets end of period (in 000's) $2,682 $2,012
Aggregate return on share outstanding
during entire period 16.94% (4.88)%
Significant ratios:
Portfolio turnover 190.06% 196.48%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 1.54% 0.06%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 14.77% (16.68)%
</TABLE>
217
<PAGE>
218
<PAGE>
9. Financial Highlights
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
EMERGING GROWTH EQUITY FUND
Year Ended Year Ended
Dec. 31/86 Dec. 31/85
<S> <C> <C>
Net asset value
beginning of period $12.58 $10.67
Income from investment operations:
Net investment income 0.03 0.10
Net realized and unrealized
gain or (loss) on investments (0.78) 2.32
Total from investment operations (0.75) 2.42
Dividend Distributions:
Net investment income (0.03) (0.40)
Net realized gain (1.35) (0.11)
Total dividend distributions (1.38) (0.51)
Net asset value end of period $10.45 $12.58
Net assets end of period (in 000's) $1,377 $1,403
Aggregate return on share outstanding
during entire period (6.59)% 23.38%
Significant ratios:
Portfolio turnover 247.88% 64.52%
Ratio of expenses to average
net assets 0.20% 0.20%
Ratio of net investment income to
average net assets 0.26% 0.81%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (6.68)% 20.63%
</TABLE>
219
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
COMMON STOCK FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Net asset value
beginning of period $14.68 $13.73
Income from investment operations:
Net investment income 0.20 0.19
Net realized and unrealized
gain or (loss) on investments (0.81) 1.64
Total from investment operations (0.61) 1.83
Dividend Distributions:
Net investment income (0.20) (0.19)
Net realized gain (0.51) (0.69)
Total dividend distributions (0.71) (0.88)
Net asset value end of period $13.36 $14.68
Net assets end of period (in 000's) $34,829 $21,651
Aggregate return on share outstanding
during entire period (4.19)% 13.39%
Significant ratios:
Portfolio turnover 84.78% 88.23%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 1.53% 1.39%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (4.49)% 11.50 %
</TABLE>
220
<PAGE>
221
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
COMMON STOCK FUND
Year Ended Year Ended
Dec. 31/92 Dec. 31/91
<S> <C> <C>
Net asset value
beginning of period $13.33 $10.48
Income from investment operations:
Net investment income 0.18 0.21
Net realized and unrealized
gain or (loss) on investments 0.61 2.94
Total from investment operations 0.79 3.15
Dividend Distributions:
Net investment income (0.18) (0.21)
Net realized gain (0.21) (0.09)
Total dividend distributions (0.39) (0.30)
Net asset value end of period $13.73 $13.33
Net assets end of period (in 000's) $9,708 $5,480
Aggregate return on share outstanding
during entire period 6.07% 30.18%
Significant ratios:
Portfolio turnover 47.60% 53.01%
Ratio of expenses to average
net assets 0.50 % 0.50 %
Ratio of net investment income to
average net assets 1.51 % 1.78 %
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 7.94 % 25.41 %
222
<PAGE>
</TABLE>
223
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
COMMON STOCK FUND
Year Ended Year Ended
Dec. 31/90 Dec. 31/89
<S> <C> <C>
Net asset value
beginning of period $11.25 $8.91
Income from investment operations:
Net investment income 0.32 0.36
Net realized and unrealized
gain or (loss) on investments (0.77) 2.34
Total from investment operations (0.45) 2.70
Dividend Distributions:
Net investment income (0.32) (0.36)
Net realized gain --- ---
Total dividend distributions (0.32) (0.36)
Net asset value end of period $10.48 $11.25
Net assets end of period (in 000's) $2,873 $2,140
Aggregate return on share outstanding
during entire period (4.06)% 30.66%
Significant ratios:
Portfolio turnover 120.84% 120.92%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 3.06% 3.48%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (3.40)% 23.77%
224
<PAGE>
</TABLE>
225
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
COMMON STOCK FUND
Year Ended Year Ended
Dec. 31/88 Dec. 31/87
<S> <C> <C>
Net asset value
beginning of period $8.36 $9.97
Income from investment operations:
Net investment income 0.28 0.15
Net realized and unrealized
gain or (loss) on investments 0.56 (1.63)
Total from investment operations 0.84 (1.48)
Dividend Distributions:
Net investment income (0.29) (0.13)
Net realized gain --- ---
Total dividend distributions (0.29) (0.13)
Net asset value end of period $8.91 $8.36
Net assets end of period (in 000's) $1,173 $942
Aggregate return on share outstanding
during entire period 9.86% (14.98)%
Significant ratios:
Portfolio turnover 172.13% 54.87%
Ratio of expenses to average
net assets 0.50% 0.50%**
Ratio of net investment income to
average net assets 3.16% 2.28%**
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 9.13% (24.73)%
226
<PAGE>
**Annualized
</TABLE>
227
<PAGE>
REAL ESTATE SECURITIES FUND
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended Year Ended
Dec. 31/94 Dec. 31/93 Dec. 31/92 Dec. 31/91
<C> <C> <C> <C>
$14.07 $12.75 $10.92 $8.16
0.55 0.47 0.45 0.53
(0.93) 2.38 1.83 2.76
(0.38) 2.85 2.28 3.29
(0.27) (0.47) (0.45) (0.53)
(0.08) (1.06) --- ---
(0.35) (1.53) (0.45) (0.53)
$13.34 $14.07 $12.75 $10.92
$42,571 $24,106 $7,273 $4,120
(2.76)% 22.61% 21.29% 41.10%
35.60% 143.00% 70.71% 40.29%
0.50% 0.50% 0.50% 0.50%
4.26% 3.93% 4.13% 5.40%
(4.48)% 15.23% 20.29% 33.48%
</TABLE>
228
<PAGE>
REAL ESTATE SECURITIES FUND
<TABLE>
<CAPTION>
Year Ended Year Ended Year Ended April 30/87
Dec. 31/90 Dec. 31/89 Dec. 31/88 Dec. 31/87
<C> <C> <C> <C>
$9.24 $9.12 $8.76 $10.02
0.67 0.68 0.70 0.48
(1.09) 0.15 0.37 (1.30)
(0.42) 0.83 1.07 (0.82)
(0.66) (0.71) (0.71) (0.44)
--- --- --- ---
(0.66) (0.71) (0.71) (0.44)
$8.16 $9.24 $9.12 $8.76
$2,771 $2,875 $2,488 $2,007
(4.53)% 9.23% 11.72% (8.42)%
24.37% 15.09% 23.15% 10.27%
0.50% 0.50% 0.50% 0.50%**
7.74% 7.29% 7.18% 7.34%**
(4.73)% 8.53% 10.52% (13.19)%
</TABLE>
229
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Net asset value $15.18 $14.52
beginning of period
Income from investment operations:
Net investment income 0.48 0.44
Net realized and unrealized gain or
(loss) on investments (1.11) 1.29
Total from investment operations (0.63) 1.73
Dividend Distributions:
Net investment income (0.48) (0.44)
Net realized gain (0.30) (0.63)
Total dividend distributions (0.78) (1.07)
Net asset value end of period $13.77 $15.18
Net assets end of period (in 000's) $74,737 $58,156
Aggregate return on share outstanding
during entire period (4.15)% 11.99%
Significant ratios:
Portfolio turnover 86.42% 96.62%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 3.37% 3.08%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (4.11)% 10.09%
</TABLE>
230
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/92 Dec. 31/91
<S> <C> <C>
Net asset value $14.51 $12.35
beginning of period
Income from investment operations:
Net investment income 0.51 0.60
Net realized and unrealized gain or
(loss) on investments 0.37 2.22
Total from investment operations 0.88 2.82
Dividend Distributions:
Net investment income (0.51) (0.60)
Net realized gain (0.36) (0.06)
Total dividend distributions (0.87) (0.66)
Net asset value end of period $14.52 $14.51
Net assets end of period (in 000's) $27,733 $18,515
Aggregate return on share outstanding
during entire period 6.21% 23.36%
Significant ratios:
Portfolio turnover 75.83% 41.95%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 3.75% 4.52%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 6.99% 20.84%
</TABLE>
231
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/90 Dec. 31/89
<S> <C> <C>
Net asset value $12.87 $11.22
beginning of period
Income from investment operations:
Net investment income 0.69 0.75
Net realized and unrealized gain or
(loss) on investments (0.50) 1.61
Total from investment operations 0.19 2.36
Dividend Distributions:
Net investment income (0.71) (0.71)
Net realized gain -- --
Total dividend distributions (0.71) (0.71)
Net asset value end of period $12.35 $12.87
Net assets end of period (in 000's) $12,733 $10,412
Aggregate return on share outstanding
during entire period 1.62% 21.33%
Significant ratios:
Portfolio turnover 116.03% 131.31%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 5.71% 6.06%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 2.04% 18.69%
</TABLE>
232
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/88 Dec. 31/87
<S> <C> <C>
Net asset value
beginning of period $11.09 $14.11
Income from investment operations:
Net investment income 0.61 0.56
Net realized and unrealized gain or
(loss) on investments 0.22 (0.28)
Total from investment operations 0.83 0.28
Dividend Distributions:
Net investment income (0.67) (0.67)
Net realized gain (0.03) (2.63)
Total dividend distributions (0.70) (3.30)
Net asset value end of period $11.22 $11.09
Net assets end of period (in 000's) $8,004 $7,872
Aggregate return on share outstanding
during entire period 7.61% (1.77)%
Significant ratios:
Portfolio turnover 132.32% 127.46%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 5.42% 3.60%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 7.40% (5.59)%
</TABLE>
233
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated.
<TABLE>
<CAPTION>
BALANCED ASSETS FUND
Year Ended Year Ended
Dec. 31/86 Dec. 31/85
<S> <C> <C>
Net asset value
beginning of period $12.85 $11.57
Income from investment operations:
Net investment income 0.68 0.79
Net realized and unrealized gain or
(loss) on investments 1.49 1.95
Total from investment operations 2.17 2.74
Dividend Distributions:
Net investment income (0.66) (1.13)
Net realized gain (0.25) (0.33)
Total dividend distributions (0.91) (1.46)
Net asset value end of period $14.11 $12.85
Net assets end of period (in 000's) $5,285 $4,435
Aggregate return on share outstanding
during entire period 17.35% 27.30%
Significant ratios:
Portfolio turnover 81.42% 36.46%
Ratio of expenses to average
net assets 0.20% 0.20%
Ratio of net investment income to
average net assets 4.83% 6.73%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 15.18% 24.70
</TABLE>
234
<PAGE>
CAPITAL GROWTH BOND FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Net asset value
beginning of period $11.33 $11.12
Income from investment operations:
Net investment income 0.72 0.65
Net realized and unrealized gain or
(loss) on investments (1.22) 0.51
Total from investment operations (0.50) 1.16
Dividend Distributions:
Net investment income (0.72) (0.65)
Net realized gain (0.01) (0.30)
Total dividend distributions (0.73) (0.95)
Net asset value end of period $10.10 $11.33
Net assets end of period (in 000's) $33,618 $41,183
Aggregate return on share outstanding
during entire period (4.49)% 10.56%
Significant ratios:
Portfolio turnover 79.04% 94.75%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 6.29% 5.69%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets (5.23)% 9.28%
</TABLE>
235
<PAGE>
CAPITAL GROWTH BOND FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31/92 Dec. 31/91
<S> <C> <C>
Net asset value
beginning of period $11.47 $10.62
Income from investment operations:
Net investment income 0.77 0.83
Net realized and unrealized gain or
(loss) on investments (0.11) 0.85
Total from investment operations 0.66 1.68
Dividend Distributions:
Net investment income (0.78) (0.83)
Net realized gain (0.23) --
Total dividend distributions (1.01) (0.83)
Net asset value end of period $11.12 $11.47
Net assets end of period (in 000's) $30,695 $29,326
Aggregate return on share outstanding
during entire period 5.89% 16.38%
Significant ratios:
Portfolio turnover 153.05% 19.60%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 6.76% 7.54%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 5.78% 15.35%
</TABLE>
236
<PAGE>
CAPITAL GROWTH BOND FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31/90 Dec. 31/89
<S> <C> <C>
Net asset value
beginning of period $10.82 $10.32
Income from investment operations:
Net investment income 0.88 0.90
Net realized and unrealized gain or
(loss) on investments (0.21) 0.50
Total from investment operations 0.67 1.40
Dividend Distributions:
Net investment income (0.87) (0.90)
Net realized gain -- --
Total dividend distributions (0.87) (0.90)
Net asset value end of period $10.62 $10.82
Net assets end of period (in 000's) $24,818 $22,768
Aggregate return on share outstanding
