AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 22, 1997
Registration No: 2-87775
811-4815
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 |_|
Pre-Effective Amendment No. |_|
Post-Effective Amendment No. 20 |X|
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 |_|
Amendment No. 24 |X|
ULTRA SERIES FUND
(Exact Name of Registrant as Specified in Charter)
2000 Heritage Way, Waverly, Iowa 50677
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code (319) 352-4090, ext. 2157
Name and complete address of agent for service:
Barbara L. Secor, Esq.
CUNA Mutual Life Insurance Company
2000 Heritage Way
Waverly, Iowa 50677
It is proposed that this filing will become effective (check appropriate
box):
|_| immediately upon filing pursuant to paragraph (b)
|X| on May 1, 1997 pursuant to paragraph (b)
|_| 60 days after filing pursuant to paragraph (a)(1)
|_| on pursuant to paragraph (a)(1)
|_| 75 days after filing pursuant to paragraph (a)(2)
|_| on pursuant to paragraph (a)(2) of Rule 485.
If appropriate, check the following box:
|_| this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.
Pursuant to Rule 24f-2, Registrant registered an indefinite amount of securities
under the Securities Act of 1933. The Rule 24f-2 Notice for Registrant's most
recent fiscal year was filed on February 18, 1997.
The index to attached exhibits is found following the signature pages in Part C
after page C-12.
================================================================================
<PAGE>
CROSS REFERENCE SHEET
Form N-1A Item Number
Part A Prospectus Caption
1 Cover Page
2 FEE TABLES
3 FINANCIAL HIGHLIGHTS
4a THE ULTRA SERIES FUND; INVESTMENT OBJECTIVES
AND POLICIES
4b SPECIAL INVESTMENT TECHNIQUES,
4c INVESTMENT OBJECTIVES AND POLICIES
5 MANAGEMENT OF THE ULTRA SERIES FUND
5A See Annual Report
6 GENERAL INFORMATION
6h OFFER, PURCHASE AND REDEMPTION OF SHARES
7 OFFER, PURCHASE AND REDEMPTION OF SHARES
8 OFFER, PURCHASE AND REDEMPTION OF SHARES
9 N/A
Part B Statement of Additional Information Caption
10 Cover Page
11 TABLE OF CONTENTS
12 GENERAL INFORMATION
13 INVESTMENT PRACTICES; INVESTMENT LIMITATIONS;
PORTFOLIO TURNOVER
14 MANAGEMENT OF THE FUND
15 Substantial Shareholders; Beneficial Owners
16 THE INVESTMENT ADVISER
17 DISTRIBUTION PLAN AND AGREEMENT; BROKERAGE
18 See Prospectus
19 HOW SECURITIES ARE OFFERED
20 DIVIDENDS, DISTRIBUTION AND TAXES
21 HOW SECURITIES ARE OFFERED
22 CALCULATION OF YIELDS AND TOTAL RETURNS
23 FINANCIAL STATEMENTS
<PAGE>
PART A
THE PROSPECTUS
Ultra Series Fund PROSPECTUS
2000 Heritage Way, Waverly, Iowa 50677
(319) 352-4090 (800) 798-5500 MAY 1, 1997
The Ultra Series Fund is an investment company consisting of six separate
investment portfolios or funds (each, a "Fund") each of which has a different
investment objective(s). Each Fund is a diversified, open-end management
investment company, commonly known as a mutual fund. The Funds are available to
the public only through: (1) the purchase of certain individual variable life
insurance contracts or variable annuity contracts, (2) the purchase of certain
group variable annuity contracts by qualified pension and retirement plans, or
(3) the purchase of Class C shares of the Ultra Series Fund directly by
qualified pension and retirement plans. The six Funds are: Capital Appreciation
Stock, Growth and Income Stock, Balanced, Bond, Money Market and Treasury 2000.
There can be no assurance that the investment objective of any Fund will be
achieved. Investment experience of each Fund will vary.
When used in connection with individual variable annuity contracts or variable
life insurance contracts, this Prospectus must be accompanied by prospectuses
for those contracts. When distributed to qualified pension and retirement plans
or to participants of such plans, this Prospectus may be accompanied by
disclosure materials relating to such plans which should be read in conjunction
with this Prospectus.
This Prospectus should be read and retained for future reference. It sets forth
concise information that a prospective investor should know before investing.
Additional information about the Ultra Series Fund is contained in a Statement
of Additional Information dated May 1, 1997, as supplemented from time to time,
available without charge from the address shown below. The Statement of
Additional Information is incorporated by reference into this Prospectus and has
been filed with the Securities and Exchange Commission.
UNLIKE CREDIT UNION AND BANK ACCOUNTS, THE VALUE OF AN INVESTMENT IN THE ULTRA
SERIES FUND IS NOT INSURED. SHARES OF THE ULTRA SERIES FUND ARE NOT A DEPOSIT
OF, OR GUARANTEED BY, ANY BANK OR CREDIT UNION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR GOVERNMENT AGENCY. AN INVESTMENT
INVOLVES CERTAIN RISKS INCLUDING A LOSS OF PRINCIPAL.
AN INVESTMENT IN THE MONEY MARKET SERIES IS NEITHER INSURED NOR GUARANTEED BY
THE U.S. GOVERNMENT. THERE IS NO ASSURANCE THAT THE MONEY MARKET SERIES WILL BE
ABLE TO MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
Distributed by:
CUNA BROKERAGE SERVICES, INC.
2000 Heritage Way
Waverly, IA 50677
(319) 352-4090
(800) 798-5500
<PAGE>
TABLE OF CONTENTS
PAGE
FEE TABLE...................................................................1
FINANCIAL HIGHLIGHTS........................................................2
THE ULTRA SERIES FUND.......................................................8
INVESTMENT OBJECTIVES AND POLICIES..........................................8
Capital Appreciation Stock Fund..........................................9
Growth and Income Stock Fund.............................................9
Balanced Fund............................................................9
Bond Fund...............................................................10
Money Market Fund.......................................................10
Treasury 2000 Fund......................................................11
SPECIAL INVESTMENT TECHNIQUES..............................................12
Investment Techniques and Instruments Authorized But Not Used...........12
Repurchase Agreements...................................................12
Borrowing...............................................................13
Foreign Securities......................................................13
MANAGEMENT OF THE ULTRA SERIES FUND........................................13
The Trustees............................................................13
CUNA Mutual Life Insurance Company......................................13
The Investment Adviser..................................................14
The Management Agreement................................................14
OFFER, PURCHASE AND REDEMPTION OF SHARES...................................14
GENERAL INFORMATION........................................................16
Shareholder Rights......................................................16
Inquiries...............................................................16
Dividends...............................................................16
The Ultra Series Fund Performance.......................................16
Tax Status..............................................................17
Net Asset Value.........................................................18
APPENDIX A.................................................................19
<PAGE>
<TABLE>
<CAPTION>
FEE TABLE
Shareholder Transaction Expenses Class C Class Z
<S> <C> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)......................None None
Maximum Deferred Sales Load......................................................................None None
Maximum Sales Load Imposed on Reinvested Dividend (and other Distributions)......................None None
Redemption Fees (as a percentage of amount redeemed, if applicable)..............................None None
Exchange Fee.....................................................................................None None
Annual Fund Operating Expenses (as a percentage of average net assets)
Management Fees
Capital Appreciation Stock Fund.........................................................0.80% 0.80%
Growth and Income Stock Fund............................................................0.60% 0.60%
Balanced Fund...........................................................................0.70% 0.70%
Bond Fund...............................................................................0.55% 0.55%
Money Market Fund.......................................................................0.45% 0.45%
Treasury 2000 Fund......................................................................0.45% 0.45%
12b-1 Fees.......................................................................................0.25% 0.00%
Other Expenses
Capital Appreciation Stock Fund.........................................................0.01% 0.01%
Growth and Income Stock Fund............................................................0.01% 0.01%
Balanced Fund...........................................................................0.01% 0.01%
Bond Fund...............................................................................0.01% 0.01%
Money Market Fund.......................................................................0.01% 0.01%
Treasury 2000 Fund......................................................................None None
Total Fund Operating Expenses
Capital Appreciation Stock Fund.........................................................1.06% 0.81%
Growth and Income Stock Fund............................................................0.86% 0.61%
Balanced Fund...........................................................................0.96% 0.71%
Bond Fund...............................................................................0.81% 0.56%
Money Market Fund.......................................................................0.71% 0.46%
Treasury 2000 Fund......................................................................0.70% 0.45%
Example
Investors would pay the following expenses on a $1,000 investment, assuming (1)
5% annual return and (2) redemption at the end of each period:
1 year 3 year 5 year 10 year
Class C Class Z Class C Class Z Class C Class Z Class C Class Z
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Capital Appreciation Stock Fund $11 $8 $34 $26 $58 $45 $129 $100
Growth and Income Stock Fund 9 6 27 20 48 34 106 76
Balanced Fund 10 7 31 23 53 40 118 88
Bond Fund 8 6 26 18 45 31 100 70
Money Market Fund 7 5 23 15 40 26 88 58
Treasury 2000 Fund 7 5 22 14 39 25 87 57
The Fee Table provided above is included to assist the investor in understanding
the various costs and expenses that an investor in the Ultra Series Fund will
bear directly or indirectly.
This Table should not be considered a representation of past or future expenses
and actual expenses may be greater or lesser than those shown.
</TABLE>
The highlights for the years 1987 through 1996 have been audited by KPMG Peat
Marwick, LLP, independent auditors. These highlights should be read in
conjunction with the financial statements and related notes and the Auditors'
Report in the Statement of Additional Information.
<PAGE>
<TABLE>
<CAPTION>
CAPITAL APPRECIATION STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Years 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>
*1994 data is for period January 3, 1994 (date of initial activity) through
December 31, 1994.
**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%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
GROWTH AND INCOME STOCK FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
----------------------- GROWTH AND INCOME STOCK FUND -----------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15 $10.74 $11.97
Income from Investment Operations
Net Investment Income 0.34 .37 0.32 0.29 0.32 0.33 0.44 0.33 0.31 0.38
Net Realized and Unrealized Gain (Loss)
on Investments 3.93 4.37 (0.04) 1.87 0.90 2.95 (0.73) 2.61 1.47 (0.17)
Total from Investment Operations 4.27 4.74 0.28 2.16 1.22 3.29 (0.29) 2.94 1.77 0.21
Distributions
Distributions from Net Investment
Income (0.34) (.37) (0.32) (0.29) (0.32) (0.34) (0.44) (0.38) (0.33) (0.50)
Distributions from Realized Capital
Gains (0.81) (1.23) (0.40) (1.85) (0.62) (0.49) (0.66) (0.58) (0.03) (0.84)
Total Distributions (1.15) (1.60) (0.73) (2.14) (0.94) (0.83) (1.10) (0.96) (0.36) (1.44)
Net Asset Value, End of Period $21.32 $18.20 $15.06 $15.51 $15.49 $15.21 $12.75 $14.13 $12.15 $10.74
Total Return* 22.02% 31.75% 1.42% 13.77% 7.66% 25.66% -1.98% 24.37% 16.62% 1.33%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $232,841 $102,138 $48,913 $32,468 $24,382 $17,101 $9,258 $7,932 $5,337 $4,342
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 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% 2.58% 3.33% 2.83% 2.75% 3.34%
Portfolio Turnover Rate 40.55% 57.80% 45.36% 56.79% 29.67% 27.90% 32.02% 35.55% 26.22% 21.95%
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 1991 1990 1989 1988 1987
Amount Charged $491,168 $281,760 $210,141 $151,195 $90,028 $64,759 $54,773 $53,742 $50,913
Ratio of Expenses to
Average Net Assets 0.69% 0.70% 0.73% 0.74% 0.74% 0.77% 0.84% 1.10% 1.10%
Ratio of Net Investment
Income to Average Net Assets 2.23% 2.14% 1.76% 2.02% 2.49% 3.21% 2.64% 2.30% 2.89%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BALANCED FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
------------------------------------- BALANCED FUND -------------------------------------
(For a share outstanding throughout
the period): ....................... 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47 $10.98 $11.50
Income from Investment Operations
Net Investment Income ............. 0.58 .55 0.52 0.50 0.55 0.62 0.74 0.61 0.60 0.55
Net Realized and Unrealized Gain
(Loss)on Investments ............. 0.98 2.29 (0.56) 0.95 0.40 1.56 (0.29) 1.42 0.57 0.10
Total from Investment Operations ... 1.56 2.84 (0.04) 1.45 0.95 2.18 .46 2.03 1.18 0.65
Distributions
Distributions from Net Investment
Income ......................... (0.58) (.55) (0.51) (0.50) (0.55) (0.63) (0.74) (0.71) (0.68) (0.74)
Distributions from Realized Capital
Gains .......................... (0.32) (0.56) (0.25) (0.79) (0.30) (0.22) (0.20) (0.20) 0.00 (0.38)
Total Distributions ................ (0.90) (1.11) (0.76) (1.29) (0.85) (0.85) (0.94) (0.91) (0.68) (1.17)
Net Asset Value, End of Period ..... $15.29 $14.63 $12.90 $13.70 $13.54 $13.44 $12.11 $12.59 $11.47 $10.98
Total Return* ...................... 10.79% 22.27% -0.46% 10.47% 6.85% 18.53% 3.75% 18.03% 10.87% 5.58%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) ................... $194,725 $110,969 $67,468 $54,363 $41,604 $29,539 $19,964 $15,416 $10,271 $7,563
Ratio of Expenses to Average Net
Assets** ......................... 0.65% 0.65% 0.65% 0.65% 0.65% 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% 4.98% 6.23% 5.97% 6.02% 5.85%
Portfolio Turnover Rate ............ 33.48% 36.68% 28.53% 28.71% 19.23% 13.26% 27.07% 30.64% 11.35% 20.18%
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 1991 1990 1989 1988 1987
Amount Charged ............. $598,507 $417,750 $362,284 $254,326 $172,438 $132,028 $102,858 $81,246 $59,847
Ratio of Expenses to
Average Net Assets ......... 0.68% 0.70% 0.74% 0.72% 0.71% 0.74% 0.82% 0.91% 0.93%
Ratio of Net Investment
Income to Average Net Assets 4.00% 3.95% 3.53% 4.03% 4.92% 6.14% 5.79% 5.77% 5.57%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BOND FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
----------------------------------------- BOND FUND -----------------------------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70 $9.79 $10.47
Income from Investment Operations
Net Investment Income 0.65 0.60 0.59 0.64 0.69 0.77 0.89 0.87 0.80 0.76
Net Realized and Unrealized Gain
(Loss)on Investments (0.28) 0.96 (0.90) 0.28 (0.03) 0.62 (0.18) 0.23 (0.03) (0.46)
Total from Investment Operations 0.37 1.56 (0.31) 0.92 0.66 1.39 0.71 1.11 0.77 0.30
Distributions
Distributions from Net Investment
Income (0.64) (0.59) (0.59) (0.65) (0.70) (0.77) (0.89) (0.88) (0.86) (0.98)
Distributions from Realized Capital
Gains (0.03) (0.01) (0.01) (0.01) (0.01) 0.00 0.00 0.00 0.00 (0.00)
Total Distributions (0.67) (0.60) (0.60) (0.66) (0.71) (0.77) (0.89) (0.88) (0.86) (0.98)
Net Asset Value, End of Period $10.33 $10.63 $9.67 $10.58 $10.32 $10.37 $9.75 $9.93 $9.70 $9.79
Total Return* 2.86% 16.37% -3.06% 8.87% 6.47% 14.70% 7.41% 11.74% 8.05% 3.06%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $26,572 $13,725 $7,867 $6,297 $5,244 $3,975 $3,399 $3,315 $3,401 $3,029
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 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% 7.74% 8.87% 8.63% 8.50% 8.20%
Portfolio Turnover Rate 25.67% 14.74% 11.97% 12.23% 13.58% 8.74% 46.09% 24.47% 4.31% 26.23%
<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:
Bond Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
Amount Charged $134,222 $70,290 $48,651 $44,293 $33,269 $27,311 $25,651 $28,139 $43,266 $41,968
Ratio of Expenses to
Average Net Assets 0.67% 0.68% 0.70% 0.75% 0.75% 0.75% 0.77% 0.83% 1.31% 1.47%
Ratio of Net Investment
Income to Average Net Assets 6.23% 6.04% 5.98% 5.89% 6.74% 7.65% 8.75% 8.45% 7.84% 7.39%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MONEY MARKET FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
-------------------------------- MONEY MARKET FUND --------------------------------
(For a share outstanding throughout
the period): 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $1.00 $1.00 $1.00 $1.00 $1.00 $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 0.05 0.08 0.08 0.07 0.06
Net Realized and Unrealized Gain
(Loss)on Investments 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total from Investment Operations 0.05 0.05 0.03 0.03 0.03 0.05 0.08 0.08 0.07 0.06
Distributions
Distributions from Net Investment
Income (0.05) (0.05) (0.03) (0.03) (0.03) (0.05) (0.08) (0.08) (0.07) (0.06)
Distributions from Realized Capital
Gains (0.00) (0.00) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total Distributions (0.05) (0.05) (0.03) (0.03) (0.03) (0.05) (0.08) (0.08) (0.07) (0.06)
Net Asset Value, End of Period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Total Return* 5.17% 5.21% 3.34% 2.86% 3.05% 5.36% 7.53% 8.39% 6.91% 6.14%
Ratio/Supplemental Data
Net Assets, End of Period
(000s Omitted) $21,011 $11,374 $7,799 $4,749 $5,097 $5,082 $4,794 $4,420 $2,541 $2,341
Ratio of Expenses to Average
Net Assets** 0.65% 0.65% 0.65% 0.65% 0.65% 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% 5.36% 7.53% 8.39% 6.91% 6.14%
Portfolio Turnover Rate -- -- -- -- -- -- -- -- -- --
For the Money Market Fund, the "seven-day average" yield for the seven days
ended December 31, 1995, was 4.93% and the "effective" yield for that period was
5.05%.
<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:
Money Market Fund 1996 1995 1994 1993 1992 1991 1990 1989 1988 1987
---- ---- ---- ---- ---- ---------------------------------------
Amount Charged $117,520 $70,062 $44,391 $44,836 $39,068 $38,030 $34,514 $28,647 $37,340 $39,358
Ratio of Expenses to
Average Net Assets 0.67% 0.73% 0.78% 0.77% 0.75% 0.73% 0.77% 0.87% 1.49% 1.68%
Ratio of Net Investment
Income to Average Net Assets 4.72% 5.09% 3.53% 2.31% 2.96% 5.29% 7.42% 8.17% 6.07% 5.11%
The Expense Reimbursement Agreement between CUNA Mutual Life Insurance Company
and the Fund was terminated effective May 1, 1997 and the Fund entered into a
Management Agreement with CIMCO Inc., the Investment Adviser, pursuant to which
the fees changed for Fund management and expenses. (See The Investment Adviser.)
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TREASURY 2000 FUND OF ULTRA SERIES FUND
Financial Highlights
Years Ended December 31
---------------------------- TREASURY 2000 FUND ----------------------------
(For a share outstanding throughout the period) 1996 1995 1994 1993 1992 1991 1990 1989 1988
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period $8.47 $7.00 $7.53 $6.53 $6.04 $5.02 $4.69 $3.85 $3.62
Income from Investment Operations
Net Investment Income 0.58 0.58 0.53 0.48 0.45 0.41 0.38 0.34 0.14
Net Realized and Unrealized Gain (Loss)
on Investments (0.41) 0.89 (1.06) 0.52 0.04 0.61 (0.05) 0.50 0.09
Total from Investment Operations 0.17 1.47 (0.53) 1.00 0.49 1.02 0.33 0.84 0.23
Distributions
Distributions from Net Investment Income 0.00 0.00 0.00 0.00 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 0.00 0.00 0.00 0.00
Total Distributions 0.00 0.00 0.00 0.00 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 $6.04 $5.02 $4.69 $3.85
Total Return* 2.10% 20.99% -7.12% 15.43% 8.01% 20.37% 7.12% 21.79% 6.28%
Ratio/Supplemental Data
Net Assets, End of Period (000s Omitted) $1,585 $1,545 $1,272 $1,363 $1,176 $1,084 $987 $834 $681
Ratio of Expenses to Average Net Assets 0.45% 0.45% 0.45% 0.45% 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% 7.76% 8.25% 8.02% 8.70%
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>
THE ULTRA SERIES FUND
The Ultra Series Fund was established as a Massachusetts Business Trust under a
Declaration of Trust dated September 16, 1983. The Ultra Series Fund is a series
fund with six separate investment portfolios, each of which is a diversified,
open-end management investment company, in effect, a separate mutual fund
("Fund"). The Ultra Series Fund issues a separate series of shares of beneficial
interest for each Fund representing fractional undivided interests in that Fund.
An investor in a Fund is entitled to a pro-rata share of all dividends and
distributions arising from the net income and capital gains on the investments
of that Fund. An investor also shares in any losses of that Fund. The six Funds
are: Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, Money
Market, and Treasury 2000. In the future, the number of Funds may change. The
Declaration of Trust permits the Ultra Series Fund to issue an unlimited number
of shares of each series and to sub-divide the shares of each series into two or
more classes. Currently, each series of shares is divided into Class C and Class
Z shares. Class C and Class Z shares are identical except for the fact that the
net asset value of each Class C share reflects a distribution fee assessed
against the assets of each Fund supporting Class C shares pursuant to a
distribution plan adopted in accordance with Rule 12b-1 under the Investment
Company Act of 1940 (the "Act"). (See FEE TABLES.)
The Ultra Series Fund offers its shares to separate accounts of CUNA Mutual Life
Insurance Company (the "Company") or of its "permanent affiliate," CUNA Mutual
Insurance Society ("CUNA Mutual") and subsidiaries and affiliates of the Company
and CUNA Mutual (together, the "CUNA Mutual Group") as well as to separate
accounts of other unaffiliated life insurance companies as funding vehicles for
certain individual variable annuity contracts, group variable annuity contracts
and individual variable life insurance contracts. Most such separate accounts
are each, like the Ultra Series Fund, registered as investment companies with
the Securities and Exchange Commission ("SEC"), and a separate prospectus, which
accompanies this Prospectus, describes each such separate account and its
related contract. Some insurance company separate accounts supporting group
variable annuity contracts sold solely to qualified pension and retirement
plans, however, are not investment companies and are not registered with the SEC
as investment companies nor are interests in the separate account registered as
securities under the federal securities laws. Although some disclosure documents
relating to such group variable annuity contracts (and/or to the plan purchasing
the contracts) may be provided to the plan purchasing the contracts or to
participants in such a plan, no prospectus exists for the contracts. The Ultra
Series Fund also may offer its shares directly to qualified pension and
retirement plans. The Ultra Series Fund generally offers Class Z shares to
separate accounts of CUNA Mutual Group insurance companies and to qualified
pension and retirement plans of CUNA Mutual Group companies and offers Class C
shares to separate accounts of insurance companies and to qualified pension and
retirements plans that are not affiliated with CUNA Mutual Group. The Ultra
Series Fund does not offer its shares directly to the general public.
Because shares of the Ultra Series Fund are sold to the CUNA Mutual Group
separate accounts, qualified retirement plans sponsored by CUNA Mutual Group,
unaffiliated insurance company separate accounts and qualified retirement plans,
it is possible that material conflicts could arise among and between the
interests of: (1) variable annuity contract owners (or participants under group
variable annuity contracts) and variable life insurance contract owners, or (2)
owners of variable annuity and variable life insurance contracts of affiliated
and unaffiliated insurance companies and (3) participants in affiliated and
unaffiliated qualified retirement plans. Such material conflicts could include,
for example, differences in federal tax treatment of variable annuity contracts
versus variable life insurance contracts. The Ultra Series Fund does not
currently foresee any disadvantage to one category of investors vis-a-vis
another arising from the fact that the Ultra Series Fund's shares support
different types of variable insurance contracts. However, the Ultra Series
Fund's Board of Trustees will continuously monitor events to identify any
potential material conflicts that may arise between the interests of different
categories or classes of investors and to determine what action, if any, should
be taken to resolve such conflicts. Such action may include redeeming shares of
the Ultra Series Fund held by one or more of the separate accounts or qualified
retirement plans involved in any material irreconcilable conflict.
INVESTMENT OBJECTIVES AND POLICIES
Each Fund has one or more investment objectives and related investment policies
and uses various investment techniques to pursue these objectives and policies.
There can be no assurance that any of the Funds will achieve its investment
objective or objectives. Investors should not consider any one Fund alone to be
a complete investment program. All of the Funds are subject to the risk of
changing economic conditions, as well as the risk inherent in the ability of the
Fund's investment adviser to make changes in the portfolio composition of the
Fund in anticipation of changes in economic, business, and financial conditions.
As with any security, a risk of loss is inherent in an investment in the shares
of any of the Funds.
The different types of securities, investments, and investment techniques used
by each Fund all have attendant risks of varying degrees. For example, with
respect to equity securities, there can be no assurance of capital appreciation
and there is a substantial risk of decline. With respect to debt securities,
there exists the risk that the issuer of a security may not be able to meet its
obligations on interest or principal payments at the time required by the
instrument. In addition, the value of debt instruments generally rises and falls
inversely with prevailing interest rates.
Certain types of investments and investment techniques common to one or more
Funds are described in greater detail, including the risks of each, under
SPECIAL INVESTMENT TECHNIQUES in this Prospectus or in INVESTMENT PRACTICES in
the Statement of Additional Information. The Funds are also subject to certain
investment restrictions that are described under the caption INVESTMENT
LIMITATIONS in the Statement of Additional Information.
The investment objective or objectives of each Fund as well as the investment
restrictions of each Fund are fundamental and may not be changed without the
approval of a majority of the votes attributable to the outstanding shares of
that Fund. (See INVESTMENT LIMITATIONS in the Statement of Additional
Information.) Investment policies are not fundamental and may be changed by the
Ultra Series Fund's Board of Trustees without shareholder approval. (See
INVESTMENT PRACTICES and INVESTMENT LIMITATIONS in the Statement of Additional
Information.)
Capital Appreciation Stock Fund
The primary investment objective of the Capital Appreciation Stock Fund is
long-term capital growth. Due to its more aggressive focus on capital growth and
lack of emphasis on current income, this Fund will typically experience greater
variability of returns over time than the Growth and Income Stock Fund. A
characteristic common to most stocks owned will be an attractive valuation
relative to the expected level and certainty of the issuing company's future
earnings. Relative to the Growth and Income Stock Fund, the Capital Appreciation
Stock Fund will include some smaller, less developed issuers and some companies
undergoing more significant fundamental changes in their markets or operations.
The Fund will diversify its holdings among various industries and among
companies within those industries but will often be less diversified than the
Growth and Income Stock Fund. The combination of these factors introduces
greater investment risk than the Growth and Income Stock Fund, but can also
provide higher long-term returns than the returns typically available from less
variable investments. When, in the opinion of management, current cash needs or
market or economic conditions warrant, the Fund may maintain a portion of its
assets in cash or cash equivalents of the types permitted for the Money Market
Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities, and
invest in put and call options, stock index futures and related options. The
Fund may invest up to 25% of assets in American Depository Receipts ("ADRs").
These practices are described in SPECIAL INVESTMENT TECHNIQUES or in the
Statement of Additional Information.
