Dear Investor:
The U. S. stock market again rewarded investors with excellent returns in 1996.
However, not all investors were treated equally. The best returns were provided
by only a few stocks.
This extreme "narrowness" of 1996's stock market is illustrated by the wide
range of 1996 total returns (i.e., price change plus reinvested dividends) on
some of the most widely known market indexes as compiled by Standard & Poor's
and Frank Russell Company.
S&P 500 Index (Large Companies, Capitalization Weighted) 22.9%
Average stock in the S&P 500 (Large Companies, Equal Weighted) 19.5%
S&P 400 Index (Mid-Sized Companies) 19.3%
Russell 2000 Index (Small-Sized Companies) 16.49%
This narrowness of top performance is further highlighted by the fact that
nearly half of the nearly 23% return of the Standard & Poor's 500 in 1996 came
from only twenty, large-capitalization stocks!
In a market like this in which most stocks underperform the big-company indexes,
most investors also underperform the index averages. This is illustrated in
these "peer group" return numbers from Lipper Analytical Services for variable
insurance product stock funds in 1996 as compared to the above indexes:
Lipper Capital Appreciation Funds 17.1%
Lipper Growth & Income Funds 21.1%
We are pleased to report that your Ultra Series Stock Funds provided better
returns in 1996 than these peer group averages, better than most market indexes,
and very near the narrow big-company indexes:
Ultra Series Capital Appreciation Stock Fund 21.4%
Ultra Series Growth & Income Stock Fund 22.0%
As we enter 1997, the financial press and many of the investment community's
higher profile pundits are expressing caution about the stock market's "lofty"
valuation levels. Without question, the recent environment of steady, broad
growth in corporate earnings, benign inflation and moderate interest rate levels
has been ideal for growing stock values, especially with so many eager and able
buyers provided by the "baby boom" generation in the U. S. and the weak foreign
markets and our strong dollar internationally.
This extremely favorable mix of factors will almost certainly dissipate to some
extent in the years ahead. As such, prudent investors should be especially
careful to employ all the proven portfolio management techniques available, like
steady accumulation of investment assets using dollar cost averaging throughout
market cycles, maintaining diversification, insistence on reasonable relative
valuation levels on the individual securities owned (directly or in funds), and
regular portfolio rebalancing to trim back areas that have grown beyond their
intended percentage allocation. Such techniques are the only ones proven to be
effective in achieving long term investment success. Attempting to "time" the
market by moving substantial amounts of investment dollars among stocks, bonds
and cash is not among the proven techniques of successful money management, even
at times when the market appears "high" and is "certain" to reach a peak soon.
Such times are only apparent in hindsight, as are the "certain lows" when equal
prescience is necessary to get back into the game. The ride is often rough, but
the destination is rarely if ever reached by those standing beside the road. We
will maintain our exposure to carefully selected, reasonably valued stocks where
ever called for in the Ultra Series Funds, and we expect this approach to
continue to serve long term investors very well.
<PAGE>
The U. S. bond market in 1996 provided much more modest returns than in the last
couple of years as interest rates rose modestly throughout the year. This is
illustrated by the returns of following popular U. S. bond market indexes
compiled by Lehman Bros.
Lehman Government/Corporate Bond Index 2.9%
Lehman Government/Corporate Intermediate Bond Index 4.1%
This uninspiring performance reflects the general level of interest rates which
started the year near 5.5%, then rose to nearly 7% before trailing off to the
mid-6% area by year end. This produced modest price declines that offset 1% to
1.5% of the 5.5% to 6.5% interest return, producing the index total returns
shown above.
Bond funds in general suffered along with these bond market indexes, as
indicated by these "peer group" return numbers from Lipper Analytical Services
for variable insurance product bond funds in 1996:
Lipper Corporate Bond Funds - A Rated 2.6%
Lipper Intermediate Investment Grade Bond Funds 3.2%
Your Ultra Series Bond Fund's 1996 return of 2.9% was in line with these market
indexes and peer group averages, and reflects the high quality, intermediate
maturity focus of this fund. This investment approach is particularly effective
at providing price stability to supplement a portfolio of various more volatile
and usually higher returning stock funds. In the always uncertain outlook for
interest rates in 1997 and beyond, a conservative bond fund like this may be
particularly valuable and comes with little if any return sacrifice relative to
more volatile bond funds.
Personal portfolio construction techniques can vary considerably, but it may be
helpful to view the Ultra Series stock funds as the "sails" of your investment
portfolio "vessel," and the bond and money market funds as the "ballast."
Together with your financial advisor, you can select a combination of funds to
create the investment vessel that best reflects your "stomach for action" (i.
e., your specific financial and emotional tolerance for investment risk) and the
desired speed with which you choose to pursue your asset accumulation program
(i. e., your long term relative total return targets). The Ultra Series Balanced
Fund, which had another year of double-digit returns in 1996 at 10.8%, provides
one such mix, with approximately 45% of its assets in stocks, 45% in bonds and
10% in money market investments. This mix is held fairly constant over time
through regular rebalancing by the portfolio management team, but will vary
somewhat in response to changes in the availability of attractively valued
stocks. We foresee no significant near term change in this mix. This portfolio
may be at the conservative end of the spectrum for many investors, in which case
it can be supplemented with additional stock fund exposure. In opposite
situations, additional bond or money market exposure can be added within the
individual investor's account.
The following discussions of each fund describe the management tactics and
strategies that produced the Ultra Series Funds' results in 1996's very diverse
markets. Key to these results was the foundational investment philosophy with
which each of the Ultra Series Funds is managed. This philosophy is somewhat
unique in today's world of narrowly focused, specialty funds which concentrate
their investments in only one or a very few industries, market sectors, types of
companies or types of securities.
Such narrowness of exposure does have one "positive" result. A fund company
offering a couple dozen different, narrowly focused funds has a strong chance of
always having one or two of its funds on the most recent quarter's "top
performer" lists. These "winning" funds change continuously, of course, so this
approach has the effect of requiring the investor to assemble an effectively
diversified portfolio appropriate to the investor's specific needs. And it
strongly implies that the route to investment success lies in deftly dancing
among such narrow, specialty funds quarter-to-quarter and year-to-year to be in
the "right" ones at the "right" times.
<PAGE>
Most investors know better; those who don't soon learn. The only winner in such
games is "the house," meaning either or both the fund company and/or its
representative. The Ultra Series Funds are not designed to appear on short term
"top performer" lists, or to create undue investor excitement, or to force high
investment turnover. They are designed to deliver very good long term investment
result to diligent investors, safely, consistently and honestly. We expect to
continue to do so through the rest of this century and beyond, whether or not
the near term market environment is more challenging than we have seen in the
last few very rewarding years.
Respectfully,
/s/ Lawrence R. Halverson
Lawrence R. Halverson, CFA
Senior Vice President
<PAGE>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
At this place, the shareholder report shows a graphic representation of how the
Capital Appreciation Stock Fund compared to several indexes. $10,000 invested on
the inception date of January 3, 1994 would have the following value as of
December 31, 1996.
Capital Appreciation Stock Fund*..............................$16,741
S&P 500 Stock Index...........................................$17,128
Lipper Average**..............................................$15,283
Consumer Price Index..........................................$10,865
The scale on this chart is different from the scale on the other charts in this
report because the fund's inception date is January 3, 1994.
- -------------------------------------------------------------------------
Average Annual Total Return Through December 31, 1996
- -------------------------------------------------------------------------
- ---------------------------------- ---------- ---------- ----------------
One Five Since Inception
Year Years of Fund
- ---------------------------------- ---------- ---------- ----------------
- ---------------------------------- ---------- ---------- ----------------
Capital Appreciation Stock 21.44% N/A 18.74%
Fund*** 22.94% N/A 19.65%
S&P 500 Stock Index 18.13% N/A 16.37%
Lipper Average** 3.31% N/A 2.95%
Consumer Price Index
- ---------------------------------- ---------- ---------- ----------------
TEN LARGEST HOLDINGS (% of Portfolio)
EMC Corp................... 4.2% Glaxo Wellcome - ADR.... 3.0%
Airtouch Communications, Inc. 3.8% Mutual Risk Management Ltd. 3.0%
Wang Laboratories, Inc..... 3.7% Aetna Life & Casualty Co. 2.9%
U.S. West Media Group...... 3.6% Telefonos deMexico SP
Owens Illinois, Inc........ 3.3% ADR - CI L...........2.8%
WMX Technologies, Inc... 2.7%
At this place, the shareholder report contains a pie chart showing a portfolio
mix of 4.1% in short-term investments and 95.9% in common stocks.
* Capital Appreciation Stock Fund returns on the graph are from inception,
January 3, 1994. Average Annual Total Returns are for the most recent 1, 5,
and 10 years ending December 31, 1996.
**Lipper Performance Summary Average for Capital Appreciation Stock Funds
represents the average annual total return of all the underlying Capital
Appreciation Stock Funds in Lipper Analytical Services Variable Insurance
Products Performance Analysis Service.
***.These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate
account level because charges made at the separate account level have not
been subtracted. Capital Appreciation Stock Fund expenses, after
reimbursement, have been .65% annually, that is, approximately $65 for
$10,000 invested during the entire year. More detail on fund level charges
is shown in the Financial Highlights on page 38.
Figures for more than one year reflect a steady compounded rate. Actual returns
fluctuated year by year. Because principal value and investment return
fluctuate, there may be a gain or loss on withdrawal. Past performance is not
predictive of future results. This material must be preceded or accompanied by a
current prospectus. Current prospectuses are mailed to existing policyholders.
<PAGE>
Management's Discussion of 1996 Performance
Capital Appreciation Stock Fund
Investment Objective: Seeks a high level of long-term growth of capital by
investing in common stocks, including those of smaller companies and companies
undergoing significant change.
Management's Discussion: The U.S. stock market turned in another strong year of
performance, led by the large capitalization "blue chip" stocks. The Capital
Appreciation Stock Fund's investment approach of staying invested in reasonably
valued companies across the small, middle and large capitalization segments of
the equity market caused the Fund's return to lag the more widely cited "big
cap" market indexes. The Fund did, however, outperform the middle and small
capitalization indexes and substantially outperformed the average of funds with
the same investment objective:
USF Capital Appreciation Stock Fund 21.4%
Russell 2000 Index (Small capitalization stocks) 16.5%
Standard & Poor's 400 Index (Middle capitalization stocks) 19.3%
Russell 1000 Index (Large capitalization stocks) 22.1%
Standard & Poor's 500 Index (Large capitalization stocks) 22.9%
Lipper Average of Capital Appreciation Funds 17.1%
The Fund's results benefited from strong performance in the technology sector,
which was our most heavily weighted sector during 1996. Technology holdings
averaged 15.8% of Fund equities during the year compared to an 11.2% weight in
the S&P 500. In addition, the Fund's technology holdings appreciated by
approximately 60.7% during the year, as compared to a return of 42.5% for the
S&P 500's technology sector. Another strong contributor to the Fund's results
relative to the S&P 500 was the performance of its energy holdings. The Fund's
energy sector appreciated by approximately 36.9% during the year versus a 25.6%
return for the S&P 500's energy sector. The Fund's weakest performing sectors
during 1996 were the capital goods and consumer cyclical sectors.
The Capital Appreciation Stock Fund enters 1997 with overweighted technology,
health care and consumer staples sectors. The basic materials, capital goods and
utilities sectors are presently underweighted relative to the S&P 500, and the
remaining sector groups carry approximately a market weight. While our sector
weights often differ from those of the S&P 500, these weightings reflect the
types of stocks we are finding that appear most attractive; we do not attempt to
make general judgments about the relative prospects of various broad economic
sectors. We do, however, ensure that our portfolios remain well diversified
across economic sectors.
The recent performance of financial assets like those in the Fund has been far
above the long-term averages. One should not expect returns of this magnitude to
persist indefinitely. Nor, however, should investors abandon long-term asset
accumulation programs in expectation of a market setback. We see no reason to
expect a negative change in the long-term performance of stocks and bonds and,
therefore, see more risk to the long-term investor in "sitting on the sidelines"
than in "remaining in the game" by accumulating a diversified portfolio of
quality, reasonably priced securities like those we seek to provide in the
Capital Appreciation Stock Fund.
Annette E. Hellmer, CFA Lawrence R. Halverson, CFA
Investment Officer Senior Vice President
CIMCO Inc. CIMCO Inc.
<PAGE>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
At this place, the shareholder report shows a graphic representation of how the
Growth and Income Stock Fund compared to several indexes. $10,000 invested on
the inception date of January 3, 1985 would have the following value as of
December 31, 1996.
Growth and Income Stock Fund* $50,729
S&P 500 Stock Index $64,578
Lipper Average** $53,541
Consumer Price Index $15,041
- -----------------------------------------------------------------------
Average Annual Total Return Through December 31, 1996
- -----------------------------------------------------------------------
- -------------------------------- ------------ ------------ ------------
One Five Ten
Year Years Years
- -------------------------------- ------------ ------------ ------------
- -------------------------------- ------------ ------------ ------------
Growth and Income Stock Fund*** 22.02% 14.84% 13.72%
S&P 500 Stock Index 22.94% 15.20% 15.28%
Lipper Average** 19.60% 16.02% 15.34%
Consumer Price Index 3.31% 2.90% 3.71%
- -------------------------------- ------------ ------------ ------------
TEN LARGEST HOLDINGS (% of Portfolio)
International Business ......... EMC Corp................ 3.3%
....Machines Corp.......... 4.6% Bristol-Myers Squibb Co. 3.1%
Glaxo Wellcome - ADR....... 4.0% U.S. West Media Group... 3.0%
WMX Technologies, Inc...... 3.7% Allstate Corporation.... 2.7%
Columbia/HCA Healthcare Corp.. 3.5% Nabisco Holdings
Aetna Life & Casualty Co... 3.4% Corp - Class A...... 2.5%
At this place, the shareholder report contains a pie chart showing a portfolio
mix of 5.1% in short-term investments and 94.9% in common stocks.
* Growth and Income Stock Fund returns on the graph are from inception,
January 3, 1985. Average Annual Total Returns are for the most recent 1, 5,
and 10 years ending December 31, 1996.
**The Lipper Performance Summary Average for Growth and Income Stock Funds
represents the average annual total return of all the underlying Growth and
Income Stock Funds in Lipper Analytical Services Variable Insurance Products
Performance Analysis Service.
*** These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate
account level because charges made at the separate account level have not
been subtracted. Growth and Income Stock Fund expenses, after reimbursement,
have been .65% annually, that is, approximately $65 for $10,000 invested
during the entire year. More detail on fund level charges is shown in the
Financial Highlights on page 39.