during entire period 6.58% 13.88%
Significant ratios:
Portfolio turnover 40.73% 68.61%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 8.25% 8.34%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 6.51% 12.83%
</TABLE>
237
<PAGE>
CAPITAL GROWTH BOND FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31/88 Dec. 31/87
<S> <C> <C>
Net asset value
beginning of period $10.53 $13.09
Income from investment operations:
Net investment income 0.92 0.99
Net realized and unrealized gain or
(loss) on investments (0.17) (1.12)
Total from investment operations 0.75 (0.13)
Dividend Distributions:
Net investment income (0.93) (1.20)
Net realized gain (0.03) (1.23)
Total dividend distributions (0.96) (2.43)
Net asset value end of period $10.32 $10.53
Net assets end of period (in 000's) $19,722 $18,095
Aggregate return on share outstanding
during entire period 7.14% (1.69)%
Significant ratios:
Portfolio turnover 29.36% 55.80%
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 8.48% 8.13%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 6.88% (1.68)%
</TABLE>
238
<PAGE>
CAPITAL GROWTH BOND FUND
<TABLE>
<CAPTION>
Year Ended Year Ended
Dec. 31/86 Dec. 31/85
<S> <C> <C>
Net asset value
beginning of period $12.62 $11.53
Income from investment operations:
Net investment income 1.04 1.15
Net realized and unrealized gain or
(loss) on investments 1.46 1.48
Total from investment operations 2.50 2.63
Dividend Distributions:
Net investment income (1.03) (1.53)
Net realized gain (1.00) (0.01)
Total dividend distributions (2.03) (1.54)
Net asset value end of period $13.09 $12.62
Net assets end of period (in 000's) $17,674 $14,481
Aggregate return on share outstanding
during entire period 22.37% 26.13%
Significant ratios:
Portfolio turnover 42.57% 286.36%
Ratio of expenses to average
net assets 0.20% 0.20%
Ratio of net investment income to
average net assets 8.10% 9.96%
Ratio of net investment income and
realized and unrealized gain (loss)
to average net assets 19.72% 23.91%
</TABLE>
239
<PAGE>
Notes to Financial Statements, December 31, 1994 (continued)
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated
<TABLE>
<CAPTION>
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/94 Dec. 31/93
<S> <C> <C>
Net asset value
beginning of period $10.23 $10.22
Income from investment operations:
Net investment income 0.39 0.27
Net realized and unrealized loss on investments
and foreign currency transactions and translation --- ---
Total from investment options 0.39 0.27
Dividend Distributions:
Net investment income (0.36) (0.26)
Net realized gain --- ---
Total dividend distributions (0.36) (0.26)
Net asset value end of period $10.26 $10.23
Net assets end of period (in 000's) $24,384 $13,860
Aggregate return on share outstanding
during entire period 3.89% 2.73%
Significant ratios:
Portfolio turnover None None
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 3.84% 2.67%
Ratio of net investment income and
realized and unrealized gain (loss
to average net assets 3.84% 2.67%
</TABLE>
240
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated
<TABLE>
<CAPTION>
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/92 Dec. 31/91
<S> <C> <C>
Net asset value
beginning of period $10.21 $10.21
Income from investment operations:
Net investment income 0.34 0.57
Net realized and unrealized loss on investments
and foreign currency transactions and translation --- ---
Total from investment options 0.34 0.57
Dividend Distributions:
Net investment income (0.33) (0.57)
Net realized gain --- ---
Total dividend distributions (0.33) (0.57)
Net asset value end of period $10.22 $10.21
Net assets end of period (in 000's) $10,825 $8,615
Aggregate return on share outstanding
during entire period 3.40% 5.60%
Significant ratios:
Portfolio turnover None None
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 3.25% 5.45%
Ratio of net investment income and
realized and unrealized gain (loss
to average net assets 3.25% 5.45%
</TABLE>
241
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated
<TABLE>
<CAPTION>
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/90 Dec. 31/89
<S> <C> <C>
Net asset value
beginning of period $10.16 $10.15
Income from investment operations:
Net investment income 0.78 0.88
Net realized and unrealized loss on investments
and foreign currency transactions and translation --- ---
Total from investment options 0.78 0.88
Dividend Distributions:
Net investment income (0.73) (0.87)
Net realized gain --- ---
Total dividend distributions (0.73) (0.87)
Net asset value end of period $10.21 $10.16
Net assets end of period (in 000's) $8,606 $6,037
Aggregate return on share outstanding
during entire period 7.82% 8.88%
Significant ratios:
Portfolio turnover None None
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 7.41% 8.43%
Ratio of net investment income and
realized and unrealized gain (loss
to average net assets 7.41% 8.43%
</TABLE>
242
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated
<TABLE>
<CAPTION>
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/88 Dec. 31/87
<S> <C> <C>
Net asset value
beginning of period $10.02 $10.14
Income from investment operations:
Net investment income 0.89 0.58
Net realized and unrealized loss on investments
Total from investment options 0.89 0.58
Dividend Distributions:
Net investment income (0.76) (0.70)
Net realized gain --- ---
Total dividend distributions (0.76) (0.70)
Net asset value end of period $10.15 $10.02
Net assets end of period (in 000's) $5,259 $1,545
Aggregate return on share outstanding
during entire period 7.06% 5.67%
Significant ratios:
Portfolio turnover None None
Ratio of expenses to average
net assets 0.50% 0.50%
Ratio of net investment income to
average net assets 6.94% 5.50%
Ratio of net investment income and
realized and unrealized gain (loss
to average net assets 6.94% 5.50%
</TABLE>
243
<PAGE>
9. Financial Highlights (continued)
Selected data for a share of capital stock outstanding for the periods
indicated
<TABLE>
<CAPTION>
MONEY MARKET FUND
Year Ended Year Ended
Dec. 31/86 Dec. 31/85
<S> <C> <C>
Net asset value
beginning of period $10.19 $10.62
Income from investment operations:
Net investment income 0.60 0.71
Net realized and unrealized loss on investments
and foreign currency transactions and translation --- ---
Total from investment options 0.60 0.71
Dividend Distributions:
Net investment income (0.65) (1.14)
Net realized gain --- ---
Total dividend distributions (0.65) (1.14)
Net asset value end of period $10.14 $10.19
Net assets end of period (in 000's) $1,198 $1,134
Aggregate return on share outstanding
during entire period 6.07% 7.13%
Significant ratios:
Portfolio turnover None None
Ratio of expenses to average
net assets 0.20% 0.20%
Ratio of net investment income to
average net assets 5.89% 6.89%
Ratio of net investment income and
realized and unrealized gain (loss
to average net assets 5.89% 6.89%
</TABLE>
244
<PAGE>
<TABLE>
<CAPTION>
<C> <C>
INTERNATIONAL FUND *PACIFIC RIM EMERGING MARKETS FUND
Period Period
Oct. 04/94 Oct. 04/94
Dec. 31/94 Dec. 31/94
$10.00 $10.00
0.02 0.04
(0.18) (0.59)
(0.16) (0.55)
(0.02) (0.04)
0.00 0.00
(0.02) (0.04)
$9.82 $9.41
$11,290 $7,657
(1.54)% (5.63)%
0.00% 0.00%
1.35%** 1.65%**
1.31%** 1.84%**
(6.28)%** (23.41)%**
* Inception Date October 4, 1994.
** Annualized
</TABLE>
245
<PAGE>
PART C.
OTHER INFORMATION
246
<PAGE>
Item 24. Financial Statements and Exhibits
(a) Financial Statements:*
Report of Independent Auditors dated February
6, 1995
Statement of investments as of December 31,
1994
Statement of assets and liabilities as of
December 31, 1994
Statement of operations for the period ended
December 31, 1994
Statement of changes in net assets for the
periods Ended December 31, 1994 and 1993
Notes to Financial Statements, December 3l,
1994
Statement of investments as of June 30, 1995
(unaudited)
Statement of assets and liabilities as of June
30, 1995 (unaudited)
Statement of operations for the period ended
June 30, 1995 (unaudited)
Statement of changes in net assets for the
periods Ended June 30, 1995 (unaudited)
Notes to Financial Statements, June 30, 1995
(b) Exhibits, including those previously filed and
incorporated herein by reference.
(1) Articles of Incorporation of
Manulife Series Fund, Inc.**
(1)(a) Articles Supplementary of Manulife
Series Fund, Inc.**
(1)(b) Articles Supplementary of Manulife
Series Fund, Inc.**
(1)(c) Articles Supplementary of Manulife
Series Fund, Inc.**
____________________
* Included in Part B of this registration statement.
** Filed electronically.
<PAGE>
(2) By-laws of Manulife Series Fund,
Inc., previously filed as Exhibit
(2) to Post-Effective Amendment No.
8, May 1, 1991.
(4)(a) Specimen Certificate of Emerging
Growth Equity Fund Common Stock,
previously filed as Exhibit (4)(a)
to Pre-Effective Amendment No. 1,
May 9, 1984.
(4)(b) Specimen Certificate of Balanced
Assets Fund Common Stock, previously
filed as Exhibit (4)(b) to Pre-
Effective Amendment No. 1, May 9,
1984.
(4)(c) Specimen Certificate of Capital
Growth Bond Fund Common Stock,
previously filed as Exhibit (4)(c)
to Pre-Effective Amendment No. 1,
May 9, 1984
(4)(d) Specimen Certificate of Money-Market
Fund Common Stock, previously filed
as Exhibit (4)(d) to Pre-Effective
Amendment No. 1, May 9, 1984.
(4)(e) Specimen Certificate of Common Stock
Fund Common Stock, previously filed
as Exhibit (4)(e) to Pre-Effective
Amendment No. 4, March 13, 1987.
(4)(f) Specimen Certificate of Real Estate
Securities Fund Common Stock,
previously filed as Exhibit (4)(f)
to Post-Effective Amendment No. 4,
March 13, 1987.
(4)(g) Specimen Certificate of
International Fund Common Stock,
previously filed as Exhibit (4)(g)
to Post-Effective Amendment No. 14,
March 1, 1994.
(4)(h) Specimen Certificate of Pacific Rim
Emerging Markets Fund Common Stock,
previously filed as Exhibit (4)(h)
to Post-Effective Amendment No. 14,
March 1, 1994.
____________________
** Filed electronically.
2
<PAGE>
(4)(i) Specimen Stock Certificate of Equity
Index Fund.**
(5)(a) Investment Advisory Agreement
Between Manulife Series Fund, Inc.
and Manufacturers Adviser
Corporation.**
(5)(a)(i) Amendment to Investment Advisory
Agreement Between Manulife Series
Fund, Inc. and Manufacturers Adviser
Corporation dated September 30,
1994.**.
(5)(a)(ii) Form of Amendment to Investment
Advisory Agreement Between Manulife
Series Fund, Inc. and Manufacturers
Adviser Corporation.**
(5)(b) Service Agreement Among The
Manufacturers Life Insurance
Company, Manulife Series Fund, Inc.
and Manufacturers Adviser
Corporation, previously filed as
Exhibit (5)(b) to Pre-Effective
Amendment No. 1, May 9, 1984.
(5)(b)(i) Service Agreement among The
Manufacturers Life Insurance
Company, Manulife Series Fund, Inc.
and Manufacturers Adviser
Corporation dated October 4, 1994.
(8)(i) Custodian Agreement Between State
Street Bank and Trust Company and
Manulife Series Fund, Inc.,
previously filed as Exhibit (8) to
Post-Effective Amendment No. 9,
February 28, 1992.
(8)(ii) Amendment to Custodian Agreement
between State Street Bank and Trust
Company and Manulife Series Fund,
Inc., previously filed as Exhibit
(8)(ii) to Post-Effective Amendment
No. 14, March 1, 1994.
____________________
** Filed electronically.
3
<PAGE>
(9) License Agreement For Use of Name
Between The Manufacturers Life
Insurance Company and Manulife
Series Fund, Inc., previously filed
as Exhibit 9 to Registrant's
registration statement on Form N-1,
July 27, 1983.
(10) Consent of Jones & Blouch.**
(11) Consent of Ernst & Young LLP.**
(13) Investment Undertaking from The
Manufacturers Life Insurance Company
of America dated May 3, 1984,
previously filed as Exhibit 13 to
Post-Effective Amendment No. 1,
December 14, 1984.
(13)(a) Investment Undertaking from The
Manufacturers Life Insurance Company
of America dated February 17, 1987,
previously filed as Exhibit 13(a) to
Post-Effective Amendment No. 4,
March 13, 1987.
(13)(b) Investment Undertaking from The
Manufacturers Life Insurance Company
of America dated October 4, 1994,
previously filed as Exhibit (13)(b)
to Post-Effective Amendment No. 14,
February 28, 1995.
(13)(c) Form of Investment Undertaking from
The Manufacturers Life Insurance
Company.**
(16) Computation of performance
quotations, previously filed as
Exhibit (16) to Post-Effective
Amendment No. 14, February 28, 1995.