Growth and Income Stock Fund
The primary investment objective of the Growth and Income Stock Fund is
long-term capital growth, with income as a secondary consideration. The Fund
will focus on stocks of companies with financial and market strength and a
long-term record of performance. Primarily through ownership of a diversified
portfolio of common stocks and securities convertible into common stocks, the
Fund will seek a rate of return in excess of returns typically available from
less variable investment alternatives. A characteristic common to most stocks
owned will be an attractive valuation relative to the issuing company's apparent
strength and earnings capability. The Fund will diversify its holdings among
various industries and among companies within those industries. When, in the
opinion of management, current cash needs or market or economic conditions
warrant, the Fund may maintain a portion of its assets in cash or cash
equivalents of the types permitted for the Money Market Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities, and
invest in put and call options, stock index futures and related options. The
Fund may invest up to 25% of assets in ADRs. These practices are described in
SPECIAL INVESTMENT TECHNIQUES or in the Statement of Additional Information.
Balanced Fund
The investment objective of the Balanced Fund is to achieve a high total return
through the combination of income and capital appreciation. Total returns are
expected to be less variable than those of the Capital Appreciation Stock Fund
and the Growth and Income Stock Fund but more variable than the Bond Fund. The
Balanced Fund invests in a broadly diversified list of securities including
common stocks, bonds and money market instruments. The percentage of assets
invested in equity securities, fixed income securities and money market
instruments may vary somewhat depending upon management's judgment of the
relative attractiveness of each sector and anticipated cash needs of the Fund.
Generally, however, common stocks will constitute 60% to 40% of Fund's assets,
bonds will constitute 40% to 60% of Fund's assets and money market instruments
may constitute up to 20% of Fund's assets. (See Money Market Fund for
description of money market instruments; see Bond Fund for description of bonds;
see Capital Appreciation Stock Fund and Growth and Income Stock Fund for
description of equity securities.)
Debt securities invested in by the Fund will be affected by general changes in
interest rates, resulting in increases or decreases in the value of these
securities. Market prices of debt securities tend to rise when interest rates
fall, and fall when interest rates rise. Issuers of debt securities may not be
able to meet their interest or principal payment obligations when due. The
ability of the portfolio to realize interest under repurchase agreements and
pursuant to loans of the Fund's securities is dependent on the ability of the
seller or borrower, as the case may be, to perform its obligations to the Fund.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities,
invest in put and call options, financial futures, stock index futures and
related options. The Fund may invest up to 15% of assets in ADRs. These
practices are described in the SPECIAL INVESTMENT TECHNIQUES or in the Statement
of Additional Information.
Bond Fund
The primary investment objective of the Bond Fund is to generate 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. To keep current income relatively stable and to
limit share price volatility, the portfolio will emphasize investment grade,
primarily intermediate term securities. Pursuit of these objectives can be
expected to result over time in a lower average return than in the Capital
Appreciation Stock Fund, Growth and Income Stock Fund or Balanced Fund. The
assets of the Fund may also be held in cash or temporarily invested in
short-term investments when, in the opinion of management, current liquidity
needs or market or economic conditions warrant. The Fund may invest in the
following instruments:
Corporate Debt Securities: Issued by domestic and foreign corporations
which have a rating within the four highest categories as determined by
Standard & Poor's Corporation and/or Moody's Investors Service, Inc.
The ratings are described in the Statement of Additional Information.
U.S. Government Debt Securities: Issued or guaranteed by the U.S.
Government or its agencies or instrumentalities (See Money Market Fund
for a description of U.S. Government securities).
Foreign Government Debt Securities: Issued or guaranteed by a foreign
government or its agencies or instrumentalities, payable in U.S.
dollars, which have a rating within the four highest categories as
established by Standard & Poor's Corporation and/or Moody's Investors
Service, Inc.
Other Issuer Debt Securities: Issued or guaranteed by corporations,
banking institutions, and others which, although not rated by a
national rating service, are considered by the Investment Adviser to
have an investment quality equivalent to the four highest categories as
determined by Standard and Poor's Corporation and/or Moody's Investors
Service, Inc.
Cash or Cash Equivalents: Of the types permitted for the Money Market
Fund.
The Bond Fund will be affected by general changes in interest rates resulting in
increases or decreases in the value of the Fund's securities. Market prices of
debt securities tend to rise when interest rates fall and fall when interest
rates rise. Issuers of debt securities may not be able to meet their interest or
principal payment obligations when due. The ability of the Fund to realize
interest under repurchase agreements and pursuant to loans of the Fund's
securities is dependent on the ability of the seller or borrower, as the case
may be, to perform its obligation to the Fund.
The Bond Fund currently invests no more than 5% of its net assets in corporate
or foreign government debt securities which are not in the four highest
categories as rated by Standard & Poor's Corporation or Moody's Investors
Service, Inc.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities, invest in restricted securities, invest in foreign securities,
invest in put and call options, financial futures, and related options. These
practices are described in SPECIAL INVESTMENT TECHNIQUES or in the Statement of
Additional Information.
Money Market Fund
The investment objective of the Money Market Fund is to seek the highest current
income available from money market instruments consistent with the preservation
of capital and liquidity. The Fund will maintain a dollar-weighted average
portfolio maturity which does not exceed 90 days. The Fund will purchase
instruments maturing in twelve months or less from the date of purchase.
The Fund will purchase instruments that meet one of the following quality
standards:
1. Securities that at the time of purchase are rated in the highest rating
category for short-term debt obligations by at least two nationally
recognized statistical rating organizations;
2. Unrated securities that at the time of purchase the Investment Adviser
determines that if they had been rated would have been rated in the
highest rating category for short-term debt obligations by at least two
nationally recognized statistical rating organizations; or
3. Securities that at the time of issuance were long-term securities but
that at the time of purchase have a remaining maturity of less than one
year and whose issuer has received with respect to a class of
short-term debt obligations (or any security within that class) that
now is comparable in priority and security with the security to be
purchased, the highest rating category for short-term debt obligations
from at least two nationally recognized statistical rating
organizations.
The Fund may invest in the following instruments meeting the above maturity and
quality standards:
U.S. Government Obligations: U.S. Government securities include, but
are not limited to: direct obligations of the U.S. Treasury such as
U.S. Treasury bills, notes and bonds, and notes, bonds, and discount
notes of U.S. Government instrumentalities or agencies, such as the
Federal Land Bank, Bank for Cooperatives, Federal Intermediate Credit
Bank, Federal Home Loan Bank, Farmers Home Administration and Federal
National Mortgage Association. The Fund may invest in securities issued
or guaranteed by any of the foregoing entities or by any other agency
or instrumentality established or sponsored by the U.S. Government.
Some obligations issued or guaranteed by government agencies or
instrumentalities of the U.S. Government are backed by the full faith
and credit of the U.S. Government, such as U.S. Treasury bills; others
are backed by the right of the issuer to borrow from the U.S. Treasury
or are backed by the credit of the agency or instrumentality issuing
the obligation. No assurance can be given that the U.S. Government
would provide financial support to U.S. Government-sponsored
instrumentalities because it is not obligated to do so.
Commercial Paper: Corporations issue these unsecured promissory notes
to finance their short-term credit needs.
Corporate Obligations: Corporations issue these bonds and notes to
finance long-term credit needs. The Fund only invests in corporate
obligations which have a maturity when purchased of one year or less.
Bank Obligations: The Fund may invest in the following obligations
issued by banks subject to regulation by the U.S. Government and having
total assets of $1 billion or more: certificates of deposit, time
deposits, bankers' acceptances. The Fund may also invest in
certificates of deposit of savings institutions regulated by the U.S.
Government and having total assets of $1 billion or more. The Fund may
invest in the securities of foreign branches of U.S. banks, such as
negotiable certificates of deposit ("Eurodollar CDs"), and may invest
in foreign securities. All such securities must be payable in U.S.
dollars. U.S. dollar denominated obligations of foreign branches of
U.S. banks and U.S. branches of foreign banks are not insured by the
Federal Deposit Insurance Corporation. (See SPECIAL INVESTMENT
TECHNIQUES.)
Certificates of Deposit of Smaller Banks and Savings Institutions: The
Fund may invest in certificates of deposit issued by banks and savings
institutions with total assets of less than $1 billion provided they
are fully insured in principal amount, but not as to interest, by the
Federal Deposit Insurance Corporation, or the National Credit Union
Share Insurance Fund. In determining whether and to what extent such
securities will be acquired by the Fund, the Investment Adviser will
consider factors such as yield, availability of a resale market for
certificates of deposit of small institutions, and the effect
investments in these securities may have on the Fund's overall
liquidity.
Although the Fund seeks to maintain a Net Asset Value of $1 per share for
purposes of purchases and redemptions, there can be no assurance that the Fund
will be able to maintain a stable Net Asset Value of $1 per share. The Fund will
be affected by general changes in interest rates resulting in increases or
decreases in the value of the obligations held by the Fund. The values of the
securities in the portfolio can be expected to vary inversely to the changes in
prevailing interest rates. Thus, if interest rates have increased from the time
a security was purchased, such security, if sold, might be sold at a price less
than its purchase cost. Similarly, if interest rates have declined from the time
a security was purchased, such security, if sold, might be sold at a price
greater than its purchase cost. In either instance, if the security was held to
maturity, no loss or gain would normally be realized as a result of these
fluctuations. Redemptions of shares could require the sale of investments at a
time when such a sale might not otherwise be desirable. The ability of the other
party to the transaction to perform its obligations to the Fund may determine
whether the Fund will receive the principal invested and the interest due.
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may invest in foreign
securities. These practices are described in SPECIAL INVESTMENT TECHNIQUES.
Treasury 2000 Fund
The investment objective of the Treasury 2000 Fund is to provide safety of
capital and a relatively predictable payout upon portfolio maturity, primarily
by investing in Stripped Treasury Securities. Stripped Treasury Securities
include U.S. Treasury debt obligations originally issued as bearer bonds which
have been stripped of their unmatured interest coupons, coupons which have been
stripped from U.S. Treasury bearer bonds, and receipts or certificates for
stripped U.S. Treasury debt obligations. Stripped Treasury Securities do not
receive any periodic payments of interest and are not subject to early
redemption. The Stripped Treasury Securities held by this Fund mature on (have a
portfolio maturity date of) November 15, 2000.
Unlike most coupon-bearing bonds, Stripped Treasury Securities are sold at a
substantial discount from face value because the buyer of Stripped Treasury
Securities receives only the right to receive one future fixed payment on the
security and does not receive any rights to periodic interest payments on the
security. While Stripped Treasury Securities insulate shareholders from being
unable to invest interest payments received at a rate as high as the yield on
the original security, they also prevent investing the interest at a higher rate
should interest rates raise.
Because of their substantial discount, Stripped Treasury Securities are
particularly susceptible to wide fluctuations in value as interest rates
increase or decrease. The longer the term to maturity, the more susceptible they
will be to a given change in interest rate levels. Variable rates of inflation
and economic growth, together with the fiscal and monetary policies adopted to
attempt to deal with these and other economic problems, contribute to wide
fluctuations in interest rates (and thus in the value of fixed-rate debt
obligations like these). Although more volatile, Stripped Treasury Securities
avoid reinvestment risk on the increase in value of the security. Avoiding this
risk is an important factor in being able to achieve a relatively predictable
payout upon portfolio maturity.
In addition to Stripped Treasury Securities, the Treasury 2000 Fund may invest
in coupon-bearing Treasury Notes with maturities identical to those of the
Stripped Treasury Securities held in the portfolio. The Treasury Notes may be
purchased to the extent necessary to maintain sufficient cash flow to pay the
Adviser's fees.
On or within 12 months prior to the portfolio maturity date, the securities will
be liquidated. (See MANAGEMENT OF THE ULTRA SERIES FUND and OFFER, PURCHASE AND
REDEMPTION OF SHARES.) Once the Treasury 2000 Fund has liquidated its portfolio,
additional Stripped Treasury Securities with a portfolio maturity date selected
at that time may be purchased and the Fund may continue, with liquidation and
subsequent refunding occurring from time to time. Operation of the new portfolio
would be consistent with the operation of the Treasury 2000 portfolio. If, at
the time of the portfolio maturity date for this Fund, it appears not to be in
the best interest of the Fund to purchase additional Stripped Treasury
Securities, the Fund will distribute its assets and cease operations. (See
MANAGEMENT OF THE ULTRA SERIES FUND and OFFER, PURCHASE AND REDEMPTION OF
SHARES.)
Consistent with applicable regulatory requirements, the Fund may enter into
repurchase agreements and borrow money. Also, the Fund may lend portfolio
securities and invest in financial futures and related options. These practices
are described in SPECIAL INVESTMENT TECHNIQUES or in the Statement of Additional
Information.
SPECIAL INVESTMENT TECHNIQUES
Investment Techniques and Instruments Authorized But Not Used
As described above, certain of the Funds may lend portfolio securities and
invest in restricted securities, foreign securities, put and call option
contracts, stock index futures contracts, financial futures contracts, and
options on stock index futures contracts and financial futures contracts in
which the Fund can invest. None of the Funds has employed these practices or
invested in these instruments during the past year and has no current intention
of doing so in the foreseeable future. Each is described in INVESTMENT PRACTICES
in the Statement of Additional Information.
Repurchase Agreements
Each Fund may enter into repurchase agreements ("repos") with banks and dealers
in U.S. Government securities. Under a repurchase agreement, a Fund may acquire
an underlying debt instrument for a relatively short period subject to an
obligation of the seller to repurchase and the Fund to resell the instrument at
a fixed price and time, thereby determining the yield during the Fund's holding
period. The yield during the holding period is insulated from market
fluctuations. The yield is not related to the interest rate on the underlying
securities. Under the Act, repurchase agreements are considered loans by the
Fund. The difference between the total amount to be received upon the repurchase
of the securities and the price paid by the Fund upon their acquisition is
accrued daily as interest. If the institution defaults on the repurchase
agreement, the Fund will retain possession of the underlying securities. In the
event of a default by an institution, the Fund may incur certain costs in
liquidating the collateral, and could also incur a loss if the proceeds realized
upon sale of the underlying obligations are less than the original purchase
price. In addition, if bankruptcy proceedings are commenced with respect to the
seller, realization on the collateral may be delayed or limited and the Fund may
incur additional costs. In such a case, the Fund will be subject to risks
associated with changes in the market value of the collateral securities. In
order to limit the risks associated with entry into repurchase agreements, the
Trustees have adopted the following policies with respect to repurchase
agreements. The portfolios will enter into repurchase agreements only (a) with
the Ultra Series Fund's custodian bank, (b) with banks (other than the
custodian) having capital (and surplus) of at least $1 billion or (c) with major
brokerage firms which are among the 10 largest government securities dealers and
which have been approved by the Board of Trustees, upon recommendation by the
Ultra Series Fund's Investment Adviser. The Fund will obtain collateral in
proper form having a market value of not less than 100% of the repurchase price.
Such collateral will be U.S. Government obligations as defined under the section
describing the Money Market Fund.
Borrowing
All of the Funds may borrow money but only from banks and only for temporary or
short-term purposes. Temporary or short-term purposes may include short-term
(i.e., five business days) credits for clearing portfolio transactions and
borrowing in order to meet redemption requests or to finance failed settlements
of portfolio trades. No Fund will borrow for leveraging purposes. Each Fund will
maintain a continuous asset coverage of at least 300% (as defined in the Act)
with respect to all of its borrowings. Should the value of a Fund's assets
decline to below 300% of borrowings, the Fund may be required to sell portfolio
securities within three days to reduce the Fund's debt and restore the 300%
asset coverage. Borrowing involves interest costs. A Fund will not purchase
additional securities while its borrowings exceed 5% of its total assets.
Foreign Securities
Investing in foreign securities involves significant risks not typically
associated with investing in domestic securities. Foreign securities may be
affected by changes in currency exchange rates, changes in foreign or U.S. laws
or restrictions applicable to such investments and in exchange control
regulations. Some foreign stock markets have substantially less volume than, for
example, the New York Stock Exchange and securities of some foreign issuers may
be less liquid than securities of domestic issuers. Commissions and dealer
mark-ups on transactions in foreign securities may be higher than for similar
transactions in the United States. In addition, clearance and settlement
procedures may be different in foreign countries and, in certain markets, on
certain occasions, such procedures have been unable to keep pace with the volume
of securities transactions, thus making it difficult to conduct such
transactions.
Foreign issuers of securities are not generally subject to uniform accounting,
auditing and financial reporting standards comparable to those applicable to
domestic companies. There may be less publicly available information about a
foreign issuer than about a domestic one. In addition, there is generally less
government regulation of stock exchanges, brokers, and listed and unlisted
issuers in foreign countries than in the United States. Furthermore, with
respect to certain foreign countries, there is the possibility of expropriation
or confiscatory taxation, imposition of withholding taxes on dividend or
interest payments, limitations on the removal of funds or other assets of the
Fund, or political or social instability or diplomatic developments which could
affect investments in those countries.
Many foreign securities are represented by ADRs. ADRs represent the right to
receive foreign securities deposited in a domestic bank or a foreign
correspondent bank. Prices of ADRs are quoted in U.S. dollars, and ADRs are
traded in the U.S. on exchanges or over-the-counter and are sponsored by and
issued by domestic banks. In general, there is a large, liquid market in the
United States for ADRs quoted on a national exchange or the NASD's national
market system. The information available for ADRs is subject to the accounting,
auditing and financial reporting standards of the domestic market or exchange on
which the they are traded, which standards are more uniform and exacting than
those to which many issuers of foreign securities are subject. ADRs do not
eliminate all of the risk inherent in investing in foreign securities. To the
extent that a Fund acquires ADRs through a bank that does not have a contractual
relationship with the issuer of a foreign security underlying the receipt to
issue and service the receipt, there may be an increased possibility that the
Fund would not become aware of and be able to respond to corporate actions such
as stock splits or rights offerings involving the foreign issuer in a timely
manner. The market value of ADRs is dependent upon the market value of the
underlying securities and fluctuations in the value of the currencies in which
the underlying security is denominated relative to the U.S. dollar. In addition,
lack of information about an issuer of the underlying security may result in
inefficiencies in the valuation of the related ADR. However, by investing in
ADRs rather than directly in foreign securities, a Fund will avoid currency
risks during the settlement period for both purchases and sales.
MANAGEMENT OF THE ULTRA SERIES FUND
The Trustees
The overall responsibility for the supervision of the affairs of the Ultra
Series Fund vests in the Trustees. CIMCO Inc. (the "Investment Adviser" or
"Adviser") has agreed to handle the day-to-day affairs of the Ultra Series Fund.
The Trustees meet periodically to review the affairs of the Ultra Series Fund
and to establish certain guidelines which the Investment Adviser is expected to
follow in implementing the investment objectives and policies of the Ultra
Series Fund.
CUNA Mutual Life Insurance Company
The Company is a mutual life insurance company organized under the laws of Iowa,
with its home office at 2000 Heritage Way, Waverly, Iowa 50677. The Company is
the transfer agent and the dividend disbursing agent for the Ultra Series Fund.
The Company owns a one-half interest in CIMCO Inc., the Investment Adviser. On
July 1, 1990, the Company entered into a permanent affiliation with the CUNA
Mutual Insurance Society, 5910 Mineral Point Road, Madison, Wisconsin 53705.
CUNA Mutual Investment Corporation, 5910 Mineral Point Road, Madison, Wisconsin
53705, is an investment subsidiary wholly-owned by CUNA Mutual. CUNA Mutual
Investment Corporation owns a one-half interest in the Investment Adviser. CUNA
Mutual Investment Corporation is the sole owner of CUNA Brokerage Services,
Inc., the principal underwriter for the Ultra Series Fund. Both the Company and
CUNA Mutual are mutual insurance companies owned by their policyholders.
The Investment Adviser
Since the inception of the Ultra Series Fund, the Investment Adviser has been
CIMCO Inc. The Investment Adviser was established July 6, 1982. It provides
investment advice to the Ultra Series Fund, pension funds, to the Company and
its subsidiaries and to CUNA Mutual and its subsidiaries. The majority of the
Board of Directors of the Investment Adviser are independent of CUNA Mutual
Group. The principal place of business of the Investment Adviser is 5910 Mineral
Point Road, Madison, WI 53705.
CIMCO employs a team approach in the management of all the Funds. Lawrence R.
Halverson, CFA (Chartered Financial Analyst), is co-manager of the Capital
Appreciation Stock Fund, Growth and Income Stock Fund, Balanced Fund, Bond Fund,
and Treasury 2000 Fund. Since December 1, 1987, he has been employed with the
Investment Adviser and is now Vice President and Secretary of the Ultra Series
Fund, and Senior Vice President and Secretary of the Investment Adviser. Annette
E. Hellmer, CFA is co-manager of the Capital Appreciation Stock Fund, Growth and
Income Stock Fund, and Balanced Fund. She has been employed by the Investment
Adviser since August 1, 1996. Joseph L. Gogola, CFA, is co-manager of the
Balanced Fund, Bond Fund, and Treasury 2000 Fund. He has been employed by the
Investment Adviser since January 1, 1992, and had been employed in the
Investment Department of CUNA Mutual for several years prior to that date. In
addition to work on behalf of the Ultra Series Fund, each manager performs
advisory services for other clients of the Investment Adviser.
The Management Agreement
The Investment Adviser, pursuant to a Management Agreement, provides investment
advice for each Fund and provides or arranges for the provision of substantially
all other services required by the Ultra Series Fund through service agreements
with affiliated and unaffiliated service providers. Such services include all
administrative, accounting and legal services as well as the services of
custodians, transfer agents and dividend disbursing agents. There are, however,
certain expenses that the Ultra Series Fund pays for itself under the Management
Agreement. These are: fees of the independent Trustees, fees of the independent
auditors, interest on borrowings by a Fund, any taxes that a Fund must pay, and
any extraordinary expenses incurred by a Fund or Funds not in the ordinary
course of business. As full compensation for these services, the Ultra Series
Fund pays the Investment Adviser a unitary fee computed at an annualized
percentage rate of the average value of the daily net assets of each series as
set forth in the table below:
Management Fee Table
Series Management Fee
------ --------------
Capital Appreciation Stock 0.80 %
Growth & Income Stock 0.60 %
Balanced 0.70 %
Bond 0.55 %
Money Market 0.45 %
Treasury 2000 0.45 %
The Ultra Series Fund anticipates that under the Management Agreement, each Fund
will incur expenses, other than the above management fees, equal to
approximately .01% of its average daily net assets for the remainder of the 1997
fiscal year.
Prior to May 1, 1997, the Company had voluntarily agreed to absorb all ordinary
business expenses of the Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond and Money Market Funds in excess of .65% of the average daily net
assets of those Funds. Effective May 1, 1997, the Company discontinued absorbing
the Ultra Series Fund expenses in excess of .65% of average daily net assets and
any such expenses will be borne by the Ultra Series Fund.
OFFER, PURCHASE AND REDEMPTION OF SHARES
Pursuant to a Distribution Agreement, CUNA Brokerage Services, Inc. serves as
principal underwriter for the Ultra Series Fund. CUNA Brokerage Services, Inc.
has its principal place of business at 5910 Mineral Point Road, Madison,
Wisconsin 53705.
Currently, each series of shares is divided into Class C and Class Z shares.
Class C and Class Z shares are identical except for the fact that the net asset
value of each Class C share reflects a distribution fee assessed against the
assets of each Fund supporting Class C shares pursuant to a distribution plan
(the "Distribution Plan"), described below, adopted in accordance with Rule
12b-1 under the Act. (See also FEE TABLES.) Both Classes of each series of
shares of the Ultra Series Fund are sold in a continuous offering. The Ultra
Series Fund generally offers Class Z shares to separate accounts of CUNA Mutual
Group insurance companies and to qualified pension and retirement plans of CUNA
Mutual Group companies and offers Class C shares to separate accounts of
insurance companies and to qualified pension and retirement plans that are not
affiliated with CUNA Mutual Group. Where either Class of shares is offered to
insurance company separate accounts, such separate accounts support either
variable annuity contracts or variable life insurance contracts. Net purchase
payments under such contracts are placed in one of the subaccounts of the
separate accounts and assets of each such subaccount are invested in shares of a
Fund of the Ultra Series Fund corresponding to that subaccount.
The CUNA Mutual Group affiliated separate accounts and qualified pension or
retirement plans purchase and redeem Class Z shares of the Ultra Series Fund at
net asset value without sales or redemption charges. Unaffiliated insurance
company separate accounts and qualified pension or retirement plans purchase and
redeem Class C shares of the Ultra Series Fund at net asset value without sales
or redemption charges but may be subject to an additional distribution fee
pursuant to the Distribution Plan.
On each day on which a Fund's net asset value is calculated, the Company
transmits to the Ultra Series Fund any orders to purchase or redeem the various
Classes and series of shares based on purchase payments, redemption (surrender)
requests, and transfer requests from owners of variable annuity or variable life
insurance contracts or, annuitants and beneficiaries under such contracts that
have been processed on that day. The Company purchases and redeems shares of
each Fund at that Fund's net asset value per share calculated as of that same
day although such purchases and redemptions may be executed the next morning.
Other insurance companies having separate accounts making investments in the
Ultra Series Fund follow substantially identical procedures. Qualified pension
and retirement plans may purchase and redeem shares on a similar basis pursuant
to procedures negotiated by the Ultra Series Fund, CUNA Brokerage Services, Inc.
and the plan.
Owners of individual variable annuity contracts and variable life insurance
contracts should refer to the separate prospectuses for such contracts for a
more detailed description of the procedures whereby a contract owner, annuitant,
or beneficiary under such contracts may allocate his or her interest in a
separate account to a subaccount using one of the series of shares of the Ultra
Series Fund as an underlying investment medium. Participants in qualified
pension or retirement plans should refer to appropriate plan documents for a
more detailed description of the procedures whereby they may allocate their
interest in the plan to a subaccount using one of the series of shares of the
Ultra Series Fund as an underlying investment medium.
Treasury 2000 Fund Only: The Ultra Series Fund anticipates demand for shares in
the Treasury 2000 Fund to decrease as the portfolio maturity date approaches.
Also, as the Maturity Date approaches, it may not be possible to purchase
additional Stripped Treasury Securities with a portfolio maturity date which is
the same as the Stripped Treasury Securities in the Fund. Accordingly, the Ultra
Series Fund reserves the right to stop selling shares in the Treasury 2000 Fund
at any time that the Trustees decide further sale of shares in the Treasury 2000
Fund is not in the best interest of the Fund. On or within 12 months prior to
maturity of the portfolio the securities will be liquidated, and the proceeds
(after deductions for accrued but unpaid fees, taxes and governmental and other
charges) will be automatically reinvested at the current Net Asset Value in the
Money Market Fund, unless an owner of a variable contract directs otherwise. No
charge will be made for reinvestment of these proceeds. No later than 45 days
before the portfolio maturity date, the Ultra Series Fund will mail to each
owner of a variable contract with an interest in the Treasury 2000 Fund a Notice
of Impending Maturity. The notice will state that on the date the portfolio
matures, the proceeds allocable to each owner of a variable contract will be
automatically reinvested in the Money Market Fund in accordance with the
procedures set out above. Proceeds will be reinvested in another Fund if the
Ultra Series Fund receives a written request 5 days before portfolio maturity.
The Distribution Plan: The Ultra Series Fund has adopted a Distribution Plan
pursuant to Rule 12b-1 of the Act under which the Ultra Series Fund bears
certain expenses relating to the distribution of Class C shares. The
Distribution Plan provides for the Ultra Series Fund to pay CUNA Brokerage
Services, Inc. a distribution fee equal, on an annual basis, to 0.25% of the
average daily net assets of each Fund attributable to Class C shares. The
distribution fee is calculated and accrued daily and paid quarterly or at such
other intervals as the Ultra Series Fund and CUNA Brokerage Services, Inc.
agree. The distribution fee is paid solely out of each Fund's assets supporting
Class C shares. This means that the net asset value of Class C shares reflects
the daily accrual of the fee but that the net asset value of Class Z shares is
not affected by the distribution fee and no distribution fee is supported by
assets of any Fund representing Class Z shares.