Figures for more than one year reflect a steady compounded rate. Actual returns
fluctuated year by year. Because principal value and investment return
fluctuate, there may be a gain or loss on withdrawal. Past performance is not
predictive of future results. This material must be preceded or accompanied by a
current prospectus. Current prospectuses are mailed to existing policyholders.
<PAGE>
Management's Discussion of 1996 Performance
Growth and Income Stock Fund
Investment Objective: Seeks long-term growth of capital, with income as a
secondary consideration, by investing primarily in common stocks of companies
with financial and market strengths and long-term records of performance.
Management's Discussion: The U.S. stock market turned in another strong year of
performance, led by the large capitalization "blue chip" stocks. The Growth and
Income Stock Fund's investment approach of staying invested in reasonably valued
stocks of generally larger companies in various economic sectors resulted in
Fund performance that was generally in line with the more widely cited "big cap"
market indexes. The Fund did, however, outperform the average of funds with the
same investment objective:
USF Growth and Income Stock Fund 22.0%
Russell 2000 Index (Small capitalization stocks) 16.5%
Standard & Poor's 400 Index (Middle capitalization stocks) 19.3%
Russell 1000 Index (Large capitalization stocks) 22.1%
Standard & Poor's 500 Index (Large capitalization stocks) 22.9%
Lipper Average of Growth and Income Funds 21.1%
The Fund's results benefited from strong performance in the technology sector.
The Fund's technology holdings appreciated by approximately 68.3% during the
year, as compared to a return of 42.5% for the S&P 500's technology sector.
Another strong contributor to the Fund's results relative to the S&P 500 was the
performance of its health care holdings. The Fund's health care sector
appreciated by approximately 27.5% during the year versus a 21.3% return for the
S&P 500's health care sector. The Fund's weakest performing sectors during 1996
were the capital goods and consumer cyclical sectors.
The Growth and Income Stock Fund enters 1997 with overweighted technology,
health care and consumer staples sectors. The finance, capital goods and basic
materials sectors are presently underweighted relative to the S&P 500, and the
remaining sector groups carry approximately a market weight. While our sector
weights often differ from those of the S&P 500, these weightings reflect the
types of stocks we are finding that appear most attractive; we do not attempt to
make general judgments about the relative prospects of various broad economic
sectors. We do, however, ensure that our portfolios remain well diversified
across economic sectors.
The recent performance of financial assets like those in the Fund has been far
above the long-term averages. One should not expect returns of this magnitude to
persist indefinitely. Nor, however, should investors abandon long-term asset
accumulation programs in expectation of a market setback. We see no reason to
expect a negative change in the long-term performance of stocks and bonds and,
therefore, see more risk to the long-term investor in "sitting on the sidelines"
than in "remaining in the game" by accumulating a diversified portfolio of
quality, reasonably priced securities like those we seek to provide in the
Growth and Income Stock Fund.
Annette E. Hellmer, CFA Lawrence R. Halverson, CFA
Investment Officer Senior Vice President
CIMCO Inc. CIMCO Inc.
<PAGE>
BALANCED FUND OF ULTRA SERIES FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
At this place, the shareholder report shows a graphic representation of how the
Balanced Fund compared to several indexes. $10,000 invested on the inception
date of January 3, 1985 would have the following value as of December 31, 1996.
Balanced Fund* $36,894
Synthetic Index** $40,438
Lipper Average*** $37,570
Consumer Price Index $15,041
- ------------------------------------------------------------------------
Average Annual Total Return Through December 31, 1996
- ------------------------------------------------------------------------
- ------------------------------- ------------ ------------- -------------
One Five Ten
Year Years Years
- ------------------------------- ------------ ------------- -------------
- ------------------------------- ------------ ------------- -------------
Balanced Fund**** 10.79% 9.74% 10.46%
Synthetic Index 12.73% 10.11% 10.89%
Lipper Average*** 12.82% 10.84% 11.66%
Consumer Price Index 3.31% 2.90% 3.71%
- ------------------------------- ------------ ------------- -------------
At this place, the shareholder report contains a pie chart showing a portfolio
mix of 10.3% in short-term investments, 15.1% in government and agency bonds,
29.4% in corporate bonds, and 45.2% in common stocks.
* Balanced Fund returns on the graph are from inception, January 3, 1985.
Average Annual Total Returns are for the most recent 1, 5, and 10 years
ending December 31, 1996.
**The Synthetic Index represents the average annual total returns of a
portfolio which was annually readjusted to 45% Standard and Poor's 500, 40%
Lehman Intermediate Government/Corporate Index, and 15% 90-Day Treasury
Bills.
***The Lipper Performance Summary Average for Balanced Funds represents the
average annual total return of all the underlying Balanced Funds in Lipper
Analytical Services Variable Insurance Products Performance Analysis
Service.
****These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate
account level because charges made at the separate account level have not
been subtracted. Balanced Fund expenses, after reimbursement, have been
.65% annually, that is, approximately $65 for $10,000 invested during the
entire year. More detail on fund level charges is shown in the Financial
Highlights on page 40.
Figures for more than one year reflect a steady compounded rate. Actual returns
fluctuated year by year. Because principal value and investment return
fluctuate, there may be a gain or loss on withdrawal. Past performance is not
predictive of future results. This material must be preceded or accompanied by a
current prospectus. Current prospectuses are mailed to existing policyholders.
<PAGE>
Management's Discussion of 1996 Performance
Balanced Fund
Investment Objective: Seeks a high total return through the combination of
income and capital growth by investing in common stocks of the type owned in the
Growth and Income and Capital Appreciation Stock Funds, bonds of the type owned
in the Bond Fund and money market instruments of the type owned in the Money
Market Fund.
Management's Discussion: The U. S. stock market turned in another very good year
in 1996, but erratically rising interest rate levels throughout the year kept
bond returns to modest levels. The Balanced Fund's conservative investment
approach of staying invested in a diversified portfolio of reasonably valued
stocks, bonds and money market instruments allowed it to advance nicely in 1996,
but at a slightly lower rate than common market indexes and the average of
similar funds:
USF Balanced Fund 10.8%
Synthetic Index* 12.4%
Lipper Average of Balanced Funds 12.6%
* 45% Standard & Poor's 500, 40% Lehman Intermediate Government/Corporate Index
and 15% 90-day U. S. Treasury bills.
The key operating factors causing a difference between the Balanced Fund's
return and that of the synthetic index were Fund expenses, which amounted to
.65% of Fund assets in 1996, and transaction costs. Market indexes are not
actual investment funds and do not bear either expenses or transaction costs.
In addition, although the indexes used in the synthetic index better represent
the types of securities owned in the Balanced Fund than any other single stock
and bond indexes, the Balanced Fund generally invests in some stocks of smaller
capitalization companies than those represented in the Standard & Poor's 500,
and it invests in some bonds of longer duration than those represented in the
Lehman Intermediate Government/Corporate Index. These differences typically
provide higher returns to the Fund, but that was not the case in 1996's
historically unique market environment. Management's discussions of performance
of the Bond, Growth and Income Stock and Capital Appreciation Stock Funds
provide descriptions of various portfolio management activities which were also
employed in the Balanced Fund, leading to positive and negative variances in
Fund performance relative to the indexes.
The difference between the Balanced Fund's 1996 performance and that of the
average balanced fund in the Lipper universe was primarily attributable to the
long-standing difference in the mix of stocks, bonds and money market
investments. The average balanced fund has a greater proportion of its assets
invested in stocks and less in bonds and money markets than does the Ultra
Series Balanced Fund. This reflects the more aggressive management style of the
average fund, or the more conservative structure of the Ultra Series Balanced
Fund. This difference has resulted in somewhat lower total returns for the
Balanced Fund, but it also very favorably impacts the Balanced Fund's stability
of returns, a common measure of investment risk. According to Morningstar, the
Balanced Fund's historic risk level is less than 60% of that of the average
balanced fund. This substantial reduction in risk makes the Balanced Fund an
attractive investment for conservative investors. More risk tolerant Balanced
Fund investors may direct a portion of their investments to one or more of the
stock funds, providing more stability and higher returns for the overall account
than might be obtained from the average balanced fund.
In spite of the modest returns provided in the bond markets, 1996 was another
year of above average overall investment market returns. One should not expect
returns of this magnitude to persist indefinitely. Nor, however, should
investors abandon long-term asset accumulation programs in expectation of a
market setback. We see no reason to expect a negative change in the long-term
performance of stocks and bonds and, therefore, see more risk to the long-term
investor in "sitting on the sidelines" than in "remaining in the game" by
accumulating a diversified portfolio of quality, reasonably priced securities
like those we seek to provide in the Balanced Fund.
Lawrence R. Halverson, CFA Annette E. Hellmer, CFA Joseph L. Gogola, CFA
Senior Vice President Investment Officer Senior Investment Officer
CIMCO Inc. CIMCO Inc. CIMCO Inc.
<PAGE>
BOND FUND OF ULTRA SERIES FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
At this place, the shareholder report shows a graphic representation of how the
Bond Fund compared to several indexes. $10,000 invested on the inception date of
January 3, 1985 would have the following values as of December 31, 1996.
Bond Fund* $27,312
Lehman Brothers Intermediate
Government/Corporate Bond Index $28,603
Lipper Average** $24,512
Consumer Price Index $15,041
- --------------------------------------------------------------------------
Average Annual Total Return Through December 31, 1996
- --------------------------------------------------------------------------
- -------------------------------- ------------- ------------- -------------
One Five Ten
Year Years Years
- -------------------------------- ------------- ------------- -------------
- -------------------------------- ------------- ------------- -------------
Bond Fund*** 2.86% 6.11% 7.51%
Lehman Brothers Intermediate
Govt./Corporate Bond Index 4.06% 6.53% 7.91%
Lipper Average** 1.77% 6.69% 7.92%
Consumer Price Index 3.31% 2.90% 3.71%
- -------------------------------- ------------- ------------- -------------
At this place, the shareholder report contains a pie chart showing a portfolio
mix of 3.1% short-term investments, 26.4% in government and agency bonds, and
70.5% in corporate bonds.
* Bond Fund returns on the graph are from inception, January 3, 1985.
Average Annual Total Returns are for the most recent 1, 5, and 10 years
ending December 31, 1996.
**The Lipper Performance Summary average for Short/Intermediate Investment
Grade Funds represents the average annual total return of all the underlying
Short/Intermediate Investment Grade Funds in Lipper Analytical Services
Variable Insurance Products Performance Analysis Service.
*** These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate
account level because charges made at the separate account level have not
been subtracted. Bond Fund expenses, after reimbursement, have been .65%
annually, that is, approximately $65 for $10,000 invested during the entire
year. More detail on fund level charges is shown in the Financial Highlights
on page 41.
Figures for more than one year reflect a steady compounded rate. Actual returns
fluctuated year by year. Because principal value and investment return
fluctuate, there may be a gain or loss on withdrawal. Past performance is not
predictive of future results. This material must be preceded or accompanied by a
current prospectus. Current prospectuses are mailed to existing policyholders.
<PAGE>
Management's Discussion of 1996 Performance
Bond Fund
Investment Objective: Seeks a high level of current income, consistent with the
prudent limitation of investment risk, through investment in a diversified
portfolio of fixed income securities with maturities of up to 30 years. It
emphasizes intermediate-term securities.
Management's Discussion: The bond market provided much lower returns to
investors in 1996 than the exceptional returns of 1995. This reflected the
year-long, erratic rise in interest rate levels, which had the effect of
lowering the market prices of existing bonds. For example, the long U.S.
Treasury bond started the year at a yield of 5.95% and closed year at 6.64%,
producing an approximately 10% decline in the value of the bond. Adding the
interest income to this loss of principal value produced approximately a -3.5%
rate of return (i.e., a small net loss) for the year. The Bond Fund's
conservative investment approach of emphasizing intermediate maturity bonds
allowed the Fund to avoid the risk inherent in long term bonds, providing
investors with a modest positive total return:
USF Bond Fund 2.9%
Lehman Brothers Government/Corporate Index 2.9%
Lehman Brothers Intermediate Government/Corporate Bond Index 4.0%
Lipper Average of Bond Funds 3.2%
The key factors causing a difference between the Bond Fund's return and that of
the indices were Fund expenses, which amounted to .65% of Fund assets, and
transaction costs. Market indices are not actual investment funds and do not
incur expenses or transaction costs. Without operating expenses and transaction
costs, the Fund's return would have exceeded the Lehman Government/Corporate
Bond Index.
In the rising interest rate environment of 1996, the Fund's performance relative
to the Lehman Intermediate Government/Corporate index was negatively affected by
its slightly longer duration (4.9 versus 3.3). Positively impacting performance
was the greater use of higher return corporate bonds than the index. The Fund
also increased its holdings of mortgage-backed securities, a stabilizing
influence on return in 1996.
The performance of the 1996 intermediate term investment grade bond market was
modestly below the long-term average return of this financial asset class. We
see no reason why the future performance of the broad bond market will not be in
line with the long-term average return. A greater risk to the investor's future
performance is "sitting on the sidelines" or following an undiversified
investment program, rather than continuing to accumulate a diversified portfolio
of quality and value-priced securities including those of the type held in the
Bond Fund.
Joseph L. Gogola, CFA Lawrence R. Halverson, CFA
Senior Investment Officer Senior Vice President
CIMCO Inc. CIMCO Inc.
<PAGE>
TREASURY 2000 FUND OF ULTRA SERIES FUND
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
At this place, the shareholder report shows a graphic representation of how the
Treasury 2000 Fund compared to several indexes. $10,000 invested on the
inception date of July 28, 1988 would have the following value as of December
31, 1996.
Treasury 2000 Fund*...........................................$23,876
Lipper Average**..............................................$24,075
Lehman Brothers Intermediate Treasury Bond Index..............$20,204
Consumer Price Index..........................................$14,058
--------------------------------------------------------------------------
Average Annual Total Return Through December 31, 1996
--------------------------------------------------------------------------
---------------------------------- ---------- ----------- ----------------
One Five Since
Year Years Inception of
Fund
---------------------------------- ---------- -----------
---------------------------------- ---------- ----------- ----------------
Treasury 2000 Fund*** 2.10% 7.42% 10.78%
Lipper Average** 1.25% 8.45% 8.85%
Lehman Brothers Intermediate
Treasury 3.86% 6.20% 8.24%
Bond Index 3.31% 2.90% 3.56%
Consumer Price Index
---------------------------------- ---------- ----------- ----------------
* Treasury 2000 Fund returns on the graph are from inception, July 28, 1988.
Average Annual Total Returns are for the most recent 1, 5, and 10 years
ending December 31, 1996.