(17) Financial Data Schedule.**
____________________
** Filed electronically.
4
<PAGE>
Item 25. Persons Controlled by or Under Common Control with
Registrant
Separate Accounts of The Manufacturers Life Insurance
Company of America ("Manufacturers Life of America"), a
corporation organized under the laws of the State of Michigan,
own all of the Registrant's outstanding securities. Shares
held by such Separate Accounts will be voted as directed by
owners of life insurance and annuity contracts participating
in such separate accounts. Manufacturers Life of America is
an indirect wholly-owned subsidiary of The Manufacturers Life
Insurance Company, a mutual life insurance company organized
under the laws of Canada. The subsidiaries of The
Manufacturers Life Insurance Company are as follows:
THE MANUFACTURERS LIFE INSURANCE COMPANY
(Subsidiaries Organization Chart - including certain
Significant Investments)
I. The Manufacturers Life Insurance Company (Canada)
A. Manulife Data Services Inc.- Barbados (100%)
B. Domlife Realty Limited - Canada (100%)
C. Balmoral Developments Inc. - Ontario (100%)
D. Cabot Place Ltd. - Canada (100%)
E. Cantay Holdings Inc. - Ontario (100%)
F. 576986 Ontario Inc. - Ontario (100%)
G. The Manufacturers (Pacific Asia) Insurance Company
Limited - H.K. (100%)
H. Manulife Holdings (Hong Kong) Limited - H.K. (100%)
I. Manulife Financial Systems (Hong Kong) Limited -
H.K. (100%)
J. P.T. Asuransi Jiwa Dharmala Manulife -
Indonesia (51%)
K. Manulife (International) Limited - Bermuda (100%)
L. OUB Manulife Pte. Ltd. - Singapore (50%)
M. Manulife Investment Management Corporation -
Canada (100%)
1. 159139 Canada Inc. - Canada (50%)
i. Altamira Management Ltd. - Canada (70.77%)
A. ACI2 Limited - Cayman (100%)
a. Regent Pacific Group Limited-
Cayman (69.4%)
B. Altamira Financial Services Inc. -
Ontario (100%)
5
<PAGE>
a. AIS Securities (Partnership) -
Ontario (5%)
b. Altamira Investment Services
Inc. - Ontario (100%)
a/ AIS Securities
(Partnership) - Ontario (95%)
b/ Altamira (Alberta) Ltd. -
Alberta (100%)
c/ Capital Growth Financial
Services Inc. -
Ontario (100%)
N. ManuCab Ltd. - Canada (100%)
1. Plazcab Service Limited - Canada (100%)
0. The Manufacturers Life Insurance Company of Michigan
- Michigan (100%)
1. The Manufacturers Life Insurance Company of
America - Michigan - (100%)
i. Manulife Series Fund Inc. -
Maryland (100%)
ii. Taiwan (Branch)
2. Manulife Reinsurance Limited - Bermuda (100%)
3. The Manufacturers Life Insurance (U.S.A.) -
Michigan (100%)
4. Manulife Holding Corporation - Delaware (100%)
i. Manufacturers Adviser Corporation -
Colorado (100%)
ii. Manufacturers Life Mortgage Securities
Corporation - Delaware (100%)
iii. Capital Design Corporation -
California (100%)
iv. ManEquity, Inc. - Colorado (100%)
v. Manulife Service Corporation -
Colorado (100%)
P. Manulife (International) Reinsurance Limited -
Bermuda (100%)
1. Manulife (International) P&C Limited -
Bermuda (100%)
6
<PAGE>
2. Manufacturers P&C Limited - Bermuda (100%)
Q. 16351 Canada Limited - Canada (100%)
R. Ky Holding Corporation - Ontario (100%)
S. 172846 Canada Limited - Canada (100%)
T. Manulife Financial Holdings Limited - Ontario (100%)
1. Family Financial Services Limited -
Ontario (100%)
i. 742166 Ontario Inc. - Ontario (100%)
ii. Family Trust Corporation - Ontario (100%)
A. Family Financial Mortgage Corporation
- Ontario (100%)
B. Family Realty Firstcorp Limited -
Ontario (100%)
C. Thos. N. Shea Investment Corporation
Limited - Ontario (100%)
2. First Line Trust Company - Canada (80.0%)
i. Broker Systems Inc. - Ontario (100%)
ii. First Line Securities Corporation -
Ontario (100%)
3. Manulife Bank of Canada - Canada (100%)
i. Manulife Securities International Ltd. -
Ontario (100%)
U. Manufacturers Life Capital Corporation Inc. -
Canada (100%)
V. Townvest Inc. - Ontario (100%)
W. Dombur Investments Limited - Ontario (100%)
X. Manulife International Investment Management Limited
- U.K. (100%)
1. Manulife International Fund Management
Limited - U.K. (100%)
Y. Manulife (Malaysia) SDN. BHD. - Malaysia (100%)
Z. Manulife (Thailand) Ltd. - Thailand (100%)
AA. Western Trust Holdings Limited - U.K. (100%)
1. Western Trust & Savings Holdings Limited -
U.K. (100%)
i. Western Trust & Savings Limited -
U.K. (100%)
7
<PAGE>
A. Western Trust Acceptance Limited -
U.K. (100%)
B. Western Trust & Savings Properties
Limited - U.K. (100%)
ii. The Tamar Mortgage Corporation Limited -
U.K. (100%)
iii. Western Trust & Savings Insurance Services
Limited - U.K. (100%)
iv. Tamar Mortgage Company No.1 Limited -
U.K. (100%)
v. Tamar Mortgage Company No.2 Limited -
U.K. (100%)
vi. Tamar Mortgage Company No.3 Limited -
U.K. (100%)
vii. Peaktons Limited - U.K. (100%)
viii. Maxpine Finance Limited - U.K. (100%)
ix. London Credit Limited - U.K. (100%)
BB. Young Poong Manulife Insurance Company - Korea (50%)
Item 26. Number of Holders of Securities
Title of Class Number of Record Holders
Emerging Growth Equity Fund 4
Common Stock
Balanced Assets Fund 4
Common Stock
Capital Growth Bond Fund 4
Common Stock
Money-Market Fund 4
Common Stock
Common Stock Fund 4
Common Stock
Real Estate Securities Fund 4
8
<PAGE>
Common Stock
International Fund 4
Common Stock
Pacific Rim Emerging Markets 4
Fund Common Stock
Equity Index Fund
Common Stock 4
Item 27. Indemnification
Under Section 2-418 of the Maryland General Corporation
Law, with respect to any proceeding against a present or
former director, officer, agent or employee (a "corporate
representative") of the Registrant, except a proceeding
brought by or on behalf of the Registrant, the Registrant may
indemnify the corporate representative against expenses,
including attorneys' fees, and judgments, fines, penalties,
and amounts paid in settlement, if such expenses were actually
and reasonably incurred by the corporate representative in
connection with the proceeding, if: (i) he acted in good
faith; (ii) in the case of conduct in his official capacity he
reasonably believed that his conduct was in the best interests
of the Registrant, and in all other cases he reasonably
believed that his conduct was not opposed to the best
interests of the Registrant; and (iii) with respect to any
criminal proceeding, he had no reasonable cause to believe his
conduct was unlawful. The Registrant is also authorized under
Section 2-418 of the Maryland General Corporation Law to
indemnify a corporate representative under certain
circumstances against reasonable expenses incurred in
connection with the defense of a suit or action by or in the
right of the Registrant except where the corporate
representative has been adjudged liable to the Registrant.
Under the Registrant's Articles of Incorporation and By-laws,
directors and officers of Registrant are entitled to
indemnification by the Registrant to the fullest extent
permitted under Maryland law and the Investment Company Act of
1940. Reference is made to Article VI(4) of Registrant's
Articles of Incorporation, Article V of Registrant's By-laws
and Section 2-418 of the Maryland General Corporation Law.
Liability Insurance
9
<PAGE>
At a meeting of the Executive Committee of the Board of
Directors of The Manufacturers Life Insurance Company held
October 21, 1993, the purchase of Directors and Officers (D&O)
liability insurance was approved. It became effective
December 1, 1993. It provides global coverage for all
Directors and Officers of The Manufacturers Life Insurance
Company and its subsidiaries.
The coverage provided:
1. Insures Directors and Officers against loss arising from
claims against them for certain acts in cases where they
are not indemnified by The Manufacturers Life Insurance
Company or a subsidiary.
2. Insures The Manufacturers Life Insurance Company against
loss arising from claims against Directors and Officers
for certain wrongful acts, but only where the corporation
indemnifies the Directors or Officers as required or
permitted under applicable statutory or by-law
provisions.
In general, the D&O coverage encompasses:
. past, present and future Directors and Officers of The
Manufacturers Life Insurance Company and subsidiaries
.defense costs and settlements (if legally obligated to be
paid) resulting from third party claims in connection with
'wrongful acts' committed by a Director or Officer within the
scope of their duties
. claims made basis (i.e. policy responds to claims
filed/reported during the policy term, including claims
arising from events transpiring before the policy was in
force as long as no Director/Officer was aware of the
events prior to coverage placement).
Item 28. Business and Other Connections of Investment Adviser
Manufacturers Adviser Corporation ("Manager") is engaged
in providing investment management services to the Registrant.
The Manager currently provides investment management services
to one other client and intends to provide such services to
others. The names of each director and officer of the Manager
10
<PAGE>
and the business of a substantial nature of each during the
past two fiscal years are as follows:
11
<PAGE>
<TABLE>
<CAPTION>
Position With Business of a Substantial
Name Manager Nature During Past Two Years
<S> <C> <C>
George Corey Director President, Exxel Management and
Marketing Corporation, Flemington, New
Jersey (management and marketing
consulting) since 1983
Bernadette B. Director Executive Director, Strategies
Murphy and Selections, M. Kimelman & Co., l00
Park Avenue, New York, N.Y.
George Slye Director Founding Partner, Vice Chairman and
part owner, Spaulding and Slye
Corporation Burlington, Massachusetts
(real estate development and
construction); Trustee, University
Hospital, Boston, Massachusetts;
Director, Hill Development Corporation,
Middletown, Connecticut
Richard R. Director Director of Research, Neuberger &
Schmaltz Berman, 605 Third Avenue, New York,
N.Y. 10158-3698, 1992 to present
Bruce D. Monus Director and Vice President, U.S. Fixed Income
President The Manufacturers Life Insurance
Company, 200 Bloor St. E., Toronto,
Canada
Robert Laughton Vice President Vice President, U.S. Fixed Income, The
Manufacturers Life Insurance Company,
200 Bloor St. E., Toronto, Canada
Mark A. Schmeer Vice President Vice President, U.S. Equities, The
Manufacturers Life Insurance Company -
1995-present; Vice President, Sun Life
Investment Management - 1993-1995
Douglas H. Myers Vice President, Assistant Vice President and
Compliance and Controller, U.S. Individual, 1988 -
Vice President, present, The Manufacturers Life
Finance and Insurance Company
Treasurer
</TABLE>
12
<PAGE>
<TABLE>
<CAPTION>
Position With Business of a Substantial
Name Manager Nature During Past Two Years
<S> <C> <C>
David Chia Vice President, Compliance Audit Officer, 1993-
present,
Compliance The Manufacturers Life Insurance
London Branch Company
Catherine Addison Vice President Assistant V.P., U.S. Investments
1994-present, The Manufacturers
Life Insurance Company; Director,
U.S. Fixed Income, 1985-1994, The
Manufacturers Life Insurance
Company
Stephen Hill Vice President Investment Management, The
Manufacturers Life Insurance
Company (London), 1995-present;
Director, Invesco Asset
Management, 1993-1994
Emilia Panadero Vice President Investment Management, The
Perez Manufacturers Life Insurance
Company (London), 1989-present
Robert Lutzko Vice President Investment Management, U.S.
Equities, The Manufacturers Life
Insurance Company - 1995-present;
U.S. Investment Manager, Workers
Compensation Board, Toronto -
1989-1995
Mark Andrew Hirst Vice President Fund Management, The Manufacturers
Life Insurance Company (London),
1986-present
Richard James Crook Vice President Fund Management, The Manufacturers
Life Insurance Company (London),
1975-present
Emily Shum Vice President Director, Money Market, The
Manufacturers Life Insurance
Company, 200 Bloor Street East,
Toronto, Canada
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
Position With Business of a Substantial
Name Manager Nature During Past Two Years
<S> <C> <C>
Leslie Grober Vice President Investment Management, U.S.
Equities, The Manufacturers Life
Insurance Company, 200 Bloor
Street East, Toronto, Canada -
1994-present; Investment
Representative, Toronto- Dominion
Bank - 1991-1993
Rhonda Chang Vice President Investment Management, The
Manufacturers Life Insurance
Company, 200 Bloor Street East
Toronto, Canada - 1994-present;
Investment Analyst, American
International Group - 1990-1994
Sheri L. Kocen Secretary and Senior Counsel, 1990 - present
General Counsel The Manufacturers Life Insurance
Company, Toronto, Canada
</TABLE>
Item 29. Principal Underwriters
Not applicable.
Item 30. Location of Accounts and Records
All accounts, books and other documents required to be
maintained under Section 31(a) of the Investment Company Act
of 1940 are kept by Manufacturers Adviser Corporation, 200
Bloor Street East, Toronto, Ontario M4W 1E5, the Registrant's
investment manager.
Item 31. Management Services
Not applicable.
14
<PAGE>
Item 32. Undertakings
Undertaking to provide annual report upon request
Registrant undertakes to provide a copy of Registrant's
latest annual report to shareholders to each person to whom a
prospectus is delivered upon request and without charge.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant,
Manulife Series Fund, Inc., has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized in this City of Toronto, Province of
Ontario, Canada on the _______ day of _________________, 19__.
MANULIFE SERIES FUND, INC.
By: /s/ Donald A. Guloien
Donald A. Guloien, 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 Title Date
Director and Chairman
John D. Richardson
Director and President
Donald A. Guloien (Principal Executive
Officer)
Director
Edward C. Balzarotti
Director
Francis J. Knott
Director
F. David Rolwing
Vice President-Finance
Douglas H. Myers and Treasurer (Principal
16
<PAGE>
Financial and Accounting
Officer)
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933 and the Investment Company Act of 1940, the Registrant,
Manulife Series Fund, Inc., has duly caused this registration
statement to be signed on its behalf by the undersigned,
thereunto duly authorized in this City of Toronto, Province of
Ontario, Canada on the 30th day of November , 1995.
MANULIFE SERIES FUND, INC.
By: /s/Donald A. Guloien
Donald A. Guloien, 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 Title Date
John D. Richardson Director and Chairman November 30, 1995
John D. Richardson
Donald A. Guloien Director and President November 30, 1995
Donald A. Guloien (Principal Executive
Officer)
Edward C. Balzarotti Director November 30, 1995
Edward C. Balzarotti
Francis J. Knott Director November 30, 1995
Francis J. Knott
F. David Rolwing Director November 30, 1995
F. David Rolwing
Douglas H. Myers Vice President- November 30, 1995
Douglas H. Myers Finance and Treasurer
(Principal Financial
and Accounting Officer)
18
<PAGE>
EXHIBITS
19
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
(1) Articles of Incorporation
of Manulife Series Fund, Inc.**
(1)(a) Articles Supplementary of
Manulife Series Fund, Inc.**
(1)(b) Articles Supplementary of
Manulife Series Fund, Inc.**
(1)(c) Articles Supplementary of
Manulife Series Fund, Inc.**
(2) By-laws of Manulife Series Previously filed as Exhibit (2) to
Fund, Inc. Post-Effective Amendment No. 8,
May 1, 1991.
(4)(a) Specimen Certificate of Previously filed as Exhibit (4)(a)
Emerging Growth Equity to Pre-Effective Amendment
Fund Common Stock No. 1, May 9, 1984.
(4)(b) Specimen Certificate of Previously filed as
Balanced Assets Fund Exhibit (4)(b) to Pre-Effective
Common Stock Amendment No. 1, May 9, 1984.