Under the Distribution Plan, CUNA Brokerage Services, Inc. receives the entire
amount of the distribution fee and may spend any amount of the fee that it
considers appropriate to finance any activity that is primarily intended to
result in the sale of Class C shares. CUNA Brokerage Services, Inc. does not
have to spend all of the distribution fee and can spend more than the amount of
the fee to finance activities intended to result in the sale of Class C shares.
If CUNA Brokerage Services, Inc. spends less than the entire amount of the fee
in any period, it may keep the amounts not spent. If CUNA Brokerage Services,
Inc. spends more than the amount of the fee in any period, The Ultra Series Fund
will not reimburse CUNA Brokerage Services, Inc. for the difference.
Activities primarily intended to result in the sale of Class C shares include,
among others: (a) compensation to employees of CUNA Brokerage Services, Inc.;
(b) compensation to and expenses, including overhead and telephone expenses, of
CUNA Brokerage Services, Inc., other selected broker-dealers, and insurance
companies who engage in or support activities primarily intended to result in
the sale of Class C shares; (c) the costs of printing and distributing
prospectuses, statements of additional information and annual and interim
reports of the Ultra Series Fund for prospective Class C shareholders; (d) the
costs of preparing, printing and distributing sales literature and advertising
materials attributable to Class C shares; (e) expenses relating to the
formulation and implementation of marketing strategies and promotional
activities relating to Class C shares such as direct mail promotions and
television, radio, newspaper, magazine and other mass media advertising; and (f)
the costs of obtaining such information, analyses and reports with respect to
marketing and promotional activities and investor accounts as The Ultra Series
Fund may, from time to time, deem advisable.
GENERAL INFORMATION
Shareholder Rights
Pursuant to current interpretations of the Act, the Company will solicit voting
instructions from owners of variable annuity or variable life insurance
contracts issued by it with respect to any matters that are presented to a vote
of shareholders. Insurance companies not affiliated with the CUNA Mutual Group
will generally follow similar procedures. On any matter submitted to a vote of
shareholders, all shares of the Ultra Series Fund then issued and outstanding
and entitled to vote shall be voted in the aggregate and not by series or Class,
except for matters concerning only a series or Class. Certain matters approved
by a vote of the shareholders of the Ultra Series Fund may not be binding on a
series or Class whose shareholders have not approved such matter. This is the
case if the matter affects interests of that series or Class which are not
identical with the interests of all other series and Classes such as a change in
investment policy, approval of the Investment Adviser or a material change in
the Distribution Plan and failure by the holders of a majority of the
outstanding voting securities of the series or Class to approve the matter. The
holder of each share of each series or Class of stock of the Ultra Series Fund
shall be entitled to one vote for each full dollar of net asset value and a
fractional vote for each fractional dollar of net asset value attributed to the
shareholder.
The Ultra Series Fund is not required to hold annual meetings of shareholders
and does not plan to do so. The Trustees may call special meetings of
shareholders for action by shareholder vote as may be required by the Act or the
Declaration of Trust. The Trustees have the power to alter the number and the
terms of office of the Trustees, and may lengthen their own terms or make their
terms of unlimited duration and appoint their successors, provided always at
least a majority of the Trustees have been elected by the shareholders of the
Ultra Series Fund. The Declaration of Trust provides that shareholders can
remove Trustees by a vote of two-thirds of the outstanding shares and the
Declaration of Trust sets out procedures to be followed.
Inquiries
Any inquiries regarding the Ultra Series Fund should be directed to CUNA
Brokerage Services, Inc., 2000 Heritage Way, Waverly, Iowa 50677, (800) 798-5500
or (319) 352-4090.
Dividends
All dividends (except those from the Treasury 2000 Fund) are distributed to the
separate accounts for variable products and qualified pension or retirement
plans and then automatically reinvested in the Ultra Series Fund shares.
Dividends from the Money Market Fund will be declared daily and reinvested
monthly in additional full and fractional shares of the Money Market Fund.
Dividends of ordinary income from the Capital Appreciation Stock, Growth and
Income Stock, Balanced, and Bond Funds, will be declared and reinvested
quarterly in additional full and fractional shares, and dividends of capital
gains from these Funds will be declared and reinvested at least annually in
additional full and fractional shares. In no event will capital gain dividends
be declared and paid more frequently than allowed under SEC rules. Annually, the
Treasury 2000 Fund will declare a consent dividend for income tax purposes.
The Ultra Series Fund Performance
The Ultra Series Fund may distribute sales literature showing total return
performance. Total return calculations are based on historical results and are
not intended to indicate future performance. Total return will vary over time
depending on market conditions, assets owned and operating expenses. Information
about the performance of the Ultra Series Fund is contained in the annual report
to shareholders which may be obtained without charge from the address shown on
the first page of this Prospectus.
Total return figures distributed by the Ultra Series Fund will show the change
in value of an investment in the Ultra Series Fund from the beginning of the
measuring period to the end of the measuring period. All dividends and capital
gains are assumed to be immediately reinvested. Average annual total return is
calculated by determining the growth or decline in value of a $1,000
hypothetical investment over a stated period and then calculating the annually
compounded percentage rate that would have produced the same ending value if the
rate of growth or decline in value had been constant during the entire period.
The actual rate of growth or decline varies over time, rather than being
constant, so actual year-to-year performance will be different from "average"
annual return. The Ultra Series Fund will show average annual total returns for
1, 5 and 10 year periods (or, if shorter, the period since inception) and may
show actual and average total returns for other periods. The Ultra Series Fund
may also show cumulative return, computed by dividing the value at the end of
the period by the value at the beginning of the period. Cumulative total return
may be shown either as a percentage change or as a dollar value. Performance
data may be shown in the form of graphs, charts, tables and numerical examples.
The Ultra Series Fund may also distribute sales literature showing yield figures
for its Money Market Fund. Yield figures are based on historical earnings and
are not intended to indicate future performance. The yield of the Money Market
Fund refers to the income generated by an investment in the Fund over the stated
seven-day period. This income is then annualized, that is, the amount of income
generated by the investment during that week is assumed to be generated each
week over a 365-day period and is shown as a percentage of the investment. The
effective yield is calculated similarly but, when annualized, the income earned
is assumed to be reinvested or "compounded." The effective yield will be
slightly higher than the yield because of the effect of assumed reinvestment.
The Ultra Series Fund may distribute sales literature comparing its total
returns to standard industry measures, for example, the Dow Jones Industrial
Average, one or more of the Standard & Poor's or Frank Russell Company stock
indexes, one or more of the Lehman Brothers bond indexes, the consumer price
index, and data published by Lipper Analytical Services, Morningstar, Inc., and
Ibbotson Associates. The Dow Jones Industrial Average (DJIA) is a market
value-weighted, unmanaged index of 30 large industrial stocks traded on the New
York Stock Exchange. The Standard and Poor's and Frank Russell Company stock
indexes are unmanaged, market value weighted indexes of various industrial,
transportation, utility and financial companies, grouped by size of market
capitalization, valuation characteristics (i.e. growth or value) or other
attributes. The Lehman Brothers bond indexes represent unmanaged groups of fixed
income securities of various issuers and terms to maturity which are
representative of bond market performance. The consumer price index is a
statistical measure of changes in the prices of goods and services over time
published by the U.S. Bureau of Labor Statistics. Lipper Analytical Services and
Morningstar, Inc. are independent services that monitor performance of mutual
funds and insurance company separate accounts. Lipper Performance Summary
Averages represent the average annual total return of all the funds (within a
specified investment category) that are covered by the Lipper Analytical
Services Variable Insurance Products Performance Analysis Service. Ibbotson
Associates annually updates "Stocks, Bonds, Bills and Inflation" (SBBI) which
compares historical investment returns and trends over specified periods. To
show how different types of investments have performed over time, a chart has
been included as Appendix A.
The volatility of each Fund may be compared to the volatility of the relevant
market as a whole. "Beta" is a measure of the sensitivity of a particular asset
or a particular Fund relative to the marketplace in which it is traded. The beta
of the market is 1.0 which serves as a benchmark to assess other assets
including the six Funds within the Ultra Series Fund. Beta is a measure of the
degree to which the return on the asset or the Fund moved relative to how the
return of the relevant market moved. A number that is both positive and less
than 1.0 means that the asset or Fund moved in the same direction as the market
but to a smaller degree. In other words, a beta of less than 1.0 indicates less
volatility (less investment risk) than the market.
Standard deviation measures the volatility of actual periodic returns around a
trendline of average returns. For example, a portfolio that grew over a
five-year period at an average annual total return of 10% with a standard
deviation of 15% would be much more volatile (would involve more investment
risk) than a portfolio that grew at an average annual total return of 8% with a
standard deviation of 5%. The latter portfolio might meet the investment needs
of a risk averse investor better than the former portfolio.
Tax Status
The Ultra Series Fund intends to qualify as a "regulated investment company"
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). The Ultra Series Fund expects to distribute all of its net investment
income and net realized capital gains to its shareholders (the separate accounts
and qualified plans) to avoid imposition of an Ultra Series Fund-level income or
excise tax. The Ultra Series Fund will inform its shareholders (the separate
accounts and qualified plans) of the amount and nature of all distributions.
Each Fund is treated as a separate entity for federal income tax purposes, and
therefore, the investments and results of the Funds are determined separately
for purposes of determining whether the Ultra Series Fund qualifies as a
"regulated investment company" and for purposes of determining net investment
income or loss and net realized capital gain or loss. Additional tax information
appears in the Statement of Additional Information.
Under the Code, no tax is imposed on an insurance company with respect to income
of a qualifying separate account properly allocable to the value of eligible
variable annuity or variable life insurance contracts. Please refer to the
appropriate tax disclosure in the prospectuses related to a separate account and
to its related variable annuity or variable life insurance contract for more
information on the taxation of life insurance companies, separate accounts, as
well as the tax treatment of variable annuity and variable life insurance
contracts and the holders thereof.
Each Fund intends to comply with the diversification requirements of section
817(h) of the Code and the regulations thereunder. These requirements are in
addition to the diversification requirements imposed on each Fund by Subchapter
M and the Act. These requirements place certain limitations on the assets of
each separate account that may be invested in the securities of a single issuer.
Because section 817(h) and the regulations thereunder treat each Fund's assets
as assets of the related separate account, these limitations apply to each
Fund's assets that may be invested in the securities of a single issuer. Failure
of a Fund to satisfy the section 817(h) requirements would result in taxation of
the separate accounts, the insurance company, the variable annuity contracts and
variable life insurance contracts, and tax consequences to the holders thereof,
other than as described in the respective variable contract prospectuses.
Net Asset Value
Funds' shares are sold and redeemed at a price equal to the shares' Net Asset
Value with no sales or other charges. Net Asset Value is determined by adding
the total current values of each Fund's securities, cash, receivables, and other
assets and then subtracting all liabilities. Net Asset Value per share is
calculated on each Valuation Day at the earlier of 3:00 p.m. Central Standard
Time or the close of the New York Stock Exchange. A Valuation Day is any day the
New York Stock Exchange is open for business, except that the Friday immediately
following Thanksgiving and the final scheduled work day preceding Christmas are
not Valuation Days, and the days immediately preceding or immediately following
New Year's Day and Independence Day when such days fall on Saturday or Sunday,
respectively, are not Valuation Days. Federal securities regulations will be
followed in case of an emergency which makes valuation extremely difficult, for
example, fire, blizzard or tornado.
Funds' shares will be purchased and redeemed at the Net Asset Value next
determined after receipt of a sales order or request for redemption. The Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond, and Treasury 2000
Funds will value their assets based on market value if such a value can be
established. If not, a good faith determination will be made by or at the
direction of the Trustees. Short-term investments having maturities of 60 days
or less will be valued at amortized cost. The Money Market Fund will value its
portfolio assets using the amortized cost method. This method is designed to
stabilize the Net Asset Value at $1.00 per share. More information about the
calculation of Net Asset Value is in the Statement of Additional Information.
<PAGE>
APPENDIX A
The chart depicts the growth of a dollar invested in common stocks, small
company stocks, long-term government bonds, Treasury bills and an index of
inflation over the period from the end of 1925 to the end of 1996. Results
assume reinvestment of dividends on stocks or coupons on bonds and no taxes.
Transaction costs are not accounted for except in the small stock index starting
in 1982. The chart was prepared to show changes in the market value of
securities, not returns on variable life and annuity contracts. The chart does
not reflect any of the charges made at the separate account level or at the
mutual fund level of a variable contract.
The chart shows how stocks, bonds and bills have performed in the past. The
chart illustrates the basic relationship between risk and return. Treasury bills
had the least investment risk and the lowest investment return. Stocks had the
most investment risk and the highest investment return. The common stock
performance shown is based on the Standard and Poor's 500 stock index, a market
value weighted index of industrial, financial, utility and transportation
stocks. The chart is a historical record of the past. It is not a projection of
future return.
At this place, the document shows a graphic representation of the information
set forth above.
(C) Computed using data from Stocks, Bonds, Bills & Inflation 1997 YearbookTM,
Ibbotson Associates, Chicago (annually updates work by Roger G. Ibbotson and Rex
Sinquefield). Used with permission. All rights reserved
<PAGE>
Part B
STATEMENT OF ADDITIONAL INFORMATION
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
ULTRA SERIES FUND
2000 Heritage Way
Waverly, Iowa 50677
(319) 352-4090
THIS IS NOT A PROSPECTUS. THIS STATEMENT OF ADDITIONAL INFORMATION SHOULD BE
READ IN CONJUNCTION WITH THE PROSPECTUS FOR THE ULTRA SERIES FUND WHICH IS
REFERRED TO HEREIN.
THE PROSPECTUS CONCISELY SETS FORTH INFORMATION THAT A PROSPECTIVE INVESTOR
SHOULD KNOW BEFORE INVESTING. FOR A COPY OF THE PROSPECTUS, DATED MAY 1, 1997,
CALL OR WRITE CUNA BROKERAGE SERVICES, INC., 2000 HERITAGE WAY, WAVERLY, IOWA
50677, (319) 352-4090, (800) 798-5500.
MAY 1, 1997
<PAGE>
TABLE OF CONTENTS
PAGE
GENERAL INFORMATION........................................................1
INVESTMENT PRACTICES.......................................................1
Lending Portfolio Securities...............................................1
Restricted Securities......................................................1
Foreign Securities.........................................................2
Put and Call Options.......................................................2
Financial Futures and Related Options......................................3
Stock Index Futures and Related Options....................................3
Bond Fund Practices........................................................4
INVESTMENT LIMITATIONS.....................................................5
PORTFOLIO TURNOVER.........................................................6
BELOW INVESTMENT GRADE CORPORATE DEBT SECURITIES...........................6
MANAGEMENT OF THE FUND.....................................................7
Officers and Trustees......................................................7
Trustees Compensation......................................................8
Substantial Shareholders...................................................9
Beneficial Owners..........................................................9
THE INVESTMENT ADVISER.....................................................9
EXPENSES OF THE FUND......................................................11
DISTRIBUTION PLAN AND AGREEMENT...........................................11
CUSTODIAN.................................................................11
INDEPENDENT AUDITORS......................................................12
BROKERAGE.................................................................12
HOW SECURITIES ARE OFFERED................................................13
Distributor...............................................................13
Transfer Agent............................................................13
NET ASSET VALUE OF SHARES.................................................13
Money Market Fund.........................................................13
Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond, and Treasury 2000 Funds..............................14
DIVIDENDS, DISTRIBUTIONS AND TAXES........................................14
Options and Futures Transactions..........................................15
Straddles.................................................................16
CALCULATION OF YIELDS AND TOTAL RETURNS...................................16
Money Market Fund Yields..................................................16
Other Fund Yields.........................................................17
Average Annual Total Returns..............................................17
Other Total Returns.......................................................18
DESCRIPTION OF BOND RATINGS
(AS PUBLISHED BY THE RATING SERVICES)................................18
DESCRIPTION OF COMMERCIAL PAPER RATINGS
(AS PUBLISHED BY THE RATING SERVICES)................................19
FINANCIAL STATEMENTS......................................................20
<PAGE>
GENERAL INFORMATION
The Ultra Series Fund is an investment company consisting of six separate
investment portfolios or funds (each, a "Fund") each of which has a different
investment objective(s). Each Fund is a diversified, open-end management
investment company, commonly known as a mutual fund. The six Funds are: Capital
Appreciation Stock, Growth and Income Stock, Balanced, Bond, Money Market, and
Treasury 2000. The Ultra Series Fund was organized under the laws of the
Commonwealth of Massachusetts on September 16, 1983, and is a Massachusetts
Business Trust. Under Massachusetts law, shareholders of a business trust may,
under certain circumstances, be held personally liable as partners for the
obligations of the Ultra Series Fund. The Declaration of Trust contains an
express disclaimer of shareholder liability for acts or obligations of the Ultra
Series Fund and requires that notice of such disclaimer be given in each
instrument entered into or executed by the Ultra Series Fund. The Declaration of
Trust provides for indemnification out of the Ultra Series Fund property for any
shareholder held personally liable for the obligations of the Ultra Series Fund.
Thus, the risk of a shareholder incurring financial loss on account of
shareholder liability is limited to circumstances in which the Ultra Series Fund
itself would be unable to meet its obligations.
INVESTMENT PRACTICES
The Ultra Series Fund Prospectus describes the investment objective and policies
of each of the six Funds. The following information is provided for those
investors wishing to have more comprehensive information than that contained in
the Prospectus. Within the past year, no Fund has employed any of the following
practices: lending of portfolio securities, investing in restricted securities,
investing in foreign securities (although it has and may continue to invest up
to 25% of assets in American Depository Receipts traded on U.S. exchanges
representing shares of foreign issues traded on foreign exchanges), investing in
options, financial futures, stock index futures and related options. No Fund has
a current intention of employing these practices in the foreseeable future. If
they are used in the foreseeable future, no more than 5% of a Fund's net assets
will be at risk.
If the Ultra Series Fund enters into futures contracts or call options thereon,
reverse repurchase agreements, firm commitment agreements or standby commitment
agreements, the Ultra Series Fund will obtain approval from the Board of
Trustees to establish a segregated account with the custodian of the Ultra
Series Fund. The segregated account will hold liquid assets such as cash, U.S.
government assets and high grade debt obligations. The cash value of the
segregated account will be not less than the market value of the futures
contracts and call options thereon, reverse repurchase agreements, firm
commitment agreements and standby commitment agreements.
Lending Portfolio Securities
All Funds, except the Money Market Fund, may lend portfolio securities. Such
loans will be made only in accordance with guidelines established by the
Trustees and on the request of broker-dealers or institutional investors deemed
qualified, and only when the borrower agrees to maintain cash or U.S. Treasury
bills as collateral with the Fund equal at all times to at least 100% of the
value of the securities. The Fund will continue to receive interest or dividends
on the securities loaned and will, at the same time, earn an agreed-upon amount
of interest on the collateral which will be invested in readily marketable
short-term obligations of high quality. The Fund will retain the right to call
the loaned securities and intends to call loaned voting securities if important
shareholder meetings are imminent. Such security loans will not be made if, as a
result, the aggregate of such loans exceeds 30% of the value of the Fund's
assets. The Fund may terminate such loans at any time. While there may be delays
in recovery of loaned securities or even a loss of rights in collateral supplied
should the borrower fail financially, loans will be made only to firms deemed by
the Investment Adviser to be in good standing and will not be made unless, in
the judgment of the Investment Adviser, the consideration to be earned from such
loans would justify the risk.
Restricted Securities
Each Fund, except the Money Market and Treasury 2000 Funds, may invest in
restricted securities. Securities regulations limit the sale of restricted
securities which have been acquired through private placement transactions,
directly from the issuer or from security holders, generally at higher yields or
on terms more favorable to investors than comparable publicly traded securities.
Privately placed securities are not readily marketable and ordinarily can be
sold only in privately negotiated transactions to a limited number of purchasers
or in public offerings made pursuant to an effective registration statement
under the Securities Act of 1933 or by obtaining an exemption therefrom. Private
or public sales of such securities by the Fund may involve significant delays
and expense. Private sales require negotiations with one or more purchasers and
generally produce less favorable prices than the sale of comparable unrestricted
securities. Public sales generally involve the time and expense of preparing and
processing a registration statement under the Securities Act of 1933 and may
involve the payment of underwriting commissions; accordingly, the proceeds may
be less than the proceeds from the sale of securities of the same class which
are freely marketable. Restricted securities in each Fund will be valued at fair
value as determined in good faith by or at the direction of the Trustees for
purposes of determining the Fund's Net Asset Value. Such securities, when
possible, will be valued on a comparative basis to securities with similar
characteristics for which market prices are available.
Foreign Securities
All Funds, except the Treasury 2000 Fund, may invest in foreign securities.
Investment in foreign issuers involves investment risks that are different, in
some respects, from an investment in U.S. domestic issuers. Such risks may
include foreign political and economic developments. Publicly available
information concerning issuers located outside the United States may not be
comparable in scope or depth of analysis to that generally available for
publicly held U.S. issuers. Accounting and auditing practices and financial
reporting requirements may vary significantly from country to country and
generally are not comparable to those applicable to publicly held U.S.
corporations. In the event of default, debt obligations of foreign issuers may
be difficult to enforce. The Investment Adviser will make every effort to
analyze potential investments in foreign issuers on the same basis as the rating
services analyze domestic issuers but because public information is not always
comparable to that available on domestic issuers, this may not be possible.
Therefore, while the Investment Adviser will make every effort to select
investments in foreign securities on the same basis relative to quality and risk
as its investments in domestic securities, this may not always be possible. No
Fund will invest more than 10% of the value of its assets in foreign securities.
Put and Call Options
All Funds, except the Money Market Fund, may engage in the purchase, sale and
writing of put and call options that are traded on U.S. exchanges and boards of
trade. A call option is a contract (generally having a duration of nine months
or less) pursuant to which the purchaser of the call option in return for a
premium paid, has the right to buy the security or instrument underlying the
option at a specified exercise price at any time during the term of the option.
The writer of the call option, who receives the premium, has the obligation,
upon exercise of the option, to deliver the underlying security or instrument
against payment of the exercise price during the option period. A put option is
a similar contract which gives the purchaser of the put option, in return for a
premium, the right to sell the underlying security or instrument at a specified
price during the term of the option. The writer of the put, who receives the
premium, has the obligation to buy the underlying security or instrument, upon
exercise, at the exercise price during the option period.
The writing of a call option is "covered" if the Fund owns the underlying
security or instrument covered by the call or has an absolute and immediate
right to acquire that security or instrument without additional cash
consideration (or for additional cash consideration held in a segregated account
by its custodian) upon conversion or exchange of other securities or instruments
held in its portfolio. The writing of a call option is also covered if the Fund
holds a call on an equivalent amount of the same security or instrument as the
call written where the exercise price of the call held is equal to or less than
the exercise price of the call written or greater than the exercise price of the
call written if the difference is maintained by the Fund in cash, U.S. Treasury
bills or other high grade short-term obligations in a segregated account with
its custodian. The writing of a put option is "covered" if the Fund maintains
cash, U.S. Treasury bills or other high grade short-term obligations with a
value equal to the exercise price in a segregated account with its custodian, or
else holds a put on an equivalent amount of the same security or instrument as
the put written where the exercise price of the put held is equal to or greater
than the exercise price of the put written. The premium paid by the purchaser of
an option will reflect, among other things, the relationship of the exercise
price to the market price and volatility of the underlying security or
instrument, the remaining term of the option, supply and demand, and interest
rates.
If the writer of an option wishes to terminate his obligation, he may effect a
"closing purchase transaction." This is accomplished by buying an option of the
same kind as the option previously written. The effect of the purchase is that
the writer's position will be canceled by the clearing corporation. However, a
writer may not effect a closing purchase transaction after it has been notified
of the exercise of an option. Likewise, an investor who is the holder of an
option may liquidate his position by effecting a "closing sale transaction."
This is accomplished by selling an option of the same kind as the option
previously purchased. There is no guarantee that either a closing purchase or a
closing sale transaction can be effected.
Effecting a closing transaction in the case of a written call option will permit
the Fund to write another call option on the underlying security or instrument
with either a different exercise price or expiration date or both, or in the
case of a written put option will permit the Fund to write another put option to
the extent that the exercise price thereof is secured by deposited cash or
short-term securities. Also, effecting a closing transaction will permit the
cash or proceeds from the concurrent sale of any securities or instruments
subject to the option to be used for other Fund investments. If the Fund desires
to sell a particular security or instrument from its portfolio on which it has
written a call option, it will effect a closing transaction prior to or
concurrent with the sale of the security or instrument.
The Fund may write put and call options only if they are covered, and the
options must remain covered so long as a Fund is obligated as a writer.
An option position may be closed out only on an exchange or board of trade which
provides a secondary market for an option of the same kind. Although the Fund
will generally purchase or write only those options for which there appears to
be an active secondary market, there is no assurance that a liquid secondary
market on an exchange or board of trade will exist for any particular option, or
at any particular time, and for some options no secondary market on an exchange
or board of trade may exist. In such event it might not be possible to effect
closing transactions in particular options, with the result that the Fund would
have to exercise its options in order to realize any profit and would incur
brokerage commissions upon the exercise of call options and upon the subsequent
disposition of underlying securities or instruments acquired through the
exercise of call options or upon the purchase of underlying securities or
instruments for the exercise of put options. If the Fund, as a covered call
option writer, is unable to effect a closing purchase transaction in a secondary
market, it will not be able to sell the underlying security or instrument until
the option expires or it delivers the underlying security or instrument upon
exercise.
The use of put and call options is restricted to no more than twenty percent
(20%) of the net assets in the Fund using such option.
Financial Futures and Related Options
The Balanced, Bond, and Treasury 2000 Funds may engage in transactions in
financial futures contracts or related options, but only as a hedge against
changes in the values of securities held in the Fund's portfolio resulting from
market conditions or which it intends to purchase and where the transactions are
economically appropriate to the reduction of risks inherent in the ongoing
management of the Fund. A Fund may not purchase or sell financial futures or
purchase related options if, immediately thereafter, more than one-third of its
net assets would be hedged. In addition, a Fund may not purchase or sell
financial futures or purchase related options if, immediately thereafter, the
sum of the amount of margin deposits on the Fund's existing futures positions
and premiums paid for related options would exceed five percent (5%) of the
market value of the Fund's total assets.
Unlike when a Fund purchases or sells a security, no price is paid or received
by the Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the custodian under the name of the futures
commission merchant an amount of cash or U.S. Treasury bills, known as initial
margin. The nature of initial margin in futures transactions is different from
that of margin in securities transactions in that a futures contract margin does
not involve the borrowing of funds by a customer to finance the transaction.