**The Lipper Performance Summary Average for Target Maturity Funds represents
the average annual total return of all the underlying Target Maturity Funds
in Lipper Analytical Services Variable Insurance Products Performance
Analysis Service. The Lipper Performance Summary Average for Target Maturity
Funds covers the period from January 1, 1988 to December 31, 1996. This is
not exactly the same time frame as the Treasury 2000 Fund which began on
July 29, 1988.
*** These return are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate
account level because charges made at the separate account level have not
been subtracted. Treasury 2000 Fund expenses have been .45% annually, that
is, approximately $45 for $10,000 invested during the entire year.
Figures for more than one year reflect a steady compounded rate. Actual returns
fluctuated year by year. Because principal value and investment return
fluctuate, there may be a gain or loss on withdrawal. Past performance is not
predictive of future results. This material must be preceded or accompanied by a
current prospectus. Current prospectuses are mailed to existing policyholders.
<PAGE>
Management's Discussion of 1996 Performance
Treasury 2000 Fund
Investment Objective: Seeks safety of capital and a relatively predictable
payout upon Portfolio Maturity, primarily by investing in Stripped Treasury
Securities.
Management's Discussion: The bond market provided much lower returns to
investors in 1996 than the exceptional returns of 1995. The Treasury 2000 Fund's
investment approach of remaining invested exclusively in U.S. Treasury Strips or
similar zero coupon securities with a maturity date of November 15, 2000
produced a return in line with the Fund's duration.
USF Treasury 2000 Fund 2.1%
Lehman Intermediate Treasury Bond Index 4.0%
Lipper Average of Target Maturity Funds 0.9%
The Fund's longer duration (3.7 versus 3.0 for the index) during a year of
volatile and rising interest rates had a negative impact on return. Similarly,
the average target maturity fund in the Lipper average had a longer duration,
even longer than the Fund's, producing an even lower return for this "peer group
average" in 1996.
Additional factors influencing Fund returns relative to the market index were
Fund expenses, which amounted to .45% of Fund assets in 1996, and transactions
costs. Market indices are not actual investment funds and do not bear either
expenses or transaction costs.
Between now and the November 15, 2000, maturity and distribution date, the
Fund's returns will reflect changes in market interest rate levels, but will be
primarily impacted by the appreciation of the Fund's investment securities to
their face value at maturity.
The performance of financial assets like those in the Fund was somewhat below
the long-term averages. We see no reason why the future performance of the broad
bond market will not be in line with the long-term average return. A greater
risk to the investor's future performance is "sitting on the sidelines " or
following an undiversified investment program, rather than continuing to
accumulate a diversified portfolio of quality and value-priced securities
including those of the type held in the Treasury 2000 Fund.
Joseph L. Gogola, CFA Lawrence R. Halverson, CFA
Senior Investment Officer Senior Vice President
CIMCO Inc. CIMCO Inc.
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Assets and Liabilities
December 31, 1996
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Assets: Stock Fund Fund Fund Fund Fund Fund
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Investments in securities, at value,
(note 2)-see accompanying schedule
(cost $86,149,857) $99,257,406 $ -- $ -- $ -- $ -- $ --
(cost $195,704,851) -- 234,433,573 -- -- -- --
(cost $177,868,978) -- -- 193,469,283 -- -- --
(cost $26,049,732) -- -- -- 26,144,779 -- --
(cost $21,019,331) -- -- -- -- 21,019,331 --
(cost $1,388,086) -- -- -- -- -- 1,585,290
Receivable for securities sold 556,544 453,046 267,730 -- -- --
Accrued interest receivable 18,614 9,180 1,378,366 441,478 5,668 --
Accrued dividends receivable 128,297 447,009 153,501 -- -- --
----------- ----------- ----------- ---------- ---------- ----------
Total assets 99,960,861 235,342,808 195,268,880 26,586,257 21,024,999 1,585,290
----------- ----------- ----------- ---------- ---------- ----------
Liabilities:
Payable for securities purchased 1,234,318 2,376,550 437,598 -- -- --
Dividends payable -- -- -- -- 2,750 --
Accrued expenses 52,710 125,485 106,408 14,334 11,262 549
----------- ----------- ----------- ---------- ---------- ----------
Total liabilities 1,287,028 2,502,035 544,006 14,334 14,012 549
----------- ----------- ----------- ---------- ---------- ----------
Net assets applicable to outstanding
capital stock $98,673,833 $232,840,773 $194,724,874 $26,571,923 $21,010,987 $1,584,741
=========== =========== =========== ========== ========== ==========
Represented by:
Capital stock, par value $.01 $67,593 $109,196 $127,374 $25,731 $210,110 $1,834
Additional paid-in capital 85,416,504 193,792,032 178,833,180 26,433,111 20,800,877 1,385,703
Undistributed net investment income 14,253 69,558 94,881 18,034 -- --
Undistributed net realized gain(loss)
on investments 67,934 141,265 69,134 -- -- --
Unrealized appreciation (depreciation)
on investments 13,107,549 38,728,722 15,600,305 95,047 -- 197,204
----------- ----------- ----------- ---------- ---------- ----------
Total net assets - representing
net assets applicable to outstanding
capital stock $98,673,833 $232,840,773 $194,724,874 $26,571,923 $21,010,987 $1,584,741
=========== =========== =========== ========== ========== ==========
Number of shares issued and
outstanding (note 5) 6,759,264 10,919,647 12,737,422 2,573,070 21,010,987 183,351
=========== =========== =========== ========== ========== ==========
Net asset value per share of
outstanding capital stock(note 2) $14.60 $21.32 $15.29 $10.33 $1.00 $8.64
=========== =========== =========== ========== ========== ==========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities
December 31, 1996
CAPITAL APPRECIATION STOCK % Net Quality Annualized Maturity Par
FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 4.7%
Coca-Cola Co. A-1+/P-1 5.69% Jan 09, 1997 $1,000,000 $998,756
Merrill Lynch Capital Markets A-1+/P-1 5.72% Jan 21, 1997 1,500,000 1,495,316
Chase Manhattan - Cash Account 4.65% 2,140,155 2,140,155
---------
TOTAL SHORT-TERM INVESTMENTS $4,634,227
---------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 95.9%
Forest Products/Paper: 2.1%
Champion International Corp. 22,150 $957,987
Georgia Pacific Corp. 4,800 345,600
Potlatch Corporation 9,700 417,100
Union Camp Corp. 7,500 358,125
--------
Forest Products/Paper total 2,078,812
--------
Insurance: 4.5%
Aetna, Inc. 35,800 2,864,000
Allstate Corporation 26,402 1,528,015
--------
Insurance total 4,392,015
--------
Banks: 1.3%
Bankers Trust New York Corp. 14,400 1,242,000
--------
Investment Banking/Brokerage: 9.0%
A. G. Edwards, Inc. 47,700 1,603,912
Dean Witter Discover & Company 11,200 742,000
Everest Reinsurance Holdings, Inc. 42,900 1,233,375
Mutual Risk Management Ltd. 78,833 2,916,820
Salomon Inc. 51,100 2,408,088
--------
Investment Banking/Brokerage total 8,904,195
--------
Drugs/Health Care: 9.7%
Bristol-Myers Squibb Co. 16,700 1,816,125
Centocor Inc.*** 42,300 1,512,225
Glaxo Wellcome PLC - ADR 92,900 2,949,575
Healthsource, Inc.*** 46,000 603,750
MedPartners, Inc.*** 59,252 1,244,292
Pharmacia & Upjohn, Inc. 35,700 1,414,613
--------
Drugs/Health Care total 9,540,580
--------
Hospital Management/Supplies: 2.2%
Biomet, Inc. 45,800 692,725
Columbia/HCA Healthcare Corp. 37,100 1,511,825
--------
Hospital Management/Supplies total 2,204,550
--------
Retail-Discount: 2.9%
Price/Costco, Inc.*** 72,200 1,814,025
Wal-Mart Stores, Inc. 47,600 1,088,850
--------
Retail-Discount total 2,902,875
--------
Media: 4.3%
Banta Corporation 43,600 997,350
Cognizant Corp. 15,700 518,100
Dun & Bradstreet Corp. 15,700 372,875
K-III Communications, Inc.*** 222,100 2,387,575
--------
Media total 4,275,900
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Foods - Products & Service: 6.5%
General Mills Inc. 21,500 $1,362,563
Hudson Foods, Inc. 39,900 758,100
Nabisco Holdings Corp. - Class A 38,200 1,485,025
Sara Lee Corp. 34,100 1,270,225
Tyson Foods, Inc. - Class A 44,700 1,530,975
--------
Foods - Products & Service total 6,406,888
--------
Auto-Related: 2.4%
General Motors Corporation 16,500 919,875
Jason, Inc.*** 87,400 568,100
Strattec Security Corp.*** 50,250 917,063
--------
Auto-Related total 2,405,038
--------
Apparel/Textile: 0.7%
Nine West Group, Inc.*** 14,500 672,438
--------
Office Equipment/Computers: 12.9%
Alphanet Solutions, Inc.*** 36,900 590,400
Amdahl Corp.*** 116,200 1,408,925
EMC Corp.*** 125,500 4,157,188
International Business Machines Corp. 12,050 1,819,550
Seagate Technology, Inc.*** 25,400 1,003,300
Wang Laboratories, Inc.*** 182,500 3,695,625
---------
Office Equipment/Computers total 12,674,988
---------
Electronics-Semiconductors: 1.5%
Dallas Semiconductor Corporation 33,000 759,000
Micron Technology, Inc.*** 23,700 690,262
--------
Electronics-Semiconductors total 1,449,262
--------
Electronics: 1.2%
Texas Instruments, Inc. 18,100 1,153,875
--------
Pollution Control: 2.7%
WMX Technologies, Inc. 81,900 2,671,988
--------
Oil/Oil Service: 6.2%
Exxon Corp. 8,400 823,200
Occidental Petroleum Corp. 82,500 1,928,437
Schlumberger, Ltd. 5,800 579,275
Unocal Corp. 22,700 922,188
USX-Marathon Group 78,400 1,871,800
--------
Oil/Oil Service total 6,124,900
--------
Natural Gas-Diversified: 1.1%
Belden & Blake Corp.*** 43,900 1,119,450
--------
Containers: 3.3%
Owens Illinois, Inc.*** 143,500 3,264,625
--------
Chemicals: 1.1%
Dow Chemical Company 4,600 360,525
Lyondell Petrochemcial Company 32,500 715,000
--------
Chemicals total 1,075,525
--------
Transportation: 1.2%
Delta Air Lines, Inc. 6,400 453,600
Hunt (JB) Transport Services, Inc. 29,300 410,200
Midwest Express Holdings, Inc.*** 9,700 349,200
--------
Transportation total 1,213,000
</TABLE>
<TABLE>
<CAPTION>
--------
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
CAPITAL APPRECIATION STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Telecommunications: 12.4%
Aerial Communications, Inc.*** 66,000 $536,250
Airtouch Communications, Inc.*** 146,600 3,701,650
Cox Communications, Inc.*** 73,100 1,690,438
Telefonos deMexico SP ADR - Cl L 82,900 2,735,700
U.S. West Media Group*** 192,000 3,552,000
---------
Telecommunications total 12,216,038
---------
Utilities-Telephone: 2.6%
Ameritech Corporation 18,800 1,139,750
Bell Atlantic Corporation 22,150 1,434,212
--------
Utilities-Telephone total 2,573,962
--------
Utilities-Electric: 0.7%
Pacific Gas & Electric Company 30,900 648,900
--------
Diversified Companies: 1.2%
Rockwell International Corporation 18,600 1,132,275
--------
Miscellaneous: 2.3%
Interim Services, Inc.*** 64,200 2,279,100
--------
TOTAL COMMON STOCKS
(COST: $81,515,630) $94,623,179
----------
TOTAL INVESTMENTS, CAPITAL APPRECIATION
STOCK FUND (COST: $86,149,857) $99,257,406
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $86,149,857. The aggregate unrealized appreciation and depreciation
of investments in securities based on this cost were:
Gross unrealized appreciation...............$15,471,798
Gross unrealized depreciation...............(2,364,249)