(4)(c) Specimen Certificate of Previously filed as Exhibit (4)(c)
Capital Growth Bond Fund to Pre-Effective Amendment No. 1,
Common Stock May 9, 1984.
(4)(d) Specimen Certificate of Previously filed as Exhibit (4)(d)
Money-Market Fund Common to Pre-Effective Amendment No. 1,
Stock May 9, 1984.
(4)(e) Specimen Certificate of Previously filed as Exhibit (4)(e)
Common Stock Fund Common to Pre-Effective Amendment No. 4,1
Stock March 13, 1987.
** Filed Electronically.
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
(4)(f) Specimen Certificate of Previously filed as Exhibit (4)(f)
Real Estate Securities Fund to Post-Effective Amendment No. 4,
Common Stock March 13, 1987.
(4)(g) Specimen Certificate of Previously filed as Exhibit (4)(g)
International Fund Common to Post-Effective Amendment No.
Stock 12, March 1, 1994.
(4)(h) Specimen Certificate of Previously filed as Exhibit (4)(h)
Pacific Rim Emerging to Post-Effective Amendment No.
Markets Fund Common Stock 12, March 1, 1994.
(4)(i) Specimen Stock Certificate of
Equity Index Fund Common Stock.**
(5)(a) Investment Advisory Agreement
Between Manulife Series Fund,
Inc. and Manufacturers Adviser
Corporation.**
(5)(a)(i) Amendment to Investment Advisory
Agreement Between Manulife Series
Fund, Inc. and Manufacturers
Adviser Corporation dated September
30, 1994.**
(5)(a)(ii) Form of Amendment to Investment
Advisory Agreement Between
Manulife Series Fund, Inc. and
Manufacturers Adviser
Corporation.**
(5)(b) Service Agreement Among The Previously filed as Exhibit (5)(b)
Manufacturers Life Insurance to Pre-Effective Amendment No. 1,
Company, Manulife Series May 9, 1984.
Fund, Inc. and Manufacturers
Adviser Corporation.
____________________
** Filed Electronically.
</TABLE>
21
<PAGE>
22
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
(5)(b)(i) Service Agreement among The Previously filed as Exhibit
Manufacturers Life Insurance (5)(b)(i) to Post-Effective
Company, Manulife Series Amendment No. 14, February
Fund, Inc. and Manufacturers 28, 1995.
Adviser Corporation.
(8)(i) Custodian Agreement Between Previously filed as Exhibit (8)
Between State Street Bank to Post-Effective Amendment
and Trust Company and No. 9, February 28, 1992.
Manulife Series Fund, Inc.
(8)(ii) Amendment to Custodian Previously filed as Exhibit
Agreement between State to (8)(ii) Post-Effective
Street Bank and Trust Amendment No. 14, March 1,
Company and Manulife 1994.
Series Fund, Inc.
(9) License Agreement For Use Previously filed as Exhibit 9
of Name Between The Manu- to Registrant's registration
facturers Life Insurance statement on Form N-1, July 27,
Company and Manulife 1983.
Series Fund, Inc.
(10) Consent of Jones & Blouch.*
(11) Consent of Ernst & Young LLP.**
(13) Investment Undertaking from Previously filed as Exhibit 13
The Manufacturers Life to Post-Effective Amendment No. 1,
Insurance Company of America December 14, 1984.
dated May 3, 1984
(13)(a) Investment Undertaking Previously filed as Exhibit 13(a)
from The Manufacturers to Post-Effective Amendment No. 4,
Life Insurance Company of March 13, 1984.
America dated February 17,
1987
_____________________
** Filed Electronically.
</TABLE>
23
<PAGE>
24
<PAGE>
<TABLE>
<CAPTION>
Page in Sequential
Numbering System
Where Exhibit
Exhibit No. Description Located
<S> <C> <C>
(13)(b) Investment Undertaking Previously filed as Exhibit
from The Manufacturers (13)(b) to Post-Effective
Life Insurance Company 14, February 28, 1995.
of America dated October
4, 1994
(13)(c) Form of Investment
Under-Taking from the
Manufacturers Life
Insurance Company.**
(16) Computation of Previously filed as Exhibit (16)
performance quotations. to Post-Effective Amendment No.
14, February 28, 1995.
(17) Financial Data Schedule.**
______________________
** Filed Electronically.
</TABLE>
25
EXHIBIT 99-1
ARTICLES OF INCORPORATION
OF
MANULIFE SERIES FUND, INC.
ARTICLE I
THE UNDERSIGNED, JAMES SUMNER JONES, whose post office
address is 1776 F Street, N.W., Washington, D.C. 20006, being
at least 18 years of age, does hereby act as an incorporator,
under and by virtue of the Maryland General Corporation Law
authorizing the formation of corporations and with the
intention of forming a corporation.
ARTICLE II
NAME
The name of the corporation (hereinafter referred to as
the "Corporation") is MANULIFE SERIES FUND, INC.
<PAGE>
ARTICLE III
PURPOSES AND POWERS
The purpose or purposes for which the Corporation is
formed and the business or objects to be transacted, carried
on and promoted by it are as follows:
(1) To conduct, operate and carry on the business of an
investment company of the management type.
(2) To hold, invest and reinvest its assets in
securities and other forms of investment, and in connection
therewith to hold part or all of its assets in cash.
(3) To issue and sell shares of its own capital stock in
such amounts and on such terms and conditions, for such
purposes and for such amount or kind of consideration now or
hereafter permitted by the Maryland General Corporation Law
and by these Articles of Incorporation, as its Board of
Directors may determine.
(4) To redeem, purchase or otherwise acquire, hold,
dispose of, resell, transfer, reissue or cancel (all without
the vote or consent of the stockholders of the Corporation)
shares of its capital stock, in any manner and to the extent
now or hereafter permitted by the Maryland General Corporation
Law and by these Articles of Incorporation.
(5) To do any and all such further acts or things and to
exercise any and all such further powers or rights as may be
necessary, incidental, relative, conducive, appropriate or
desirable for the accomplishment, carrying out or attainment
<PAGE>
of any of the foregoing purposes or objects.
The Corporation shall be authorized to exercise and enjoy
all the powers, rights and privileges granted to, or conferred
upon, corporations by the Maryland General Corporation Law now
or hereafter in force, and the enumeration of the foregoing
shall not be deemed to exclude any powers, rights or
privileges so granted or conferred.
ARTICLE IV
PRINCIPAL OFFICE AND RESIDENT AGENT
The post office address of the principal office of the
Corporation in this state is c/o The Manufacturers Life
Insurance Company, Suite 2424 World Trade Center, Baltimore,
Maryland 21202. The name of the resident agent of the
Corporation in this state is Paul S. McCarthy, a citizen and
resident of this state, and the post office address of the
resident agent is Suite 2424 World Trade Center, Baltimore,
Maryland 21202.
ARTICLE V
CAPITAL STOCK
The total number of shares of capital stock which the
Corporation shall have authority to issue is One Billion
(1,000,000,000) shares of common stock of the par value of one
cent ($0.01) per share and of the aggregate par value ten
million dollars ($10,000,000). Four hundred million
(400,000,000) of such shares may be issued in the following
classes of common stock, each class comprising the number of
<PAGE>
shares and having the designation indicated, subject, however,
to the authority hereinafter granted to the Board of Directors
to increase and decrease the number of shares of any class:
Class Number of Shares
Emerging Growth Equity Fund Common Stock 100,000,000
Capital Growth Bond Fund Common Stock 100,000,000
Balanced Assets Fund Common Stock 100,000,000
Money-Market Fund Common Stock 100,000,000
The balance of six hundred million (600,000,000) shares of
such stock may be issued in these classes, or in any new class
or classes each comprising such number of shares and having
such designation, such powers, preferences and rights and such
qualifications, limitations and restrictions thereof as shall
be fixed and determined from time to time by resolution or
resolutions providing for the issuance of such shares adopted
by the Board of Directors, to whom authority so to fix and
determine the same is hereby expressly granted. In addition,
the Board of Directors is hereby expressly granted authority
to change the designation of any class, to increase or
decrease the number of shares of any class, provided that the
number of shares of any class shall not be decreased by the
Board of Directors below the number of shares thereof then
outstanding, and to reclassify any unissued shares into one or
more classes that may be established and designated from time
to time.
(a) The Corporation may issue shares of stock in
<PAGE>
fractional denominations to the same extent as its whole
shares, and shares in fractional denominations shall be shares
of stock having proportionately, to the respective fractions
represented thereby, all the rights of whole shares, including
without limitation, the right to vote, the right to receive
dividends and distributions and the right to participate upon
liquidation of the Corporation, but excluding the right to
receive a stock certificate representing fractional shares.
(b) The holders of each share of stock of the Cor-
poration shall be entitled to one vote for each full share,
and a fractional vote for each fractional share, of stock,
irrespective of the class, then standing in his name on the
books of the Corporation. On any matter submitted to a vote
of stockholders, all shares of the Corporation then issued and
outstanding and entitled to vote shall be voted in the
aggregate and not by class except that (1) when otherwise
expressly required by the Maryland General Corporation Law or
the Investment Company Act of 1940, as amended, shares shall
be voted by individual class, and (2) if the Board of
Directors, in its sole discretion, determines that a matter
affects the interests of only one or more particular classes,
then only the holders of shares of such affected class or
classes shall be entitled to vote thereon.
(c) Unless otherwise provided in the resolution of the
Board of Directors providing for the issuance of shares in any
new class or classes not designated in this Article, each
class of stock of the Corporation shall have the following
<PAGE>
powers, preferences and rights, and qualifications,
restrictions and limitations thereof:
(1) Assets Belonging to a Class. All consideration
received by the Corporation for the issue or sale of shares of
a particular class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to that class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books
and accounts of the Corporation. Such consideration, assets,
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that class as
provided in the following sentence, are herein referred to as
'assets belonging to" that class. In the event that there are
any assets, income, earnings, profits, proceeds thereof, funds
or payments which are not readily identifiable as belonging to
any particular class (collectively "General Items"), such
General Items shall be allocated by or under the supervision
of the Board of Directors to and among any one or more of the
classes established and designated from time to time in such
manner and on such basis as the Board of Directors, in its
<PAGE>
sole discretion, deems fair and equitable, and any General
Items so allocated to a particular class shall belong to that
class. Each such allocation by the Board of Directors shall
be conclusive and binding for all purposes.
(2) Liabilities Belonging to a Class. The asset
belonging to each particular class shall be charged with the
liabilities of the Corporation in respect of that class and
all expenses, costs, charges and reserves attributable to that
class, and any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily
identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board
of Directors to and among any one or more of the classes
established and designated from time to time in such manner
and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged
to a class are herein referred to as "liabilities belonging
to" that class. Each allocation of liabilities, expenses,
costs, charges and reserves by the Board of Directors shall be
conclusive and binding for all purposes.
(3) Dividends. The Board of Directors may from time to
time declare and pay dividends or distributions, in stock or
in cash, on any or all classes of stock, the amount of such
dividends and distributions and the payment of them being
wholly in the discretion of the Board of Directors. Dividends
may be declared daily or otherwise pursuant to a standing
<PAGE>
resolution or resolutions adopted only once or with such
frequency as the Board of Directors may determine, after
providing for actual and accrued liabilities belonging to that
class. All dividends or distributions on shares of a
particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors
as belonging to such class. The Board of Directors shall have
the power, in its sole discretion, to distribute in any fiscal
year as dividends, including dividends designated in whole or
in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation to qualify as a regulated investment company under
the Internal Revenue Code of 1954, as amended, or any
successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability for the
Corporation for Federal income tax in respect of that year.
In furtherance, and not in limitation of the foregoing, in the
event that a class of shares has a net capital loss for a
fiscal year, and to the extent that a net capital loss for a
fiscal year offsets net capital gains from one or more of the
other classes, the amount to be deemed available for
distribution to the class or classes with the net capital gain
may be reduced by the amount offset.
(4) Liquidation. In the event of the liquidation of the
Corporation or of the assets attributable to a particular
class, the shareholders of each class that has been
established and designated and is being liquidated shall be
<PAGE>
entitled to receive, as a class, when and as declared by the
Board of Directors, the excess of the assets belonging to that
class over the liabilities belonging to that class. The
holders of shares of any class shall not be entitled thereby
to any distribution upon liquidation of any other class. The
assets so distributable to the shareholders of any particular
class shall be distributed among such shareholders in
proportion to the number of shares of that class held by them
and recorded on the books of the Corporation. The liquidation
of assets attributable to any particular class in which there
are shares then outstanding may be authorized by vote of a
majority of the Board of Directors then in office, subject to
the approval of a majority of the outstanding voting
securities of that class, as defined in the Investment Company
Act of 1940, as amended. In the event that there are any
general assets not belonging to any particular class of stock
and available for distribution, such distribution shall be
made to holders of stock of various classes in such proportion
as the Board of Directors determines to be fair and equitable,
and such determination by the Board of Directors shall be
conclusive and binding for all purposes.
(5) Redemption. All shares of stock of the Corporation
shall have the redemption rights provided for in Article VII.
(d) The Corporation's shares of stock are issued and
sold, and all persons who shall acquire stock of the
Corporation shall acquire the same, subject to the condition
and understanding that the provisions of the Corporation's
<PAGE>
Articles of Incorporation, as from time to time amended, shall
be binding upon them.
ARTICLE VI
PROVISIONS FOR DEFINING, LIMITING, AND
REGULATING CERTAIN POWERS OF THE
CORPORATION AND OF THE DIRECTORS AND
STOCKHOLDERS
(1) The number of directors of the Corporation shall be
three (3), which number may be increased or decreased pursuant
to the by-laws of the Corporation but shall never be less than
the minimum number required by the Maryland General
Corporation Law. The names of the directors who shall act
until the first annual meeting or until their successors are
duly elected and qualify are:
Joseph J. Pietroski
James D. Gallagher
James Sumner Jones
(2) The Board of Directors of the Corporation is hereby
empowered to authorize the issuance from time to time of
shares of common stock, whether now or hereafter authorized,
for such consideration as the Board of Directors may deem
advisable, subject to such limitations as may be set forth in
these Articles of Incorporation or in the by-laws of the
Corporation or in the Maryland General Corporation Law.