Rather, the initial margin is in the nature of a performance bond or a good
faith deposit on a contract which is returned to the Fund upon termination of
the Fund's contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to or from the custodian will be
made on a daily basis as the price of the underlying securities or instruments
fluctuates making the long and short positions in the futures contract more or
less valuable, a process known as "mark to the market." At any time prior to
expiration of the futures contract, the Fund may elect to close the position by
taking an opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
There are several risks in connection with the use of financial futures as a
hedging device. One risk arises because of the imperfect correlation between
movements in the price of the futures contracts and movements in the price of
the securities or instruments which are the subject of the hedge. The price of
the futures contract may move more than or less than the price of the securities
or instruments being hedged. If the price of the futures contract moves less
than the price of the securities or instruments which are the subject of the
hedge, the hedge will not be fully effective but, if the price of the securities
or instruments being hedged has moved in an unfavorable direction, the Fund
would be in a better position than if it had not hedged at all. If the price of
the securities being hedged has moved in a favorable direction, this advantage
will be partially offset by the futures. If the price of the futures contract
moves more than the price of the securities or instruments being hedged, the
Fund will experience either a loss or a gain on the futures contract which will
not be completely offset by movements in the price of the securities or
instruments. To compensate for the imperfect correlation of movements in the
price of securities or instruments being hedged and movements in the price of
the futures contracts, the Fund may buy or sell financial futures contracts in a
greater dollar amount than the dollar amount of securities being hedged if the
historical volatility of the prices of such securities has been greater than the
historical volatility of the futures. Conversely, the Fund may buy or sell fewer
financial futures contracts if the historical volatility of the price of the
securities being hedged is less than the historical volatility of the futures.
The financial impact of any use of financial futures is subject to movements in
interest rates. For example, if the Fund is hedged against the possibility of a
rise in interest rates, adversely affecting the value of bonds held in its
portfolio, and bond prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its bonds which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.
Stock Index Futures and Related Options
The Capital Appreciation Stock, Growth and Income Stock, and Balanced Funds may
engage in transactions in stock index futures contracts or related options, but
only as a hedge against changes resulting from market conditions in the values
of securities held in the Fund's portfolio or which the Fund intends to purchase
and where the transactions are economically appropriate to the reduction of
risks inherent in the ongoing management of the Fund. A Fund may not purchase or
sell stock index futures or purchase related options if, immediately thereafter,
more than one-third of its net assets would be hedged. In addition, a Fund may
not purchase or sell stock index futures or purchase related options if,
immediately thereafter, the sum of the amount of margin deposits on the Fund's
existing futures positions and premiums paid for related options would exceed
five percent (5%) of the market value of total assets.
Unlike when a Fund purchases or sells a security, no price is paid or received
by the Fund upon the purchase or sale of a futures contract. Initially, the Fund
will be required to deposit with the custodian under the name of the futures
commission merchant an amount of cash or U.S. Treasury bills known as initial
margin. The nature of initial margin in futures transactions is different from
that of margin in security transactions in that futures contract margin does not
involve the borrowing of funds by a customer to finance the transactions.
Rather, the initial margin is in the nature of a performance bond or good faith
deposit on the contract which is returned to the Fund upon termination of the
futures contract assuming all contractual obligations have been satisfied.
Subsequent payments, called "variation margin," to or from the custodian, will
be made on a daily basis as the price of the underlying stock index fluctuates
making the long and short positions in the futures contract more or less
valuable, a process known as "mark to the market." At any time prior to
expiration of the futures contract, the Fund may elect to close the position by
taking an opposite position which will operate to terminate the Fund's position
in the futures contract. A final determination of variation margin is then made,
additional cash is required to be paid by or released to the Fund, and the Fund
realizes a loss or a gain.
There are several risks in connection with the use of stock index futures as a
hedging device. One risk arises because of the imperfect correlation between
movements in the price of the stock index futures contract and movements in the
price of the securities which are the subject of the hedge. The price of the
stock index future may move more than or less than the price of the securities
being hedged. If the price of the stock index futures contract moves less than
the price of the securities which are the subject of the hedge, the hedge will
not be fully effective but, if the price of the securities being hedged has
moved in an unfavorable direction, the Fund would be in a better position than
if it had not hedged at all. If the price of the securities being hedged has
moved in a favorable direction, this advantage will be partially offset by the
futures contract. If the price of the futures contract moves more than the price
of the stock, the Fund will experience either a loss or a gain on the futures
contract which will not be completely offset by movements in the price of the
securities which are the subject of the hedge. To compensate for the imperfect
correlation of movements in the price of securities being hedged and movements
in the price of the stock index futures, the Fund may buy or sell stock index
futures contracts in a greater dollar amount than the dollar amount of
securities being hedged if the historical volatility of the prices of such
securities has been greater than the historical volatility of the index.
Conversely, the Fund may buy or sell fewer stock index futures contracts if the
historical volatility of the price of the securities being hedged is less than
the historical volatility of the stock index.
The financial impact of any use of stock index futures is subject to movements
in the direction of the market. For example, if the Fund has hedged against the
possibility of a decline in the market adversely affecting stocks held in its
portfolio and stock prices increase instead, the Fund will lose part or all of
the benefit of the increased value of its stocks which it has hedged because it
will have offsetting losses in its futures positions. In addition, in such
situations, if the Fund has insufficient cash, it may have to sell securities to
meet daily variation margin requirements. Such sales of securities may be, but
will not necessarily be, at increased prices which reflect the rising market.
The Fund may have to sell securities at a time when it may be disadvantageous to
do so.
Compared to the use of stock index futures, the purchase of options on stock
index futures involves less potential risk because the maximum amount at risk is
the premium paid for the options (plus transaction costs). However, there may be
circumstances when the use of an option on a stock index future would result in
a loss when the use of a stock index future would not, such as when there is no
movement in the level of the index.
Bond Fund Practices
As stated in the Prospectus, the Bond Fund will emphasize investment grade,
primarily intermediate term securities. If an investment grade security is
downgraded by the rating agencies or otherwise falls below the investment
quality standards stated in the Prospectus, management will retain that
instrument only if management believes it is in the best interest of the Fund.
Management does not currently intend to invest more than five percent (5%) of
the net assets in corporate debt securities which are not in the four highest
ratings by Standard and Poor's Corporation or Moody's Investors Service, Inc.,
but, on occasion, the Fund may do so. The Fund may also invest in debt options,
interest rate futures contracts, and options on interest rate futures contracts.
The Fund may utilize interest rate futures and options to manage the risk of
fluctuating interest rates. These instruments will be used to control risk or
obtain additional income and not with a view toward speculation. The Fund will
invest only in futures and options which are traded on U.S. exchanges or boards
of trade.
In the fixed income securities market, purchases of some issues are occasionally
made under firm (forward) commitment agreements. Purchases of securities under
such agreements can involve risk of loss due to changes in the market rate of
interest between the commitment date and the settlement date. As a matter of
operating policy, the Fund will not commit itself to forward commitment
agreements in an amount in excess of 25% of net assets and will not engage in
such agreements for leveraging purposes. For purposes of this limitation,
forward commitment agreements are defined as those agreements involving more
than five business days between the commitment date and the settlement date.
INVESTMENT LIMITATIONS
The Ultra Series Fund has adopted the following restrictions and policies
relating to the investment of assets and the activities of each Fund. The
policies in this INVESTMENT LIMITATION section are fundamental and may not be
changed for a Fund without the approval of the holders of a majority of the
outstanding votes of that Fund (which for this purpose and under the Investment
Company Act of 1940 (the "Act") means the lesser of (i) sixty-seven percent
(67%) of the outstanding votes attributable to shares represented at a meeting
at which more than fifty percent (50%) of the outstanding votes attributable to
shares are represented or (ii) more than fifty percent (50%) of the outstanding
votes attributable to shares). None of the Funds within the Ultra Series Fund
may:
1. Borrow money in excess of one-third of the value of its total assets
taken at market value (including the amount borrowed) and then only
from banks as a temporary measure for extraordinary or emergency
purposes. This borrowing provision is not for investment leverage, but
solely to facilitate management of a Fund by enabling the Fund to meet
redemption requests where the liquidation of an investment is deemed to
be inconvenient or disadvantageous. Monies used to pay interest on
borrowed funds will not be available for investment. A Fund will not
make additional investments while it has borrowings outstanding.
2. Underwrite securities of other issuers, except that a Fund may acquire
portfolio securities under circumstances where, if the securities are
later publicly offered or sold by the Fund, it may be deemed to be an
underwriter for purposes of the Securities Act of 1933.
3. Invest over twenty-five percent (25%) of assets taken at its market
value in any one industry. Securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or instruments secured
by these money market instruments, such as repurchase agreements, shall
not be considered investments in any one industry for purposes of these
rules. Telephone, gas, and electric utility industries shall be
considered separate industries.
4. Purchase or sell commodities, commodity contracts (except futures
contracts), foreign exchange or real estate, including interests in
real estate investment trusts whose securities are not readily
marketable or invest in oil, gas or other mineral development or
exploration programs. (This does not prohibit investment in the
securities of corporations which own interests in commodities, foreign
exchange, real estate or oil, gas or other mineral development or
exploration programs.)
5. Invest more than five percent (5%) of the value of the assets of a Fund
in securities of any one issuer, except in the case of the securities
issued or guaranteed by the U.S. Government, its agencies or
instrumentalities.
6. Invest in securities of a company for the purpose of exercising control
or management.
7. Invest in securities issued by any other registered investment
companies in excess of five percent (5%) of total assets, nor in excess
of three percent (3%) of the assets of the acquired investment company.
Not more than ten percent (10%) of total assets taken at market value
will be invested in such securities.
8. Purchase or sell real estate, except a Fund may purchase securities
which are issued by companies which invest in real estate or interests
therein.
9. Issue senior securities as defined in the Act, except insofar as a Fund
may be deemed to have issued a senior security by reason of (a)
entering into any repurchase agreement; (b) borrowing money in
accordance with restrictions described above; (c) lending portfolio
securities; (d) purchasing securities on a when-issued or delayed
delivery basis; or (e) accommodating short sales. If the asset coverage
falls below three hundred percent (300%), when taking into account
items (a) through (e), a Fund may be required to liquidate investments
to be in compliance with the Act.
10. Lend portfolio securities in excess of thirty percent (30%) of the
value of its total assets. Any loans of portfolio securities will be
made according to guidelines established by the Trustees, including
maintenance of collateral of the borrower at least equal at all times
to the current market value of the securities loaned.
11. Invest in illiquid assets (which include repurchase agreements that do
not mature within seven (7) days, non-negotiable time deposits maturing
in over seven (7) days, restricted securities, and other securities for
which there is no ready market) in an amount in excess of ten percent
(10%) of the value of its total assets.
12. Make loans (the acquisition of bonds, debentures, notes and other
securities as permitted by the investment objectives of a Fund shall
not be deemed to be the making of loans) except that a Fund may
purchase securities subject to repurchase agreements under policies
established by the Trustees.
13. Invest in foreign securities in excess of ten percent (10%) of the
value of its total assets.
Except for the limitations on borrowing from banks, if the above percentage
restrictions are adhered to at the time of investment, a later increase or
decrease in such percentage resulting from a change in values of securities or
amount of net assets will not be considered a violation of any of the foregoing
restrictions.
The Money Market Fund may not write put or call options, purchase common stock
or other equity securities or purchase securities on margin or sell short. The
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds may not purchase securities on margin or sell short.
However, each Fund may obtain such short-term credits as may be necessary for
the clearance of transactions and may make margin payments in connection with
transactions in futures and related options as permitted by its investment
policies.
PORTFOLIO TURNOVER
While the Money Market Fund is not subject to specific restrictions on portfolio
turnover, it generally does not seek profits by short-term trading. However, it
may dispose of a portfolio security prior to its maturity where disposition
seems advisable because of a revised credit evaluation of the issuer or other
considerations. Because money market instruments have short maturities, the Fund
expects to have a high portfolio turnover, but since brokerage commissions are
not customarily charged on money market instruments, a high turnover should not
affect Net Asset Value or net investment income.
The Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds will trade whenever, in management's view, changes are
appropriate to achieve the stated investment objectives. Management does not
anticipate that unusual portfolio turnover will be required and intends to keep
such turnover to moderate levels consistent with the objectives of each Fund.
Although management makes no assurances, it is expected that the annual
portfolio turnover rate will be generally less than 100%. This would mean that
normally less than 100% of the securities held by the Fund would be replaced in
any one year (excluding turnover of securities having a maturity of one year or
less). The portfolio turnover rate for the fiscal year ended December 31, 1995,
for each Fund was as follows: Capital Appreciation Stock, 61.3%; Growth and
Income Stock, 57.8%; Balanced, 36.7%; Bond, 14.7%; and Treasury 2000, 0.0%. The
portfolio turnover rate for the fiscal year ended December 31, 1996, for each
Fund is as follows: Capital Appreciation Stock, 49.8%; Growth and Income Stock,
40.6%; Balanced, 33.5% (Stocks, 23.2%; Bonds, 10.3%); Bond, 25.7%; and Treasury
2000, 0.0%.
BELOW INVESTMENT GRADE CORPORATE DEBT SECURITIES
Corporate debt securities which are not within the four highest ratings by
Standard & Poor's Corporation or Moody's Investors Service, Inc.
("non-investment grade bonds") may have speculative characteristics and adverse
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than higher grade
corporate debt securities.
Lower rated securities involve higher risks, in that they are especially subject
to adverse changes in general economic conditions and in the industries in which
the issuers are engaged, to changes in the financial condition of the issuers
and to price fluctuations in response to changes in interest rates. Accordingly,
the returns on lower rated debt securities will fluctuate over time. During
periods of economic downturn or rising interest rates, highly leveraged issuers
may experience financial stress which could adversely affect their ability to
make payments of principal and interest and increase the possibility of default.
In addition, noninvestment grade bonds may have a limited secondary market in
which to dispose of or from which to obtain valuations of these securities.
Therefore, any valuation of these securities may be more subjective than valuing
securities for which there is a more established secondary market. Also, adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the value and liquidity of these securities.
Achievement of the investment objective of a Fund that invests in noninvestment
grade bonds may be more dependent on the Investment Adviser's credit analysis
than a Fund which invests exclusively in investment-grade securities. While
ratings are, therefore, important in the securities selection process, the
Investment Adviser does not rely totally on ratings assigned to corporate debt
obligations by commercial rating firms. For more information about the
characteristics of the various bond ratings, see DESCRIPTION OF BOND RATINGS.
Subsequent to its purchase, a rating of an issue of debt securities may be
reduced below the minimum rating required for purchase. The Investment Adviser
will consider such an event when deciding whether a Fund should continue to hold
that security. The Funds are not required to dispose of securities after ratings
have dropped below such minimum rating.
MANAGEMENT OF THE FUND
Officers and Trustees
<TABLE>
<CAPTION>
Name and Address Position(s) Held with Fund Principal Occupation(s) For
the Past 5 Years
<S> <C> <C>
Michael S. Daubs* President CIMCO Inc.
5910 Mineral Point Road 1983 - Present President
Madison, WI 53705 1982 - Present
CUNA Mutual Life Insurance Company
Chief Investment Officer
1973 - Present
CUNA Mutual Insurance Society
Chief Investment Officer
1990 - Present
Lawrence R. Halverson* Vice President CIMCO Inc.
5910 Mineral Point Road 1987 - Present Senior Vice President
Madison, WI 53705 Secretary 1996 - Present
1992 - Present Vice President
1987 - 1996
Secretary
1992 - Present
CUNA Brokerage Services, Inc.
President
1996 - Present
Donald E. Heltner* Vice President CIMCO Inc.
5910 Mineral Point Road 1983 - Present Vice President
Madison, WI 53705 1982 - Present
Treasurer
1992 - Present
Robert M. Buckingham* Chief Financial Officer and CUNA Mutual Life Insurance Company
2000 Heritage Way Assistant Secretary Vice President and Valuation Actuary
Waverly, IA 50677 1993-Present 1991-Present
Michael G. Joneson* Chief Accounting Officer, CUNA Mutual Life Insurance Company
2000 Heritage Way Treasurer, and Assistant Vice President - Controller, Treasurer
Waverly, IA 50677 Secretary 1986-Present
1992-Present
Gwendolyn M. Boeke Trustee Evangelical Lutheran Church in America
2000 Heritage Way 1988 - Present Area Representative - Iowa
Waverly, IA 50677 1990 - Present
Alfred L. Disrud Trustee Planned Giving Services
2000 Heritage Way 1987 - Present Waverly, Iowa 50677
Waverly, IA 50677 Owner
1986 - Present
Kevin T. Lentz* Trustee CUNA Mutual Life Insurance Company
2000 Heritage Way 1993 - Present Chief Operating Officer
Waverly, IA 50677 1993 - Present
CUNA Mutual Life Insurance Company
Vice President, Individual Life & Health
1992 - 1993
CUNA Mutual Insurance Company
Vice President, Member Services
1992 - Present
Keith S. Noah Trustee Noah & Smith
2000 Heritage Way 1984 - Present Charles City, Iowa 50616
Waverly, IA 50677 Partner
1948 - Present
Thomas C. Watt Trustee MidAmerican Energy Company
2000 Heritage Way 1986 - Present Waterloo, Iowa 50704
Waverly, IA 50677 District Manager
1995 - Present
Midwest Power Systems, Inc.
Waterloo, Iowa 50704
Division Manager
1992 - 1995
Iowa Public Service Company
Waterloo, Iowa 50704
Vice President - East District
1962 - 1992
<FN>
*An interested person within the meaning of the Act.
</FN>
</TABLE>
Trustees Compensation
Aggregate Compensation
Names of Trustees From The Ultra Series Fund 1996
----------------- -------------------------------
Gwendolyn M. Boeke $2,500
Alfred L. Disrud $2,500
Kevin T. Lentz* $ 0
Keith S. Noah $2,500
Thomas C. Watt $2,500
* Uncompensated Interested Trustee
Trustees and officers of the Ultra Series Fund do not receive any benefits from
the Ultra Series Fund upon retirement nor does the Ultra Series Fund accrue any
expense for pension or retirement benefits. The Trustees and officers of the
Ultra Series Fund do not currently serve as trustees or officers of any open-end
management investment company that is an affiliated person of the Ultra Series
Fund or that is managed by the Investment Adviser.
Substantial Shareholders
CUNA Mutual Life Insurance Company (the "Company") established the Ultra Series
Fund as an investment vehicle underlying the separate accounts of the Company
which issue variable contracts. As of May 1, 1997 the separate accounts of the
Company were the only shareholders of the Ultra Series Fund. Voting rights are
described in the Ultra Series Fund Prospectus in the GENERAL INFORMATION,
Shareholder Rights section.
Beneficial Owners
As of May 1, 1997, except for the Company's initial capital contribution, the
beneficial owners of the Ultra Series Fund are policyowners and contract owners
of the Company. As of April 1, 1997, the directors and officers as a group own
less than one percent (1%). In addition to its own beneficial interest in each
Fund, the Company holds legal title on behalf of the beneficiaries of employee
benefit plans held within the Company separate accounts not registered pursuant
to an exemption from the registration provisions of the securities acts. As of
April 1, 1997, the following persons had a beneficial interest exceeding five
percent (5%):
Fund Beneficial Owner Holdings of Net
Assets
Treasury 2000 CUNA Mutual Life Insurance Company
2000 Heritage Way $340,779.74 21.59%
Waverly, IA 50677
Treasury 2000 Helena Community Federal Credit Union
915 Kessler Street $205,197.48 13.0%
Helena, MT 59601
THE INVESTMENT ADVISER
The Management Agreement ("Agreement") requires that the Investment Adviser
provide continuous professional investment management of the investments of the
Ultra Series Fund, including establishing an investment program complying with
the investment objectives, policies and restrictions of each Series. In
addition, the Adviser has agreed to provide, or arrange to have provided, all
services to each Series of the Ultra Series Fund, including but not limited to
legal and accounting services, mailing and printing services, custody and
transfer agent services, etc. The Investment Adviser is CIMCO Inc. The Company,
and CUNA Mutual Investment Corporation each own a one-half interest in the
Investment Adviser. CUNA Mutual Insurance Society is the sole owner of CUNA
Mutual Investment Corporation. CUNA Mutual Investment Corporation is the sole
owner of CUNA Brokerage Services, Inc., the principal underwriter. The
Investment Adviser and the Ultra Series Fund have servicing agreements with the
Company and with CUNA Mutual Insurance Society. The Company and CUNA Mutual
Insurance Society entered into a permanent affiliation July 1, 1990. At the
current time, all of the directors of the Company are also directors of CUNA
Mutual Insurance Society and many of the senior executive officers of the
Company hold similar positions with CUNA Mutual Insurance Society.
The Investment Adviser, pursuant to a Management Agreement, provides investment
advice for each Fund and provides or arranges for the provision of substantially
all other services required by the Ultra Series Fund through services agreements
with affiliated and unaffiliated service providers. Such services include all
administrative, accounting and legal services as well as the services of
custodians, transfer agents and dividend disbursing agents. There are, however,
certain expenses that The Ultra Series Fund pays for itself under the Management
Agreement. These are: fees of the independent Trustees, fees of the independent
auditors, interest on borrowings by a Fund, any taxes that a Fund must pay, and
any extraordinary expenses incurred by a Fund or Funds not in the ordinary
course of business. As full compensation for its services, the Ultra Series Fund
pays the Investment Adviser a unitary fee computed at an annualized percentage
rate of the average value of the daily net assets of each series as set forth in
the table below:
Management Fee Table
Series Management Fee
Capital Appreciation Stock 0.80 %
Growth & Income Stock 0.60 %
Balanced 0.70 %
Bond 0.55 %
Money Market 0.45 %
Treasury 2000 0.45 %
Prior to May 1, 1997, the Company had voluntarily agreed to absorb all ordinary
business expenses of the Capital Appreciation Stock, Growth and Income Stock,
Balanced, Bond and Money Market Funds in excess of .65% of the average daily net
assets of those Funds. Effective May 1, 1997, the Company discontinued absorbing
the Ultra Series Fund expenses in excess of .65% of average daily net assets and
any such expenses will be borne by the Ultra Series Fund.
Under the Investment Advisory Agreement effective prior to May 1, 1997, the
total fee paid to the Investment Adviser during the year ended December 31,
1994, was $594,112. The fees were allocated to the Funds as follows: $24,864 to
Capital Appreciation Stock, $199,911 to Growth and Income Stock, $300,282 to
Balanced, $34,590 to Bond, $28,639 to Money Market, and $5,826 to Treasury 2000.
The total fee paid to the Investment Adviser during the year ended December 31,
1995, was $1,003,650. The fees were allocated to the Funds as follows: $103,513
to Capital Appreciation Stock, $357,783 to Growth and Income Stock, $436,723 to
Balanced, $51,283 to Bond, $48,171 to Money Market, and $6,177 to Treasury 2000.
The total fee paid to the Investment Adviser during the year ended December 31,
1996, was $2,094,152. The fees were allocated to the Funds as follows: $335,246
to Capital Appreciation Stock, $804,430 to Growth and Income Stock, $759,395 to
Balanced, $100,076 to Bond, $87,984 to Money Market, and $7,021 to Treasury
2000.
The Investment Adviser makes the investment decisions and is responsible for the
investment and reinvestment of assets; performs research, statistical analysis,
and continuous supervision of the Fund's investment portfolio; furnishes office
space for the Ultra Series Fund; provides the Ultra Series Fund with such
accounting data concerning the investment activities of the Ultra Series Fund as
is required to be prepared and files all periodic financial reports and returns
required to be filed with the Securities and Exchange Commission ("SEC") and any
other regulatory agency; continuously monitors compliance by the Ultra Series
Fund in its investment activities with the requirements of the Act and the rules
promulgated pursuant thereto; and renders to the Ultra Series Fund such periodic
and special reports as may be reasonably requested with respect to matters
relating to the duties of the Investment Adviser.
Effective January 1, 1992, the Adviser contracted with the Company to perform
some of these services on behalf of the Ultra Series Fund in return for a
portion of the investment advisory fee. In 1994, the Adviser paid $129,311 for
those services. In 1995, the Adviser paid $217,034 for those services. In 1996,
the Adviser paid $447,362 for those services. Effective July 17, 1993, the
Adviser contracted with CUNA Mutual Insurance Society to perform cash management
and investment accounting services on behalf of the Ultra Series Fund in return
for a portion of the investment advisory fee. In 1994, the Adviser paid $5,578
for those services. In 1995, the Adviser paid $9,487 for those services. In
1996, the Adviser paid $19,711 for those services.
On January 16, 1997, the Management Agreement was approved by the beneficial
owners of the Ultra Series Fund after approval and recommendation by the
Trustees of the Ultra Series Fund, including a majority of Trustees who are not
parties to the Management Agreement or interested persons to any such party as
defined in the Act, on October 29, 1996. The Management Agreement, unless sooner
terminated, shall continue until two years from the effective date of the
Management Agreement and thereafter shall continue automatically for periods of
one calendar year so long as such continuance is specifically approved at least
annually (a) by the Trustees or by a vote of a majority of the outstanding votes
attributable to the shares of the Class representing an interest in the Fund;
and (b) by a vote of a majority of those Trustees who are not parties to the
Management Agreement or interested persons of any such party, cast in person at
a meeting called for the purpose of voting on such approval, provided the
Management Agreement may be terminated as to any Fund or to all Funds by the
Ultra Series Fund at any time, without the payment of any penalty, by vote of a
majority of the Trustees or by a majority vote of the outstanding votes
attributable to the shares of the applicable Fund or by the Investment Adviser
on sixty (60) days written notice to the other party. The Management Agreement
will terminate automatically in the event of its assignment.
The Management Agreement provides that the Investment Adviser shall not be
liable to the Ultra Series Fund or any shareholder for anything done or omitted
by it, or for any losses that may be sustained in the purchase, holding or sale
of any security, except for an act or omission involving willful misfeasance,
bad faith, gross negligence, or reckless disregard of the duties imposed upon it
by the Management Agreement.
The directors and principal officers of the Investment Adviser are as follows:
Joyce A. Harris Director and Chair
James C. Hickman Director
Michael B. Kitchen Director
Michael S. Daubs Director and President
George A. Nelson Director and Vice Chair
Lawrence R. Halverson Senior Vice President and Secretary
Donald E. Heltner Vice President and Treasurer
Charles A. Knudsen Vice President
Daniel J. Larson Vice President
Thomas J. Merfeld Vice President
James M. Greaney Vice President
Lois A. O'Rourke Vice President
EXPENSES OF THE FUND
The Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Money Market Funds are currently obligated to pay to the Investment Adviser the
Management Fee set forth in Management Fee Table above. As part of its services,
the Investment Adviser has agreed to provide or arrange to have provided,
administrative services to each Fund. Currently, the Company is providing some
of these services on behalf of the Investment Adviser.
Prior to May 1, 1997, expenses which exceeded .65% of the average value of daily
net assets of such Fund were being absorbed by the Company pursuant to an
Expense Reimbursement Agreement between the Company and the Ultra Series Fund.
For the year ended December 31, 1995, the Company absorbed $96,817 of ordinary
business expense. This expense was allocated among the Funds as follows: $22,806
was allocated to Capital Appreciation Stock, $28,817 to the Growth and Income
Stock, $33,518 to Balanced, $3,971 to Bond, and $7,705 to Money Market. For the
year ended December 31, 1996, no expenses were absorbed by the Company.
DISTRIBUTION PLAN AND AGREEMENT
As described in the Prospectus, the Board of Trustees has adopted a Distribution
Plan for the Fund under Rule 12b-1 of the Act to compensate CUNA Brokerage
Services, Inc. for certain services and to pay expenses of the Ultra Series Fund
incurred in connection with the offering of Class C Fund shares.
The Distribution Plan was initially approved on October 29, 1996, by the Board
of Trustees of the Ultra Series Fund, including all disinterested Trustees. The
Plan takes effect May 1, 1997, and continues in effect from year to year only so
long as such continuance is approved at least annually by the Trustees,
including a majority of the Trustees who are not interested, as defined by the
Act, and who have no direct or indirect financial interest in the operation of
the Plan or agreements related to it.