---------
Net unrealized appreciation.................$13,107,549
=========
***This Security is not income producing.
</FN>
</TABLE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net Quality Annualized Maturity Par
FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
Short-Term Investments:
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper/Savings: 5.8%
Associates Corp of North America A-1+/P-1 5.32% Feb 18, 1997 $3,000,000 $2,984,928
CIT Group Holdings A-1/P-1 5.48% Mar 11, 1997 1,000,000 989,784
Ford Motor Credit Company A-1/P-1 5.42% Feb 10, 1997 2,000,000 1,988,244
General Electric Capital Corporation A-1+/P-1 5.43% Feb 04, 1997 2,900,000 2,888,415
Interstate Power Co. A-1/P-1 5.45% Jan 09, 1997 800,000 799,052
Madison Gas & Electric A-1+/P-1 5.57% Jan 15, 1997 1,000,000 997,874
Chase Manhattan - Cash Account 4.65% 2,908,315 2,908,315
--------
TOTAL COMMERCIAL PAPER,
SAVINGS, AT COST $13,556,612
----------
% Net
Long-Term Investments: Assets Shares Value
Common Stocks: 94.9%
Forest Products/Paper: 1.6%
Champion International Corp. 44,800 $1,937,600
Georgia Pacific Corp. 11,600 835,200
Louisiana - Pacific Corporation 43,500 918,938
Union Camp Corp. 18,000 859,500
--------
Forest Products/Paper total 4,551,238
--------
Insurance: 6.9%
Aetna Inc. 98,500 7,880,000
Allstate Corporation 107,219 6,205,300
Everest Reinsurance Holdings, Inc. 68,800 1,978,000
---------
Insurance total 16,063,300
---------
Banks: 1.4%
Bankers Trust New York Corp. 36,800 3,174,000
--------
Investment Banking/Brokerage: 4.2%
A. G. Edwards, Inc. 74,100 2,491,612
Dean Witter Discover & Company 38,500 2,550,625
Salomon Inc. 98,500 4,641,813
--------
Investment Banking/Brokerage total 9,684,050
--------
Drugs/Health Care: 11.1%
Bristol-Myers Squibb Co. 66,750 7,259,062
Glaxo Wellcome PLC - ADR 289,800 9,201,150
MedPartners, Inc.*** 78,185 1,641,885
Pharmacia & Upjohn, Inc. 115,365 4,571,338
United Healthcare Corp. 70,000 3,150,000
---------
Drugs/Health Care total 25,823,435
---------
Hospital Management/Supplies: 3.5%
Columbia/HCA Healthcare Corp. 198,406 8,085,045
--------
Retail - Discount: 3.5%
Price/Costco, Inc.*** 113,500 2,851,687
Wal-Mart Stores, Inc. 229,400 5,247,525
--------
Retail - Discount total 8,099,212
--------
Retail - Drug: 1.6%
Revco D. S., Inc.*** 97,700 3,614,900
--------
Real Estate: 0.8%
Highwood Properties, Inc. 57,500 1,940,625
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Media 3.7%
Banta Corporation 99,900 $2,285,212
Cognizant Corp 37,900 1,250,700
Cox Communications, Inc.*** 119,900 2,772,688
Dun & Bradstreet Corp. 92,900 2,206,375
--------
Media total 8,514,975
--------
Foods - Products & Service: 9.7%
General Mills Inc. 83,600 5,298,150
Nabisco Holdings Corp. - Class A 150,300 5,842,912
Sara Lee Corp. 153,000 5,699,250
Tyson Foods Inc., - Class A 168,800 5,781,400
---------
Foods - Products & Service total 22,621,712
---------
Auto-Related: 2.9%
Echlin, Inc. 99,400 3,143,525
General Motors Corporation 64,000 3,568,000
--------
Auto-Related total 6,711,525
--------
Office Equipment/Computers: 9.4%
Amdahl Corp.*** 181,900 2,205,537
EMC Corp.*** 229,900 7,615,438
International Business Machines Corp. 70,950 10,713,450
Seagate Technology, Inc.*** 35,400 1,398,300
---------
Office Equipment/Computers total 21,932,725
---------
Electronics: 2.0%
Texas Instruments, Inc. 74,000 4,717,500
--------
Electrical Equipment: 0.5%
Grainger, (W.W.) Inc. 15,000 1,203,750
--------
Pollution Control: 3.7%
WMX Technologies, Inc. 262,700 8,570,588
--------
Oil/Oil Service: 7.8%
Amoco Corporation 36,850 2,966,425
Exxon Corp. 42,100 4,125,800
Occidental Petroleum Corp. 127,600 2,982,650
Schlumberger, Ltd. 10,650 1,063,668
Texaco Inc. 13,700 1,344,312
Unocal Corp. 53,800 2,185,625
USX-Marathon Group 149,600 3,571,700
---------
Oil/Oil Service total 18,240,180
---------
Containers: 2.0%
Owens-Illinois, Inc.*** 200,300 4,556,825
--------
Chemicals: 0.8%
Dow Chemical Company 24,000 1,881,000
--------
Transportation: 1.0%
Delta Air Lines, Inc. 24,100 1,708,088
Hunt (JB) Transport Services, Inc. 45,800 641,200
--------
Transportation total 2,349,288
--------
Telecommunications: 4.7%
Airtouch Communications, Inc. 156,800 3,959,200
U.S. West Media Group*** 372,700 6,894,950
---------
Telecommunications total 10,854,150
---------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
GROWTH AND INCOME STOCK % Net
FUND INVESTMENTS, CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Utilities-Telephone: 6.1%
Ameritech Corporation 76,200 $4,619,625
Bell Atlantic Corporation 87,150 5,642,963
GTE Corp. 87,300 3,972,150
---------
Utilities-Telephone total 14,234,738
---------
Utilities-Electric: 2.7%
Duke Power Company 35,300 1,632,625
Northern States Power Company 40,000 1,835,000
Pacific Gas & Electric Company 130,100 2,732,100
--------
Utilities-Electric total 6,199,725
--------
Diversified Companies: 3.1%
Alexander & Baldwin, Inc. 57,800 1,445,000
Rockwell International Corp. 95,400 5,807,475
--------
Diversified Companies total 7,252,475
--------
TOTAL COMMON STOCKS
(COST: $182,148,240) $220,876,961
-----------
TOTAL INVESTMENTS, GROWTH AND
INCOME STOCK FUND (COST: $195,074,851)** $234,433,573
===========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $195,074,851. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation.........................$41,217,593
Gross unrealized depreciation.........................(2,488,871)
----------
Net unrealized appreciation...........................$38,728,722
==========
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
BALANCED FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 7.5%
CIT Group Holdings A-1/P-1 5.48% Mar 11, 1997 $4,000,000 $3,946,947
Ford Motor Credit Corporation A-1/P-1 5.42% Jan 21, 1997 2,000,000 1,994,111
General Electric Capital Corporation A-1+/P-1 5.41% Jan 07, 1997 2,000,000 1,998,240
Interstate Power Company A-1/P-1 5.45% Jan 09, 1997 2,000,000 1,997,631
John Deere Capital A-1/P-1 5.44% Feb 25, 1997 2,000,000 1,983,897
Merrill Lynch Capital Markets A-1+/P-1 5.48% Mar 05, 1997 2,000,000 1,981,415
Chase Manhattan - Cash Account 4.65% 747,560 747,560
--------
TOTAL COMMERCIAL PAPER/SAVINGS $14,649,801
----------
Government Guaranteed - U.S.: 0.5%
U.S. Treasury Bill 5.29% Feb 06, 1997 1,000,000 994,910
--------
Quasi-Government/Government Sponsored: 2.1%
Federal Home Loan Bank Discount Notes 5.35% Jan 23, 1997 2,000,000 1,993,632
Federal Home Loan Bank Discount Notes 5.43% Jan 03, 1997 2,000,000 1,999,417
--------
TOTAL QUASI-GOVERNMENT/
GOVERNMENT SPONSORED 3,993,049
--------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $19,637,760
----------
% Net Quality Coupon Maturity Par
Long-Term Investments: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
Government Guaranteed - U.S.: 8.0%
U.S. Treasury Notes AAA 8.500 Feb 15, 2000 $500,000 $534,063
U.S. Treasury Notes AAA 7.875 Nov 15, 1999 500,000 524,063
U.S. Treasury Notes AAA 7.125 Oct 15, 1998 1,000,000 1,020,313
U.S. Treasury Notes AAA 7.500 Nov 15, 2001 1,000,000 1,053,126
U.S. Treasury Notes AAA 7.875 Apr 15, 1998 1,000,000 1,023,751
U.S. Treasury Notes AAA 5.500 Apr 15, 2000 500,000 491,719
U.S. Treasury Notes AAA 7.125 Sep 30, 1999 1,000,000 1,027,501
U.S. Treasury Notes AAA 5.875 Feb 15, 2004 850,000 827,954
U.S. Treasury Notes AAA 5.750 Aug 15, 2003 700,000 679,219
U.S. Treasury Notes AAA 6.500 May 15, 2005 1,100,000 1,108,251
U.S. Treasury Notes AAA 6.500 Aug 15, 2005 700,000 705,032
U.S. Treasury Notes AAA 5.875 Nov 15, 2005 1,350,000 1,302,751
U.S. Treasury Notes AAA 6.875 May 15, 2006 1,000,000 1,031,251
U.S. Treasury Notes AAA 6.625 Jul 31, 2001 1,400,000 1,422,751
U.S. Treasury Notes AAA 6.375 May 15, 1999 2,000,000 2,018,126
U.S. Treasury Notes AAA 8.500 May 15, 1997 700,000 707,219
--------
TOTAL GOVERNMENT GUARANTEED- U.S.
(COST: $15,443,355) $15,477,090
----------
Quasi-Government/Government Sponsored: 7.1%
Federal Home Loan Bank AAA 5.440 Oct 15, 2003 620,000 583,363
Federal Home Loan Bank AAA 6.440 Jan 28, 2000 250,000 251,939
FHLMC 1455 HA AAA 7.900 Jun 15, 2021 3,344,000 3,503,445
FHLMC 1378 H AAA 10.000 Jan 15, 2021 2,250,000 2,534,328
FNMA Pass Through Certificate AAA 8.000 Feb 01, 2002 102,447 105,281
FNMA Pass Through Certificate AAA 8.400 Nov 25, 2019 1,600,000 1,660,696
FNMA 1996 - M6 G AAA 7.750 Sep 17, 1923 4,000,000 4,122,500
Private Export Funding AAA 5.500 Mar 15, 2001 1,000,000 970,211
--------
TOTAL QUASI-GOVERNMENT/GOVERNMENT
SPONSORED (COST: $13,697,208) $13,731,763
----------
Nonconvertible Corporate Bonds: 29.4%
Building Materials: 0.2%
Stanley Works A-2/A 7.375 Dec 15, 2002 $250,000 $258,962
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Drug/Health Care: 1.1%
Abbott Laboratories, Inc. AA-1/AAA 6.800 May 15, 2005 $500,000 $502,033
American Home Products, Corp. A-2/A- 7.700 Feb 15, 2000 1,000,000 1,037,567
Bergen Brunswig BAA-1/A- 7.250 Jun 01, 2005 500,000 499,986
--------
Drug/Health Care total 2,039,586
--------
Electronics: 0.5%
Raytheon Co. A-1/A+ 6.500 Jul 15, 2005 500,000 485,306
Texas Instruments, Inc. A-3 9.000 Mar 15, 2001 500,000 544,014
--------
Electronics total 1,029,320
--------
Forest Products/Paper: 2.1%
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 250,000 274,874
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 1,550,000 1,547,580
International Paper A-3/A- 7.875 Aug 01, 2006 500,000 529,075
Kimberly Clark Corp. AA-2/AA 9.000 Aug 01, 2000 750,000 810,952
Weyerhaeuser Company A-2/A 8.375 Feb 02, 2007 800,000 883,468
--------
Forest Products/Paper total 4,045,949
--------
Hospital Supplies: 0.5
Baxter International, Inc. A-3/A 7.625 Nov 15, 2002 250,000 259,984
Columbia/HCA Healthcare Corporation A-2/A- 6.910 Jun 15, 2005 700,000 700,323
--------
Hospital Supplies total 960,307
--------
Insurance/Casualty: 0.3%
Lincoln National Corp. A-2/A 7.250 May 15, 2005 500,000 501,678
--------
Investment Banking/Brokerage: 3.0%
Dean Witter Discover & Company A-2/A 6.250 Mar 15, 2000 200,000 198,847
Donaldson, Lufkin Jenrette, Inc. BAA-1/A- 6.875 Nov 01, 2005 300,000 292,808
Donaldson, Lufkin Jenrette, Inc. BAA-1/A- 5.625 Feb 15, 2016 500,000 479,550
Merrill Lynch AA-3/AA- 6.250 Jan 15, 2006 650,000 617,070
Merrill Lynch AA-3/AA- 7.000 Mar 15, 2006 1,000,000 997,580
Paine Webber Group BAA-1/BBB+ 6.750 Feb 01, 2006 1,000,000 956,406
Salomon Inc. BAA-1/BBB 6.700 Dec 01, 1998 650,000 653,322
Salomon Inc. BAA-1/BBB 7.125 Aug 01, 1999 1,000,000 1,012,165
Salomon Inc. BAA-1/BBB 6.875 Dec 15, 2003 600,000 587,030
--------
Investment Banking/Brokerage total 5,794,778
--------
Finance Co. - Consumer Loan: 0.8%
American General Finance A-1/A+ 7.125 Dec 01, 1999 500,000 510,056
Household Finance Co. A-2/A 7.125 Sep 01, 2005 500,000 505,046
Norwest Financial Inc. AA-3/AA- 7.875 Feb 15, 2002 500,000 526,512
--------
Finance Co. - Consumer Loan total 1,541,614
--------
Mortgage Related Securities: 0.7%
Prudential Home Funding AAA 6.050 Apr 25, 2024 1,500,000 1,305,720
--------
Cosmetics/Personal Care: 0.1%
Gillette Co. AA-3/AA- 5.750 Oct 15, 2005 300,000 280,557
--------
Leisure Time 0.5%
Walt Disney Company A-2/A 6.750 Mar 30, 2006 1,000,000 992,867
--------
Media: 0.1%
McGraw-Hill, Inc. A-1 9.430 Sep 01, 2000 250,000 272,311
--------
Publishing-News: 0.3%
Knight Ridder, Inc. A-1/AA- 8.500 Sep 01, 2001 500,000 529,373
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Retail-Department: 1.1%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 $500,000 $ 528,868
Dayton Hudson Corp. BAA-1/BBB+ 7.500 Jul 15, 2006 1,000,000 1,022,370
J. C. Penney Co. A-1/A+ 6.875 Jun 15, 1999 500,000 505,420
--------
Retail-Department total 2,056,658
--------
Foods-Products & Services: 0.5%