(3) No holder of stock of the Corporation shall, as such
holder, have any right to purchase or subscribe for any shares
<PAGE>
of the common stock of the Corporation or any other security
of the Corporation which it may issue or sell (whether out of
the number of shares authorized by these Articles of
Incorporation, or out of any shares of the common stock of the
Corporation acquired by it after the issue thereof, or
otherwise) other than such right, if any, as the Board of
Directors, in its discretion, may determine.
(4) Each director and each officer of the Corporation
shall be indemnified by the Corporation to the fullest extent
permitted by the laws of the State of Maryland and the by-laws
of the Corporation.
(5) The business and affairs of the Corporation shall be
managed under the direction of the Board of Directors, which
shall have and may exercise all powers of the Corporation
except those powers which are by law, by these Articles of
Incorporation or by the by-laws of the Corporation conferred
upon or reserved to the stockholders. In furtherance and not
in limitation of the powers conferred by law, the Board of
Directors shall have the power:
(i) to make, alter and repeal by-laws of the Cor-
poration; and
(ii) from time to time to set apart out of any
assets of the Corporation otherwise available for
dividends a reserve or reserves for working capital or
for any other proper purpose or purposes, and to reduce,
abolish or add to any such reserve or reserves from time
to time as said Board of Directors may deem to be in the
<PAGE>
best interests of the Corporation; and to determine in
its discretion what part of the assets of the Corporation
available for dividends in excess of such reserve or
reserves shall be declared in dividends and paid to the
stockholders of the Corporation.
(6) Notwithstanding any provision of the Maryland
General Corporation Law requiring a greater proportion than a
majority of the votes of all classes or of any class of the
Corporation's stock entitled to be cast in order to take or
authorize any action, any such action may be taken or
authorized upon the concurrence of a majority of the aggregate
number of votes entitled to be cast thereon subject to
applicable laws and regulations as from time to time in
effect, or rules or orders of the Securities and Exchange
Commission or any successor thereto.
(7) Any determination made in good faith and, so far as
accounting matters are involved, in accordance with generally
accepted accounting principles, by or pursuant to the
direction of the Board of Directors, as to the amount of the
assets, debts, obligations, or liabilities of the Corporation,
as to the amount of any reserves or charges set up and the
propriety thereof, as to the time of or purpose for creating
such reserves or charges, as to the use, alteration or
cancellation of any reserves or charges (whether or not any
debt, obligation or liability for which such reserves or
charges shall have been created shall have been paid or
discharged or shall be then or thereafter required to be paid
<PAGE>
or discharged as to the establishment or designation of
procedures or methods to be employed for valuing any asset of
the Corporation and as to the value of any asset, as to the
allocation of any asset of the Corporation to a particular
class or classes of the Corporation's stock, as to the funds
available for the declaration of dividends and as to the
declaration of dividends, as to the charging of any liability
of the Corporation to a particular class or classes of the
Corporation's stock, as to the number of shares of any class
or classes of the Corporation's outstanding stock, as to the
estimated expense to the Corporation in connection with
purchases or redemptions of its shares, as to the ability to
liquidate investments in orderly fashion, or as to any other
matters relating to the issue, sale, purchase or redemption or
other acquisition or disposition of investments or shares of
the Corporation or the determination of the net asset value
per share of shares of any class of the Corporation's stock
shall be conclusive and binding for all purposes.
ARTICLE VII
REDEMPTION
(1) Each holder of shares of common stock of the
Corporation shall be entitled to require the Corporation to
redeem all or any part of the shares of common stock of the
Corporation standing in the name of such holder on the books
of the Corporation, and all shares of common stock issued by
the Corporation shall be subject to redemption by the
<PAGE>
Corporation, at the redemption price of such shares as in
effect from time to time as may be determined by the Board of
Directors of the Corporation in accordance with the provisions
hereof, subject to the right of the Board of Directors of the
Corporation to suspend the right of redemption of shares of
common stock of the Corporation or postpone the date of
payment of such redemption price in accordance with provisions
of applicable law. The redemption price of shares of any
class of common stock of the Corporation shall be the net
asset value of such class as determined by, or pursuant to the
direction of, the Board of Directors of the Corporation from
time to time in accordance with the provisions of applicable
law, less such redemption fee or other charge, if any, as may
be fixed by resolution of the Board of Directors of the
Corporation. Redemption shall be conditional upon the
Corporation having funds legally available therefor. Payment
of the redemption price shall be made in cash or by check on
current funds, or in assets other than cash, by the
Corporation at such time and in such manner as may be
determined from time to time by the Board of Directors of the
Corporation.
(2) If the Board of Directors determines that the net
asset value per share of any class or classes of the
Corporation's stock should remain constant, the Corporation
may declare, pay and credit as dividends daily the net income
(which may include or give effect to realized and unrealized
gains and losses, as determined in accordance with the
<PAGE>
Corporation's accounting and portfolio valuation policies) of
the Corporation allocated to that class. If the amount so
determined for any day is negative, the Corporation may,
without the payment of monetary compensation but in
consideration of the interest of the Corporation and its
stockholders in maintaining a constant net asset value per
share of the class, redeem pro rata from all the stockholders
of record of shares of the class at the time of such
redemption such number of outstanding shares of the class, or
fractions thereof, as shall be required to reduce the
aggregate number of outstanding shares of the class in order
to permit the net asset value per share of the class to remain
constant.
ARTICLE VIII
AMENDMENT
The Corporation reserves the right to alter, amend, or
repeal any provisions contained in these Articles of
Incorporation from time to time, including any amendment which
alters the contract rights of any outstanding stock, at any
time in the manner now or hereafter prescribed by the laws of
the State of Maryland, and all rights conferred herein upon
the Corporation's stockholders, directors and officers are
granted subject to such reservation.
ARTICLE IX
PERPETUAL EXISTENCE
<PAGE>
The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, the undersigned incorporator of
MANULIFE SERIES FUND, INC. hereby executes the foregoing
Articles of Incorporation and acknowledges the same to be his
act and further acknowledges that, to the best of his
knowledge, the matters and facts set forth therein are true in
all material respects under the penalties of perjury.
Dated the 22nd day of July, 1983.
James Sumner Jones
James Sumner Jones
1776 F Street, N.W.
Washington, D. C. 20006
EXHIBIT 99-1A
ARTICLES SUPPLEMENTARY
OF
MANULIFE SERIES FUND, INC.
A. Article V of the Corporation's Articles of Incorporation
is supplemented as follows:
In addition to the four classes of common stock pre-
viously authorized, the Corporation may issue two hundred
million (200,000,000) shares of its authorized common stock,
par value of one cent ($0.01) per share, in the following
classes of common stock, each class comprising the number of
shares and having the designation indicated, subject, however,
to the authority of the Board of Directors to increase and
decrease the number of shares of any class:
Class Number of Shares
Real Estate Securities Fund Common Stock 100,000,000
Common Stock Fund Common Stock 100,000,000
The powers, preferences, and rights and qualifications,
limitations and restrictions of each such class shall be as
set forth in Article V(c) of the Articles of incorporation.
As provided in Article V of the Articles of Incorporation, the
Board of Directors may change the designation of any class,
may increase or decrease the number of shares of any class,
provided that the number of shares of any class shall not be
decreased by the Board of Directors below the number of shares
thereof then outstanding, and may reclassify any unissued
shares into one or more classes that may be established and
designated from time to time.
B. As provided in Article V(c) of the Articles of
Incorporation, each of the classes designated Real Estate
Securities Fund Common Stock and Common Stock Fund Common
Stock shall have the following powers, preferences and rights
and qualifications, restrictions and limitations:
(1) Assets Belonging to a Class. All consideration
received by the Corporation for the issue or sale of shares of
a particular class,' together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds in whatever form the same may be, shall irrevocably
belong to that class for all purposes, subject only to the
rights of creditors, and shall he so recorded upon the books
and accounts of the Corporation. Such consideration, assets,
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that class as
<PAGE>
provided in the following sentence, are herein referred to as
'assets belonging toll that class. In the event that there
are any assets, income, earnings, profits, proceeds thereof,
funds or payments which are not readily identifiable as
belonging to any particular class (collectively "General
Items"), such General Items shall be allocated by or under the
supervision of the Board of Directors to and among any one or
more of the classes established and designated from time to
time in such manner and on such basis as the Board of
Directors, in its sole discretion, deems fair and equitable,
and any General Items so allocated to a particular class shall
belong to that class. Each such allocation by the Board of
Directors shall be conclusive and binding for all purposes.
(2) Liabilities Belonging to a Class. The assets
belonging to each particular class shall be charged with the
liabilities of the Corporation in respect of that class and
all expenses, costs, charges and reserves attributable to that
class, and any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily
identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board
of Directors to and among any one or more of the classes
established and designated from time to time in such manner
and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged
to a class are herein referred to as "liabilities belonging
to" that class. Each allocation of liabilities, expenses,
costs, charges and reserves by the Board of Directors shall be
conclusive and binding for ail purposes.
(3) Dividends. The Board of Directors may from
time to time declare and Day dividends or distributions, in
stock or in cash, on any or all classes of stock, the amount
of such dividends and distributions and the payment of them
being wholly in the discretion of the Board of Directors.
Dividends may be declared daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with
such frequency as the Board of Directors may determine, after
providing for actual and accrued liabilities belonging to that
class. All dividends or distributions on shares of a
particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors
as belonging to such class. The Board of Directors shall have
the power, in its sole discretion, to distribute in any fiscal
year as dividends, including dividends designated in whole or
in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation to qualify as a regulated investment company under
the Internal Revenue Code of 1954, as amended, or any
successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability for the
Corporation for Federal income tax in respect of that year.
In furtherance, and not in limitation of the foregoing, in the
event that a class of shares has a net capital loss for a
<PAGE>
fiscal year, and to the extent that a net capital loss for a
fiscal year offsets net capital gains from one or more of the
other classes, the amount to be deemed available for
distribution to the class or classes with the net capital gain
may be reduced by the amount offset.
(4) Liquidation. In the event of the liquidation
of the Corporation or of the assets attributable to a
particular class, the shareholders of each class that has been
established and designated and is being liquidated shall be
entitled to receive, as a class, when and as declared by the
Board of Directors, the excess of the assets belonging to that
class over the liabilities belonging to that class. The
holders of shares of any class shall not be entitled thereby
to any distribution upon liquidation of any other class. The
assets so distributable to the shareholders of any particular
class shall be distributed among such shareholders in
proportion to the number of shares of that class held by them
and recorded on the books of the Corporation. The liquidation
of assets attributable to any particular class in which there
are shares then outstanding may be authorized by vote of a
majority of the Board of Directors then in office, subject to
the approval of a majority of the outstanding voting
securities of that class, as defined in the Investment Company
Act of 1940, as amended. In the event that there are any
general assets not belonging to any particular class of stock
and available for distribution, such distribution shall be
made to holders of stock of various classes in such proportion
as the Board of Directors determines to be fair and equitable,
and such determination by the Board of Directors shall be
conclusive and binding for all purposes.
C. The classification of the Corporation's common stock
described above was made by action of the Board of Directors
pursuant to authority contained in Article V of the Articles
of Incorporation.
IN WITNESS WHEREOF, the undersigned officers of MANULIFE
SERIES FUND, INC. hereby execute the foregoing Articles
Supplementary and acknowledge the same to be the act of this
Corporation and further acknowledge that, to the best of their
knowledge, the matters and facts set forth therein are true in
all material respects under the penalties for perjury.
Dated the 27th day of February, 1987.
Donald A. Guloien
President
Attested:
[seal]
James D. Gallagher
Secretary
EXHIBIT 99-1B
ARTICLES SUPPLEMENTARY
OF
MANULIFE SERIES FUND, INC.
A. Article V of the Corporation's Articles of Incorporation
as supplemented by Articles Supplementary is supplemented as
follows:
In addition to the six classes of common stock previously
authorized, the Corporation may issue one hundred million
(100,000,000) shares of its authorized common stock, par value
of one cent ($0.01) per share, in each of the following
classes of common stock, each such class comprising the number
of shares and having the designation indicated, subject,
however, to the authority of the Board of Directors to
increase and decrease the number of shares of each such class:
Class Number of Shares
International Fund Common Stock 100,000,000
Pacific Rim Emerging Markets Fund
Common Stock 100,000,000
The powers, preferences and rights and qualifications,
limitations and restrictions of each such class shall be as
set forth in Article V(c) of the Articles of Incorporation.
As provided in Article V of the Articles of Incorporation, the
Board
of Directors may change the designation of any class, may
increase or decrease the number of shares of any class,
provided that the number of shares of any class shall not be
decreased by the Board of Directors below the number of shares
thereof then outstanding, and may reclassify any unissued
shares into one or more classes that may be established and
designated from time to time.
B. As provided in Article V(c) of the Articles of
Incorporation, the class designated International Fund Common
Stock and the class designated Pacific Rim Emerging Markets
Fund Common Stock shall have the following powers, preferences
and rights and qualifications, restrictions and limitations:
(1) Assets Belonging to a Class. All consideration
received by the Corporation for the issue or sale of shares of
a particular class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds whatever form the same may be shall irrevocably
belong to that class for all purposes, subject only to the
<PAGE>
rights of creditors, and shall be so recorded upon the books
and accounts of the Corporation. Such consideration, assets,
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that class as
provided in the following sentence, are herein referred to as
"assets belonging to" that class. In the event that there are
any assets, income, earnings, profits, proceeds thereof, funds
or payments which are not readily identifiable as belonging to
any particular class (collectively "General Items"), such
General Items shall be allocated by or under the supervision
of the Board of Directors to and among any one or more of the
classes established and designated from time to time in such
manner and on such basis as the Board of Directors, in its
sole discretion, deems fair and equitable, and any General
Items so allocated to a particular class shall belong to that
class. Each such allocation by the Board of Directors shall
be conclusive and binding for all purposes.