Any amendment which would materially increase the amount which the Ultra Series
Fund may expend under the Plan requires approval by holders of a majority of the
outstanding shares of the Ultra Series Fund. Any agreement related to the Plan
may be terminated at any time, upon sixty (60) days written notice to the other
party, by a vote of a majority of the disinterested Trustees, or by vote of a
majority of the Trust's outstanding voting securities. In the event of an
assignment, the Plan terminates automatically. As long as the Plan is in effect,
the selection and nomination of the disinterested Trustees of the Ultra Series
Fund are committed to the discretion of the disinterested Trustees.
CUSTODIAN
Chase Manhattan Corporation (the surviving company of a merger of U.S. Trust
Company of New York into Chase Manhattan Corporation in 1995) is the current
custodian for the securities and cash of the Ultra Series Fund. The Ultra Series
Fund is in the process of transferring the custodianship to State Street Bank
and Trust Company and the transfer is expected to be completed within the first
half of fiscal year 1997. The custodian holds for the Ultra Series Fund all
securities and cash owned by the Ultra Series Fund, and receives for the Ultra
Series Fund all payments of income, payments of principal or capital
distributions with respect to securities owned by the Ultra Series Fund. Also,
the custodian receives payment for the shares issued by the Ultra Series Fund.
The custodian releases and delivers securities and cash upon proper instructions
from the Ultra Series Fund. Pursuant to and in furtherance of a Custody
Agreement with the custodian, the Ultra Series Fund uses automated instructions
and a cash data entry system to transfer monies to and from the Ultra Series
Fund's account at the custodian.
INDEPENDENT AUDITORS
The financial statements have been included herein and elsewhere in the
Registration Statement in reliance upon the reports of KPMG Peat Marwick, LLP,
Des Moines, Iowa, independent auditors, and upon the authority of said firm as
experts in accounting and auditing.
BROKERAGE
It is the policy of the Ultra Series Fund, in effecting transactions in
portfolio securities, to seek best execution of orders at the most favorable
prices. The determination of what may constitute best execution and price in the
execution of a securities transaction by a broker involves a number of
considerations, including without limitation, the overall direct net economic
result (involving both price paid or received and any commissions and other
costs paid), the efficiency with which the transaction is effected, the ability
to effect the transaction at all where a large block is involved, the
availability of the broker to stand ready to execute potentially difficult
transactions in the future and the financial strength and stability of the
broker. Such considerations are judgmental and are weighed by management in
determining the overall reasonableness of brokerage commissions paid.
Subject to the foregoing, a factor in the selection of brokers is the receipt of
research services, analyses and reports concerning issuers, industries,
securities, economic factors and trends and other statistical and factual
information. Any such research and other statistical and factual information
provided by brokers to the Ultra Series Fund or the Investment Adviser is
considered to be in addition to and not in lieu of services required to be
performed by the Investment Adviser under its contract with the Ultra Series
Fund. Research obtained on behalf of the Ultra Series Fund may be used by the
Investment Adviser in connection with other clients of the Investment Adviser.
Conversely, research received from placement of brokerage for other accounts may
be used by the Investment Adviser in managing investments of the Ultra Series
Fund. Therefore, the correlation of the cost of research to individual clients
of the Adviser, including the Ultra Series Fund, is indeterminable and cannot
practically be allocated among the Ultra Series Fund and the Investment
Adviser's other clients. Consistent with the above, the Ultra Series Fund may
effect principal transactions with a broker-dealer that furnishes brokerage
and/or research services, or designate any such broker-dealer to receive selling
commissions, discounts or other allowances, or otherwise deal with any
broker-dealer, in connection with the acquisition of securities in
underwritings. Accordingly, the net prices or commission rates charged by any
such broker-dealer may be greater than the amount another firm might charge if
the management of the Ultra Series Fund determines in good faith that the amount
of such net prices and commissions is reasonable in relation to the value of the
services and research information provided by such broker-dealer to the Ultra
Series Fund. For the year ended December 31, 1994, Capital Appreciation Fund
paid $22,779, Growth and Income Stock Fund paid $85,572 and Balanced Fund paid
$61,279 in brokerage fees. There were no brokerage fees paid by Bond, Money
Market, or Treasury 2000 Funds in 1994. For the year ended December 31, 1995,
Capital Appreciation Stock Fund paid $76,931, Growth and Income Stock Fund paid
$169,671, and Balanced Fund paid $100,693 in brokerage fees. There were no
brokerage fees paid by Bond, Money Market, or Treasury 2000 Funds in 1995. For
the year ended December 31, 1996, Capital Appreciation Stock Fund paid $171,251,
Growth and Income Fund paid $336,331 and Balanced Fund paid $150,550 in
brokerage fees. There were no brokerage fees paid by Bond, Money Market, or
Treasury 2000 Funds in 1996.
The Ultra Series Fund expects that purchases and sales of money market
instruments usually will be principal transactions. Money market instruments are
normally purchased directly from the issuer or from an underwriter or market
maker for the securities. There usually will be no brokerage commissions paid
for such purchases. Purchases from underwriters will include the underwriting
commission or concession and purchases from dealers serving as market makers
will include the spread between the bid and asked price. Where transactions are
made in the over-the-counter market, the Ultra Series Fund will deal with the
primary market makers unless equal or more favorable prices are otherwise
obtainable.
Where advantageous, the Ultra Series Fund may participate with other clients of
the Investment Adviser in "bunching of trades" wherein one purchase or sale
transaction representing several different client accounts is placed with a
broker. The Investment Adviser has established various policies and procedures
that assure equitable treatment of all accounts.
The policy with respect to brokerage is and will be reviewed by the Trustees
from time to time. Because of the possibility of further regulatory developments
affecting the securities exchanges and brokerage practices generally, the
foregoing practices may be changed, modified or eliminated.
HOW SECURITIES ARE OFFERED
Distributor
As described in the Prospectus, the Ultra Series Fund does not deal directly
with the public. Shares of the Ultra Series Fund are currently issued and
redeemed through the distributor, pursuant to a Distribution Agreement between
the Ultra Series Fund and the distributor. The principal place of business of
CUNA Brokerage Services, Inc. is 5910 Mineral Point Road, Madison, Wisconsin
53705. The distributor is owned by CUNA Mutual Investment Corporation which in
turn is owned by CUNA Mutual Insurance Society. The Company and CUNA Mutual
Insurance Society entered into an agreement of permanent affiliation on July 1,
1990. Shares of the Ultra Series Fund are purchased and redeemed at Net Asset
Value. The Distribution Agreement provides that the distributor will use its
best efforts to render services to the Ultra Series Fund, but in the absence of
willful misfeasance, bad faith, gross negligence or reckless disregard of its
obligations, it will not be liable to the Ultra Series Fund or any shareholder
for any error of judgment or mistake of law or any act or omission or for any
losses sustained by the Ultra Series Fund or its shareholders.
Transfer Agent
The Company, an affiliated person, acts as transfer agent and dividend
disbursing agent for the Ultra Series Fund.
NET ASSET VALUE OF SHARES
Net Asset Value per share is calculated each Valuation Day. Net Asset Value is
determined by dividing each Fund's total net assets by the number of shares
outstanding at the time of calculation. Total net assets are determined by
adding the total current value of portfolio securities, cash, receivables, and
other assets and subtracting liabilities. Shares will be sold and redeemed at
the Net Asset Value next determined after receipt of the purchase order or
request for redemption.
The Net Asset Value of a share issued by the Capital Appreciation Stock, Growth
and Income Stock, Balanced, and Bond Funds was initially set at $10.00 per
share. The Net Asset Value of a share issued by the Money Market Fund was
initially set at $1.00 per share. (See Money Market Fund below.) The Net Asset
Value of a share of the Treasury 2000 Fund was initially set at $3.62 per share.
Money Market Fund
The Trustees have determined that the best method currently available for
determining the Net Asset Value is the amortized cost method. The Trustees will
utilize this method pursuant to Rule 2a-7 of the Act. The use of this valuation
method will be continuously reviewed and the Trustees will make such changes as
may be necessary to assure that assets are valued fairly as determined by the
Trustees in good faith. Rule 2a-7 obligates the Trustees, as part of their
responsibility within the overall duty of care owed to the shareholders, to
establish procedures reasonably designed, taking into account current market
conditions and the investment objectives, to stabilize the Net Asset Value per
share as computed for the purpose of distribution and redemption at $1.00 per
share. The Trustees' procedures include periodically monitoring, as they deem
appropriate and at such intervals as are reasonable in light of current market
conditions, the relationship between the amortized cost value per share and the
Net Asset Value per share based upon available market quotations. The Trustees
will consider what steps should be taken, if any, in the event of a difference
of more than 1/2 of one percent (1%) between the two. The Trustees will take
such steps as they consider appropriate, (e.g., redemption in kind or shortening
the average portfolio maturity) to minimize any material dilution or other
unfair results which might arise from differences between the two. The Rule
requires that the Fund limit its investments to instruments which the Trustees
determine will present minimal credit risks and which are of high quality as
determined by a major rating agency, or, in the case of any instrument that is
not so rated, of comparable quality as determined by the Trustees. It also calls
for the Fund to maintain a dollar weighted average portfolio maturity (not more
than 90 days) appropriate to its objective of maintaining a stable Net Asset
Value of $1.00 per share and precludes the purchase of any instrument with a
remaining maturity of more than 397 days. Should the disposition of a portfolio
security result in a dollar weighted average portfolio maturity of more than 90
days, the Fund will invest its available cash in such manner as to reduce such
maturity to 90 days or less as soon as reasonably practicable.
It is the normal practice of the Fund to hold portfolio securities to maturity.
Therefore, unless a sale or other disposition of a security is mandated by
redemption requirements or other extraordinary circumstances, the Fund will
realize the par value of the security. Under the amortized cost method of
valuation traditionally employed by institutions for valuation of money market
instruments, neither the amount of daily income nor the Net Asset Value is
affected by any unrealized appreciation or depreciation. In periods of declining
interest rates, the indicated daily yield on shares the Fund has computed by
dividing the annualized daily income by the Net Asset Value will tend to be
higher than if the valuation were based upon market prices and estimates. In
periods of rising interest rates, the indicated daily yield on shares the Fund
has computed by dividing the annualized daily income by the Net Asset Value will
tend to be lower than if the valuation were based upon market prices and
estimates.
Capital Appreciation Stock, Growth and Income Stock, Balanced, Bond, and
Treasury 2000 Funds
Common stocks that are traded on an established exchange or over-the-counter are
valued on the basis of market price as of the end of the Valuation Period,
provided that a market quotation is readily available. Otherwise, they are
valued at fair value as determined in good faith by or at the direction of the
Trustees.
Stripped Treasury Securities, long-term straight debt obligations, and
non-convertible preferred stocks are valued using readily available market
quotations, if available. When exchange quotations are used, the latest quoted
sale price is used. If an over-the-counter quotation is used, the last bid price
will normally be used. If readily available market quotations are not available,
these securities are valued at market value as determined in good faith by or at
the direction of the Trustees. Readily available market quotations will not be
deemed available if an exchange quotation exists for a debt security, preferred
stock, or security convertible into common stock, but it does not reflect the
true value of the Fund's holdings because sales have occurred infrequently, the
market for the security is thin, or the size of the reported trade is considered
not comparable to the Fund's institutional size holdings. When readily available
market quotations are not available, the Fund will use an independent pricing
service which provides valuations for normal institutional size trading units of
such securities. Such a service may utilize a matrix system which takes into
account appropriate factors such as institutional size trading in similar groups
of securities, yield, quality, coupon rate, maturity, type of issue, trading
characteristics and other market data in determining valuations. These
valuations are reviewed by the Investment Adviser. If the Investment Adviser
believes that evaluation still does not represent a fair value, it will present
for approval of the Trustees such other valuation as the Investment Adviser
considers to represent a fair value. The specific pricing service or services to
be used will be presented for approval of the Trustees.
Short-term instruments having maturities of sixty (60) days or less will be
valued at amortized cost. Short-term instruments having maturities of more than
sixty (60) days will be valued at market values or values based on current
interest rates.
Options, stock index futures, interest rate futures, and related options which
are traded on U.S. exchanges or boards of trade are valued at the closing price
as of the close of the New York Stock Exchange.
The Investment Adviser, at the direction of the Trustees, values the following
at prices it deems in good faith to be fair:
1. Securities (including restricted securities) for which complete
quotations are not readily available, and
2. Listed securities if, in the opinion of the Investment Adviser, the
last sale price does not reflect the current market value or if no sale
occurred, and
3. Other assets.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Ultra Series Fund has qualified and intends to continue to qualify as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"). Each Fund will be treated as a separate entity
for federal income tax purposes, and, therefore, the investments and results of
each Fund is determined separately for purposes of determining whether the Fund
qualifies as a "regulated investment company" and for purposes of determining
the Fund's net ordinary income (or loss) and net realized capital gains (or
losses). To qualify for treatment as a "regulated investment company," a Fund
must, among other things, meet the diversification requirements of Subchapter M
of the Code, derive in each taxable year at least ninety percent (90%) of its
gross income from dividends, interest and gains from the sale or other
disposition of securities and derive less than thirty percent (30%) of its gross
income in each taxable year from the gains (without deduction for losses) from
the sale or other disposition of securities held for less than three months. It
is the intention of the Ultra Series Fund to meet these requirements with
respect to each Fund in order to qualify as a regulated investment company.
In order for a Fund to be treated as a conduit and avoid the imposition of any
Fund-level income or excise tax, the Fund must distribute at least ninety
percent (90%) of its net investment income. Net investment income of each Fund,
other than the Money Market Fund, will consist of all payments of dividends or
interest received by such Fund less the estimated expenses of such Fund
(including fees payable to the Investment Adviser). Net investment income of the
Money Market Fund (from the last determination thereof) consists of interest
accrued and/or discount earned less the estimated expenses of that Fund
applicable to that dividend period. Net investment income of the Treasury 2000
Fund includes accrued original issue discount.
It is the intention of the Ultra Series Fund to distribute substantially all of
the net investment income, if any, of each Fund thereby avoiding the imposition
of any Fund-level income or excise tax as follows:
(i) Dividends on the Money Market Fund will be declared daily and
reinvested monthly in additional full and fractional shares of the
Money Market Fund.
(ii) Dividends of ordinary income from the Capital Appreciation Stock,
Growth and Income Stock, Balanced, and Bond Funds will be declared and
reinvested quarterly in additional full and fractional shares of the
respective Fund.
(iii) All net realized short-term and long-term capital gains of the
Ultra Series Fund, if any, will be declared and distributed at least
annually, but in any event, no more frequently than allowed under SEC
rules, to the shareholders of each Fund to which such gains are
attributable.
(iv) Dividends on the Treasury 2000 Fund cannot be paid to its
shareholders (the Separate Accounts) during the taxable year since no
cash will be available for distribution until the securities are sold
or mature. The Fund is treated as if it paid a dividend of a certain
amount without actually paying the dividend if the shareholder consents
to the treatment ("consent dividend"). The Separate Accounts will file
a consent on Form 972 each year to include in gross income, as a
taxable dividend for that year, an amount computed to be sufficient to
enable the Fund to meet the distribution requirements necessary for the
Fund to be treated as a conduit and taxed as a regulated investment
company.
Because there will be no periodic payment of interest on the Stripped
Treasury Securities held by the Treasury 2000 Fund, shareholders (i.e.,
the separate accounts or qualified plans) will be requested
periodically to sign consents to have a certain portion of the accrued
amount of discount treated as dividends. Currently the separate
accounts are the only shareholders of the Treasury 2000 Fund; it is
anticipated that any taxable income will be offset by a corresponding
deduction for an increase in reserves.
Options and Futures Transactions
The tax consequences of options transactions entered into by a Fund will vary
depending on the nature of the underlying security, whether the option is
written or purchased and finally, whether the "straddle" rules, discussed
separately below, apply to the transaction. When a Fund writes a call or a put
option on an equity or convertible debt security, the treatment for federal
income tax purposes of the premium that it receives will, subject to the
straddle rules, depend on whether the option is exercised. If the option expires
unexercised, or if the Fund enters into a closing purchase transaction, the Fund
will realize a gain (or loss if the cost of the closing purchase transaction
exceeds the amount of the premium) without regard to any unrealized gain or loss
on the underlying security. Any such gain or loss will be short-term capital
gain or loss, except that any loss on a "qualified" covered call stock option
that is not treated as part of a straddle may be treated as long-term capital
loss. If a call option written by a Fund is exercised, the Fund will recognize a
capital gain or loss from the sale of the underlying security, and will treat
the premium as additional sales proceeds. Whether the gain or loss will be
long-term or short-term will depend on the holding period of the underlying
security. If a put option written by a Fund is exercised, the amount of the
premium will reduce the tax basis of the security that the Fund then purchases.
If a put or call option that a Fund has purchased on an equity or convertible
debt security expires unexercised, the Fund will realize a capital loss equal to
the cost of the option. If the Fund enters into a closing sale transaction with
respect to the option, it will realize a capital gain or loss (depending on
whether the proceeds from the closing transaction are greater or less than the
cost of the option). The gain or loss will be short-term or long-term depending
on the Fund's holding period in the option. If the Fund exercises such a put
option, it will realize a short-term gain or loss (long-term if the Fund holds
the underlying security for more than one year before it purchases the put) from
the sale of the underlying security measured by the sales proceeds decreased by
the premium paid. If the Fund exercises such a call option, the premium paid for
the option will be added to the tax basis of the security purchased.
One or more Funds may invest in Section 1256 contracts. Section 1256 contracts
generally include options on nonconvertible debt securities (including
securities of U.S. Government agencies or instrumentalities), options on stock
indexes, futures contracts, options on futures contracts and certain foreign
currency contracts. Options on foreign currency, futures contracts on foreign
currency, and options on foreign currency futures will qualify as Section 1256
contracts if the options or futures are traded on or subject to the rules of a
qualified board or exchange. In general, gain or loss on Section 1256 contracts
will be treated as 60% long-term and 40% short-term capital gain or loss
("60/40"), regardless of the period of time particular positions are actually
held by a Fund. In addition, any Section 1256 contracts held at the end of each
taxable year (and on October 31 of each year for purposes of determining the
amount of capital gain net income that a Fund must distribute to avoid liability
for the 4% excise tax) are "marked to market" with the result that unrealized
gains or losses are treated as though they were realized and the resulting gain
or loss is treated as 60/40 gain or loss. This deemed realization does not cause
a disposition for purposes of the "short-short" rule.
Straddles
Hedging transactions undertaken by a Fund may result in "straddles" for federal
income tax purposes. Straddles are defined to include "offsetting positions" in
actively-traded personal property. Under current law, it is not clear under what
circumstances one investment made by a Fund, such as an option or futures
contract, would be treated as "offsetting" another investment also held by the
Fund, such as the underlying security (or vice versa) and, therefore, whether
the Fund would be treated as having entered into a straddle. In general,
investment positions may be "offsetting" if there is a substantial diminution in
the risk of loss from holding one position by reason of holding one or more
other positions (although certain "qualified" covered call stock options written
by a Fund may be treated as not creating a straddle).
To the extent that the straddle rules apply to positions established by a Fund,
losses realized by the Fund may be either deferred or recharacterized as
long-term losses, and long-term gains realized by the Fund may be converted to
short-term gains.
Each Fund may make one or more of the elections available under the Code which
are applicable to straddles. If a Fund makes any of the elections, the amount,
character, and timing of the recognition of gains or losses from the affected
straddle positions will be determined under rules that vary according to the
election(s) made. The rules applicable under certain of the elections operate to
accelerate the recognition of gains or losses from the affected straddle
positions.
Because application of the straddle rules may affect the character of gains or
losses, defer losses and/or accelerate the recognition of gains or losses from
the affected straddle positions, the amount which must be distributed to
shareholders, and which will be taxed to shareholders as ordinary income or
long-term capital gain, may be increased or decreased substantially as compared
to a Fund that did not engage in such hedging transactions.
CALCULATION OF YIELDS AND TOTAL RETURNS
From time to time, the Ultra Series Fund may disclose yields, total returns, and
other performance data. Such performance data will be computed, or accompanied
by performance data computed in accordance with the standards defined by the
SEC. The Ultra Series Fund will not disclose performance of the Ultra Series
Fund in separate account sales literature or advertising without also showing
performance at the separate account level.
Money Market Fund Yields
From time to time, sales literature may quote the current annualized yield of
the Money Market Fund for a seven-day period in a manner which does not take
into consideration any realized or unrealized gains or losses on portfolio
securities.
This current annualized yield is computed by determining the net change
(exclusive of realized gains and losses on the sale of securities and unrealized
appreciation and depreciation) at the end of the seven-day period in the value
of a hypothetical account having a balance of 1 share at the beginning of the
period, dividing such net change in account value by the value of the
hypothetical account at the beginning of the period to determine the base period
return, and annualizing this quotient on a 365-day basis. The net change in
value reflects net income from the Fund attributable to the hypothetical
account. Current yield is calculated according to the following formula:
Current Yield = ((NCS - ES)/UV) X (365/7)
Where:
NCS = the net change in the value of the Money Market
Fund (exclusive of realized gains or losses on the
sale of securities and unrealized appreciation and
depreciation) for the seven-day period attributable
to a hypothetical account having a balance of 1
share.
ES = per share expenses attributable to the hypothetical
account for the seven-day period.
UV = the share value for the first day of the seven-day
period.
Effective yield = (1 + ((NCS-ES)/UV)) 365/7 - 1
Where:
NCS = the net change in the value of the Money Market
Fund (exclusive of realized gains or losses on the
sale of securities and unrealized appreciation and
depreciation) for the seven-day period attributable
to a hypothetical account having a balance of 1
share.
ES = per share expenses attributable to the hypothetical
account for the seven-day period.
UV = the share value for the first day of the seven-day
period.
The current and effective yields on amounts held in the Money Market Fund
normally fluctuate on a daily basis. Therefore, the disclosed yield for any
given past period is not an indication or representation of future yields or
rates of return. The Money Market Fund's actual yield is affected by changes in
interest rates on money market securities, average portfolio maturity, the types
and quality of portfolio securities held and operating expenses. Yields on
amounts held in the Money Market Fund may also be presented for periods other
than a seven-day period.
Other Fund Yields
From time to time, sales literature may quote the current annualized yield of
one or more of the Funds (except the Money Market Fund) for 30-day or one-month
periods. The annualized yield of a Fund refers to income generated by the Fund
during a 30-day or one-month period and is assumed to be generated each period
over a 12-month period.
The yield is computed by: 1) dividing the net investment income of the Fund for
the period; by 2) the maximum offering price per share on the last day of the
period times the daily average number of shares outstanding for the period; by
3) compounding that yield for a six-month period; and by 4) multiplying that
result by 2. The 30-day or one-month yield is calculated according to the
following formula:
Yield = 2 X (((NI - ES)/(U X UV)) + 1)6 - 1)
Where:
NI = net income of the Fund for the 30-day or one-month
period attributable to the Fund's shares.
ES = expenses of the Fund for the 30-day or one-month
period.
U = the average number of shares outstanding.
UV = the share value at the close (highest) of the last
day in the 30-day or one-month period.
The yield normally fluctuates over time. Therefore, the disclosed yield for any
given past period is not an indication or representation of future yields or
rates of return. A Fund's actual yield is affected by the types and quality of
portfolio securities held and operating expenses.
Average Annual Total Returns
From time to time, sales literature may also quote average annual total returns
for one or more of the Funds for various periods of time.
When a Fund has been in operation for 1, 5, and 10 years, respectively, the
average annual total return for these periods will be provided. Average annual
total returns for other periods of time may, from time to time, also be
disclosed.
Standard average annual total returns represent the average annual compounded
rates of return that would equate an initial investment of $1,000 to the
redemption value of that investment as of the last day of each of the periods.
The ending date for each period for which total return quotations are provided
will be for the most recent month or calendar quarter-end practicable,
considering the type of the communication and the media through which it is
communicated.
The total return is calculated according to the following formula:
TR = ((ERV/P)1/N) - 1
Where:
TR = the average annual total return net of any Fund
recurring charges.
ERV = the ending redeemable value of the hypothetical
account at the end of the period.
P = a hypothetical initial payment of $1,000.
N = the number of years in the period.
Such average annual total return information for the Funds is as follows:
For the For the For the
1-year 5-year 10-year
period period period
ended ended ended
Fund 12/31/96 12/31/96 12/31/96
Capital Appreciation 21.44% N/A 18.74%*
Growth and Income 22.02% 14.84% 13.72%
Balanced 10.79% 9.74% 10.46%
Bond 2.86% 6.11% 7.51%
Treasury 2000 2.10% 7.42% 10.78%
* Capital Appreciation Fund returns are from inception, January 3, 1994.
Other Total Returns
From time to time, sales literature may also disclose cumulative total returns
in conjunction with the standard formats described above. The cumulative total
returns will be calculated using the following formula:
CTR = (ERV/P) - 1
Where:
CTR = The cumulative total return net of any Fund recurring
charges for the period.
ERV = The ending redeemable value of the hypothetical
investment at the end of the period.
P = A hypothetical single payment of $1,000.
DESCRIPTION OF BOND RATINGS (AS PUBLISHED BY THE RATING SERVICES)
Moody's Investors Service, Inc.
Aaa--Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edge." Interest payments are protected by a large or by an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.
Aa--Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.
A--Bonds which are rated A possess many favorable investment attributes and are
to be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.
Baa--Bonds which are rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present, but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics, and in
fact, have speculative characteristics as well.
Ba--Bonds which are rated Ba and below are judged to have speculative elements;
their future cannot be considered as well secured. Often the protection of
interest and principal payments may be very moderate and thereby not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B--Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.
Caa--Bonds which are rated Caa are a poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.
Ca--Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.
Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa through B in its corporate bond rating system. The
modifier 1 indicates that the security ranks in the higher end of this generic
rating category; the modifier 2 indicates a mid-range ranking; and the modifier
3 indicates that the issue ranks in the lower end of its generic rating
category.
Standard & Poor's Corporation
AAA--Debt rated AAA has the highest rating assigned by Standard & Poor's.
Capacity to pay interest and repay principal is extremely strong.
AA--Debt rated AA has a very strong capacity to pay interest and repay principal
and differs from the highest rated issues only in small degree.
A--Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.
BBB--Debt rated BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.
BB--B--CCC--CC--Bonds rated BB, B, CCC and CC are regarded, on balance, as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.
Note: Standard & Poor's applies the modifiers of (+) or (-) in each generic
rating classification from "AA" through "B" in its corporate bond rating system.
The plus sign indicates that the security ranks in the higher end of this
generic rating category; the lack of a modifier indicates a mid-range ranking;
and the minus sign indicates that the issue ranks in the lower end of its
generic rating category.
DESCRIPTION OF COMMERCIAL PAPER RATINGS
(AS PUBLISHED BY THE RATING SERVICES)
Moody's Investors Service, Inc.
Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment capacity of rated issuers:
Prime-1 Highest Quality
Prime-2 Higher Quality
Prime-3 High Quality
If an issuer represents to Moody's that its commercial paper obligations are
supported by the credit of another entity or entities, Moody's, in assigning
ratings to such issuers, evaluates the financial strength of the indicated
affiliated corporations, commercial banks, insurance companies, foreign
governments or other entities, but only as one factor in the total rating
assessment.
Standard & Poor's Corporation
A brief description of the applicable Standard & Poor's rating symbols for
investment grade commercial paper and their meanings follows:
A. Issues assigned this highest rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated
with the numbers 1, 2, and 3 to indicate the relative degree of safety.