Archer Daniels Midland AA-2/AA- 6.250 May 15, 2003 500,000 487,752
Sysco Corporation A-1/AA- 6.500 Jun 15, 2005 585,000 572,034
--------
Foods-Products & Services total 1,059,786
--------
Beverage/Confect/Tobacco: 0.4%
Coca-Cola Co. AA-3/AA 6.000 Jul 15, 2003 500,000 485,840
Pepsico Inc. A-1/A 6.125 Jan 15, 1998 250,000 251,062
--------
Beverage/Confect/Tobacco total 736,902
--------
Auto-Related: 2.5%
Borg-Warner Automotive BAA-2/BBB+ 7.000 Nov 01, 2006 1,150,000 1,140,339
Ford Motor Company A-1/A+ 7.500 Nov 15, 1999 500,000 513,770
Ford Motor Company A-1/A+ 6.125 Jan 09, 2006 1,000,000 937,336
Ford Motor Company A-1/A+ 7.250 Oct 01, 2008 2,000,000 2,021,004
General Motors Corporation A-3/A- 7.000 Jun 15, 2003 300,000 302,693
--------
Auto-Related total 4,915,142
--------
Hotel & Motel 0.5%
Marriott International, Inc. BAA-1/A- 7.125 Jun 01, 2007 1,000,000 982,090
--------
Electrical Equipment: 0.3%
Emerson Electric Co. AA-1/AA+ 6.300 Nov 01, 2005 500,000 484,350
--------
Electric Household Appliances: 0.1%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 250,000 282,283
--------
Finance-Diversified: 0.3%
Dow Capital B.V. A-1/A 7.125 Jan 15, 2003 250,000 254,666
Dow Capital B.V. A-1/A 7.375 Jul 15, 2002 250,000 257,987
--------
Finance-Diversified total 512,653
--------
Engineering/Construction Services: 0.5%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 1,000,000 971,071
--------
Machinery/Tools: 0.6%
Giddings & Lewis BA-1/BBB 7.500 Oct 01, 2005 500,000 496,229
Ingersoll Rand Company A-2/A 6.480 Jun 01, 2025 700,000 689,728
--------
Machinery/Tools total 1,185,957
--------
Office Equipment/Computers: 0.4%
International Business Machines A-1/A 6.375 Jun 15, 2000 500,000 503,125
Xerox Corporation A-2/A 7.150 Aug 01, 2004 300,000 305,172
--------
Office Equipment/Computers total 808,297
--------
Telecommunications: 0.3%
Cox Communications BAA-2/A- 6.875 Jun 15, 2005 500,000 493,592
--------
Oil/Oil Service: 1.2%
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 500,000 518,831
Mobil Corporation AA-2/AA 8.375 Feb 12, 2001 500,000 534,283
Shell Oil Company AA-1/AAA 6.625 Jul 01, 1999 300,000 302,731
Shell Canada, Ltd. A-1/AA 8.875 Jan 14, 2001 500,000 543,510
Union Oil California BAA-2/BBB 7.200 May 15, 2005 500,000 505,833
--------
Oil/Oil Service total 2,405,188
</TABLE>
<TABLE>
<CAPTION>
--------
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Pollution Control: 0.8%
Waste Management A-1/A+ 7.700 Oct 01, 2002 $350,000 $367,788
WMX Technologies A-1/A+ 6.700 May 01, 2001 1,250,000 1,251,900
--------
Pollution Control total 1,619,688
--------
Chemicals: 0.6%
PPG Industries, Inc. A-1/A 6.875 Aug 01, 2005 500,000 502,296
Union Carbide Corporation BBA-2/BBB 6.790 Jun 01, 2025 700,000 698,170
--------
Chemicals total 1,200,466
--------
Specialty Chemicals: 0.3%
Praxair, Inc. A-3/BBB+ 6.850 Jun 15, 2005 500,000 495,477
--------
Transportation: 4.0%
American Airlines A-3/BBB 8.040 Sep 16, 2011 1,000,000 1,042,830
Burlington Northern Inc. BAA-2/BBB 7.400 May 15, 1999 500,000 511,377
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 1,542,601 1,636,850
Federal Express A-3/BBB+ 7.890 Sep 28, 2008 500,000 521,680
Federal Express - Series A-2 A-3/BBB+ 7.850 Jan 30, 2015 1,000,000 1,032,210
Golden State Petroluem Transport Corp. BAA-2/BBB 8.040 Feb 01, 2019 2,000,000 1,987,420
Union Pacific Co. BAA-2/BBB 6.250 Mar 15, 1999 500,000 499,195
United Airlines BAA-1/BBB- 9.020 Apr 19, 2012 472,313 510,675
--------
Transportation total 7,742,237
--------
Aerospace/Defense: 0.9%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 1,250,000 1,262,832
Rockwell International Corp. A-1/AA 7.625 Feb 17, 1998 500,000 508,772
--------
Aerospace/Defense total 1,771,604
--------
Utilities-Natural Gas Distribution: 0.4%
Laclede Gas Co. AA-3/AA- 6.250 May 01, 2003 700,000 685,017
--------
Utilities-Telephone: 1.9%
Alltel Corporation A2/A+ 7.250 Apr 01, 2004 500,000 508,852
Bell South Telecommunications, Inc. AAA/AAA 6.500 Feb 01, 2000 250,000 251,875
Bell South Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 350,000 344,658
Bell Tel of Penn AA-1/AA 6.125 Mar 15, 2003 500,000 487,678
GTE-California AA-3/AA- 6.250 Jan 15, 1998 250,000 250,922
GTE Corporation A-3/A- 9.100 Jun 01, 2003 500,000 560,810
New England Telephone & Telegraph AA-2/AA- 4.625 Jul 01, 2005 572,000 489,454
New York Telephone A-2/A 6.500 Mar 01, 2005 500,000 490,460
Northwestern Bell Telephone Co. AA-3/A+ 9.500 May 01, 2000 250,000 272,446
--------
Utilities-Telephone total 3,657,155
--------
Utilities-Electric: 1.3%
Central Power & Light, Inc. A-2/A 6.000 Oct 01, 1997 250,000 250,141
Consolidated Edison of New York, Inc. A-1/A+ 6.250 Apr 01, 1998 300,000 300,626
Florida Power Corp. AA-3/AA- 6.000 Jul 01, 2003 400,000 384,169
Midwest Power Systems A-2/A+ 7.125 Feb 01, 2003 250,000 254,112
Pacific Gas & Electric Co. A-2/A 6.250 Aug 01, 2003 300,000 291,620
Pacificorp A-2/A 6.750 Apr 01, 2005 500,000 493,169
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 500,000 514,272
--------
Utilities-Electric total 2,488,109
--------
Utilities-Natural Gas Pipeline: 0.1%
Burlington Resources Inc. A-3/A- 9.625 Jun 15, 2000 250,000 273,298
--------
Diversified Companies 0.2%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 300,000 309,122
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Miscellaneous: 0.1%
Chrysler Buildings of New York A-1/A- 9.125 May 01, 1999 $250,000 $263,111
--------
TOTAL NONCONVERTIBLE CORPORATE
BONDS (COST: $56,333,928) $56,952,275
----------
% Net
Assets Shares Value
Common Stocks: 45.2%
Forest Products/Paper: 0.9%
Champion International Corp. 18,300 $791,475
Georgia Pacific Corp. 4,700 338,400
Potlatch Corp 7,000 301,000
Union Camp Corp. 7,300 348,575
--------
Forest Products/Paper total 1,779,450
--------
Insurance: 3.2%
Aetna Inc. 38,700 3,096,000
Allstate Corporation 37,457 2,167,824
Everest Reinsurance Holdings, Inc. 36,200 1,040,750
--------
Insurance total 6,304,574
--------
Banks: 0.7%
Bankers Trust New York Corp. 14,700 1,267,875
--------
Investment Banking/Brokerage: 2.0%
A. G. Edwards, Inc. 35,800 1,203,775
Dean Witter Discover & Company 11,200 742,000
Salomon Inc. 40,100 1,889,713
--------
Investment Banking/Brokerage total 3,835,488
--------
Drugs/Health Care: 5.5%
Bristol-Myers Squibb Co. 23,400 2,544,750
Centocor Inc.*** 24,600 879,450
Glaxo Wellcome PLC - ADR 106,000 3,365,500
Healthsource, Inc.*** 30,900 405,562
MedPartners, Inc.*** 39,404 827,484
Pharmacia & Upjohn, Inc. 43,335 1,717,149
United Healthcare Corp. 20,800 936,000
---------
Drugs/Health Care total 10,675,895
---------
Hospital Management/Supplies: 1.5%
Biomet, Inc. 36,300 549,037
Columbia/HCA Healthcare Corp. 56,100 2,286,075
--------
Hospital Management/Supplies total 2,835,112
--------
Retail-Discount: 1.3%
Price/Costco, Inc.*** 37,700 947,212
Wal-Mart Stores, Inc. 67,700 1,548,638
--------
Retail-Discount total 2,495,850
--------
Retail-Drug: 0.7%
Revco D.S. Inc*** 36,400 1,346,800
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Media: 2.2%
Banta Corporation 38,000 $869,250
Cognizant Corp 12,800 422,400
Cox Communications, Inc.*** 65,900 1,523,938
Dun & Bradstreet Corp 12,800 304,000
K-III Communications Corp 113,600 1,221,200
--------
Media total 4,340,788
--------
Foods-Food Products: 3.8%
General Mills, Inc. 30,800 1,951,950
Nabisco Holdings Corp. - Class A 54,500 2,118,688
Sara Lee Corp. 34,300 1,277,675
Tyson Foods, Inc. - Class A 59,500 2,037,875
--------
Foods-Food Products total 7,386,188
--------
Auto-Related: 0.6%
General Motors Corporation 21,200 1,181,900
--------
Office Equipment/Computers: 5.5%
Amdahl Corp.*** 89,300 1,082,762
EMC Corp.*** 103,900 3,441,688
International Business Machines Corp. 22,050 3,329,550
Seagate Technology, Inc.*** 18,800 742,600
Wang Laboratories, Inc. *** 104,800 2,122,200
---------
Office Equipment/Computers total 10,718,800
---------
Electronics: 0.9%
Micron Technology Inc.*** 14,200 413,575
Texas Instruments, Inc. 19,700 1,255,875
--------
Electronics total 1,669,450
--------
Electrical Equipment: 0.3%
Grainger, (W. W.) Inc. 7,000 561,750
--------
Pollution Control: 1.6%
WMX Technologies, Inc. 98,050 3,198,880
--------
Oil/Oil Service: 3.7%
Amoco Corporation 10,900 877,450
Belden & Blake Corp.*** 32,000 816,000
Exxon Corp. 13,300 1,303,400
Occidental Petroleum Corp. 55,600 1,299,650
Schlumberger, Ltd. 5,050 504,369
Unocal Corp 21,300 865,312
USX-Marathon Group 65,600 1,566,200
--------
Oil/Oil Service total 7,232,381
--------
Containers: 1.3%
Owens-Illinois, Inc.*** 106,900 2,431,975
--------
Chemicals: 0.3%
Dow Chemical Company 7,100 556,463
--------
Specialty Chemicals: 0.2%
Lyondell Petrochemical Company 18,550 408,100
--------
Transportation: 0.6%
Delta Air Lines, Inc. 10,300 730,013
Hunt (JB) Transport Services, Inc. 27,200 380,800
--------
Transportation total 1,110,813
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BALANCED FUND INVESTMENTS, % Net
CONTINUED: Assets Shares Value
<S> <C> <C> <C>
Telecommunications: 2.1%
Telefonos deMexico SP ADR Cl L 38,400 $1,267,200
US West Media Group*** 153,800 2,845,300
--------
Telecommunications total 4,112,500
--------
Utilities-Telephone: 3.8%
Airtouch Communications, Inc.*** 109,850 2,773,712
Ameritech Corporation 24,700 1,497,438
Bell Atlantic Corporation 31,400 2,033,150
GTE Corp. 24,100 1,096,550
--------
Utilities-Telephone total 7,400,850
--------
Utilities-Electric: 0.9%
Northern States Power Company 18,400 844,100
Pacific Gas & Electric Company 39,200 823,200
--------
Utilities-Electric total 1,667,300
--------
Diversified Companies: 1.1%
Alexander & Baldwin, Inc. 21,700 542,500
Rockwell International Corporation 26,700 1,625,363
--------
Diversified Companies total 2,167,863
--------
Miscellaneous: 0.5%
Interim Services, Inc.*** 27,700 983,350
--------
TOTAL COMMON STOCKS,
(COST: $72,756,728) $87,670,395
----------
TOTAL INVESTMENTS, BALANCED FUND
(COST: $177,868,978) $193,469,283
===========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $177,868,978. The aggregate unrealized appreciation and
depreciation of investments in securities based on this cost were:
Gross unrealized appreciation...........................$17,755,361
Gross unrealized depreciation...........................(2,155,056)
---------
Net unrealized appreciation.............................$15,600,305
=========
***This Security is not income producing.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
BOND FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
Short-Term Investments:
<S> <C> <C> <C> <C> <C> <C>
Commercial Paper/Savings: 1.3%
Interstate Power Co. A-1/P-1 5.94% Jan 09, 1997 $200,000 $199,740
J. C. Penney Funding A-1/P-1 5.92% Jan 13, 1997 100,000 99,806
Chase Manhattan - Cash Account 6.45% 47,419 47,418
--------
TOTAL SHORT-TERM INVESTMENTS,
AT COST $346,964
--------
<FN>
* For Short-term Investments, Market Value is assumed to equal Book Value.
</FN>
% Net Quality Coupon Maturity Par
Government & Agency Bonds: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
Government Guaranteed - U.S.: 12.0%
U.S. Treasury Note AAA 8.500 May 15, 1997 $300,000 $303,095
U.S. Treasury Note AAA 7.125 Oct 15, 1998 250,000 255,078
U.S. Treasury Note AAA 7.500 Nov 15, 2001 200,000 210,625
U.S. Treasury Note AAA 7.125 Sep 30, 1999 250,000 256,875
U.S. Treasury Note AAA 5.875 Feb 15, 2004 150,000 146,110
U.S. Treasury Note AAA 5.750 Aug 15, 2003 200,000 194,063
U.S. Treasury Note AAA 6.500 May 15, 2005 400,000 403,000
U.S. Treasury Note AAA 6.500 Aug 15, 2005 300,000 302,156
U.S. Treasury Note AAA 5.875 Nov 15, 2005 100,000 96,500
U.S. Treasury Note AAA 6.625 Jul 31, 2001 1,000,000 1,016,251
--------
Government Guaranteed - U.S.