(2) Liabilities Belonging to a Class. The assets
belonging to each particular class shall be charged with the
liabilities of the Corporation in respect of that class and
all expenses, costs, charges and reserves attributable to that
class, and any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily
identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board
of Directors to and among any one or more of the classes
established and designated from time to time in such manner
and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged
to a class are herein referred to as "Liabilities belonging
to" that class. Each allocation of liabilities, expenses,
costs, charges and reserves by the Board of Directors shall
be conclusive and binding for all purposes.
(3) Dividends. The Board of Directors may from
time to time declare and pay dividends or distributions, in
stock or in cash, on any or all classes of stock, the amount
of such dividends and distributions and the payment of them
being wholly in the discretion of the Board of Directors.
Dividends may be declared daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with
such frequency as the Board of Directors may determine, after
providing for actual and accrued liabilities belonging to that
class. All dividends or distributions on shares of a
particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors
as belonging to such class. The Board of Directors shall have
the power, in its sole discretion, to distribute in any fiscal
year as dividends, including dividends designated in whole or
<PAGE>
in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation to qualify as a regulated investment company under
the Internal Revenue Code of 1986, as amended, or any
successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability for the
Corporation for Federal income tax in respect of that year.
In furtherance, and not in limitation of the foregoing, in the
event that a class of shares has a net capital loss for a
fiscal year and to the extent that a net capital loss for a
fiscal year offsets net capital gains from one or more of the
other classes, the amount to be deemed available for
distribution to the class or classes with the net capital gain
may be reduced by the amount offset.
(4) Liquidation. In the event of the liquidation
of the Corporation or of the assets attributable to a
particular class, the shareholders of each class that has been
established and designated and is being liquidated shall be
entitled to receive, as a class, when and as declared by the
Board of Directors, the excess of the assets belonging to that
class over the liabilities belonging to that class. The
holders of shares of any class shall not be entitled thereby
to any distribution upon liquidation of any other class. The
assets so distributable to the shareholders of any particular
class shall be distributed among such shareholders in
proportion to the number of shares of that class held by them
and recorded on the books of the Corporation. The liquidation
of assets attributable to any particular class in which there
are shares then outstanding may be authorized by vote of a
majority of the Board of Directors then in office, subject to
the approval of a majority of the outstanding voting
securities of that class, as defined in the Investment Company
Act of 1940, as amended or any successor or comparable statute
thereto. In the event that there are any general assets not
belonging to any particular class of stock and available for
distribution, such distribution shall be made to holders of
stock of various classes in such proportion as the Board of
Directors determines to be fair and equitable, and such
determination by the Board of Directors shall be conclusive
and binding for all purposes.
C. The classification of the Corporation's common stock
described above was made by action of the Board of Directors
pursuant to authority contained in Article V of the Articles
of Incorporation.
IN WITNESS WHEREOF, the undersigned officers of MANULIFE
SERIES FUND, INC. hereby execute the foregoing Articles
Supplementary and acknowledge the same to be the act of this
Corporation and further acknowledge that, to the best of their
knowledge, the matters and facts set forth therein are true in
all material respects under the penalties for perjury.
<PAGE>
<PAGE>
DATED the 22nd day of February, 1994.
Donald A. Guloien
President
Attested:
[seal]
Sheri L. Kocen
Secretary
EXHIBIT 99-1C
ARTICLES SUPPLEMENTARY
OF
MANULIFE SERIES FUND, INC.
A. Article V of the Corporation's Articles of Incorporation
as supplemented by Articles Supplementary is supplemented as
follows:
In addition to the eight classes of common stock
previously authorized, the Corporation may issue one hundred
million (100,000,000) shares of its authorized common stock,
par value of one cent ($0.01) per share, in the following
class of common stock, such class comprising the number of
shares and having the designation indicated, subject, however,
to the authority of the Board of Directors to increase and
decrease the number of shares of such class:
Class Number of Shares
Equity Index Fund Common Stock 100,000,000
The powers, preferences and rights and qualifications,
limitations and restrictions of each such class shall be as
set forth in Article V(c) of the Articles of Incorporation.
As provided in Article V of the Articles of Incorporation, the
Board of Directors may change the designation of any class,
may increase or decrease the number of shares of any class,
provided that the number of shares of any class shall not be
decreased by the Board of Directors below the number of shares
thereof then outstanding, and may reclassify any unissued
shares into one or more classes that may be established and
designated from time to time.
<PAGE>
B. As provided in Article V(c) of the Articles of
Incorporation, the class designated Equity Index Fund Common
Stock shall have the following powers, preferences and rights
and qualifications, restrictions and limitations:
(1) ASSETS BELONGING TO A CLASS. All consideration
received by the Corporation for the issue or sale of shares of
a particular class, together with all assets in which such
consideration is invested or reinvested, all income, earnings,
profits and proceeds thereof, including any proceeds derived
from the sale, exchange or liquidation of such assets, and any
funds or payments derived from any reinvestment of such
proceeds whatever form the same may be shall irrevocably
belong to that class for all purposes, subject only to the
rights of creditors, and shall be so recorded upon the books
and accounts of the Corporation. Such consideration, assets,
income, earnings, profits and proceeds thereof, including any
proceeds derived from the sale, exchange or liquidation of
such assets, and any funds or payments derived from any
reinvestment of such proceeds, in whatever form the same may
be, together with any General Items allocated to that class as
provided in the following sentence, are herein referred to as
"assets belonging to" that class. In the event that there are
any assets, income, earnings, profits, proceeds thereof, funds
or payments which are not readily identifiable as belonging to
any particular class (collectively "General Items"), such
General Items shall be allocated by or under the supervision
of the Board of Directors to and among any one or more of the
<PAGE>
classes established and designated from time to time in such
manner and on such basis as the Board of Directors, in its
sole discretion, deems fair and equitable, and any General
Items so allocated to a particular class shall belong to that
class. Each such allocation by the Board of Directors shall
be conclusive and binding for all purposes.
(2) LIABILITIES BELONGING TO A CLASS. The assets
belonging to each particular class shall be charged with the
liabilities of the Corporation in respect of that class and
all expenses, costs, charges and reserves attributable to that
class, and any general liabilities, expenses, costs, charges
or reserves of the Corporation which are not readily
identifiable as belonging to any particular class shall be
allocated and charged by or under the supervision of the Board
of Directors to and among any one or more of the classes
established and designated from time to time in such manner
and on such basis as the Board of Directors, in its sole
discretion, deems fair and equitable. The liabilities,
expenses, costs, charges and reserves allocated and so charged
to a class are herein referred to as "Liabilities belonging
to" that class. Each allocation of liabilities, expenses,
costs, charges and reserves by the Board of Directors shall
be conclusive and binding for all purposes.
(3) DIVIDENDS. The Board of Directors may from
time to time declare and pay dividends or distributions, in
stock or in cash, on any or all classes of stock, the amount
of such dividends and distributions and the payment of them
<PAGE>
being wholly in the discretion of the Board of Directors.
Dividends may be declared daily or otherwise pursuant to a
standing resolution or resolutions adopted only once or with
such frequency as the Board of Directors may determine, after
providing for actual and accrued liabilities belonging to that
class. All dividends or distributions on shares of a
particular class shall be paid only out of surplus or other
lawfully available assets determined by the Board of Directors
as belonging to such class. The Board of Directors shall have
the power, in its sole discretion, to distribute in any fiscal
year as dividends, including dividends designated in whole or
in part as capital gains distributions, amounts sufficient, in
the opinion of the Board of Directors, to enable the
Corporation to qualify as a regulated investment company
under the Internal Revenue Code of 1986, as amended, or any
successor or comparable statute thereto, and regulations
promulgated thereunder, and to avoid liability for the
Corporation for Federal income tax in respect of that year.
In furtherance, and not in limitation of the foregoing, in the
event that a class of shares has a net capital loss for a
fiscal year. and to the extent that a net capital loss for a
fiscal year offsets net capital gains from one or more of the
other classes, the amount to be deemed available for
distribution to the class or classes with the net capital gain
may be reduced by the amount offset.
(4) LIQUIDATION. In the event of the liquidation
of the Corporation or of the assets attributable to a
<PAGE>
particular class, the shareholders of each class that has been
established and designated and is being liquidated shall be
entitled to receive, as a class, when and as declared by the
Board of Directors, the excess of the assets belonging to that
class over the liabilities belonging to that class. The
holders of shares of any class shall not be entitled thereby
to any distribution upon liquidation of any other class. The
assets so distributable to the shareholders of any particular
class shall be distributed among such shareholders in
proportion to the number of shares of that class held by them
and recorded on the books of the Corporation. The liquidation
of assets attributable to any particular class in which there
are shares then outstanding may be authorized by vote of a
majority of the Board of Directors then in office, subject to
the approval of a majority of the outstanding voting
securities of that class, as defined in the Investment Company
Act of 1940, as amended or any successor or comparable statute
thereto. In the event that there are any general assets not
belonging to any particular class of stock and available for
distribution, such distribution shall be made to holders of
stock of various classes in such proportion as the Board of
Directors determines to be fair and equitable, and such
determination by the Board of Directors shall be conclusive
and binding for all purposes.
C. The classification of the Corporation's common stock
described above was made by action of the Board of Directors
pursuant to authority contained in Article V of the Articles
<PAGE>
of Incorporation.
IN WITNESS WHEREOF, the undersigned officers of MANULIFE
SERIES FUND, INC. hereby execute the foregoing Articles
Supplementary and acknowledge the same to be the act of this
Corporation and further acknowledge that, to the best of their
knowledge, the matters and facts set forth therein are true in
all material respects under the penalties for perjury.
DATED the 16th day of November, 1995.
/s/ Donald A. Guloien
Donald A. Guloien
President
Attested:
[seal]
/s/ Sheri L. Kocen
_____________________
Secretary
<PAGE>
EXHIBIT 99-4I
Exhibit (4)(i) is a sample stock certificate for the Equity
Index Fund with the following text:
[FRONT]
NUMBER SHARES
[PICTURE]
This Certifies that ____________________________ is the owner
of ___________________________ Shares of _____________ Each
of the Capital Stock of
transferable only on the books of the Corporation by the
holder hereof in person or by Attorney, upon surrender of
this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this
Certificate to be signed by its duly authorized officers
and to be sealed with the Seal of the Corporation
This ____________ day of _______________ A.D. 19__.
[BACK]
CERTIFICATE
[PICTURE]
CAPITAL STOCK
ISSUED TO
----------------
----------------
DATED
For Value Received, _____ hereby sell, assign and
t r a n s f e r u n t o
_________________________________________________________
_____________________________________________________ Shares
of the Capital Stock represented by the within Certificate and
do hereby irrevocably constitute and appoint _________________
______________________________________________________________
_ to transfer the said Stock on the books of the within named
Corporation with full power or substitution in the premises.
Dated ____________________ 19__
I n p r e s e n c e o f
___________________________________________
______________________________________________________________
_
<PAGE>
NUMBER SHARES
SPECIMEN
MANULIFE SERIES FUND, INC.
EQUITY INDEX FUND
MARYLAND
THIS CERTIFIES THAT SPECIMEN is the owner of ____________
Shares of ___________________ each of the Capital Stock of
transferable only on the books of the Corporation by the
holder hereof in person or by Attorney, upon surrender of
this Certificate properly endorsed.
IN WITNESS WHEREOF, the said Corporation has caused this
Certificate to be signed by its duly authorized officers
and so be sealed with the Seal of the Corporation
this ________ day of ________________ A.D.
19_____
Shares _____ Each.
EXHIBIT 99-5A
INVESTMENT ADVISORY AGREEMENT
AGREEMENT made this 1st day of January, 1987, between
ManuLife Series Fund, Inc., a Maryland corporation (the
"Fund"), and Manufacturers Adviser Corporation, a Colorado
corporation (the "Adviser");
WITNESSETH:
WHEREAS, the Fund is engaged in business as a diversified
open-end management investment company and is registered as
such under the Investment Company Act of 1940 (the Investment
Company Act");
AND WHEREAS, the Fund is comprised of four or more
separate portfolios, each of which pursues its investment
objective through separate investment polices;
AND WHEREAS, the Adviser is engaged principally in
rendering investment advisory services and is registered as an
investment adviser under the Investment Advisers Act of 1940
(the "Investment Advisers Act");
AND WHEREAS, the Fund desires to appoint the Adviser to
provide investment advisory, management, and administrative
services to the Fund in the manner and on the terms
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained and other good and valuable
consideration, the parties do hereby agree as follows:
Section 1. Appointment of Adviser.
The Fund appoints the Adviser to act as the investment
<PAGE>
adviser to and manager of the Fund and to manage the
investment and reinvestment of the assets of each of its
portfolios and to administer its affairs subject to the
supervision of the Board of Directors of the Fund, effective
the date first mentioned above and for the period and on the
terms and conditions set forth in this Agreement. The Adviser
accepts such appointment and agrees to render the services and
to assume the obligations set forth in this Agreement. The
Adviser will for all purposes provided in this Agreement be
deemed to be an independent contractor and will have no
authority to act for or represent the Fund in any way or
otherwise be deemed an agent of the Fund, unless otherwise
expressly provided or authorized in writing by the Fund. The
Fund retains the ultimate responsibility and authority for
direction and control of the services provided by the Adviser
pursuant to this Agreement.
Section 2. Duties of Adviser.
(a) Investment Advisory Services.