A-1. This designation indicates that the degree of safety regarding
timely payment is either overwhelming or very strong. Those
issues determined to possess overwhelming safety
characteristics will be denoted with a plus (+) sign
designation.
A-2. Capacity for timely payment on issues with this designation is
strong. However, the relative degree of safety is not as high
as for issues designated "A-1."
A-3. Issues carrying this designation have a satisfactory capacity
for timely payment. They are, however, somewhat more
vulnerable to the adverse effects of changes in circumstances
than obligations carrying the higher designations.
FINANCIAL STATEMENTS
Data from the most recent annual report begins on the next page.
<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>
<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>
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>
<PAGE>
<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>
<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>
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>
<PAGE>
<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 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.
(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> <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>
PART C
OTHER INFORMATION
Item 24. Financial Statements and Exhibits
(a) (1) Financial statements included in Part A:
Financial Highlights
(2) Financial Statements included in Part B:
Audited financial statements as of and for the year ended
December 31, 1996: Statements of Assets and
Liabilities* Investments in Securities* Statements of
Operations* Statements of Changes in Net Assets (for
the two-year period ended December 31, 1996)* Notes
to Financial Statements Independent Auditors' Report
*Separate statements are prepared for each Fund of the Ultra
Series Fund.
There are no financial statements included in Part C.
(b) Exhibits:
(1) Amended and Restated Declaration of Trust. Incorporated herein
by reference to post-effective amendment number 19 to this
Form N-1A registration statement (File No. 2-87775) filed with
the Commission on February 28, 1997.
(2) Amended and Restated Bylaws. Incorporated herein by reference
to post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(3) Not Applicable
(4) Not Applicable
(5) A. Management Agreement effective May 1, 1997. Incorporated
herein by reference to post-effective amendment number 19 to
this Form N-1A registration statement (File No. 2-87775) filed
with the Commission on February 28, 1997.
B. Servicing Agreement between Century Life of America (now
known as CUNA Mutual Life Insurance Company) and Century
Investment Management Co. (now known as CIMCO Inc.) effective
October 1, 1994. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
C. Servicing Agreement between Century Investment Management
Co. (now known as CIMCO Inc.) and CUNA Mutual Insurance
Society effective July 17, 1993. Incorporated herein by
reference to post-effective amendment number 19 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(6) Distribution Agreement between Ultra Series Fund and CUNA
Brokerage Services, Inc. effective December 29, 1993.
Incorporated herein by reference to post-effective amendment
number 19 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 28, 1997.
(7) Not Applicable
(8) A. Custodian Agreement with United States Trust Company of New
York dated June 24, 1993. Assumed by Chase Manhattan on
September 2, 1995. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
B. Cash Data Entry Agreement with United States Trust Company
dated June 24, 1993. Assumed by Chase Manhattan on September
2, 1995. Incorporated herein by reference to post-effective
amendment number 19 to this Form N-1A registration statement
(File No. 2-87775) filed with the Commission on February 28,
1997.
C. Custodian Agreement with State Street Bank and Trust
Company.
(9) Not Applicable
(10) Opinion of Counsel. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(11) A. Consent of KPMG Peat Marwick LLP
(12) Not Applicable
(13) A. Termination Agreement dated December 31, 1993 concerning
Agreement Governing Contribution dated September 30, 1983.
Incorporated herein by reference to post-effective amendment
number 19 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 28, 1997.
Agreement Governing Contribution. Incorporated herein by
reference to post-effective amendment number 19 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
B. Termination Agreement dated December 31, 1993 concerning
Agreement Governing Contribution dated May 31, 1988.
Incorporated herein by reference to post-effective amendment
number 19 to this Form N-1A registration statement (File No.
2-87775) filed with the Commission on February 28, 1997.
Agreement Governing Contribution. Incorporated herein by
reference to post-effective amendment number 19 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
C. Termination of Expense Reimbursement Agreement dated
January 16, 1997, effective May 1, 1997. Incorporated herein
by reference to post-effective amendment number 19 to this
Form N-1A registration statement (File No. 2-87775) filed with
the Commission on February 28, 1997.
Expense Reimbursement Agreement. Incorporated herein by
reference to post-effective amendment number 19 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(14) Not Applicable
(15) Plan of Distribution dated May 1, 1997. Incorporated herein by
reference to post-effective amendment number 19 to this Form
N-1A registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(16) Schedule for Computation. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(17) Financial Data Schedules.
(18) Multi-Class Plans. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
(19) Powers of Attorney. Incorporated herein by reference to
post-effective amendment number 19 to this Form N-1A
registration statement (File No. 2-87775) filed with the
Commission on February 28, 1997.
Item 25. Persons Controlled by or Under Common Control with Registrant
The shares of the Ultra Series Fund are currently sold to separate accounts of
CUNA Mutual Life Insurance Company. See Part A MANAGEMENT OF THE ULTRA SERIES
FUND, CUNA Mutual Life Insurance Company and Part B THE INVESTMENT ADVISER for a
description of related parties.
CUNA Mutual Life Insurance Company is a mutual life insurance company and
therefore is controlled by its contractowners. Various companies and other
entities are controlled by CUNA Mutual Life Insurance Company and various
companies may be considered to be under common control with CUNA Mutual Life
Insurance Company. Such other companies and entities, together with the identity
of their controlling persons (where applicable), are set forth in the following
organization charts. In addition, by virtue of an Agreement of Permanent
Affiliation with CUNA Mutual Insurance Society ("CUNA Mutual"), the Ultra Series
Fund could be considered to be an affiliated person or an affiliated person of
an affiliated person of CUNA Mutual. Likewise, CUNA Mutual and its affiliates,
together with the identity of their controlling persons (where applicable), are
set forth on the following organization charts.
See organization charts on the following pages.
<PAGE>
CUNA Mutual Life Insurance Company
ORGANIZATIONAL CHART AS OF DECEMBER 31, 1996
CUNA Mutual Life Insurance Company
An Iowa mutual life insurance company
Fiscal Year End: December 31
CUNA Mutual Life Insurance Company is the controlling company for the
following subsidiaries:
1. Red Fox Motor Hotel Corporation
An Iowa Business Act Corporation.
100% ownership by CUNA Mutual Life Insurance Company
Business: Operation of Red Fox Inn, a motel
Classes of Stock: Common only
Authorized Shares: 1,000 nonpar
Issued Shares: 242.7821
Capital Structure:
Stated capital: $242,782
Add. paid-in: $0
Ret. earn: ($14,447)
Total Equity: $257,229
Sole Shareholder: CUNA Mutual Life Insurance Company
Fiscal Year End: December 31
2. CIMCO Inc.
An Iowa Business Act Corporation
50% ownership by CUNA Mutual Life Insurance Company
50% ownership by CUNA Mutual Investment Corporation
Business: Registered Investment Advisor
Classes of Stock: Non-assessable
Authorized Shares: 500,000 nonpar
Issued Shares: 100
Capital Structure:
Stated capital: $10,000
Add. paid-in: $520,000
Ret. earn.: $435,660
Total Equity: $965,660
Equal Shareholders: CUNA Mutual Life Insurance Company &
CUNA Mutual Investment Corporation
Fiscal Year End: December 31
CIMCO Inc. is the investment adviser of:
a. The Ultra Series Fund
A Massachusetts Business Trust
Domiciled in Iowa
Business:Open-end diversified management investment
company offered through insurance contracts
Shareholders: Three separate accounts of CUNA Mutual
Life Insurance Company hold legal title for
the benefit of policyowners.
Principal Underwriter: CUNA Brokerage Services, Inc.
Fiscal Year End: December 31
3. Plan America Program, Inc.
A Maine Business Act Corporation
100% ownership by CUNA Mutual Life Insurance Company
Business:Quasi-public corporation, operating an insurance
business
Classes of Stock: Voting common only
Authorized Shares: 5,000 of $1.00 par
Issued Shares: 100
Capital Structure:
Stated capital: $500
Sole Shareholder: CUNA Mutual Life Insurance Company
Fiscal Year End: December 31
CUNA Mutual Insurance Society
ORGANIZATIONAL CHART
AS OF DECEMBER 31, 1996
CUNA Mutual Insurance Society
Business: Life Health & Disability Insurance
May 20, 1935*
State of domicile: Wisconsin
CUNA Mutual Insurance Society, either directly or indirectly is the
controlling company of the following wholly-owned subsidiaries:
1. CUNA Mutual Investment Corporation
Business: Holding Company
September 15, 1972*
State of domicile: Wisconsin
CUNA Mutual Investment Corporation is the owner of the
following subsidiaries:
a. CUMIS Insurance Society, Inc.
Business: Corporate Property/Casualty
May 23, 1960*
State of domicile: Wisconsin
CUMIS Insurance Society, Inc. is the 100% owner of
the following subsidiary:
(1) Credit Union Mutual Insurance Society New
Zealand Ltd.
Business: Fidelity Bond Coverages
November 1, 1990*
State of domicile: Wisconsin
b. League General Insurance Company
Business: Individual Property/Casualty
January 1, 1983*
State of domicile: Michigan
c. CUNA Brokerage Services, Inc.
Business: Brokerage
July 19, 1985*
State of domicile: Wisconsin
d. CUNA Mutual General Agency of Texas, Inc.
Business: Managing General Agent
August 14, 1991*
State of domicile: Texas
e. Members Life Insurance Company
Business: Credit Disability/Life/Health
February 27, 1976*
State of domicile: Wisconsin
Formerly CUMIS Life & CUDIS
f. International Commons, Inc.
Business: Special Events
January 13, 1981*
State of domicile: Wisconsin
g. CUNA Mortgage Corporation
Business: Mortgage Servicing
November 20, 1978*
State of domicile: Wisconsin
h. Investors Equity Insurance Company, Inc.
Business: Private Mortgage Insurance
April 14, 1994*
State of Domicile: California
i. CUNA Mutual Insurance Agency, Inc.
Business: Leasing/Brokerage
March 1, 1974*
State of domicile: Wisconsin
Formerly CMCI Corporation
CUNA Mutual Insurance Agency, Inc. is the 100% owner
of the following subsidiaries:
(1) CM Field Services, Inc.
Business: Serves Agency Field Staff
January 26, 1994*
State of domicile: Wisconsin
(2) CUNA Mutual Insurance Agency of Alabama, Inc.
Business: Property & Casualty Agency
May 27, 1993*
State of domicile: Alabama
(3) CUNA Mutual Insurance Agency of New Mexico, Inc.
Business:Brokerage of Corporate & Personal Lines
June 10, 1993*
State of domicile: New Mexico
(4) CUNA Mutual Insurance Agency of Hawaii, Inc.
Business: Property & Casualty Agency
June 10, 1993*
State of domicile: Hawaii
(5) CUNA Mutual Casualty Insurance Agency of
Mississippi, Inc.
Business: Property & Casualty Agency
June 24, 1993*
State of domicile: Mississippi
(6) CUNA Mutual Insurance Agency of Kentucky, Inc.
Business:Brokerage of Corporate &Personal Lines
October 5, 1994*
State of domicile: Kentucky
(7) CUNA Mutual Insurance Agency of Massachusetts,
Inc.
Business:Brokerage of Corporate &Personal Lines
January 27, 1995*
State of domicile: Massachusetts
2. C.U.I.B.S. Pty. Ltd.
Business: Brokerage
February 18, 1981*
Country of domicile: Australia
*Dates shown are dates of acquisition, control or organization.
CUNA Mutual Insurance Society, either directly or through a wholly-owned
subsidiary, has a partial ownership interest in the following:
1. C. U. Family Insurance Services, Inc./Colorado
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by Colleague Services Corporation
September 1, 1981
2. C. U. Insurance Services, Inc./Oregon
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by Oregon Credit Union League
December 27, 1989
3. CUFIS of New York, Inc.
50% ownership by CUNA Mutual Insurance Agency, Inc.
50% ownership by CUC Services, Inc.
March 28, 1991
4. The CUMIS Group Limited
63.4% ownership by CUNA Mutual Insurance Society (as of 12-31-96)
5. CIMCO Inc. (CIMCO)
50% ownership by CUNA Mutual Investment Corporation
50% ownership by CUNA Mutual Life Insurance Company
January 1, 1992
6. Cooperative Savings and Credit Unions Insurance Society
"Benefit" SA (Poland)
70.9% ownership by CUNA Mutual Insurance Society
15.3% ownership by CUMIS Insurance Society, Inc.
13.8% ownership by Foundation for Polish Credit Unions
September 1, 1992
7. GWARANT, Ltd.
50% ownership by CUNA Mutual Insurance Society
50% ownership by Foundation for Polish Credit Unions
February 18, 1994
8. CUNA Mutual Insurance Agency of Ohio, Inc.
1% of value owned by Michael Corcoran (CUNA Mutual Employee) subject to a
voting trust agreement, Michael B. Kitchen as Voting Trustee.
99% of value owned by CUNA Mutual Insurance Agency, Inc. Due to Ohio
regulations, CUNA Mutual Insurance Agency, Inc. holds no voting stock in
this corporation. June 14, 1993
9. SECURITY Management Company, Ltd. (Hungary)
90% ownership by CUNA Mutual Insurance Society
10% ownership by: Federation of Savings Cooperatives
Savings Cooperative of Szoreg
Savings Cooperative of Szekkutas
(collectively called Hungarian Associates
September 5, 1992
10. CMG Mortgage Insurance Company
55% ownership by CUNA Mutual Investment Corporation
45% ownership by PMI Mortgage Insurance Co.
April 14, 1994
Limited Liability Companies
"Sofia LTD." (Ukraine)
99.96% CUNA Mutual Insurance Society
.04% CUMIS Insurance Society, Inc.
March 6, 1996
a. `FORTRESS' (Ukraine)
80% "Sofia LTD."
19% The Ukrainian National Association of Savings and Credit
Unions
1% Service Center by UNASCU
September 25, 1996
2. CUNA Mortgage Assistance, L.L.C.
50% interest by CUNA Mortgage Corporation
50% interest by CUNA Service Group, Inc.
November 7, 1995
Stock Corporation - CUNA Mutual Group owns less than 50%
1. Cooperators Life Assurance Society Limited (Jamaica)
CUNA Mutual Insurance Society owns 122,500 shares
Jamaica Co-op Credit Union League owns 127,500 shares
(NOTE: Awaiting authority to write business)
May 10, 1990
2. CUNA Caribbean Insurance Society Limited (Trinidad and Tobago, W.I.)
47.96% ownership by CUNA Mutual Insurance Society
July 4, 1985
3. CU Interchange Group, Inc.
Owned by CUNA Mutual Investment Corporation, CUNA Service Group and
various state league organizations December 15, 1993 - CUNA Mutual
Investment Corporation purchased 100 shares stock
4. CUNA Service Group, Inc.
April 22, 1974 - CUNA Mutual Insurance Society purchased 200.71 shares
5. "Benevita LKS" (Russia)
49% CUNA Mutual Insurance Society
51% League of Credit Unions
December 7, 1995
6. Credit Union Service Corporation
Owned by CUNA Mutual Investment Corporation, Credit Union National
Association, Inc. and 18 state league organizations March 29, 1996 - CUNA
Mutual Investment Corporation purchased 1,300,000 shares of stock
Partnerships
1. PLAN AMERICA(R) Financial Services, a Wisconsin partnership
CUNA Mutual Insurance Society - 50% Partner
CUNA Mutual Life Insurance Company - 50% Partner
December 17, 1987
2. LeaSo Partners, a California partnership
CUNA Mutual Insurance Society - 50% Partner
California Credit Union League - 50% Partner
December 29, 1981
3. CM CUSO Limited Partnership, a Washington Partnership
CUMIS Insurance Society, Inc. - General Partner
Credit Unions in Washington - Limited Partners
June 14, 1993
Affiliated (Nonstock)
1. NARCUP, Inc.
August 8, 1978
2. CUNA Mutual Group Foundation, Inc.
July 5, 1967
3. CUNA Mutual Life Insurance Company
July 1, 1990
4. Aseguradora Solidaria de Colombia (formerly Seguros UCONAL Limitada)
17.2% membership by CUNA Mutual Insurance Society
July 2, 1985
Item 26. Number of Holders of Securities
Number of Shareholders
Fund as of March 31, 1997
Capital Appreciation Stock 3
Growth and Income Stock 3
Balanced 3
Bond 3
Money Market 3
Treasury 2000 3
Item 27. Indemnification
Each officer, Trustee or agent of the Ultra Series Fund shall be indemnified by
the Ultra Series Fund to the full extent permitted under the General Laws of the
State of Massachusetts and the Investment Company Act of 1940, as amended,
except that such indemnity shall not protect any such person against any
liability to the Ultra Series Fund or any shareholder thereof to which such
person would otherwise be subject by reason of willful misfeasance, bad faith,
gross negligence or reckless disregard of the duties involved in the conduct of
his office ("disabling conduct"). Indemnification shall be made when (1) a final
decision on the merits is made by a court or other body before whom the
proceeding was brought, that the person to be indemnified was not liable by
reason of disabling conduct or, (2) in the absence of such a decision, a
reasonable determination, based upon a review of the facts, that the person to
be indemnified was not liable by reason of disabling conduct, by (a) the vote of
a majority of the quorum of Trustees who are not "interested persons" of the
Ultra Series Fund as defined in Section 2(a)(19) of the Investment Company Act
of 1940, or (b) an independent legal counsel in a written opinion. The Ultra
Series Fund may, by vote of a majority of a quorum of Trustees who are not
interested persons, advance attorneys' fees or other expenses incurred by
officers, Trustees, Investment Advisers or principal underwriters, in defending
a proceeding upon the undertaking by or on behalf of the person to be
indemnified to repay the advance unless it is ultimately determined that he is
entitled to indemnification. Such advance shall be subject to at least one of
the following: (1) the person to be indemnified shall provide a security for his
undertaking, (2) the Ultra Series Fund shall be insured against losses arising
by reason of any lawful advances, or (3) a majority of a quorum of the
disinterested non-party Trustees of the Ultra Series Fund, or an independent
legal counsel in a written opinion, shall determine, based on a review of
readily available facts, that there is reason to believe that the person to be
indemnified ultimately will be found entitled to indemnification.
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities Act
of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act of 1933 and will be governed by the final adjudication of such issue.
Item 28. Business and Other Connections of Investment Adviser
The Investment Adviser for the Ultra Series Fund is CIMCO Inc. See Part A
MANAGEMENT OF THE ULTRA SERIES FUND, The Investment Adviser for a more complete
description.
NAME POSITION HELD
Michael S. Daubs CIMCO Inc.
President
1982 - Present
Director
1995-Present
CUNA Mutual Life Insurance Company
Chief Investment Officer
1989 - Present
CUNA Mutual Insurance Society
Chief Investment Officer
1990 - Present
Lawrence R. Halverson CIMCO Inc.
Senior Vice President and Secretary
1996 - Present
Vice President and Secretary
1992 - 1996
CUNA Brokerage Services, Inc.
President
1996 - Present
Joyce A. Harris CIMCO Inc.
Director and Chair
1992 - Present
Telco Community Credit Union
President, Chief Executive Officer
1978 - Present
James C. Hickman CIMCO Inc.
Director
1992 - Present
University of Wisconsin
Professor
1972 - Present
Michael B. Kitchen CIMCO Inc.
Director
1995 - Present
CUNA Mutual Life Insurance Company
President and Chief Executive Officer
1995 - Present
CUNA Mutual Insurance Society
President and Chief Executive Officer
1995 - Present
George A. Nelson CIMCO Inc.
Director and Vice Chair
1992 - Present
Evening Telegram Co. - WISC-TV
Vice President
1982 - Present
Item 29. Distributor
a. CUNA Brokerage Services, Inc., a registered broker-dealer, is
the principal Distributor of the shares of the Ultra Series
Fund. CUNA Brokerage Services, Inc. does not act as principal
underwriter, depositor or investment adviser for any
investment company other than the Registrant, CUNA Mutual Life
Variable Account, and CUNA Mutual Life Variable Annuity
Account.
b. The officers and directors of CUNA Brokerage Services, Inc.
are as follows:
Name and Principal Position with Positions and Offices
Business Address Distributor with Registrant
Steven A. Goldberg Director None
5910 Mineral Point Road Secretary
Madison, WI 53705
Michael G. Joneson Director Chief Accounting Officer,
2000 Heritage Way Treasurer Treasurer,and
Waverly, IA 50677 Assistant Secretary
Gary L. Cutler Director None
2000 Heritage Way
Waverly, IA 50677
John M. Waggoner Chief Legal Officer None
5910 Mineral Point Road
Madison, WI 53705
Campbell D. McHugh Compliance Officer None
5910 Mineral Point Road
Madison, WI 53705
Brian Lasko Managing Principal None
2000 Heritage Way
Waverly, IA 50677
Lawrence R. Halverson Director Vice President
5910 Mineral Point Road President and Secretary
Madison, WI 53705
Marc A. Krasnick Director None
5910 Mineral Point Road Vice President
Madison, WI 53705
Sandra K. Steffeney Vice President None
33320 9th Avenue South
Suite 250
Federal Way, WA 98063-3919
c. There have been no commissions or other compensation paid by
Registrant to the Distributor.
Item 30. Location of Accounts and Records
The accounts, books and other documents required to be maintained by Registrant
pursuant to Section 31(a) of the Investment Company Act of 1940 and the rules
promulgated thereunder are maintained by the CUNA Mutual Life Insurance Company
at 2000 Heritage Way, Waverly, Iowa 50677 or at CIMCO Inc., 5910 Mineral Point
Road, Madison, Wisconsin 53705 or at CUNA Mutual Insurance Society, 5910 Mineral
Point Road, Madison, Wisconsin 53705.
Item 31. Management Services
Not Applicable
Item 32. Undertakings
(a) Not applicable.
(b) Not applicable.
(c) Registrant undertakes to furnish each person to whom a prospectus is
delivered a copy of the registrant's annual report to shareholders,
upon request and without charge.
(d) The registrant undertakes, if requested to do so by the holders of at
least 10% of the votes represented by its outstanding shares, to call a
meeting of shareholders for the purpose of voting upon any question of
removal of any Trustee or Trustees, and to assist in communications
with shareholders as required by Section 16(c) of the Investment
Company Act of 1940, as amended.
<PAGE>
SIGNATURES
As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485 for effectiveness of this Registration Statement and has caused this
Registration Statement to be signed on its behalf, in the City of Madison, State
of Wisconsin, on the 18th day of April, 1997.
ULTRA SERIES FUND
By: /s/ Michael S. Daubs
Michael S. Daubs, President
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated.
SIGNATURES AND TITLE DATE
Gwendolyn M. Boeke*
Gwendolyn M. Boeke, Trustee
Alfred L. Disrud*
Alfred L. Disrud, Trustee
/s/ Kevin T. Lentz 04/18/97
Kevin T. Lentz, Trustee
Keith S. Noah*
Keith S. Noah, Trustee
Thomas C. Watt*
Thomas C. Watt, Trustee
/s/ Linda L. Lilledahl 04/18/97
Linda L. Lilledahl, Attorney-In-Fact
* Pursuant to Powers of Attorney filed herewith
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
SIGNATURES AND TITLE DATE
/s/ Michael S. Daubs 04/18/97
Michael S. Daubs, President
/s/ Robert M. Buckingham 04/18/97
Robert M. Buckingham, Chief Financial
Officer and Assistant Secretary
/s/ Michael G. Joneson 04/18/97
Michael G. Joneson, Chief Accounting
Officer, Treasurer and Assistant Secretary
<PAGE>
INDEX TO EXHIBITS TO
FORM N-1A FOR
ULTRA SERIES FUND
8. C. Custodian Agreement with State Street Bank and Trust
Company.
11. A. Consent of KPMG Peat Marwick
17. Financial Data Schedules
<PAGE>
EXHIBIT 8 (c)
MUTUAL FUND CUSTODY AGREEMENT
Ultra Series Fund
STATE STREET BANK AND TRUST COMPANY
<PAGE>
MUTUAL FUND CUSTODY AGREEMENT
Ultra Series Fund
Table of Contents
Section/Article Page
1. Appointment..........................................................1
2. Delivery of Documents................................................1
3. Definitions..........................................................2
4. Delivery and Registration of the Property...........................3
5. Voting Rights........................................................3
6. Receipt and Disbursement of Money....................................4
7. Receipt of Securities................................................4
8. Use of Securities Depository or the Book-Entry System................5
9. Instructions Consistent With The Declaration, etc....................6
10. Transactions........................................................7
11. Transactions Requiring Instructions.................................8
12. Purchase of Securities..............................................9
13. Sales of Securities................................................10
14. DUTIES OF CUSTODIAN WITH RESPECT TO PROPERTY OF
THE FUND HELD OUTSIDE OF THE UNITED STATES.........................10
15. Authorized Shares..................................................13
16. Records............................................................13
17. Cooperation with Accountants.......................................13
18. Confidentiality....................................................14
19. Equipment Failures.................................................14
20. Right to Receive Advice............................................14
21. Compliance with Governmental Rules and Regulations.................15
22. Compensation.......................................................15
23. Indemnification....................................................15
24. Responsibility of State Street.....................................16
25. Collection.........................................................16
26. Duration and Termination...........................................17
27. Notices............................................................17
28. Insurance..........................................................17
29. Further Actions....................................................18
30. Amendments.........................................................18
31. Miscellaneous......................................................18
32. ADDITIONAL FUNDS...................................................18
33. REPRODUCTION OF DOCUMENTS..........................................18
31. SHAREHOLDER COMMUNICATIONS ELECTION................................18
Attachment A -- Fees
Attachment B -- Investment Portfolios of the Fund
<PAGE>
MUTUAL FUND CUSTODY AGREEMENT
THIS AGREEMENT is made as of April _____, 1997, by and between the
Ultra Series Fund, a Massachusetts Business Trust (the "Fund"), and STATE STREET
BANK AND TRUST COMPANY, a Massachusetts State chartered bank trust company
("State Street").
WITNESSETH:
WHEREAS, the Fund is registered as an open-end management
investment company under the Investment Company Act of 1940, as amended (the
"1940 Act"); and
WHEREAS, the Fund is authorized to issue shares in separate series,
with each such series representing interests in a separate portfolio of
securities and other assets; and
WHEREAS, the Fund intends to initially offer two classes of shares
in six series, the Capital Appreciation Stock Series, the Money Market Series,
the Growth and Income Series, the Bond Series, the Balanced Series and the
Treasury 2000 Series (such series together with all other series subsequently
established by the Fund and made subject to this Contract in accordance with
Article 32, being herein referred to as the "Portfolio(s)");
WHEREAS, the Fund desires to retain State Street to serve as the
custodian of the assets of the Portfolios of the Fund and State Street is
willing to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, it is agreed between the parties hereto as follows:
1. Appointment. The Fund hereby appoints State Street to act as
custodian of the portfolio securities, cash and other property of each Portfolio
of the Fund on the terms set forth in this Agreement. State Street accepts such
appointment and agrees to furnish the services herein set forth in return for
the compensation as provided in Article 21 of this Agreement.