(COST: $3,196,968) $3,183,753
---------
Quasi-Government/Government Sponsored: 14.4%
Federal Home Loan Mortgage Corp. AAA 6.440 Jan 28, 2000 150,000 151,163
Federal Home Loan Mortgage Corp. AAA 7.900 Jun 15, 2021 836,000 875,861
Federal Home Loan Mortgage Corp. AAA 10.000 Jan 15, 2021 750,000 844,776
FHLMC Pass Through Certificate AAA 8.500 Apr 01, 2001 7,871 8,128
FHLMC Pass Through Certificate AAA 8.500 May 01, 2001 19,359 19,991
Federal National Mortgage Association AAA 8.400 Nov 25, 2019 400,000 415,174
Federal National Mortgage Association AAA 7.750 Sep 17, 2023 1,000,000 1,030,625
Private Export Funding AAA 5.500 Mar 15, 2001 500,000 485,106
--------
Quasi-Government/Government Sponsored
(COST: $3,830,953) $3,830,824
---------
Nonconvertible Corporate Bonds: 70.5%
Forest Products/Paper: 3.6%
Champion International Corp. BAA-1/BBB 9.875 Jun 01, 2000 $100,000 $109,950
Champion International Corp. BAA-1/BBB 7.100 Sep 01, 2005 750,000 748,829
Kimberly-Clark Corp. AA-2/AA 9.000 Aug 01, 2000 100,000 108,127
--------
Forest Products/Paper total 966,906
--------
Financing & Leasing: 3.7%
International Lease Finance A-1/A+ 5.625 Mar 01, 1998 1,000,000 996,260
--------
Investment Banking/Brokerage: 9.6%
Donaldson, Lufkin, Jenrette, Inc. BAA-1/A- 6.875 Nov 01, 2005 200,000 195,205
Donaldson, Lufkin, Jenrette, Inc. BAA-1/A- 5.625 Feb 15, 2016 200,000 191,820
Lehman Brothers Holdings BAA-1/A 5.750 Feb 15, 1998 500,000 497,818
Merrill Lynch AA-3/AA- 6.250 Jan 15, 2006 350,000 332,268
Paine Webber Group BAA-1/BBB+ 6.750 May 01, 2006 700,000 669,484
Salomon Inc. BAA-1/BBB 6.700 Dec 01, 1998 150,000 150,767
Salomon Inc. BAA-1/BBB 7.125 Aug 01, 1999 500,000 506,083
--------
Investment Banking/Brokerage total 2,543,445
--------
Finance Co. - Consumer Loans: 1.2%
Household Finance Co. A-2/A 7.125 Sep 01, 2005 325,000 328,280
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Mortgage Related Securities: 1.6%
Prudential Home Funding AAA 6.050 Apr 25, 2024 $500,000 $435,240
--------
Drugs/Health Care: 2.7%
Abbott Labs AA-1/AAA 5.600 Oct 01, 2003 200,000 189,336
American Home Products A-2/A- 7.700 Feb 15, 2000 500,000 518,784
--------
Drugs/Health Care total 708,120
--------
Hospital Management/Supplies 1.1%
Columbia/HCA Healthcare Corporation A-2/A- 6.910 Jun 15, 2005 300,000 300,139
--------
Leisure Time 1.9%
Walt Disney Company A-2/A 6.750 Mar 30, 2006 500,000 496,434
--------
Media: 0.4%
McGraw-Hill, Inc. A-1 9.430 Sep 1, 2000 100,000 108,924
--------
Retail-Department: 2.9%
Dayton Hudson Corp. BAA-1/BBB+ 9.750 Nov 01, 1998 250,000 264,434
Dayton Hudson Corp. BAA-1/BBB+ 7.500 Jul 15, 2006 500,000 511,185
--------
Retail-Department total 775,619
--------
Foods-Products & Services: 0.4%
Dean Foods Co. A-3/A 6.750 Jun 15, 2005 100,000 98,466
--------
Beverages/Confect/Tobacco: 0.9%
Coca-Cola Co. AA-3/AA 6.000 Jul 15, 2003 250,000 242,920
--------
Auto-Related: 1.1%
Ford Motor Co. A-1/A+ 7.500 Nov 15, 1999 200,000 205,508
General Motors Acceptance Corporation A-3/A- 6.625 Oct 01, 2002 100,000 99,155
--------
Auto-Related total 304,663
--------
Hotel & Motel: 1.8%
Marriott International, Inc. BAA-1/A- 7.125 Jun 01, 2007 500,000 491,045
--------
Electronics: 3.0%
Motorola Inc. AA-3/AA 6.500 Sep 01, 2025 500,000 497,012
Raytheon Co. A-1/A+ 6.500 Jul 15, 2005 300,000 291,184
--------
Electronics total 788,196
--------
Electrical Equipment: 1.1%
Emerson Electric Co. AA-1/AA+ 6.300 Nov 01, 2005 300,000 290,610
--------
Aerospace/Defense: 3.4%
Lockheed Martin A-3/BBB+ 6.850 May 15, 2001 750,000 757,700
Rockwell International Corp. A-1/AA 6.750 Sep 15, 2002 150,000 150,763
--------
Aerospace/Defense total 908,463
--------
Electric Household Appliance: 0.4%
Maytag Corporation BAA-1/BBB+ 9.750 May 15, 2002 100,000 112,913
--------
Engineering/Construction Services: 0.7%
Foster Wheeler Corp. BAA-2/BBB 6.750 Nov 15, 2005 200,000 194,214
--------
Machine Tools: 2.0%
Giddings & Lewis BA1/BBB 7.500 Oct 01, 2005 250,000 248,114
Ingersoll Rand Company A-2/A 6.480 Jun 01, 2025 300,000 295,598
--------
Machine Tools total 543,712
--------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
BOND FUND INVESTMENTS, % Net Quality Coupon Maturity Par
CONTINUED: Assets Rating* Rate Date Amount Value
------ ------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Finance-Diversified: 1.0%
Dow Capital B.V. A-1/A 7.375 Jul 15, 2002 $250,000 $257,987
--------
Pollution Control: 3.4%
Waste Management A-1/A+ 7.700 Oct 01, 2002 150,000 157,623
WMX Technologies, Inc. A-1/A+ 6.700 May 01,2001 750,000 751,140
--------
Pollution Control total 908,763
--------
Oil/Oil Service: 2.9%
Enron Corp. BAA-2/BBB+ 7.625 Sep 10, 2004 300,000 311,298
Shell Oil Company AA-1/AAA 6.625 Jul 01, 1999 150,000 151,366
Union Oil Co. of California BAA-2/BBB 7.200 May 15, 2005 300,000 303,500
--------
Oil/Oil Service total 766,164
--------
Chemicals: 1.1%
Union Carbide Corporation BAA-2/BBB 6.790 Jun 01, 2025 300,000 299,216
--------
Transportation: 11.6%
American Airlines A-3/BBB 8.040 Sep 16, 2011 500,000 521,415
Burlington Northern, Inc. BAA-2/BBB 7.400 May 15, 1999 200,000 204,551
Delta Air Lines BAA-1/BBB 8.540 Jan 02, 2007 305,438 324,217
Federal Express A-3/BBB+ 7.850 Jan 30, 2015 500,000 516,105
Golden State Petroleum Transport BAA-2/BBB 8.040 Feb 01, 2019 1,000,000 993,710
United Airlines BAA-1/BBB- 9.020 Apr 19, 2012 472,313 510,674
--------
Transportation total 3,070,672
--------
Metals-Fabrication & Manufacturing: 0.5%
Cyprus Minerals BAA-2/BBB- 6.625 Oct 15, 2005 130,000 125,250
--------
Utilities-Telephone: 2.5%
Bell South Telecommunications, Inc. AAA/AAA 6.500 Feb 01, 2000 150,000 151,125
Bell South Telecommunications, Inc. AAA/AAA 6.500 Jun 15, 2005 150,000 147,710
Bell Tel of Penn AA-1/AA 6.125 Mar 15, 2003 250,000 243,839
Northwestern Bell Telephone Co. AA-3/A+ 9.500 May 01, 2000 100,000 108,978
--------
Utilities-Telephone total 651,652
--------
Utilities-Electric: 3.2%
Consolidated Edison of New York A-1/A+ 6.250 Apr 01, 1998 200,000 200,418
Midwest Power Systems A-2/A+ 7.125 Feb 01, 2003 150,000 152,467
Pacificorp A-2/A 6.750 Apr 01, 2005 250,000 246,584
Wisconsin Public Service, Inc. AA-2/AA+ 7.300 Oct 01, 2002 250,000 257,136
--------
Utilities-Electric total 856,605
--------
Utilities-Natural Gas Pipeline: 0.4%
Burlington Resources, Inc. A-3/A- 9.625 Jun 15, 2000 100,000 109,319
--------
Diversified Companies: 0.4%
Whitman Corporation BAA-2/BBB+ 7.500 Feb 01, 2003 100,000 103,041
--------
TOTAL NONCONVERTIBLE CORPORATE
BONDS (COST: $18,674,846) $18,783,238
----------
TOTAL INVESTMENTS, BOND FUND
(COST: $26,049,732)** $26,144,779
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
**At December 31, 1996, the cost of securities for federal income tax
purposes was $26,049,732. The aggregate unrealized appreciation and depreciation
of investments in securities based on this cost were:
Gross unrealized appreciation......................... $288,316
Gross unrealized depreciation.........................(193,269)
--------
Net unrealized depreciation........................... $95,047
========
</FN>
</TABLE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% Net Quality Annualized Maturity Par
MONEY MARKET FUND INVESTMENTS: Assets Rating* Yield Date Amount Value
------ ------- ----- ---- ------ -----
<S> <C> <C> <C> <C> <C> <C>
Short-Term Investments:
Commercial Paper/Savings: 46.6%
American Information Technologies A-1+/P-1 5.42% Feb 04, 1997 $900,000 $895,495
Anheuser Busch Companies A-1+/P-1 6.34% Jan 02, 1997 1,000,000 999,826
Associates Corp of North America A-1+/P-1 5.44% Jan 31, 1997 950,000 945,804
CIT Group Holdings A-1/P-1 5.48% Apr 22, 1997 950,000 934,505
Coca-Cola Co. A-1+/P-1 5.37% Feb 14, 1997 975,000 968,768
Ford Motor Credit Company A-1/P-1 5.42% Jan 07, 1997 800,000 799,297
General Electric Capital Corporation A-1+/P-1 5.90% Feb 10, 1997 911,000 905,331
Interstate Power Co. A-1/P-1 5.53% Jan 15, 1997 765,000 763,385
Interstate Power Co. A-1/P-1 5.94% Jan 09, 1997 100,000 99,870
John Deere Capital Corporation A-1/P-1 5.44% Feb 25, 1997 950,000 942,351
Merrill Lynch Capital Market A-1+/P-1 5.46% Feb 18, 1997 950,000 943,262
Pepsico, Inc. A-1/P-1 5.60% Jan 31, 1997 303,000 301,611
Chase Manhattan - Cash Account 4.65% 290,670 290,670
-------
TOTAL COMMERCIAL PAPER,
SAVINGS, AT COST $9,790,175
---------
Quasi-Government/Government Sponsored: 27.8%
Federal Home Loan Bank 5.58% Mar 26, 1997 $3,885,000 $3,854,999
FNMA Discount Notes 5.41% Mar 24, 1997 2,000,000 1,977,071
--------
TOTAL QUASI-GOVERNMENT
GOVERNMENT SPONSORED, AT COST $5,832,070
---------
Government Guaranteed: 25.7%
U. S. Treasury Bill 5.29% Feb 06, 1997 $1,000,000 $994,910
U. S. Treasury Bill 5.30% Feb 06, 1997 1,500,000 1,492,350
U. S. Treasury Bill 5.30% May 29, 1997 1,000,000 979,116
U. S. Treasury Bill 5.32% Jul 24, 1997 1,000,000 971,270
U. S. Treasury Bill 5.37% Oct 16, 1997 1,000,000 959,440
--------
TOTAL GOVERNMENT GUARANTEED,
AT COST $5,397,086
---------
TOTAL INVESTMENTS, MONEY MARKET
FUND, AT COST $21,019,331
==========
See accompanying notes to investments in securities.
<FN>
*Moody's/Standard & Poors' quality ratings (unaudited). See the current
Prospectus and Statement of Additional Information for a complete description of
these ratings.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Investments in Securities (Continued)
December 31, 1996
% of Interest Maturity Principal
TREASURY 2000 FUND INVESTMENTS: Net Assets Rate Date Amount Value
---------- ---- ---- ------ -----
<S> <C> <C> <C> <C> <C>
Government Guaranteed - U.S.:
U.S. Treasury Strip (Cost $1,388,086)* 100.0% 9.69% Nov 15, 2000 $2,000,000 $1,585,290
=========
</TABLE>
See accompanying notes to investments in securities.
Notes to investments in securities:
Interest rates on and stripped Treasury Securities represent annualized yield to
maturity at date of purchase. Values of investment securities are determined as
described in Note 2 of the financial statements.