Subject to the direction and approval of the Board of
Directors of the Fund, the Adviser will manage the investments
of the Fund and determine the composition of the assets of
each of the Fund's portfolios. In acting as investment
adviser to the Fund, the Adviser must regularly provide the
Fund with such investment research, supervision and advice as
the Fund considers necessary for the proper supervision of its
portfolios. The Adviser shall continuously furnish an
investment program and shall determine what securities will be
<PAGE>
purchased, sold or exchanged, and what portion of the assets
of each portfolio will be held in the various securities in
which it may invest and in cash. These duties will be
performed in accordance with all relevant provisions of the
Fund's Articles of Incorporation and By-Laws, the provisions
of the Investment Company Act and resolutions adopted by the
Fund's Board of Directors and with the statements of the
investment objective, policies and restrictions of each
portfolio as set forth in the prospectus of the Fund from time
to time in effect ("Prospectus").
(b) Execution of Transactions.
The Adviser will be responsible for the selection of
brokers and dealers to effect all transactions. The Adviser
will place all necessary orders with brokers, dealers, or
issuers, and will negotiate brokerage commissions, if
applicable. The Adviser is directed at all times to seek to
obtain for the Fund the most favorable net results subject to
such policies or practices as may be determined by the Board
of Directors and set forth in the Prospectus. The Adviser
may, however, pay a higher spread or commission than otherwise
would be necessary for a particular transaction in order to
obtain research services from a broker or dealer if the
Adviser determines that the higher spread or commission is
reasonable in relation to the value of the brokerage and
research services that the broker or dealer provides, viewed
in terms of either the particular transaction or the Adviser's
overall responsibilities with respect to accounts managed by
<PAGE>
the Adviser. The Fund agrees that the Adviser may use for the
benefit of the Adviser's other clients, or make available to
companies affiliated with it for the benefit of their clients,
any such research services that it obtains from brokers or
dealers. Subject to the requirements and the provisions of
the Investment Company Act, the Securities Exchange Act of
1934, and other applicable provisions of law, the Adviser may
use a broker who is an affiliated person of the Adviser (as
that term is defined in the Investment Company Act).
(c) Administrative Services.
The Adviser shall perform certain administrative services
in connection with the management of the Fund and its
portfolios. The administrative services will include:
(i) supervising all aspects of the Fund's
operation, including co-ordinating matters
relating to the custodians of securities
owned by the Fund, shareholders' services,
accountants, attorneys, and other parties
performing services or operational
functions for the Fund;
(ii) providing to the Fund, at the Adviser's
expense, executive and other personnel
required to manage the affairs of the Fund
and to perform all necessary clerical and
administrative functions of the Fund
(except for functions to be performed by
custodians or any other agent retained by
the Fund);
(iii) providing to the Fund, at the Adviser's
expense, office space and office
facilities necessary for the Fund's
operations; and
(iv) acting as the Fund's transfer agent and
dividend disbursing agent.
(d) Records.
The Fund shall own and control all files, documents,
correspondence, papers and other records of every kind and
<PAGE>
description maintained and prepared by the Adviser in
connection with the services provided by the Adviser by reason
of this Agreement. The Adviser shall not disclose or use any
records prepared by reason of this Agreement in any manner
except as expressly authorized therein or directed by the Fund
and shall keep confidential any information obtained by reason
of this Agreement. Upon termination of this Agreement, the
Adviser shall promptly return to the Fund or its designee all
records prepared and maintained by the Adviser by reason of
this Agreement.
Section 3. Allocation of Charges and Expenses.
The Adviser shall pay for maintaining its staff and
personnel. The Adviser shall also provide, at its own
expense, the equipment, office space and facilities, necessary
to perform its obligations under this Agreement. The
investment management fee, brokerage commissions on portfolio
transactions including any other direct costs related to the
acquisition, disposition, lending or borrowing of portfolio
investments), taxes payable by the Fund, interest and any
other costs related to borrowings by the Fund, and any
extraordinary or non-recurring expenses (such as legal claims
and liabilities and litigation costs and any indemnification
related thereto).
<PAGE>
Section 4. Compensation of the Adviser.
As compensation for the services performed, the
facilities furnished and expenses assumed by the Adviser under
this Agreement, the Fund will pay to the Adviser an investment
services fee. The fee will be paid each day on which the net
asset value of the Fund is determined and will be based upon
the value of the aggregate net assets of the portfolios, as
determined on such day and computed in accordance with the
description of the method of determination of net asset value
contained in the Prospectus, at the annual rate of 0.50% of
the average daily value of the aggregate net assets of the
portfolios. The amount of each daily charge for the fee shall
be divided among the portfolios in proportion to their daily
net asset values.
Section 5. Limitation of Liability of the Adviser.
Except for those services provided pursuant to Section
2(c) above, the Adviser will not be liable for any error of
judgment or mistake of law or for any loss suffered by the
Fund in connection with the matters dealt with under this
Agreement. Nothing contained in this Agreement shall be
construed to protect the Adviser against any liability to
which the Adviser shall otherwise be subject by reason of
willful misfeasance, bad faith, or gross negligence in the
performance of its duties to the Fund, reckless disregard of
the Adviser's obligations and duties under this Agreement, or
the violation of any applicable law.
Section 6. Availability of Adviser to Others.
<PAGE>
The Adviser may provide the same or similar services to
others, including any of its affiliates, that it provides
under this Agreement so long as it is capable of doing so
without adversely affecting the service it provides to the
Fund hereunder. When investment opportunities arise that may
be appropriate for more than one account, fund, or company for
which the Adviser serves as investment manager or adviser,
including any of its affiliates, the Adviser will not favor
one over another and may allocate investments among them in an
impartial manner believed to be equitable to each entity
involved, taking into consideration, among other things, each
such entity's then current investment objectives and its cash
and investment positions.
Section 7. Supplemental Arrangements.
To better enable it to fulfill its obligations under any
investment advisory agreement between it and the Fund,
including this Agreement, the Adviser has entered into a
service agreement with ManuLife, to which the Fund is also a
party, under which ManuLife has agreed to furnish certain
personnel and facilities to the Adviser on a cost
reimbursement basis.
Section 8. Conflicts of Interest.
It is understood that directors, officers, agents and
stockholders of the Fund are or may be interested in the
Adviser as directors, officers, stockholders, or otherwise,
that directors, officers, agents and stockholders of the
Adviser are or may be interested in the Fund as directors,
<PAGE>
officers, stockholders or otherwise, that the Adviser may be
interested in the Fund and that the existence of any such dual
interest shall not affect the validity hereof or of any
transactions hereunder except as otherwise provided in the
Articles of Incorporation of the Fund and the Adviser,
respectively, or by specific provision of applicable law.
Section 9. Regulations.
The Adviser shall submit to all regulatory and
administrative bodies having jurisdiction over the services
provided pursuant to this Agreement, present or future, any
information, reports or other material which any such body by
reason of this Agreement may request or require pursuant to
applicable laws and regulations.
Section 10. Duration and Termination of Agreement.
This Agreement shall become effective as of the date
first above written and will continue in effect for a period
more than two years from its effective date only so long as
such continuance is specifically approved at least annually
either by the Board of Directors of the Fund or by the vote of
a majority of the outstanding voting securities of the Fund,
provided that in either event such continuance shall also be
approved by the vote of a majority of the directors of the
Fund who are not interested persons (as defined in the
Investment Company Act) of any party to this Agreement cast in
person at a meeting called for the purpose of voting on such
approval. The required shareholder approval of any
continuance of the Agreement shall be effective with respect
<PAGE>
to any portfolio if a majority of the outstanding voting
securities of the class (as defined in Rule 18f-2(h) adopted
pursuant to the Investment Company Act) of capital stock of
that portfolio vote to approve its continuance,
notwithstanding that its continuance may not have been
approved by a majority of the outstanding voting securities of
the Fund.
If the shareholders of a class of capital stock of any
portfolio fail to approve any continuance of the Agreement,
the Adviser will continue to act as investment adviser with
respect to such portfolio pending the required approval of its
continuance, of a new contract with the Adviser or a different
adviser or other definitive action; provided, that the
compensation received by the Adviser in respect of such
portfolio during such period will be no more than its actual
costs incurred in furnishing investment advisory and
management services to such portfolio or the amount it would
have received under the Agreement in respect of such
portfolio, which is less.
This Agreement may be terminated at any time, without the
payment of any penalty, by the Board of Directors of the Fund
or by the vote of a majority of the outstanding voting
securities of the Fund, with respect to any portfolio by the
vote of a majority of the outstanding voting securities of the
class of capital stock of such portfolio, or by the Adviser,
on sixty days' written notice to the other party. This
Agreement will automatically terminate in the event of its
<PAGE>
assignment (as defined in the Investment Company Act).
Section 11. Amendments to the Agreements.
This Agreement contains the entire understanding and
agreement of the parties. This Agreement may be amended by
the parties only if such amendment is specifically approved by
the vote of a majority of the outstanding voting securities of
the Fund and by the vote of a majority of the directors of the
Fund who are not interested persons of any party to this
Agreement cast in person at a meeting called for the purpose
of voting on such approval. The required shareholder approval
shall be effective with respect to any portfolio if a majority
of the outstanding voting securities of the class of capital
stock of that portfolio vote to approve the amendment,
notwithstanding that the amendment may not have been approved
by a majority of the outstanding voting securities of the
Fund.
Section 12. Headings.
The headings in the sections of this Agreement are
inserted for convenience of reference only and shall not
constitute a part thereof.
Section 13. Severability.
Should any portion of this Agreement for any reason be
held to be void in law or in equity, the Agreement shall be
construed, insofar as is possible, as if such portion had
never been contained therein.
Section 14. Governing Law.
The provisions of this Agreement shall be construed and
<PAGE>
interpreted in accordance with the laws of the State of
Maryland and the applicable provisions of the Investment
Company Act. To the extent that the laws of the State of
Maryland, or any of the provisions in this Agreement, conflict
with applicable provisions of the Investment Company Act, the
latter shall control.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed under seal by their duly
authorized officers as of the date first mentioned above.
ATTEST: MANULIFE SERIES FUND, INC.
/s/ By: /s/
President
ATTEST: MANUFACTURERS ADVISER
CORPORATION
/s/ By: /s/
President
EXHIBIT 99-5AI
AMENDMENT TO
INVESTMENT ADVISORY AGREEMENT
AMENDMENT made this 30th day of September , 1994 to
the Investment Advisory Agreement dated January 1, 1987 (the
"Agreement") between Manulife Series Fund, Inc., a Maryland
corporation (the "Fund"), and Manufacturers Adviser
Corporation, a Colorado corporation (the "Adviser").
In consideration of the mutual covenants contained in the
Agreement as supplemented hereby, the parties hereto agree
that the following sections shall be amended as follows:
1. Section 3, Allocation of Charges and Expenses
Section 3, Allocation of Charges and Expenses, shall be
deemed to be amended as follows:
(a) in the second sentence of the paragraph, deleting
the upper case "T" on the initial word "The" and replacing it
with a lower case "t";
(b) inserting at the beginning of the second sentence
the words "Except with respect to the International Fund and
the Pacific Rim Emerging Markets Fund,..."; and
(c) adding the following paragraph to the end of Section
3:
With respect to the International Fund and the
Pacific Rim Emerging markets Fund the following expenses shall
be borne by the Fund: the investment management fee,
brokerage commissions on portfolio transactions (including any
other direct costs related to the acquisition, disposition,
<PAGE>
lending or borrowing of portfolio investments), taxes payable
by the Fund, interest and any other costs related to
borrowings by the Fund, and any extraordinary or non-recurring
expenses (such as legal claims and liabilities and litigation
costs and any indemnification related thereto). In addition,
any other expenses related to the International and Pacific
Rim Emerging Markets shall be borne by the Fund at the rate of
(i) up to .50% of the average daily value of the aggregate net
assets of the portfolio for the International Fund and (ii) up
to .65% of the average daily value of the aggregate net assets
of the portfolio for the Pacific Rim Emerging Markets Fund.
The expense fee is payable each day on which the net asset
value of the fund is determined and computed in accordance
with the description of the method of determination of net
asset value contained in the Prospectus.
2. Section 4, Compensation of the Adviser.
Section 4, Compensation of the Adviser, shall be deemed
to be amended as follows:
(a) In the first sentence of the paragraph, deleting the
uppercase "A" in the initial word "As" and replacing it
with a lower case "a";
(b) inserting at the beginning of the first sentence the
words "Except with respect to the International Fund and
the Pacific Rim Emerging Markets Fund,...; and
(c) adding the following paragraph to Section 4:
With respect solely to the International Fund and
<PAGE>
the Pacific Rim Emerging Markets Fund, as compensation
for the services performed, the facilities furnished, and
expenses assumed by the Adviser under this Agreement, the
Fund will pay to the Adviser an investment services fee.
The fee will be paid each day on which the net asset
value of the Fund is determined and will be based upon
the value of the aggregate net assets of the portfolios,
as determined on such day and computed in accordance with
the description of the method of determination of net
asset value contained in the Prospectus, at the annual
rate of:
For the International Fund:
(i) .85% of the average daily value of the
aggregate net assets of the portfolio on the first $100
million in assets and (ii) .70% on the assets over $100
million.
For the Pacific Rim Emerging Markets Fund:
(i) .85% of the average daily value of the aggregate
net assets of the portfolio on the first $100 million in
assets and (ii).70% on the assets over $100 million.
This Amendment shall become effective on the later of the
date of its execution and the date of the meeting of the
shareholders of the Fund at which the Amendment is approved by
a vote of the majority of the outstanding voting securities
(as defined in the Investment Company Act) of the Fund. The
required shareholder approval shall be effective with respect
to any portfolio if a majority of the outstanding voting
<PAGE>
securities of the class of capital stock of that portfolio
vote to approve the Amendment, notwithstanding that the
Amendment may not have been approved by a majority of the
outstanding voting securities of the Fund.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed under seal by their duly authorized
officers as of the date first mentioned above.