2. Delivery of Documents. The Fund will promptly furnish to State
Street such copies, properly certified or authenticated, of contracts, documents
and other related information that State Street may request or requires to
properly discharge its duties. Such documents may include but are not limited to
the following:
(a) Resolutions of the Fund's Trustees authorizing the appointment
of State Street as Custodian of the portfolio securities, cash and other
property of the Fund and approving this Agreement;
(b) Incumbency and signature certificates identifying and
containing the signatures of the Fund's officers and/or the persons authorized
to sign Written Instructions, as hereinafter defined, on behalf of the Fund;
(c) The Fund's Declaration of Trust filed with the Office of the
Secretary of the Commonwealth of Massachusetts and all amendments thereto (such
Declaration of Trust, as currently in effect and as they shall from time to time
be amended, are herein called the "Declaration");
(d) The Fund's By-Laws and all amendments thereto (such By-Laws, as
currently in effect and as they shall from time to time be amended, are herein
called the "By-Laws");
(e) Resolutions of the Fund's Trustees and/or the Fund's
stockholders approving the Management Agreement between the Fund and the Fund's
investment adviser (the "Management Agreement");
(f) The Management Agreement;
(g) The Fund's current Registration Statement on Form N-1A under
the 1940 Act and the Securities Act of 1933, as amended ("the 1933 Act") as
filed with the Securities and Exchange Commission (the "SEC"); and
(h) The Fund's most recent prospectus including all amendments and
supplements thereto (the "Prospectus").
The Fund will furnish State Street from time to time with copies of
all amendments of or supplements to the foregoing, if any. The Fund will also
furnish State Street with a copy of the opinion of counsel for the Fund with
respect to the validity of the shares of common stock, par value $.01 per share
(the "Shares"), of the Fund and the status of such Shares under the 1933 Act as
registered with the SEC, and under any other applicable federal law or
regulation.
3. Definitions
(a) "Authorized Person". As used in this Agreement, the term
"Authorized Person" means the Fund's President, Vice-President, Treasurer and
any other person, whether or not any such person is an officer or employee of
the Fund, duly authorized by the Trustees of the Fund to give Written
Instructions on behalf of the Fund.
(b) "Book-Entry System". As used in this Agreement, the term
"Book-Entry System" means the Federal Reserve/Treasury book-entry system for
United States and federal agency securities, its successor or successors and its
nominee or nominees.
(c) "Property". The term "Property", as used in this Agreement,
means:
(i) any and all securities, cash, and other property
of the Fund which the Fund may from time to time deposit, or cause
to be deposited, with State Street or which State Street may from
time to time hold for the Fund;
(ii) all income in respect of any such securities or
other property;
(iii) all proceeds of the sales of any of such
securities or other property;
and
(iv) all proceeds of the sale of securities issued by
the Fund, which are received by State Street from time to time from
or on behalf of the Fund.
(d) "Securities Depository". As used in this Agreement, the term
"Securities Depository" shall mean The Depository Trust Company, a clearing
agency registered with the SEC, or its successor or successors and its nominee
or nominees; and shall also mean any other registered clearing agency, its
successor or successors, specifically identified in a certified copy of a
resolution of the Fund's Trustees approving deposits by State Street therein.
(e) "Written Instructions". Means instructions
(i) delivered by mail, tested telegram, cable, telex,
facsimile sending device, and received by State Street, signed by
one Authorized Person if the transaction is valued at less than
$1,000,000 and by two Authorized Persons if the transaction is
valued at equal to or greater than $1,000,000 or by persons
reasonably believed by State Street to be Authorized Persons; or
(ii) transmitted electronically through the State
Street `s electronic trade delivery system .
4. Delivery and Registration of the Property. The Fund will deliver or
cause to be delivered to State Street all Property owned by it, including cash
received for the issuance of its Shares, at any time during the period of this
Agreement, except for securities and monies to be delivered to any subcustodian
appointed pursuant to Article 7 hereof. State Street will not be responsible for
such securities and such monies until actually received by State Street or by
any subcustodian. All securities delivered to State Street or to any such
subcustodian (other than in bearer form) shall be registered in the name of the
Fund or in the name of a nominee of the Fund or in the name of State Street or
any nominee of State Street (with or without indication of fiduciary status) or
in the name of any subcustodian or any nominee of such subcustodian appointed
pursuant to Article 7 hereof or shall be properly endorsed and in form for
transfer satisfactory to State Street. If, however, the Fund directs State
Street to maintain securities in "street name", State Street shall utilize its
best efforts only to timely collect income due the Fund on such securities and
to notify the Fund on a best efforts basis only of relevant corporate actions
including, without limitation, pendency of calls, maturities, tender or exchange
offers.
5. Voting Rights. With respect to all securities, however
registered, it is understood that the voting and other rights and powers shall
be exercised by the Fund. State Street's only duty shall be to mail to the Fund
any documents received, including proxy statements and offering circulars, with
any proxies for securities registered in a nominee name executed by such
nominee. Where warrants, options, tenders or other securities have fixed
expiration dates, the Fund understands that in order for State Street to act,
State Street must receive the Fund's instructions at its offices in North
Quincy, Massachusetts, addressed as State Street may from time to time request,
by no later than noon (Massachusetts time) at least one business day prior to
the last scheduled date to act with respect thereto (or such earlier date or
time as permits the Fund a reasonable period of time in which to respond after
State Street notifies the Fund of such date or time). Absent State Street's
timely receipt of such instructions, such instruments will expire without
liability to State Street.
6. Receipt and Disbursement of Money.
(a) State Street shall open and maintain a demand deposit account for
each Portfolio of the Fund (the "Bank Account") subject only to draft or order
by State Street acting pursuant to the terms of this Agreement, and shall hold
in such Bank Account, subject to the provisions hereof, all cash received by it
from or for such Portfolio of the Fund. State Street shall make payments of cash
to, or for the account of, such Portfolio of the Fund from such cash only (i)
for the purchase of securities for the Fund as provided in Article 12 hereof;
(ii) upon receipt of Written Instructions, for the payment of dividends or other
distributions of shares, or for the payment of interest, taxes, administration,
distribution or advisory fees or expenses which are to be borne by the Portfolio
under the terms of this Agreement, any Management Agreement, or any
administration agreement of the Fund; (iii) upon receipt of Written Instructions
for payments in connection with the conversion, exchange or surrender of
securities owned or subscribed to by the Portfolio and held by or to be
delivered to State Street; (iv) to a subcustodian pursuant to Article 7 hereof;
or (v) upon receipt of Written Instructions for other corporate purposes.
(b) State Street is hereby authorized to endorse and collect all
checks, drafts or other orders for the payment of money received as custodian
for the Fund.
7. Receipt of Securities.
(a) Except as provided by Article 8 hereof, State Street shall hold all
securities and non-cash Property received by it for each Portfolio of the Fund.
All such securities and non-cash Property are to be held or disposed of by State
Street for each Portfolio of the Fund pursuant to the terms of this Agreement.
In the absence of Written Instructions accompanied by a certified resolution
authorizing the specific transaction by the Fund's Trustees, State Street shall
have no power or authority to withdraw, deliver, assign, hypothecate, pledge or
otherwise dispose of any such securities and non-cash Property, except in
accordance with the express terms provided for in this Agreement.
Upon receipt of Written Instructions, State Street shall on behalf of
the applicable Portfolio(s) from time to time employ one or more sub-custodians,
located in the United States but only in accordance with an applicable vote by
the Board of Trustees of the Fund on behalf of the applicable Portfolio(s), and
provided that State Street shall have no more or less responsibility or
liability to the Fund on account of any actions or omissions of any
sub-custodian employed at the direction of the Fund than any such sub-custodian
has to State Street. The Custodian may employ as sub-custodian for the Fund's
foreign securities on behalf of the applicable Portfolio(s) the foreign banking
institutions and foreign securities depositories designated in Schedule A hereto
but only in accordance with the provisions of Article 14.
State Street may itself at any time or times in its discretion appoint
(and may at any time remove) any other bank or trust company which is itself
qualified under the Investment Company Act of 1940, as amended, to act as its
agent to carry out such of the provisions of this Agreement as State Street may
from time to time direct; provided, however, that the appointment of any agent
shall not relieve State Street of its responsibilities or liabilities hereunder.
(b) Promptly after the close of business on each day, State Street
shall furnish the Fund with confirmations and a summary of all transfers to or
from the account of each Portfolio of the Fund during said day. Where securities
are transferred to for the account of a Portfolio of the Fund to an account
maintained by State Street at a Securities Depository or the Book Entry System
pursuant to Article 8 hereof, State Street shall also by book-entry or otherwise
identify as belonging to such Portfolio of the Fund the quantity of securities
that belongs to such Portfolio of the Fund that are part of a fungible bulk of
securities registered in the name of State Street (or its nominee) or shown in
State Street's account on the books of a Securities Depository or the Book-Entry
System. At least monthly and at such other times as may be reasonable requested
by the Fund, State Street shall furnish the Fund with a detailed statement of
the Property held for each Portfolio of the Fund under this Agreement.
8. Use of Securities Depository or the Book-Entry System. The Fund
shall deliver to State Street a certified resolution of the Trustees of the Fund
approving, authorizing and instructing State Street on a continuous and ongoing
basis until instructed to the contrary by Written Instructions actually received
by State Street (i) to deposit in a Securities Depository or the Book-Entry
System all securities of each Portfolio of the Fund eligible for deposit therein
and (ii) to utilize a Securities Depository or the Book-Entry System to the
extent possible in connection with the performance of its duties hereunder,
including without limitation, settlements of purchases and sales of securities
by a Portfolio of the Fund, and deliveries and returns of securities collateral
in connection with borrowings. Without limiting the generality of such use, it
is agreed that the following provisions shall apply thereto:
(a) Securities and any cash of a Portfolio of the Fund deposited in
a Securities Depository or the Book-Entry System will at all times be segregated
from any assets and cash controlled by State Street in other than a fiduciary or
custodian capacity but may be commingled with other assets held in such
capacities. State Street will effect payment for securities and receive and
deliver securities in accordance with accepted industry practices in the place
where the transaction is settled, unless the Fund has given State Street Written
Instructions to the contrary.
(b) All Books and records maintained by State Street which relate
to any Portfolio of the Fund's participation in a Securities Depository or the
Book-Entry System will at all times during State Street's regular business hours
be open to the inspection of the Fund's duly authorized employees or agents, and
the Fund will be furnished with all information in respect of the services
rendered to it as it may require.
(c) Anything to the contrary in this Contract notwithstanding,
State Street shall be liable to the Fund for the benefit of a Portfolio for any
loss or damage to the Portfolio resulting from use of a Securities Depository or
the Book-Entry System by reason of any negligence, misfeasance or misconduct of
State Street or any of its agents or of any of its or their employees or from
failure of State Street or any such agent to enforce effectively such rights as
it may have against the Securities Depository or the Book-Entry System; at the
election of the Fund, it shall be entitled to be subrogated to the rights of
State Street with respect to any claim against a. Securities Depository or the
Book-Entry System or any other person which State Street may have as a
consequence of any such loss or damage if and to the extent that the Portfolio
has not been made whole for any such loss or damage.
9. Instructions Consistent With The Declaration, etc. Unless otherwise
provided in this Agreement, State Street shall act only upon Written
Instructions. State Street may assume that any Written Instructions received
hereunder are not in any way inconsistent with any provision of the Articles or
By-Laws of the Fund or any vote or resolution of the Fund's Trustees, or any
committee thereof. State Street shall be entitled to rely upon any Written
Instructions actually received by State Street pursuant to this Agreement. The
Fund agrees that State Street shall incur no liability in acting upon Written
Instructions given to State Street. In accord with instructions from the Fund,
as required by accepted industry practice or as State Street may elect in
effecting the execution of Fund instructions, advances of cash or other Property
made by State Street on behalf of a Portfolio of the Fund, arising from the
purchase, sale, redemption, transfer or other disposition of Property of the
Fund, or in connection with the disbursement of funds to any party, or in
payment of fees, expenses, claims or liabilities owed to State Street by the
Fund, or to any other party which has secured judgment in a court of law against
the Fund which creates an overdraft in the accounts or over-delivery of Property
shall be deemed a loan by State Street to the Fund, payable on demand, bearing
interest at such rate customarily charged by State Street for similar loans and
any property at any time held for the account of the applicable Portfolio shall
be security therefor and should the Fund fail to repay State Street promptly,
State Street shall be entitled to utilize available cash and to dispose of such
Portfolio's assets to the extent necessary to obtain reimbursement.
The Fund agrees that test arrangements, authentication methods or other
security devices to be used with respect to instructions which the Fund may give
by telephone, telex, TWX facsimile transmission, bank wire or through an
electronic instruction system, shall be processed in accordance with terms and
conditions for the use of such arrangements, methods or devices as State Street
may put into effect and modify from time to time. The Fund shall safeguard any
test keys, identification codes or other security devices which State Street
makes available to the Fund and agrees that the Fund shall be responsible for
any loss, liability or damage incurred by State Street or by the Fund as a
result of State Street's acting in accordance with instructions from any
unauthorized person using the proper security device unless such loss, liability
or damage was incurred as a result of State Street's negligence or willful
misconduct. State Street may electronically record, but shall not be obligated
to so record, any instructions given by telephone and any other telephone
discussions with respect to the Account. In the event that the Fund uses State
Street's electronic trade delivery system, the Fund agrees that State Street is
not responsible for the consequences of the failure of the system to perform for
any reason beyond the reasonable control of State Street, or the failure of any
communications carrier, utility, or communications network. In the event the
system is inoperable, the Fund agrees that it will accept the communication of
transaction instructions by telephone, facsimile transmission on equipment
compatible to State Street's facsimile receiving equipment or by letter, at no
additional charge to the Fund.
10. Transactions Not Requiring Instructions. State Street is
authorized to take the following action without Written Instructions:
(a) Collection of Income and Other Payments. State Street shall:
(i) subject to Article 4, collect and receive for the account
of each Portfolio of the Fund, all income and other payments and
distributions, including (without limitation) stock dividends, rights,
warrants and similar items, included or to be included in the Property
of such Portfolio of the Fund, and promptly advise the Fund of such
receipt and shall credit such income, as collected, to such Portfolio
of the Fund. From time to time, State Street may elect, but shall not
be so obligated, to credit the Account with interest, dividends or
principal payments on payable or contractual settlement date, in
anticipation of receiving same from a payer, central depository, broker
or other agent employed by the Fund or State Street. Any such crediting
and posting shall be at the Fund's sole risk, and State Street shall be
authorized to reverse any such advance posting in the event State
Street does not receive good funds from any such payer, central
depository, broker or agent of the Fund.
(ii) endorse and deposit for collection in the name of the
Fund, checks, drafts, or other orders for the payment of money on the
same day as received;
(iii) receive and hold for the account of each Portfolio of
the Fund all securities received by the Fund as a result of a stock
dividend, share split-up or reorganization, recapitalization,
readjustment or other rearrangement or distribution of rights or
similar securities issued with respect to any portfolio securities of
such Portfolio of the Fund held by State Street hereunder;
(iv) present for payment and collect the amount payable upon
all securities which may mature or be called, redeemed or retired, or
otherwise become payable on the date such securities become payable;
(v) take any action which may be necessary and proper in
connection with the collection and receipt of such income and other
payments and the endorsement for collection of checks, drafts and other
negotiable instruments;
(vi) with respect to domestic securities, to exchange
securities in temporary form for securities in definitive form, to
effect an exchange of the shares where the par value of stock is
changed, and to surrender securities at maturity or when advised of
earlier call for redemption, against payment therefor in accordance
with accepted industry practice. The Fund understands that State Street
subscribes to one or more nationally recognized services that provide
information with respect to calls for redemption of bonds or other
corporate actions. State Street shall not be liable for failure to
redeem any called bond or to take other action if notice of such call
or action was not provided by any service to which it subscribes
provided that State Street shall have acted in good faith without
negligence and in accordance with "Street Practice" (as is customary in
industry). State Street shall have no duty to notify the Fund of any
rights, duties, limitations, conditions or other information set forth
in any security (including mandatory or optional put, call and similar
provisions), but State Street shall forward to the Fund any notices or
other documents subsequently received in regard to any such security.
When fractional shares of stock of a declaring corporation are received
as a stock distribution, unless specifically instructed to the contrary
in writing, State Street is authorized to sell the fraction received
and credit the applicable Portfolio's account. Unless specifically
instructed to the contrary in writing, State Street is authorized to
exchange securities in bearer form for securities in registered form.
If any Property registered in the name of a nominee of State Street is
called for partial redemption by the issuer of such Property, State
Street is authorized to allot the called portion to the respective
beneficial holders of the Property in such manner deemed to be fair and
equitable by State Street in its sole discretion.
(b) Miscellaneous Transactions. State Street is authorized to
deliver or cause to be delivered Property against payment or other consideration
or written receipt therefor in the following cases:
(i) for examination by a broker selling for the
account of a Portfolio of the Fund in accordance with street
delivery custom;
(ii) for the exchange of interim receipts or temporary
securities for definitive securities;
(iii)for transfer of securities into the name of the
Fund or State Street or a nominee of either, or for exchange of
securities for a different number of bonds, certificates, or other
evidence, representing the same aggregate face amount or number of
units bearing the same interest rate, maturity date and call
provisions, if any; provided that, in any such case, the new
securities are to be delivered to State Street.
11. Transactions Requiring Instructions. Upon receipt of Written
Instructions and not otherwise, State Street, directly or through the use of a
Securities Depository or the Book-Entry System, shall:
(a) Execute and deliver to such persons as may be designated in
such Written Instructions, proxies, consents, authorizations, and any other
instruments whereby the authority of the Fund as owner of any securities may be
exercised,
(b) Deliver any securities held for a Portfolio of the Fund against
receipt of other securities or cash issued or paid in connection with the
liquidation, reorganization, refinancing, merger, consolidation or
recapitalization of any corporation, or the exercise of any conversion
privilege;
(c) Deliver any securities held for a Portfolio of the Fund to any
protective committee, reorganization committee or other person in connection
with the reorganization, refinancing, merger, consolidation, recapitalization or
sale of assets of any corporation, against receipt of such certificates of
deposit, interim receipts or other instruments or documents as may be issued to
it to evidence such delivery;
(d) Make such transfers or exchanges of the assets of a Portfolio
of the Fund and take such other steps as shall be stated in said instructions to
be for the purpose of effectuating any duly authorized plan of liquidation,
reorganization, merger, consolidation or recapitalization of such Portfolio of
the Fund;
(e) Release securities belonging to a Portfolio of the Fund to any
bank or trust company for the purpose of pledge or hypothecation to secure any
loan incurred by such Portfolio of the Fund; provided, however, that securities
shall be released only upon payment to State Street of the monies borrowed,
except that in cases where additional collateral is required to secure a
borrowing already made, subject to proper prior authorization, further
securities may be released for that purpose; and pay such loan upon redelivery
to it of the securities pledged or hypothecated therefor and upon surrender of
the note or notes evidencing the loan;
(f) Deliver any securities held for a Portfolio of the Fund upon
the exercise of a covered call option written by the Fund on such securities on
behalf of such Portfolio; and
(g) Deliver securities held for a Portfolio of the Fund pursuant to
separate security lending agreements concerning the lending of the Portfolio's
securities into which the Fund may enter, from time to time on behalf of such
Portfolio.
(h) Without specific authorization of the Fund, State Street shall
not accept due bills in place of Property or securities or accept partial
delivery or settlement. State Street is authorized to deliver Property of a
Portfolio of the Fund, against a receipt therefor, for examination in accordance
with "street delivery" custom and to accept, in lieu of Property, documents,
including trust and collateral receipts and letters of undertaking, as long as
such documents contain the agreement of the issuer thereof to hold such Property
subject to State Street's sole order.
12. Purchase of Securities. Promptly after each purchase of
securities by the Fund's investment adviser (or any sub-adviser), the Fund shall
deliver to State Street (as Custodian) Written Instructions specifying with
respect to each such purchase: (a) the name of the issuer and the title of the
securities, (b) the number of shares of the principal amount purchased and
accrued interest, if any, (c) the dates of purchase and settlement, (d) the
purchase price per unit, (e) the total amount payable upon such purchase, (f)
the name of the person from whom or the broker through whom the purchase was
made and (g) the Portfolio of the Fund for which the purchase was made. State
Street shall upon receipt of securities purchased by or for a Portfolio of the
Fund pay out of the moneys held for the account of such Portfolio the total
amount payable to the person from whom or the broker through whom the purchase
was made, provided that the same conforms to the total amount payable as set
forth in such Written Instructions.
13. Sales of Securities. Promptly after each sale of securities by
the Fund's investment adviser, the Fund shall deliver to State Street (as
Custodian) Written Instructions, specifying with respect to each such sale: (a)
the name of the issuer and the title of the security, (b) the number of shares
or principal amount sold, and accrued interest' if any, (c) the date of sale,
(d) the sale price per unit, (e) the total amount payable to the Fund upon such
sale, (f) the name of the broker through whom or the person to whom the sale was
made and (g) the Portfolio of the Fund for which the sale was made. State Street
shall deliver the securities upon receipt of the total amount payable to the
Fund upon such sale, provided that the same conforms to the total amount payable
as set forth in such Written Instructions. Subject to the foregoing, State
Street may accept payment in such form as shall be satisfactory to it, and may
deliver securities and arrange for payment in accordance with the customs
prevailing among dealers in securities.
14. Duties of the Custodian with Respect to Property of the Fund
Held Outside of the United States
(a) Appointment of Foreign Sub-Custodians. The Fund hereby
authorizes and instructs the Custodian to employ as sub-custodians for the
Portfolio's securities and other assets maintained outside the United States the
foreign banking institutions and foreign securities depositories designated on
Schedule A hereto ("foreign sub-custodians"). Upon receipt of Written
Instructions, together with a certified resolution of the Fund's Board of
Trustees, the Custodian and the Fund may agree to amend Schedule A hereto from
time to time to designate additional foreign banking institutions and foreign
securities depositories to act as sub-custodian. Upon receipt of Written
Instructions, the Fund may instruct the Custodian to cease the employment of any
one or more such sub-custodians for maintaining custody of the Portfolio's
assets.
(b) Assets to be Held. The Custodian shall limit the
securities and other assets maintained in the custody of the foreign
sub-custodians to: (a) "foreign securities", as defined in paragraph (c)(1) of
Rule 17f-5 under the Investment Company Act of 1940, and (b) cash and cash
equivalents in such amounts as the Custodian or the Fund may determine to be
reasonably necessary to effect the Portfolio's foreign securities transactions.
The Custodian shall identify on its books as belonging to the Fund, the foreign
securities of the Fund held by each foreign sub-custodian.
(c) Foreign Securities Systems. Except as may otherwise be
agreed upon in writing by the Custodian and the Fund, assets of the Portfolios
shall be maintained in a clearing agency which acts as a securities depository
or in a book-entry system for the central handling of securities located outside
the United States (each a "Foreign Securities System") only through arrangements
implemented by the foreign banking institutions serving as sub-custodians
pursuant to the terms hereof. Where possible, such arrangements shall include
entry into agreements containing the provisions set forth in Article 14 (e)
hereof.
(d) Holding Securities. The Custodian may hold securities and
other non-cash property for all of its customers, including the Fund, with a
foreign sub-custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
records of the Custodian with respect to securities and other non-cash property
of the Fund which are maintained in such account shall identify by book-entry
those securities and other non-cash property belonging to the Fund and (ii) the
Custodian shall require that securities and other non-cash property so held by
the foreign sub-custodian be held separately from any assets of the foreign
sub-custodian or of others.
(e) Agreements with Foreign Banking Institutions. Each
agreement with a foreign banking institution shall provide that: (a) the assets
of each Portfolio will not be subject to any right, charge, security interest,
lien or claim of any kind in favor of the foreign banking institution or its
creditors or agent, except a claim of payment for their safe custody or
administration; (b) beneficial ownership for the assets of each Portfolio will
be freely transferable without the payment of money or value other than for
custody or administration; (c) adequate records will be maintained identifying
the assets as belonging to each applicable Portfolio; (d) officers of or
auditors employed by, or other representatives of the Custodian, including to
the extent permitted under applicable law the independent public accountants for
the Fund, will be given access to the books and records of the foreign banking
institution relating to its actions under its agreement with the Custodian; and
(e) assets of the Portfolios held by the foreign sub-custodian will be subject
only to the instructions of the Custodian or its agents.
(f) Access of Independent Accountants of the Fund. Upon
request of the Fund, the Custodian will use its best efforts to arrange for the
independent accountants of the Fund to be afforded access to the books and
records of any foreign banking institution employed as a foreign sub-custodian
insofar as such books and records relate to the performance of such foreign
banking institution under its agreement with the Custodian.
(g) Reports by Custodian. The Custodian will supply to the
Fund from time to time, as mutually agreed upon, statements in respect of the
securities and other assets of the Portfolio(s) held by foreign sub-custodians,
including but not limited to an identification of entities having possession of
the Portfolio(s) securities and other assets and advices or notifications of any
transfers of securities to or from each custodial account maintained by a
foreign banking institution for the Custodian on behalf of each applicable
Portfolio indicating, as to securities acquired for a Portfolio, the identity of
the entity having physical possession of such securities.
(h) Transactions in Foreign Custody Account. (i) Except as
otherwise provided in subparagraph (ii) of this Article 14 (h), the provisions
of Articles 12 and 13 of this Contract shall apply, mutatis mutandis to the
foreign securities of the Fund held outside the United States by foreign
sub-custodians.
(ii) Notwithstanding any provision of this Contract to the
contrary, settlement and payment for securities received for the account of each
applicable Portfolio and delivery of securities maintained for the account of
each applicable Portfolio may be effected in accordance with the customary
established securities trading or securities processing practices and procedures
in the jurisdiction or market in which the transaction occurs, including,
without limitation, delivering securities to the purchaser thereof or to a
dealer therefor (or an agent for such purchaser or dealer) against a receipt
with the expectation of receiving later payment for such securities from such
purchaser or dealer.
(iii) Securities maintained in the custody of a foreign
sub-custodian may be maintained in the name of such entity's nominee to the same
extent as set forth in Article 4 of this Contract, and the Fund agrees to hold
any such nominee harmless from any liability as a holder of record of such
securities.
(i) Liability of Foreign Sub-Custodians. Each agreement
pursuant to which the Custodian employs a foreign banking institution as a
foreign sub-custodian shall require the institution to exercise reasonable care
in the performance of its duties and to indemnify, and hold harmless, the
Custodian and the Fund from and against any loss, damage, cost, expense,
liability or claim arising out of or in connection with the institution's
performance of such obligations. At the election of the Fund, it shall be
entitled to be subrogated to the rights of the Custodian with respect to any
claims against a foreign banking institution as a consequence of any such loss,
damage, cost, expense, liability or claim if and to the extent that the Fund has
not been made whole for any such loss, damage, cost, expense, liability or
claim.
(j) Liability of Custodian. The Custodian shall be liable for
the acts or omissions of a foreign banking institution to the same extent as set
forth with respect to sub-custodians generally in this Contract and, regardless
of whether assets are maintained in the custody of a foreign banking
institution, a foreign securities depository or a branch of a U.S. bank as
contemplated by Article 14(l) hereof, the Custodian shall not be liable for any
loss, damage, cost, expense, liability or claim resulting from nationalization,
expropriation, currency restrictions, or acts of war or terrorism or any loss
where the sub-custodian has otherwise exercised reasonable care. Notwithstanding
the foregoing provisions of this Article 14 (j), in delegating custody duties to
State Street London Ltd., the Custodian shall not be relieved of any
responsibility to the Fund for any loss due to such delegation, except such loss
as may result from (a) political risk (including, but not limited to, exchange
control restrictions, confiscation, expropriation, nationalization,
insurrection, civil strife or armed hostilities) or (b) other losses (excluding
a bankruptcy or insolvency of State Street London Ltd. not caused by political
risk) due to Acts of God, nuclear incident or other losses under circumstances
where the Custodian and State Street London Ltd. have exercised reasonable care.