*At December 31, 1996, the cost of securities for federal income tax purposes
was $1,388,086. The aggregate unrealized appreciation and depreciation of
investments in securities based on this cost were:
Gross unrealized appreciation................................$197,204
Gross unrealized depreciation................................ --
--------
Net unrealized appreciation..................................$197,204
========
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Operations
Year Ended December 31, 1996
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
Investment income (note 2):
<S> <C> <C> <C> <C> <C> <C>
Interest income $164,944 $525,661 $5,678,732 $1,382,079 $951,281 $114,864
Dividend income 917,123 3,383,433 1,230,690 -- -- --
---------- ---------- ---------- -------- -------- --------
Total income 1,082,067 3,909,094 6,909,422 1,382,079 951,281 114,864
---------- ---------- ---------- -------- -------- --------
Expenses (note 4):
Advisory fees 336,290 807,229 762,436 100,452 88,296 --
Advisory/Administrative fees -- -- -- -- -- 6,936
Accounting and custodian fees 47,251 91,306 87,538 16,623 14,112 --
Trustees' fees 1,602 3,845 3,616 478 422 --
Legal fees 18,473 44,325 41,680 5,513 4,858 --
Audit fees 3,043 7,302 6,866 908 800 --
Printing and mailing fees 19,735 47,355 44,530 5,890 5,190 --
Other expenses 14,605 44,421 40,663 4,358 3,842 --
---------- ---------- ---------- -------- -------- --------
Expenses before reimbursement 440,999 1,045,783 987,329 134,222 117,520 6,936
Reimbursable expenses from
CUNA Mutual Life Insurance Company (5,211) -- -- (4,119) (3,169) --
---------- ---------- ---------- -------- -------- --------
Total net expenses 435,788 1,045,783 987,329 130,103 114,351 6,936
---------- ---------- ---------- -------- -------- --------
Net investment income 646,279 2,863,311 5,922,093 1,251,976 836,930 107,928
---------- ---------- ---------- -------- -------- --------
Realized and unrealized gain (loss)
on investments (notes 2 and 3):
Realized gain (loss) on security
transactions:
Proceeds from sale of securities
and principal pay downs 33,783,726 67,526,667 52,832,225 5,207,141 4,478,141 --
Cost of securities sold (30,630,977) (61,869,710) (48,563,422) (5,157,425) (4,478,141) --
---------- ---------- ---------- --------- -------- --------
Net realized gain (loss) on
security transactions 3,152,749 5,656,957 4,268,803 49,716 -- --
Net change in unrealized appreciation
or depreciation on investments 9,688,795 26,520,015 6,612,755 (477,126) -- (75,534)
---------- ---------- ---------- --------- -------- --------
Net gain (loss) on investments 12,841,544 32,176,972 10,881,558 (427,410) -- (75,534)
---------- ---------- ---------- --------- -------- --------
Net increase in net assets
resulting from operations $13,487,823 $35,040,283 $16,803,651 $824,566 $836,930 $32,394
========== ========== ========== ========= ======== ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets
Years Ended December 31, 1996 and 1995
CAPITAL APPRECIATION GROWTH AND INCOME
STOCK FUND STOCK FUND BALANCED FUND
Operations: 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net investment income $646,279 $283,910 $2,863,311 $1,631,967 $5,922,093 $3,527,057
Net realized gain (loss) on security
transaction 3,152,749 1,078,662 5,656,957 6,556,318 4,268,803 4,247,861
Net change in unrealized appreciation
or depreciation on investments 9,688,795 3,744,217 26,520,015 11,134,096 6,612,755 9,430,371
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
operations 13,487,823 5,106,789 35,040,283 19,322,381 16,803,651 17,205,289
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (639,086) (280,255) (2,804,744) (1,628,238) (5,850,662) (3,519,859)
From realized gains on investments (3,084,815) (1,089,798) (5,675,210) (6,422,927) (4,393,033) (4,072,590)
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (3,723,901) (1,370,053) (8,479,954) (8,051,165) (10,243,695) (7,592,449)
----------- ---------- ----------- ----------- ----------- -----------
Capital share transactions (note 5):
Proceeds from sale of shares 48,543,686 25,682,821 99,870,808 35,770,514 70,374,669 28,498,420
Net asset value of shares issued
in reinvestment of distributions 3,723,901 1,370,053 8,479,954 8,051,165 10,243,695 7,592,449
----------- ---------- ----------- ----------- ----------- -----------
52,267,587 27,052,874 108,350,762 43,821,679 80,618,364 36,090,869
Cost of shares repurchased (1,475,008) (2,121,172) (4,208,480) (1,868,194) (3,422,404) (2,203,087)
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets derived
from capital share transactions 50,792,579 24,931,702 104,142,282 41,953,485 77,195,960 33,887,782
----------- ---------- ----------- ----------- ----------- -----------
Increase in net assets 60,556,501 28,668,438 130,702,611 53,224,701 83,755,916 43,500,622
Net assets:
Beginning of year 38,117,332 9,448,894 102,138,162 48,913,461 110,968,958 67,468,336
----------- ---------- ----------- ----------- ----------- -----------
End of year $98,673,833 $38,117,332 $232,840,773 $102,138,162 $194,724,874 $110,968,958
=========== ========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets $14,253 $7,061 $69,558 $10,991 $94,881 $23,449
=========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ULTRA SERIES FUND
Statement of Changes in Net Assets (Continued)
Years Ended December 31, 1996 and 1995
BOND FUND MONEY MARKET FUND TREASURY 2000 FUND
Operations: 1996 1995 1996 1995 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net investment income $1,251,976 $624,100 $836,930 $499,998 $107,928 $105,279
Net realized gain (loss) on
security transactions 49,716 29,840 -- -- -- --
Net change in unrealized appreciation
or depreciation on investments (477,126) 883,542 -- -- (75,534) 161,762
---------- ---------- ---------- ---------- ---------- ----------
Change in net assets from
operations 824,566 1,537,482 836,930 499,998 32,394 267,041
----------- ---------- ----------- ----------- ----------- -----------
Distributions to shareholders:
From net investment income (1,238,292) (622,541) (836,930) (499,998) -- --
From realized gains on investments (49,716) (29,840) -- -- -- --
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets from
distributions (1,288,008) (652,381) (836,930) (499,998) -- --
----------- ---------- ----------- ----------- ----------- -----------
Capital share transactions (note5):
Proceeds from sale of shares 13,819,369 5,496,387 32,934,173 16,248,249 7,020 6,176
Net asset value of shares issued in
reinvestment of distributions 1,288,008 652,380 835,642 499,536 -- --
----------- ---------- ----------- ----------- ----------- -----------
15,107,377 6,148,767 33,769,815 16,747,785 7,020 6,176
Cost of shares repurchased (1,796,780) (1,176,460) (24,132,957) (13,173,017) -- --
----------- ---------- ----------- ----------- ----------- -----------
Change in net assets derived from
capital share transactions 13,310,597 4,972,307 9,636,858 3,574,768 7,020 6,176
----------- ---------- ----------- ----------- ----------- -----------
Increase (decrease) in net assets 12,847,155 5,857,408 9,636,858 3,574,768 39,414 273,217
Net assets:
Beginning of year 13,724,768 7,867,360 11,374,129 7,799,361 1,545,327 1,272,110
----------- ---------- ----------- ----------- ----------- -----------
End of year $26,571,923 $13,724,768 $21,010,987 $11,374,129 $1,584,741 $1,545,327
=========== ========== =========== =========== =========== ===========
Undistributed net investment
income included in net assets $18,034 $4,349 -- -- -- --
=========== ========== =========== =========== =========== ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------ CAPITAL APPRECIATION STOCK FUND ----------------------
(For a share outstanding throughout the period): 1996 1995 1994
------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period $12.51 $9.97 $10.00
------ ------ ------
Income from Investment Operations
Net Investment Income .13 .14 0.16
Net Realized and Unrealized Gain (Loss)
on Investments 2.55 2.91 0.37
------ ------ ------
Total from Investment Operations 2.68 3.05 0.53
-------------------------------------------
Distributions
Distributions from Net Investment Income (.13) (.14) (0.15)
Distributions from Realized Capital Gains (.46) (.37) (0.41)
------ ------ ------
Total Distributions (.59) (.51) (0.56)
-------------------------------------------
Net Asset Value, End of Period $14.60 $12.51 $9.97
====================================================================================================================================
Total Return* 21.44% 30.75% 5.44%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $98,674 $38,117 $9,449
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 0.96% 1.37% 1.55%
Portfolio Turnover Rate 49.77% 61.32% 65.81%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Capital Appreciation Stock Fund 1996 1995 1994
---- ---- ----
Amount Charged $440,999 $156,184 $42,519
Ratio of Expenses to
Average Net Assets 0.66% 0.75% 0.85%
Ratio of Net Investment
Income to Average Net Assets 0.95% 1.25% 1.35%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------- GROWTH AND INCOME STOCK FUND ----------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.20 $15.06 $15.51 $15.49 $15.21
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.34 0.37 0.32 0.29 0.32
Net Realized and Unrealized Gain (Loss)
on Investments 3.93 4.37 (0.04) 1.87 0.90
----- ----- ----- ----- -----
Total from Investment Operations 4.27 4.74 0.28 2.16 1.22
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.34) (0.37) (0.32) (0.29) (0.32)
Distributions from Realized Capital Gains (0.81) (1.23) (0.40) (1.85) (0.62)
----- ----- ----- ----- -----
Total Distributions (1.15) (1.60) (0.73) (2.14) (0.94)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $21.32 $18.20 $15.06 $15.51 $15.49
====================================================================================================================================
Total Return* 22.02% 31.75% 1.42% 13.77% 7.66%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $232,841 $102,138 $48,913 $32,468 $24,382
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 1.78% 2.28% 2.19% 1.84% 2.11%
Portfolio Turnover Rate 40.55% 57.80% 45.36% 56.79% 29.67%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Growth and Income Stock Fund 1995 1994 1993 1992
---- ---- ---- ----
Amount Charged $491,168 $281,760 $210,141 $151,195
Ratio of Expenses to
Average Net Assets 0.69% 0.70% 0.73% 0.74%
Ratio of Net Investment
Income to Average Net Assets 2.23% 2.14% 1.76% 2.02%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------------------------- BALANCED FUND -----------------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.63 $12.90 $13.70 $13.54 $13.44
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.58 0.55 0.52 0.50 0.55
Net Realized and Unrealized Gain (Loss)
on Investments 0.98 2.29 (0.56) 0.95 0.40
----- ----- ----- ----- -----
Total from Investment Operations 1.56 2.84 (0.04) 1.45 0.95
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.58) (0.55) (0.51) (0.50) (0.55)
Distributions from Realized Capital Gains (0.32) (0.56) (0.25) (0.79) (0.30)
----- ----- ----- ----- -----
Total Distributions (0.90) (1.11) (0.76) (1.29) (0.85)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $15.29 $14.63 $12.90 $13.70 $13.54
====================================================================================================================================
Total Return* 10.79% 22.27% -0.46% 10.47% 6.85%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $194,725 $110,969 $67,468 $54,363 $41,604
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 3.91% 4.03% 4.00% 3.62% 4.10%
Portfolio Turnover Rate 33.48% 36.68% 28.53% 28.71% 19.23%
Average Commission Rate $0.06 $0.06
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, prior to 1996, CUNA Mutual Life Insurance Company
and its affiliates absorbed all expenses in excess of .65% of the average net
assets of the Capital Appreciation Stock, Growth and Income Stock, Balanced,
Bond and Money Market Funds under the terms of an Expense Reimbursement
Agreement between the Ultra Series Fund and CUNA Mutual Life Insurance
Company. Annually, the Fund and CUNA Mutual Life Insurance Company have
renewed the Expense Reimbursement Agreement. If the Expense Reimbursement
Agreement had not been in effect and if the full expenses allowable under the
Investment Advisory Agreement between the Ultra Series Fund and the
Investment Adviser had been charged, the amounts that would have been charged
and the ratios that would have resulted are:
Balanced Fund 1995 1994 1993 1992
---- ---- ---- ----
Amount Charged $598,507 $417,750 $362,284 $254,326
Ratio of Expenses to
Average Net Assets 0.68% 0.70% 0.74% 0.72%
Ratio of Net Investment
Income to Average Net Assets 4.00% 3.95% 3.53% 4.03%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------------------------- BOND FUND ------------------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.63 $9.67 $10.58 $10.32 $10.37
------ ------ ------ ------ ------
Income from Investment Operations
Net Investment Income 0.65 0.60 0.59 0.64 0.69
Net Realized and Unrealized Gain (Loss)
on Investments (0.28) 0.96 (0.90) 0.28 (0.03)
----- ----- ----- ----- -----
Total from Investment Operations 0.37 1.56 (0.31) 0.92 0.66
-------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.64) (0.59) (0.59) (0.65) (0.70)
Distributions from Realized Capital Gains (0.03) (0.01) (0.01) (0.01) (0.01)
----- ----- ----- ----- -----
Total Distributions (0.67) (0.60) (0.60) (0.66) (0.71)
-------------------------------------------------------------------------------------
Net Asset Value, End of Period $10.33 $10.63 $9.67 $10.58 $10.32
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return* 2.86% 16.37% -3.06% 8.87% 6.47%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $26,572 $13,725 $7,867 $6,297 $5,244
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 6.25% 6.08% 6.03% 5.99% 6.83%
Portfolio Turnover Rate 25.67% 14.74% 11.97% 12.23% 13.58%
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Bond Fund 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Amount Charged $134,222 $70,290 $48,651 $44,293 $33,269
Ratio of Expenses to
Average Net Assets 0.67% 0.68% 0.70% 0.75% 0.75%
Ratio of Net Investment
Income to Average Net Assets 6.23% 6.04% 5.98% 5.89% 6.74%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
---------------------------------------------- MONEY MARKET FUND -----------------------------
(For a share outstanding throughout the period): 1996 1995 1994 1993 1992
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.05 0.05 0.03 0.03 0.03
Net Realized and Unrealized Gain (Loss)
on Investments 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- -----
Total from Investment Operations 0.05 0.05 0.03 0.03 0.03
--------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income (0.05) (0.05) (0.03) (0.03) (0.03)
Distributions from Realized Capital Gains (0.00) (0.00) 0.00 0.00 0.00
----- ----- ----- ----- -----
Total Distributions (0.05) (0.05) (0.03) (0.03) (0.03)
--------------------------------------------------------------------------------------
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00
====================================================================================================================================
Total Return* 5.17% 5.21% 3.34% 2.86% 3.05%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $21,011 $11,374 $7,799 $4,749 $5,097
Ratio of Expenses to Average Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65%
Ratio of Net Investment Income to Average
Net Assets** 4.74% 5.17% 3.66% 2.43% 3.05%
Portfolio Turnover Rate -- -- -- -- --
====================================================================================================================================
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1996, was 4.70% and the "effective" yield for that period was
4.81%.
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
** During the periods shown, CUNA Mutual Life Insurance Company and its
affiliates absorbed all expenses in excess of .65% of the average net assets
of the Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond
and Money Market Funds under the terms of an Expense Reimbursement Agreement
between the Ultra Series Fund and CUNA Mutual Life Insurance Company.
Annually, the Fund and CUNA Mutual Life Insurance Company have renewed the
Expense Reimbursement Agreement. If the Expense Reimbursement Agreement had
not been in effect and if the full expenses allowable under the Investment
Advisory Agreement between the Ultra Series Fund and the Investment Adviser
had been charged, the amounts that would have been charged and the ratios
that would have resulted are:
Money Market Fund 1996 1995 1994 1993 1992
---- ---- ---- ---- ----
Amount Charged $117,520 $70,062 $44,391 $44,836 $39,068
Ratio of Expenses to
Average Net Assets 0.67% 0.73% 0.78% 0.77% 0.75%
Ratio of Net Investment
Income to Average Net Assets 4.72% 5.09% 3.53% 2.31% 2.96%
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Financial Highlights
Year Ended December 31
------------------------------------------------- TREASURY 2000 FUND --------------------------------
(For a share outstanding throughout the period) 1996 1995 1994 1993 1992
------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.47 $7.00 $7.53 $6.53 $6.04
----- ----- ----- ----- -----
Income from Investment Operations
Net Investment Income 0.58 0.58 0.53 0.48 0.45
Net Realized and Unrealized Gain (Loss)
on Investments (0.41) 0.89 (1.06) 0.52 0.04
----- ----- ----- ----- -----
Total from Investment Operations 0.17 1.47 (0.53) 1.00 0.49
---------------------------------------------------------------------------------------
Distributions
Distributions from Net Investment Income 0.00 0.00 0.00 0.00 0.00
Distributions from Realized Capital Gains 0.00 0.00 0.00 0.00 0.00
----- ----- ----- ----- -----
Total Distributions 0.00 0.00 0.00 0.00 0.00
---------------------------------------------------------------------------------------
Net Asset Value, End of Period $8.64 $8.47 $7.00 $7.53 $6.53
====================================================================================================================================
Total Return* 2.10% 20.99% -7.12% 15.43% 8.01%
====================================================================================================================================
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,585 $1,545 $1,272 $1,363 $1,176
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 0.45%
Ratio of Net Investment Income to Average
Net Assets 7.03% 7.40% 7.50% 6.69% 7.26%
Portfolio Turnover Rate -- -- -- -- --
====================================================================================================================================
<FN>
*These returns are after all charges at the mutual fund level have been
subtracted. These returns are higher than the returns at the separate account
level because charges made at the separate account level have not been
subtracted.
</FN>
</TABLE>
<PAGE>
ULTRA SERIES FUND
Notes to Financial Statements
(1) Description of the Fund
The Ultra Series Fund, a Massachusetts Business Trust, is registered as a
diversified, open-end management investment company under the Investment
Company Act of 1940. The Ultra Series Fund is a series fund with six
investment portfolios (funds), each with different investment objectives
and policies and each issuing a separate class of common stock with a par
value of $.01 per share. Fund shares are sold and redeemed at a price equal
to the shares' net asset value (note 2(b)). The assets of each fund are
held separate from the assets of the other funds.
Shares in each fund are currently offered only to separate accounts of CUNA
Mutual Life Insurance Company (formerly known as Century Life of America)
at a price equal to their respective net asset values per share, without
sales charge.