ATTEST: MANULIFE SERIES FUND, INC.
/s/ /s/
By: Donald A. Guloien
Title: President
ATTEST: MANUFACTURERS ADVISER CORPORATION
/s/ /s/
By: Bruce D. Monus
Title: President
EXHIBIT 99-5AII
FORM OF AMENDMENT TO
INVESTMENT ADVISORY AGREEMENT
AMENDMENT made this ____ day of _____________, 19__ to
the Investment Advisory Agreement dated January 1, 1987, as
amended September 30, 1994, (the "Agreement") between Manulife
Series Fund, Inc., a Maryland corporation (the "Fund"), and
Manufacturers Adviser Corporation, a Colorado corporation (the
"Adviser").
In consideration of the mutual covenants contained in the
Agreement as supplemented hereby, the parties hereto agree
that the following sections shall be amended as follows:
1. SECTION 3, ALLOCATION OF CHARGES AND EXPENSES
Section 3, Allocation of Charges and Expenses, shall be
deemed to be amended as follows:
(a) The beginning of the third sentence of the first
paragraph which currently reads "Except with respect
to the International Fund and the Pacific Rim
Emerging Markets Fund,...", shall be amended to read
"Except with respect to the International Fund, the
Pacific Rim Emerging Markets Fund and the Equity
Index Fund,..."; and
(b) adding the following paragraph to the end of Section
3:
With respect to the Equity Index Fund, the following
expenses shall be borne by the Fund: the investment
management fee, brokerage commissions on portfolio
transactions (including any other direct costs
related to the acquisition, disposition, lending or
borrowing of portfolio investments), taxes payable
by the Fund, interest and any other costs related to
borrowings by the Fund, and any extraordinary or
non-recurring expenses (such as legal claims and
liabilities and litigation costs and any
indemnification related thereto). In addition, any
other expenses related to the Equity Index Fund
shall be borne by the Fund at the rate of (i) up to
.15% of the average daily value of the aggregate net
assets of the portfolio for the Equity Index Fund.
The expense fee is payable each day on which the net
asset value of the fund is determined and computed
in accordance with the description of the method of
determination of net asset value contained in the
Prospectus.
<PAGE>
<PAGE>
2. SECTION 4, COMPENSATION OF THE ADVISER.
Section 4, Compensation of the Adviser, shall be deemed
to be amended as follows:
(a) The beginning of the first sentence of the
paragraph, which currently reads:
"Except with respect to the International Fund and
the Pacific Rim Emerging Markets Fund,..."; shall be
amended to read "Except with respect to the
International Fund, the Pacific Rim Emerging Markets
Fund and the Equity Index Fund,..."; and
(b) adding the following paragraph to Section 4:
With respect solely to the Equity Index Fund, as
compensation for the services performed, the
facilities furnished, and expenses assumed by the
Adviser under this Agreement, the Fund will pay to
the Adviser an investment services fee. The fee
will be paid each day on which the net asset value
of the Fund is determined and will be based upon the
value of the aggregate net assets of the portfolios,
as determined on such day and computed in accordance
with the description of the method of determination
of net asset value contained in the Prospectus, at
the annual rate of .25% of the average daily value
of the aggregate net assets of the portfolio.
This Amendment shall become effective on the later of the
date of its execution and the date of the meeting of the
shareholders of the Fund at which the Amendment is approved by
a vote of the majority of the outstanding voting securities
(as defined in the Investment Company Act) of the Fund. The
required shareholder approval shall be effective with respect
to any portfolio if a majority of the outstanding voting
securities of the class of capital stock of that portfolio
vote to approve the Amendment, notwithstanding that the
Amendment may not have been approved by a majority of the
outstanding voting securities of the Fund.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed under seal by their duly authorized
officers as of the date first mentioned above.
ATTEST: MANULIFE SERIES FUND, INC.
SHERI L. KOCEN Donald A. Guloien
By: Donald A. Guloien
Title: President
ATTEST: MANUFACTURERS ADVISER
CORPORATION
SHERI L. KOCEN Bruce D. Monus
By: Bruce D. Monus
Title: President
EXHIBIT 99-10
Jones & Blouch
1025 THOMAS JEFFERSON STREET, N.W.
WASHINGTON, D.C. 20007
(202) 965-8100
November 30, 1995
The Board of Directors
The Manufacturers Life Insurance
Company of America
500 N. Woodward Avenue
Bloomfield Hills, MI 48304
Dear Sirs:
We hereby consent to the reference to this firm under the
caption "Legal Matters" in the Statement of Additional
Information included in post-effective amendment No. 15 to the
registration statement on Form N-1A, to be filed with the
Securities and Exchange Commission pursuant to the Securities
Act of 1933, File No. 2-85454 (amendment No. 16 to the
registration statement under the Investment Company Act of
1940) by Manulife Series Fund, Inc.
Very truly yours,
Jones & Blouch
Jones & Blouch
EXHIBIT 99-11
Consent of Independent Auditors
We consent to the reference to our firm under the captions
"Condensed Financial Information" and "Experts" and to the use
of our report dated February 6, 1995 accompanying the
financial statements of Manulife Series Fund, Inc. in Post-
Effective Amendment No. 15 to the Registration Statement on
Form N-1A and related Prospectus and Statement of Additional
Information of Manulife Series Fund, Inc.
Ernst & Young LLP
ERNST & YOUNG LLP
November 30, 1995
-------------------
EXHIBIT 99 (13)(c)
, 19
Manulife Series Fund, Inc.
200 Bloor Street East
Toronto, Ontario, Canada
Gentlemen:
The Manufacturers Life Insurance Company of America
("ManAmerica") by authority of its Board of Directors, wishes
to purchase certain shares of the Common Stock of Manulife
Series Fund, Inc., a Maryland corporation as follows:
65,000 shares of Common Stock of the Equity Index Fund
at the price of $10.00 per share.
All such shares are to be allocated to ManAmerica's General
Account and will be purchased as an investment and not with a
view towards resale, distribution or redemption.
Sincerely,
THE MANUFACTURERS LIFE INSURANCE
COMPANY OF AMERICA
By:
----------------------------------
Name: Donald A. Guloien
Its: President
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
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<NAME> BALANCED ASSETS FUND
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<PERIOD-START> Jan-01-1995
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<PAYABLE-FOR-SECURITIES> 1,022,778
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<OTHER-ITEMS-LIABILITIES> 36,884
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<SHARES-COMMON-PRIOR> 5,425,697
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<NET-ASSETS> 90,974,722
<DIVIDEND-INCOME> 366,075
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<NET-INVESTMENT-INCOME> 1,535,526
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<OVERDIST-NET-GAINS-PRIOR> 0
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<NAME> BALANCED ASSETS FUND
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<PAGE>
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<PER-SHARE-GAIN-APPREC> 1.39
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WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> CAPITAL GROWTH BOND FUND
<SERIES> 3
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> June-30-1995
<INVESTMENTS-AT COST> 38,683,496
<INVESTMENTS-AT VALUE> 39,823,449
<RECEIVABLES> 690,878
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1,139,953
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<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,328,662
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<EXPENSES-NET> (93,187)
<NET-INVESTMENT-INCOME> 1,235,475
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<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 93,000
<PAGE>
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<PER-SHARE-NAV-BEGIN> 10.10
<PER-SHARE-NII> 0.35
<PER-SHARE-GAIN-APPREC> 0.91
<PER-SHARE-DIVIDEND> 0
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<PER-SHARE-NAV-END> 11.36
<EXPENSE-RATIO> 0.50
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> MONEY MARKET FUND
<SERIES> 4
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> June-30-1995
<INVESTMENTS-AT COST> 33,334,798
<INVESTMENTS-AT VALUE> 33,334,798
<RECEIVABLES> 0
<ASSETS-OTHER> 7,869
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<NET-INVESTMENT-INCOME> 770,824
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<NUMBER-OF-SHARES-SOLD> 1,645,436
<NUMBER-OF-SHARES-REDEEMED> (863,230)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 8,945,065
<ACCUMULATED-NII-PRIOR> 1,404
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 68,000
<PAGE>
<AVERAGE-NET-ASSETS> 27,330,000
<PER-SHARE-NAV-BEGIN> 10.26
<PER-SHARE-NII> 0.29
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
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<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> COMMON STOCK
<SERIES> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> June-30-1995
<INVESTMENTS-AT COST> 42,767,140
<INVESTMENTS-AT VALUE> 46,951,720
<RECEIVABLES> 504,488
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<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 46,065,348
<DIVIDEND-INCOME> 322,188
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<NET-INVESTMENT-INCOME> 363,906
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<SHARES-REINVESTED> 0
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<ACCUMULATED-NII-PRIOR> 0
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<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 99,000
<PAGE>
<AVERAGE-NET-ASSETS> 40,985,000
<PER-SHARE-NAV-BEGIN> 13.36
<PER-SHARE-NII> 0.12
<PER-SHARE-GAIN-APPREC> 1.44
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.92
<EXPENSE-RATIO> 0.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> REAL ESTATE FUND
<SERIES> 6
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
<PERIOD-END> June-30-1995
<INVESTMENTS-AT COST> 46,355,886
<INVESTMENTS-AT VALUE> 46,617,425
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<ASSETS-OTHER> 27,477
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 46,900,871
<PAYABLE-FOR-SECURITIES> 268,750
<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL LIABILITIES> 287,820
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 45,138,086
<SHARES-COMMON-STOCK> 3,300,107
<SHARES-COMMON-PRIOR> 3,190,140
<ACCUMULATED-NII-CURRENT> 1,945,181
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<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 261,539
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<DIVIDEND-INCOME> 1,054,176
<INTEREST-INCOME> 146,220
<OTHER-INCOME> 0
<EXPENSES-NET> (108,184)
<NET-INVESTMENT-INCOME> 1,092,212
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<APPREC-INCREASE-CURRENT> 1,837,620
<NET-CHANGE-FROM-OPS> 2,600,498
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 414,045
<NUMBER-OF-SHARES-REDEEMED> (304,078)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 4,041,908
<ACCUMULATED-NII-PRIOR> 852,969
<ACCUMULATED-GAINS-PRIOR> (402,421)
<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
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<GROSS-EXPENSE> 108,000
<PAGE>
<AVERAGE-NET-ASSETS> 43,770,000
<PER-SHARE-NAV-BEGIN> 13.34
<PER-SHARE-NII> 0.32
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<PER-SHARE-DIVIDEND> 0
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<PER-SHARE-NAV-END> 14.12
<EXPENSE-RATIO> 0.50
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> INTERNATIONAL FUND
<SERIES> 7
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
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<INVESTMENTS-AT COST> 15,079,713
<INVESTMENTS-AT VALUE> 15,158,981
<RECEIVABLES> 579,374
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<TOTAL-ASSETS> 15,765,891
<PAYABLE-FOR-SECURITIES> 601,730
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<OTHER-ITEMS-LIABILITIES> 24,900
<TOTAL LIABILITIES> 626,630
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<PAID-IN-CAPITAL-COMMON> 14,897,281
<SHARES-COMMON-STOCK> 1,497,235
<SHARES-COMMON-PRIOR> 1,149,953
<ACCUMULATED-NII-CURRENT> 124,335
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 38,055
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 79,590
<NET-ASSETS> 15,139,261
<DIVIDEND-INCOME> 142,346
<INTEREST-INCOME> 66,037
<OTHER-INCOME> 0
<EXPENSES-NET> (88,841)
<NET-INVESTMENT-INCOME> 119,542
<REALIZED-GAINS-CURRENT> 44,928
<APPREC-INCREASE-CURRENT> 269,787
<NET-CHANGE-FROM-OPS> 434,257
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 364,195
<NUMBER-OF-SHARES-REDEEMED> (16,913)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 3,848,854
<ACCUMULATED-NII-PRIOR> 4,793
<ACCUMULATED-GAINS-PRIOR> (6,873)
<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 56,000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 89,000
<PAGE>
<AVERAGE-NET-ASSETS> 13,563,000
<PER-SHARE-NAV-BEGIN> 9.82
<PER-SHARE-NII> 0.08
<PER-SHARE-GAIN-APPREC> 0.21
<PER-SHARE-DIVIDEND> 0
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<PER-SHARE-NAV-END> 10.11
<EXPENSE-RATIO> 1.35
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000111111
<NAME> PACIFIC RIM EMERGING MARKETS FUND
<SERIES> 8
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> Six Months
<FISCAL-YEAR-END> Dec-31-1995
<PERIOD-START> Jan-01-1995
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<INVESTMENTS-AT COST> 10,638,518
<INVESTMENTS-AT VALUE> 10,391,493
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<PAYABLE-FOR-SECURITIES> 614,473
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<OTHER-ITEMS-LIABILITIES> 16,743
<TOTAL LIABILITIES> 631,216
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 10,373,175
<SHARES-COMMON-STOCK> 1,058,954
<SHARES-COMMON-PRIOR> 813,995
<ACCUMULATED-NII-CURRENT> 72,431
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<ACCUMULATED-NET-GAINS> 61,164
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (247,863)
<NET-ASSETS> 10,258,907
<DIVIDEND-INCOME> 33,124
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<OTHER-INCOME> 0
<EXPENSES-NET> (65,673)
<NET-INVESTMENT-INCOME> 66,992
<REALIZED-GAINS-CURRENT> 60,653
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<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 273,082
<NUMBER-OF-SHARES-REDEEMED> (28,123)
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 2,601,690
<ACCUMULATED-NII-PRIOR> 5,439
<ACCUMULATED-GAINS-PRIOR> 511
<OVERDISTRIB NII- PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 37,000
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 66,000
<PAGE>
<AVERAGE-NET-ASSETS> 9,035,000
<PER-SHARE-NAV-BEGIN> 9.41
<PER-SHARE-NII> 0.06
<PER-SHARE-GAIN-APPREC> 0.22
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 9.69
<EXPENSE-RATIO> 1.50
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