(k) Monitoring Responsibilities. The Custodian shall furnish
annually to the Fund, during the month of June, information concerning the
foreign sub-custodians employed by the Custodian. Such information shall be
similar in kind and scope to that furnished to the Fund in connection with the
initial approval of this Contract. In addition, the Custodian will promptly
inform the Fund in the event that the Custodian learns of a material adverse
change in the financial condition of a foreign sub-custodian or any material
loss of the assets of the Fund or in the case of any foreign sub-custodian not
the subject of an exemptive order from the Securities and Exchange Commission is
notified by such foreign sub-custodian that there appears to be a substantial
likelihood that its shareholders' equity will decline below $200 million (U.S.
dollars or the equivalent thereof) or that its shareholders' equity has declined
below $200 million (in each case computed in accordance with generally accepted
U.S. accounting principles).
(l) Branches of U.S. Banks. (i) Except as otherwise set forth
in this Contract, the provisions hereof shall not apply where the custody of the
Portfolios assets are maintained in a foreign branch of a banking institution
which is a "bank" as defined by Section 2(a)(5) of the Investment Company Act of
1940 meeting the qualification set forth in Section 26(a) of said Act. The
appointment of any such branch as a sub-custodian shall be governed by Article 1
of this Contract.
(ii) Cash held for each Portfolio of the Fund in the United
Kingdom shall be maintained in an interest bearing account established for the
Fund with the Custodian's London branch, which account shall be subject to the
direction of the Custodian, State Street London Ltd. or both.
(m) Tax Law. The Custodian shall have no responsibility or
liability for any obligations now or hereafter imposed on the Fund or the
Custodian as custodian of the Fund by the tax law of the United States of
America or any state or political subdivision thereof. It shall be the
responsibility of the Fund to notify the Custodian of the obligations imposed on
the Fund or the Custodian as custodian of the Fund by the tax law of
jurisdictions other than those mentioned in the above sentence, including
responsibility for withholding and other taxes, assessments or other
governmental charges, certifications and governmental reporting. The sole
responsibility of the Custodian with regard to such tax law shall be to use
reasonable efforts to assist the Fund with respect to any claim for exemption or
refund under the tax law of jurisdictions for which the Fund has provided such
information.
15. Authorized Shares. The Fund has two classes of shares, Class C
(unaffiliated separate accounts and qualified plans) and Class Z (separate
accounts and qualified plans affiliated with CUNA Mutual Group).
16. Records. The books and records pertaining to the Fund which are
in the possession of State Street shall be the property of the Fund. Such books
and records shall be prepared and maintained as required by the 1940 Act; other
applicable federal and state securities laws and rules and regulations; and, any
state or federal regulatory body having appropriate jurisdiction. The Fund, or
the Fund's authorized representatives, shall have access to such books and
records at all times during State Street's normal business hours, and such books
and records shall be surrendered to the Fund promptly upon request. Upon
reasonable request of the Fund, copies of any such books and records shall be
provided by State Street to the Fund or the Fund's authorized representative at
the Fund's expense.
17. Cooperation with Accountants. State Street shall cooperate
with the Fund's independent certified public accountants and shall take all
reasonable action in the performance of its obligations under this Agreement to
assure that the necessary information is made available to such accountants for
the expression of their unqualified opinion, including but not limited to the
opinion included in the Fund's semiannual report on Form N-SAR.
18. Confidentiality. State Street agrees on behalf of itself and
its employees to treat confidentially and as the proprietary information of the
Fund all records and other information relative to the Fund and its prior,
present or potential Shareholders and relative to the investment advisers and
its prior, present or potential customers, and not to use such records and
information for any purpose other than performance of its responsibilities and
duties hereunder, except after prior notification to and approval in writing by
the Fund, which approval shall not be unreasonably withheld and may not be
withheld where State Street may be exposed to civil or criminal contempt
proceedings for failure to comply, when requested to divulge such information by
duly constituted authorities, or when so requested by the Fund. Nothing
contained herein, however, shall prohibit State Street from advertising or
soliciting the public generally with respect to other products or services,
regardless of whether such advertisement or solicitation may include prior,
present or potential Shareholders of the Fund.
19. Equipment Failures. In the event of equipment failures beyond
State Street's control, State Street shall, at no additional expense to the
Fund, take reasonable steps to minimize service interruptions but shall not have
liability with respect thereto. State Street shall enter into and shall maintain
in effect with appropriate parties one or more agreements making reasonable
provision for back up emergency use of electronic data processing equipment to
the extent appropriate equipment is available.
20. Right to Receive Advice.
(a) Advice of Fund. If State Street shall be in doubt as to any
action to be taken or omitted by it, it may request, and shall receive, from the
Fund clarification or advice.
(b) Advice of Counsel. If State Street shall be in doubt as to any
question of law involved in any action to be taken or omitted by State Street,
it may request advice at its own cost from counsel of its own choosing (who may
be counsel for the Fund or State Street, at the option of State Street).
(c) Conflicting Advice. In case of conflict between directions or
advice received by State Street pursuant to subparagraph (a) of this Article and
advice received by State Street pursuant to subparagraph (b) of this paragraph,
State Street shall be entitled to rely on and follow the advice received
pursuant to the latter provision alone.
(d) Protection of State Street. State Street shall be protected in
any action or inaction which it takes or omits to take in reliance on any
directions or advice received pursuant to subparagraph (a) of this Article which
State Street, after receipt of any such directions or advice, in good faith
believes to be consistent with such directions or advice. However, nothing in
this paragraph shall be construed as imposing upon State Street any obligation
(i) to seek such directions or advice, or (ii) to act in accordance with such
directions or advice when received, unless, under the terms or another provision
of this Agreement, the same is a condition to State Street's properly taking or
omitting to take such action. Nothing in this subparagraph shall excuse State
Street when an action or omission on the part of State Street constitutes
willful misfeasance, bad faith, gross negligence or reckless disregard by State
Street of its duties under this Agreement.
21. Compliance with Governmental Rules and Regulations. The Fund
assumes full responsibility for insuring that the contents of each Prospectus of
the Fund complies with all applicable requirements of the 1933 Act, the 1940
Act, and any laws, rules and regulations of governmental authorities having
jurisdiction.
22. Compensation. As compensation for the services described within
this Agreement and rendered by State Street during the term of this Agreement,
the Fund will pay to State Street, in addition to reimbursement of its
out-of-pocket expenses, monthly fees as outlined in Attachment A.
23. Indemnification. The Fund, as sole owner of the Property, agrees
to indemnify and hold harmless State Street and its nominees from all taxes,
charges, expenses, assessments, claims, and liabilities (including, without
limitation, liabilities arising under the 1933 Act, the Securities Exchange Act
of 1934 as amended, the 1940 Act, and any state and foreign securities and blue
sky laws, all as or to be amended from time to time) and expenses, including
(without limitation) attorney's fees and disbursements, arising directly or
indirectly (a) from the fact that securities included in the Property are
registered in the name of any such nominee or (b) without limiting the
generality of the foregoing clause (a) from any action or thing which State
Street takes or does or omits to take or do (i) at the request or on the
direction of or in reliance on the advice of the Fund given in accordance with
the terms of this Agreement, (ii) upon Written Instructions or (iii) in carrying
out the provisions of this Contract in good faith without negligence; provided,
that neither State Street nor any of its nominees or agents shall be indemnified
against any liability to the Fund or to its Shareholders (or any expenses
incident to such liability) arising out of (x) State Street's or such nominee's
or agent's own willful misfeasance, bad faith, gross negligence or reckless
disregard of its duties under this Agreement or any agreement between State
Street and any nominee or subcustodian or (y) State Street's own or its agent's
negligent failure to perform its duties under this Agreement. In no event shall
State Street be liable for indirect, special or consequential damages. In the
event of any advance of cash for any purpose made by State Street on behalf of a
Portfolio resulting from orders or Written Instructions of the Fund, or in the
event that State Street or its nominee or agent shall incur or be assessed any
taxes, charges, expenses, assessments, claims or liabilities in connection with
the performance of this Agreement, except such as may arise from its or its
nominee's or agent's own negligent action, negligent failure to act, willful
misconduct, or reckless disregard of its duties under this Agreement or any
agreement between State Street and any nominee or agent, the Fund shall promptly
reimburse State Street for such advance of cash or such taxes, charges,
expenses, assessments, claims or liabilities and any property at any time held
for the account of the applicable Portfolio shall be security therefor and
should the Fund fail to repay State Street promptly, State Street shall be
entitled to utilize available cash and to dispose of such Portfolio's assets to
the extent necessary to obtain reimbursement.
If the Fund on behalf of a Portfolio requires State Street to take any
action with respect to securities, which action involves the payment of money or
which action may, in the opinion of State Street, result in State Street or its
nominee assigned to the Fund or the Portfolio being liable for the payment of
money or incurring liability of some other form, the Fund on behalf of the
Portfolio, as a prerequisite to requiring State Street to take such action,
shall provide indemnity to State Street in an amount and form satisfactory to
it.
State Street will indemnify the Fund for loss of Property in its
care, provided such loss is due to the gross negligence or dishonesty of State
Street's officers or employees, or to burglary, robbery, holdup, theft,
extortion, mysterious disappearance or loss due to damage or destruction. In the
event of such loss, State Street agrees that it shall promptly replace such
Property or the value of same (by, among other means, posting appropriate bond
with the issuer to obtain reissue of such Property), together with the value of
any loss of rights or privileges resulting from such loss. State Street shall
make available to the Fund for inspection any such Property or value amounts so
replaced.
24. Responsibility of State Street. State Street shall be under no
duty to take any action on behalf of the Fund except as specifically set forth
herein or as may be specifically agreed to by State Street in writing. In the
performance of its duties hereunder, State Street shall be obligated to exercise
reasonable care and diligence and to act in good faith and to use its best
efforts within reasonable limits to insure the accuracy of all services
performed under this Agreement. State Street shall be responsible for its own
negligent failure or that of any agent it shall appoint to perform its duties
under this Agreement but to the extent that duties, obligations and
responsibilities are not expressly set forth in this Agreement, State Street
shall not be liable for any act or omission which does not constitute willful
misfeasance, bad faith, or gross negligence on the part of State Street or
reckless disregard of such duties, obligations and responsibilities. Without
limiting the generality of the foregoing or of any other provision of this
Agreement, State Street in connection with its duties under this Agreement shall
not be under any duty or obligation to inquire into and shall not be liable for
or in respect of (a) the validity or invalidity or authority or lack thereof of
any advice, direction, notice or other instrument which conforms to the
applicable requirements of this Agreement, if any, and which State Street
believes to be genuine, (b) the validity of the issue of any securities
purchased or sold by the Fund, the legality of the purchase or sale thereof or
the propriety of the amount paid or received therefor, (c) the legality of the
issue or sale of any Shares, or the sufficiency of the amount to be received
therefor, (d) the legality of the redemption of any Shares, or the propriety of
the amount to be paid therefor, (e) the legality of the declaration or payment
of any dividend or distribution on Shares, or (f) delays or errors or loss of
data occurring by reason of circumstances beyond State Street's control,
including acts of civil or military authority, national emergencies, labor
difficulties, fire, mechanical breakdown (except as provided in Article 18),
flood or catastrophe, acts of God, insurrection, war, riots, or failure of the
mail, transportation systems, communication systems or power supply.
25. Collection. All collections of monies or other property in
respect, or which are to become part, of the Property (but not the safekeeping
thereof upon receipt by State Street) shall be at the sole risk of the Fund. In
any case in which State Street does not receive any payment due the Fund within
a reasonable time after State Street has made proper demands for the same, it
shall so notify the Fund in writing, including copies of all demand letters, any
written responses thereto, and memoranda of all oral responses thereto, and to
telephonic demands, and await instructions from the Fund. State Street shall not
be obliged to take legal action for collection unless and until reasonably
indemnified to its satisfaction. State Street shall also notify the Fund as soon
as reasonably practicable whenever income due on securities is not collected in
due course.
26. Duration and Termination. This Agreement shall be effective as
of the date hereof and shall continue until termination by the Fund or by State
Street on 90 day's written notice. Upon any termination of this Agreement,
pending appointment of a successor to State Street or a vote of the Shareholders
of the Fund to dissolve or to function without a custodian of its cash,
securities or other property, State Street shall not deliver cash, securities or
other property of the Fund to the Fund, but may deliver them to a bank or trust
company of its own selection, having aggregate capital, surplus and undivided
profits, as shown by its last published report of not less than twenty million
dollars ($20,000,000) as a successor custodian for the Fund to be held under
terms similar to those of this Agreement, provided, however, that State Street
shall not be required to make any such delivery or payment until full payment
shall have been made by the Fund of all liabilities constituting a charge on or
against the properties then held by State Street or on or against State Street
and until full payment shall have been made to State Street of all of its fees,
compensation, costs and expenses, subject to the provisions of Paragraph 21 of
this Agreement.
27. Notices. All notices and other communications (collectively
referred to as "Notice" or "Notices" in this Article) hereunder shall be in
writing or by confirming telegram, cable, telex, or facsimile sending device.
Notices shall be addressed : if to the Fund: Ultra Series Fund, 2000 Heritage
Way, Waverly, IA 50677-0061, telephone: (319) 352-1000 extension 2231; and if to
State Street: State Street Bank and Trust Company, 108 Myrtle Street, North
Quincy, MA 02171-2197, Attention: Kenneth A. Bergeron, Vice President,
telephone: (617) 985-6489 or, in either case, at such other address as shall
have been notified to the sender of any such Notice or other communication. If
the location of the sender of a Notice and the address of the addressee thereof
are, at the time of sending, more than 100 miles apart, the Notice may be sent
by first-class mail, in which case it shall be deemed to have been given three
days after it is sent, or if sent by confirming telegram, cable, telex or
facsimile sending device, it shall be deemed to have been given immediately,
and, if the location of the sender of a Notice and the address of the addressee
thereof are, at the time of sending, not more than 100 miles apart, the Notice
may be sent by first-class mail, in which case it shall be deemed to have been
given two days after it is sent, of if sent by messenger, it shall be deemed to
have been given on the day it is delivered, or if sent by confirming telegram,
cable, telex or facsimile sending device, it shall be deemed to have been given
immediately. All postage, cable, telegram, telex and facsimile sending device
charges arising from the sending of a Notice hereunder shall be paid by the
sender.
28. Insurance. State Street shall at all times carry insurance
with insurers acceptable to the Fund and in amounts sufficient to cover losses,
errors, omissions, or fraud for which State Street in this custody agreement has
agreed to indemnify the Fund. From time to time the types and amounts of these
policies will be reviewed with the Fund by State Street.
29. Further Actions Each party agrees to perform such further acts
and execute such further documents as are necessary to effectuate the purposes
hereof.
30. Amendments. This Agreement or any part hereof may be changed or
waived only by an instrument in writing signed by the party against which
enforcement of such change or waiver is sought.
31. Miscellaneous. This Agreement embodies the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings relating to the parties hereto. The captions in
this Agreement are included for convenience of reference only and in no way
define or delimit any of the provisions hereof or otherwise affect their
construction or effect. This Agreement shall be deemed to be a contract made in
Massachusetts and governed by Massachusetts law. If any provision of this
Agreement shall be held or made invalid by a court decision, statute, rule or
otherwise, the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the parties
hereto and their respective successors.
32. Additional Funds. In the event that the Fund establishes one
or more series of Shares in addition to the Capital Appreciation Stock Series,
Money Market Series, Growth and Income Stock Series, Bond Series, Balanced
Series and Treasury 2000 Series with respect to which it desires to have State
Street render services as custodian under the terms hereof, it shall so notify
State Street in writing, and if State Street agrees in writing to provide such
services, such series of Shares shall become a Portfolio hereunder.
33. Reproduction of Documents. This Contract and all schedules,
exhibits, attachments and amendments hereto may be reproduced by any
photographic, photostatic, microfilm, micro-card, miniature photographic or
other similar process. The parties hereto all/each agree that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding, whether or not the original is in
existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.
34. Shareholder Communications Election. Securities and Exchange
Commission Rule 14b-2 requires banks which hold securities for the account of
customers to respond to requests by issuers of securities for the names,
addresses and holdings of beneficial owners of securities of that issuer held by
the bank unless the beneficial owner has expressly objected to disclosure of
this information. In order to comply with the rule, State Street needs the Fund
to indicate whether it authorizes State Street to provide the Fund's name,
address, and share position to requesting companies whose securities the Fund
owns. If the Fund tells State Street "no", State Street will not provide this
information to requesting companies. If the Fund tells State Street "yes" or
does not check either "yes" or "no" below, State Street is required by the rule
to treat the Fund as consenting to disclosure of this information for all
securities owned by the Fund or any funds or accounts established by the Fund.
For the Fund's protection, the Rule prohibits the requesting company from using
the Fund's name and address for any purpose other than corporate communications.
Please indicate below whether the Fund consents or objects by checking one of
the alternatives below.
YES [ X] State Street is authorized to release the Fund's name, address, and
share positions.
NO [ ] State Street is not authorized to release the Fund's name, address,
and share positions.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their officers designated below as of the day and year first above written.
ULTRA SERIES FUND
Attest: /s/ Linda L. Lilledahl By: /s/ Michael S. Daubs
Name: Michael S. Daubs
Title: President
STATE STREET BANK AND TRUST COMPANY
Attest: /s/ Janice M. Duffy By: /s/ Mark A. Bowler
Name: Mark A. Bowler
Title: Senior Vice President
<PAGE>
ATTACHMENT B
Portfolios of the Ultra Series Fund
Capital Appreciation Stock Series
Money Market Series
Growth and Income Stock Series
Bond Series
Balanced Series
Treasury 2000 Series
<PAGE>
EXHIBIT 11
The Trustees and Shareholders of Ultra Series Fund:
We consent to the use of our reports included herein and to the reference to our
Firm under the heading "Financial Highlights" in Part A and "Independent
Auditors" in Part B of Form N-1A Post Effective Amendment for the Ultra Series
Fund.
Our report dated March 26, 1997, contains an explanatory paragraph that states
that the Company prepared the financial statements using accounting practices
prescribed or permitted by the Insurance Division, Department of Commerce, of
the State of Iowa, which practices differ from generally accepted accounting
principles. Also, as discussed in note 1 to the financial statements, the
Company changed its method of accounting for mortgage loan foreclosure losses in
1995.
KPMG Peat Marwick LLP
Des Moines, Iowa
April 17, 1997
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 1
<NAME> GROWTH AND INCOME
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 195,704,852
<INVESTMENTS-AT-VALUE> 234,433,573
<RECEIVABLES> 909,235
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 235,342,808
<PAYABLE-FOR-SECURITIES> 2,376,550
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 125,485
<TOTAL-LIABILITIES> 2,502,035
<SENIOR-EQUITY> 109,196
<PAID-IN-CAPITAL-COMMON> 193,792,032
<SHARES-COMMON-STOCK> 10,919,647
<SHARES-COMMON-PRIOR> 8,246,972
<ACCUMULATED-NII-CURRENT> 69,558
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 141,265
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 38,728,722
<NET-ASSETS> 232,840,773
<DIVIDEND-INCOME> 3,383,433
<INTEREST-INCOME> 525,661
<OTHER-INCOME> 0
<EXPENSES-NET> 1,045,783
<NET-INVESTMENT-INCOME> 2,863,311
<REALIZED-GAINS-CURRENT> 32,176,972
<APPREC-INCREASE-CURRENT> 26,520,015
<NET-CHANGE-FROM-OPS> 35,040,283
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,804,744
<DISTRIBUTIONS-OF-GAINS> 5,675,210
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,323,654
<NUMBER-OF-SHARES-REDEEMED> 420,513
<SHARES-REINVESTED> 405,459
<NET-CHANGE-IN-ASSETS> 5,308,600
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 807,229
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,045,783
<AVERAGE-NET-ASSETS> 161,183,627
<PER-SHARE-NAV-BEGIN> 18.20
<PER-SHARE-NII> .34
<PER-SHARE-GAIN-APPREC> 3.93
<PER-SHARE-DIVIDEND> (.34)
<PER-SHARE-DISTRIBUTIONS> (.81)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 21.32
<EXPENSE-RATIO> .64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 2
<NAME> BALANCED
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 177,868,979
<INVESTMENTS-AT-VALUE> 193,469,283
<RECEIVABLES> 1,799,597
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 195,268,880
<PAYABLE-FOR-SECURITIES> 437,598
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 106,408
<TOTAL-LIABILITIES> 544,006
<SENIOR-EQUITY> 127,374
<PAID-IN-CAPITAL-COMMON> 178,833,180
<SHARES-COMMON-STOCK> 12,737,422
<SHARES-COMMON-PRIOR> 10,161,857
<ACCUMULATED-NII-CURRENT> 94,881
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 69,134
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 15,600,305
<NET-ASSETS> 194,724,874
<DIVIDEND-INCOME> 1,230,690
<INTEREST-INCOME> 5,678,732
<OTHER-INCOME> 0
<EXPENSES-NET> 987,329
<NET-INVESTMENT-INCOME> 5,922,093
<REALIZED-GAINS-CURRENT> 10,881,558
<APPREC-INCREASE-CURRENT> 6,612,755
<NET-CHANGE-FROM-OPS> 16,803,651
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 5,850,662
<DISTRIBUTIONS-OF-GAINS> 4,393,033
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,158,268
<NUMBER-OF-SHARES-REDEEMED> 681,458
<SHARES-REINVESTED> 675,369
<NET-CHANGE-IN-ASSETS> 5,152,179
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 762,436
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 987,329
<AVERAGE-NET-ASSETS> 151,567,626
<PER-SHARE-NAV-BEGIN> 14.63
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> .98
<PER-SHARE-DIVIDEND> (.58)
<PER-SHARE-DISTRIBUTIONS> (.32)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.29
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 3
<NAME> BOND
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 26,049,731
<INVESTMENTS-AT-VALUE> 26,144,779
<RECEIVABLES> 441,478
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 26,586,257
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,334
<TOTAL-LIABILITIES> 14,334
<SENIOR-EQUITY> 25,731
<PAID-IN-CAPITAL-COMMON> 26,433,111
<SHARES-COMMON-STOCK> 2,573,070
<SHARES-COMMON-PRIOR> 1,959,490
<ACCUMULATED-NII-CURRENT> 18,034
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 95,047
<NET-ASSETS> 26,571,923
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,382,079
<OTHER-INCOME> 0
<EXPENSES-NET> 130,103
<NET-INVESTMENT-INCOME> 1,251,976
<REALIZED-GAINS-CURRENT> (427,410)
<APPREC-INCREASE-CURRENT> (477,126)
<NET-CHANGE-FROM-OPS> 824,566
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,238,292
<DISTRIBUTIONS-OF-GAINS> 49,716
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,473,941
<NUMBER-OF-SHARES-REDEEMED> 316,839
<SHARES-REINVESTED> 124,689
<NET-CHANGE-IN-ASSETS> 1,281,791
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 100,452
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 134,222
<AVERAGE-NET-ASSETS> 20,046,372
<PER-SHARE-NAV-BEGIN> 10.63
<PER-SHARE-NII> .65
<PER-SHARE-GAIN-APPREC> (.36)
<PER-SHARE-DIVIDEND> (.64)
<PER-SHARE-DISTRIBUTIONS> .05
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.33
<EXPENSE-RATIO> .65
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 4
<NAME> MONEY MARKET
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 21,019,331
<INVESTMENTS-AT-VALUE> 21,019,331
<RECEIVABLES> 5,668
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 21,024,999
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 14,012
<TOTAL-LIABILITIES> 14,012
<SENIOR-EQUITY> 210,110
<PAID-IN-CAPITAL-COMMON> 20,800,877
<SHARES-COMMON-STOCK> 21,010,987
<SHARES-COMMON-PRIOR> 19,541,720
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 21,010,987
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 951,281
<OTHER-INCOME> 0
<EXPENSES-NET> 114,351
<NET-INVESTMENT-INCOME> 836,930
<REALIZED-GAINS-CURRENT> 0
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 836,930
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 836,930
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 32,932,884
<NUMBER-OF-SHARES-REDEEMED> 24,132,956
<SHARES-REINVESTED> 836,930
<NET-CHANGE-IN-ASSETS> 9,636,858
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 88,296
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 117,520
<AVERAGE-NET-ASSETS> 17,666,978
<PER-SHARE-NAV-BEGIN> 1.00
<PER-SHARE-NII> .05
<PER-SHARE-GAIN-APPREC> 0
<PER-SHARE-DIVIDEND> (.05)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 1.00
<EXPENSE-RATIO> .67
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 5
<NAME> TREASURY 2000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 1,388,086
<INVESTMENTS-AT-VALUE> 1,585,290
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,585,290
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 549
<TOTAL-LIABILITIES> 549
<SENIOR-EQUITY> 1,834
<PAID-IN-CAPITAL-COMMON> 1,278,364
<SHARES-COMMON-STOCK> 183,351
<SHARES-COMMON-PRIOR> 182,546
<ACCUMULATED-NII-CURRENT> 107,339
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 0
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 197,204
<NET-ASSETS> 1,584,741
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 114,864
<OTHER-INCOME> 0
<EXPENSES-NET> 6,936
<NET-INVESTMENT-INCOME> 107,928
<REALIZED-GAINS-CURRENT> (75,534)
<APPREC-INCREASE-CURRENT> (75,534)
<NET-CHANGE-FROM-OPS> 32,394
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69,986
<NUMBER-OF-SHARES-REDEEMED> 69,181
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 805
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 6,936
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 6,936
<AVERAGE-NET-ASSETS> 1,532,738
<PER-SHARE-NAV-BEGIN> 8.47
<PER-SHARE-NII> .58
<PER-SHARE-GAIN-APPREC> (.41)
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.64
<EXPENSE-RATIO> .45
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 6
<NAME> CAPITAL APPRECIATION
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<INVESTMENTS-AT-COST> 86,149,857
<INVESTMENTS-AT-VALUE> 99,257,406
<RECEIVABLES> 703,455
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 99,960,861
<PAYABLE-FOR-SECURITIES> 1,234,318
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 52,710
<TOTAL-LIABILITIES> 1,287,028
<SENIOR-EQUITY> 67,593
<PAID-IN-CAPITAL-COMMON> 85,416,504
<SHARES-COMMON-STOCK> 6,759,264
<SHARES-COMMON-PRIOR> 4,869,643
<ACCUMULATED-NII-CURRENT> 14,253
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 67,934
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 13,107,549
<NET-ASSETS> 98,673,833
<DIVIDEND-INCOME> 917,123
<INTEREST-INCOME> 164,944
<OTHER-INCOME> 0
<EXPENSES-NET> 435,788
<NET-INVESTMENT-INCOME> 646,279
<REALIZED-GAINS-CURRENT> 12,841,544
<APPREC-INCREASE-CURRENT> 9,688,795
<NET-CHANGE-FROM-OPS> 13,487,823
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 639,086
<DISTRIBUTIONS-OF-GAINS> 3,084,815
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,646,073
<NUMBER-OF-SHARES-REDEEMED> 189,580
<SHARES-REINVESTED> 256,221
<NET-CHANGE-IN-ASSETS> 3,712,714
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 336,290
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 440,999
<AVERAGE-NET-ASSETS> 67,173,306
<PER-SHARE-NAV-BEGIN> 12.51
<PER-SHARE-NII> .13
<PER-SHARE-GAIN-APPREC> 2.55
<PER-SHARE-DIVIDEND> (.13)
<PER-SHARE-DISTRIBUTIONS> (.46)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.60
<EXPENSE-RATIO> .66
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