(2) Significant Accounting Policies
(a) Valuation of Investment Securities
Value of Securities, including call options, which are traded on
exchanges are valued at the last sales price on the principal exchange
as of the close of the New York Stock Exchange or 3:00 p.m. Central
Standard Time, whichever is earlier, on the day the securities are
being valued. Securities not traded on a stock exchange on a given day
or traded over-the-counter are valued using a procedure determined in
good faith to represent a fair value and which is authorized by the
Board of Trustees. Pursuant to Rule 2A-7 of the Investment Company Act
of 1940 (as amended), all money market instruments in the Money Market
Fund are valued on an amortized cost basis. Money Market instruments in
the other funds are valued on an amortized cost basis if there are less
than 60 days to maturity.
(b) Share Valuation and Dividends to Shareholders
The net asset value of the shares of each fund is determined on a daily
basis based on the valuation of the net assets of the funds divided by
the number of shares of the fund outstanding. Expenses, including the
investment advisory and advisory/ administrative fees (note 4), are
accrued daily and reduce the net asset value per share.
Dividends on the Money Market Fund will be declared and reinvested
daily in additional full and fractional shares of the Money Market
Fund. Dividends of ordinary income from the Capital Appreciation Stock
Fund, Growth and Income Stock Fund, Bond Fund, and Balanced Fund will
be declared and reinvested quarterly in additional full and fractional
shares of the respective funds. All net realized capital gains of these
funds, if any, will be declared and reinvested at least annually. The
Treasury 2000 Fund will utilize an annual consent dividend procedure
which provides the Fund with the deduction for dividends constructively
paid to shareholders. As a result of permanent book-to-tax differences
from the consent dividends, $107,339 for Treasury 2000 Fund has been
reclassified from undistributed net investment income to additional
paid-in capital.
(c) Federal Income and Excise Taxes
The Ultra Series Fund intends to distribute all of its taxable income
and to comply with the other requirements of the Internal Revenue Code
applicable to regulated investment companies. Accordingly, no provision
for income or excise taxes is required.
(d) Other
Security transactions are recorded on the trade date basis. Realized
gains and losses from security transactions are reported on the
identified cost basis. Interest, including amortization of premium and
discount, is accrued daily and dividend income is recorded on the
ex-dividend date.
(e) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of increase
and decrease in net assets from operations during the period. Actual
results could differ from those estimates.
<PAGE>
(3) Purchase and Sales of Investment Securities
The cost of securities purchased and the proceeds from securities sold
(including maturities, excluding short-term securities for all funds except
Money Market) for each fund during the year ended December 31, 1996, were
as follows:
<TABLE>
<CAPTION>
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C>
Total costs of securities purchased $79,151,948 $159,709,031 $114,633,013 $18,376,441 $154,317,312$ --
========== =========== =========== ========== =========== ========
Total proceeds received on security
sales and principal paydowns $33,783,726 $67,526,667 $52,832,225 $5,207,141 $145,584,378 $ --
========== =========== =========== ========== =========== ========
</TABLE>
(4) Transactions with Affiliates
The Ultra Series Fund has entered into an investment advisory agreement
with CIMCO Inc. (the Investment Adviser), an affiliated company. During
1996, the Investment Adviser received monthly advisory or
advisory/administrative fees, based on average daily net assets, at an
annual rate of .5 percent of the Capital Appreciation Stock, Growth and
Income Stock, Balanced, Bond and Money Market Funds and .45 percent of the
Treasury 2000 Fund.
Expenses of the Ultra Series Fund are accrued daily. Each fund bears the
expenses directly attributable to its own investments. Such expenses
include, but are not limited to, brokerage and other commission costs,
legal fees relating to the enforcement of rights under a specific
investment owned by the fund and expenses related to defense of claims made
solely against the fund. However, certain expenses from shared resources
are allocated to the various funds on the basis of the net assets of the
respective funds as determined each day. These expenses include trustees,
accountants, legal, investment management and other general and
administrative expenses. As a result of sharing these resources, the funds
are expected to experience cost savings over the aggregate amount that
would be payable if each fund were a separate mutual fund. There can be no
assurance, however, that such savings will be realized.
The Investment Adviser is required to reimburse the funds for the amount,
if any, by which the aggregate expenses of any fund (including the
Investment Adviser's fee, but excluding brokerage commissions, interest,
taxes, and extraordinary expenses) in any calendar year exceed 2.0 percent
of the average daily net assets of the funds. In addition, CUNA Mutual Life
Insurance Company has voluntarily agreed to reimburse the Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond and Money
Market Funds for ordinary business expenses in excess of .65 percent (of
which .5 percent is the advisory fee and .15 percent is general and
administrative expenses) of the average daily net assets of these funds.
Also, the Investment Adviser has agreed to assume responsibility for
providing all administrative services and paying all ordinary business
expenses of the Treasury 2000 Fund which exceed .45 percent (all of which
is the advisory/administrative fee) of average daily net assets. Currently,
CUNA Mutual Life Insurance Company and CUNA Mutual Insurance Society,
affiliated companies, are providing administrative services on behalf of
the Adviser.
During the year ended December 31, 1996, CUNA Mutual Life Insurance Company
voluntarily reimbursed expenses for each of the funds in the following
amounts:
Capital Appreciation Stock Fund ...$5,211 Money Market Fund....... $3,169
Bond Fund..........................$4,119
All capital shares outstanding at December 31, 1996, are owned by separate
investment accounts of CUNA Mutual Life Insurance Company.
Certain officers and directors of the Ultra Series Fund are also officers
of CUNA Mutual Life Insurance Company or CIMCO Inc. During the twelve-month
period ended December 31, 1996, the Ultra Series Fund made no direct
payments to its officers and paid trustees' fees of approximately $10,000
to its unaffiliated trustees.
<PAGE>
(5) Share Activity
Transactions in shares of each fund for the years ended December 31, 1996
and 1995, were as follows:
<TABLE>
<CAPTION>
Capital Growth and Money Treasury
Appreciation Income Stock Balanced Bond Market 2000
Stock Fund Fund Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C>
Shares outstanding at December 31,1994 947,425 3,248,703 5,230,875 813,520 7,799,361 181,807
Share sold, including reinvestment
of dividends 2,337,211 2,621,441 2,823,694 657,600 16,747,785 43,617
Shares repurchased (238,086) (259,097) (469,326) (179,841) (13,173,017) (42,878)
--------- --------- --------- -------- ---------- -------
Shares outstanding at December 31, 1995 3,046,550 5,611,047 7,585,243 1,291,279 11,374,129 182,546
--------- --------- --------- -------- ---------- -------
Share sold, including reinvestment
of dividends 3,818,030 5,524,047 5,380,713 1,453,110 33,769,815 805
Shares repurchased (105,316) (215,447) (228,534) (171,319) (24,132,957) --
--------- --------- --------- -------- ---------- -------
Shares outstanding at December 31, 1996 6,759,264 10,919,647 12,737,422 2,573,070 21,010,987 183,351
--------- --------- --------- -------- ---------- -------
</TABLE>
<PAGE>
ULTRA SERIES FUND
INDEPENDENT AUDITORS' REPORT
The Trustees and Shareholders
Ultra Series Fund:
We have audited the statements of assets and liabilities, including the
schedules of investments in securities, of the Capital Appreciation Stock Fund,
Growth and Income Stock Fund, Balanced Fund, Bond Fund, Money Market Fund, and
Treasury 2000 Fund of the Ultra Series Fund as of December 31, 1996, and the
related statements of operations for the year then ended, the statements of
changes in net assets for each of the years in the two-year period then ended,
and financial highlights for each of the years in the five-year (three years for
Capital Appreciation Stock Fund) period then ended. 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 and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Investment securities held in custody were confirmed to us by the
custodian. As to securities purchased or sold, but not received or delivered, we
request confirmation from brokers, and where replies are not received, we
carried out other appropriate audit procedures. An audit also includes assessing
the accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of the
Capital Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund,
Bond Fund, Money Market Fund, and Treasury 2000 Fund of Ultra Series Fund as of
December 31, 1996, the results of their operations for the year then ended, the
changes in their nets assets for each of the years in the two-year period then
ended, and the financial highlights for each of the years in the five-year
(three years for Capital Appreciation Stock Fund) period then ended, in
conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Des Moines, Iowa
February 7, 1997
<PAGE>
Report of Special Meeting of Shareholders
Held January 16, 1997
A Special Meeting of the Ultra Series Fund (the "Fund") Shareholders was held
January 16, 1997. Proxy statements and voting cards were mailed December 1, 1996
to all Policyowners of record as of November 18, 1996 of UltraVers-ALL LifeSM,
MEMBERS(R) Variable Universal Life and MEMBERS(R) Variable Annuity (the
"Separate Accounts").
The voting results for each issue described in the Proxy Statement, based on
returned proxy cards plus proportionate voting on behalf of Separate Account
shares for which instructions were not received, shares owned by CUNA Mutual
Life Group Variable Annuity, and shares owned directly by CUNA Mutual Life
Insurance Company, are set forth below:
1. Election of Trustees:
A vote was taken to consider the election of five (5) members of the Board of
Trustees to serve until their respective successors are chosen and qualified.
All nominees were elected by a plurality of shares of the Fund voting as one
class.
<TABLE>
<CAPTION>
FOR % AGAINST % ABSTAIN % TOTAL VOTES CAST
<S> <C> <C> <C> <C> <C> <C> <C>
Gwendolyn M. Boeke 50,716,170 98.7% 0 0% 663,583 1.3% 51,379,753
Kevin T. Lentz 50,672,866 98.6% 0 0% 706,887 1.4% 51,379,753
Alfred L. Disrud 50,672,866 98.6% 0 0% 706,887 1.4% 51,379,753
Keith S. Noah 50,672,866 98.6% 0 0% 706,887 1.4% 51,379,753
Thomas C. Watt 50,716,170 98.7% 0 0% 663,583 1.3% 51,379,753
2. Proposal to approve Management Agreement:
A vote was taken to consider the approval of a new Management Agreement, on
behalf of each series, between the Fund and CIMCO Inc. (formerly Century
Investment management Co.) to take effect May 1, 1997. The Management Agreement
was approved by a majority of the shares of each Series of the Fund voting
separately.
SERIES FOR % AGAINST % ABSTAIN % TOTAL VOTES CAST
<S> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation 5,848,351 93.75% 90,504 1.45% 299,104 4.8% 6,237,959
Money Market 19,852,065 97.4% 37,425 0.2% 493,673 2.4% 20,383,163
Growth & Income 9,531,461 94.1% 194,610 1.9% 404,507 4.0% 10,130,578
Bond 2,314,388 97.0% 21,035 0.9% 51,750 2.1% 2,387,173
Balanced 11,488,049 95.3% 231,374 1.9% 338,910 2.8% 12,058,333
Treasury 2000 181,086 99.2% 183 0.1% 1,278 0.7% 182,547
TOTAL 51,379,753
3. Proposal to Approve the Amendment to the Fund's Declaration of Trust:
A vote was taken to consider the approval of an Amendment to the Fund's
Declaration of Trust to permit the Fund and each series to offer additional
classes of shares and to provide Shareholders with one vote for each dollar of
net asset value of each series.
The Amendment was approved by a majority of the shares of the Fund voting as one
class.
FOR % AGAINST % ABSTAIN % TOTAL VOTES CAST
<S> <C> <C> <C> <C> <C> <C> <C>
49,071,336 95.5% 663,157 1.3% 1,645,260 3.2% 51,379,753
4. Proposal to Approve KPMG Peat Marwick as Independent Auditors:
A vote was taken to consider the ratification of the selection of KPMG Peat
Marwick as the independent auditors for the Fund for the fiscal year ending
December 31, 1996. The proposal was approved by a majority of the shares of the
Fund voting as one class.
FOR % AGAINST % ABSTAIN % TOTAL VOTES CAST
<S> <C> <C> <C> <C> <C> <C> <C>
49,351,719 96.1% 419,112 0.8% 1,608,922 3.1% 51,379,753
A copy of the Certification of Election Results follows.
</TABLE>
<PAGE>
ULTRA SERIES FUND
Waverly, Iowa
CERTIFICATION OF ELECTION RESULTS
I, Holly A. Guenther, do hereby certify that I am the Inspector of Elections
appointed by the Ultra Series Fund Board of Trustees, and that as Inspector of
Elections, I have tabulated all votes, including votes cast by Lawrence R.
Halverson as proxy for shareholders and as proxy for CUNA Mutual Life Insurance
Company (formerly known as Century Life of America). By virtue of my appointment
as Inspector of Elections, I have authority to make this certification. I
further certify that the vote totals shown below are true and accurate totals of
all votes tabulated for the following proposals at the Special Meeting of
Shareholders of the Fund, January 16, 1997.
1. Election of Trustees:
FOR AGAINST ABSTAIN
Gwendolyn M. Boeke 50,716,170 0 663,583
--------- ---- --------
Kevin T. Lentz 50,672,866 0 706,887
--------- ---- --------
Alfred L. Disrud 50,672,866 0 706,887
--------- ---- --------
Keith S. Noah 50,672,866 0 706,887
--------- ---- --------
Thomas C. Watt 50,716,170 0 663,583
--------- ---- --------
2. Proposal to approve Management Agreement:
FOR AGAINST ABSTAIN
Capital Appreciation 5,848,351 90,504 299,104
--------- ------- --------
Money Market 19,852,065 37,425 493,673
--------- ------- --------
Growth & Income 9,531,461 194,610 404,507
--------- ------- --------
Bond 2,314,388 21,035 51,750
--------- ------- --------
Balanced 11,488,049 231,374 338,910
--------- ------- --------
Treasury 2000 181,086 183 1,278
--------- ------- --------
3. Proposal to approve the Amendment to the Fund's Declaration of Trust:
FOR AGAINST ABSTAIN
49,071,336 663,157 1,645,260
--------- ------- --------
4. Proposal to approve KPMG Peat Marwick as Independent Auditors:
FOR AGAINST ABSTAIN
49,351,719 419,112 1,608,922
--------- ------- --------
Dated: January 16, 1997 /s/ Holly A. Guenther
--------------
Holly A. Guenther
Inspector of Elections
<PAGE>
ULTRA SERIES FUND
Officers and Trustees
OFFICERS
Michael S. Daubs, President
Lawrence R. Halverson, Vice President/Secretary
Donald E. Heltner, Vice President
Michael G. Joneson, Chief Accounting Officer, Treasurer and Assistant Secretary
Robert M. Buckingham, Chief Financial Officer/Assistant Secretary
BOARD OF TRUSTEES
Gwendolyn M. Boeke
Alfred L. Disrud
Kevin T. Lentz
Keith S. Noah
Thomas C. Watt
